Growing demand, tightening supply. That’s the water investment opportunity in a nutshell. By 2030, demand could exceed supply by 40%, according to the IFC. With that opportunity has come a growth in solutions. “The number of companies in the water value chain has grown significantly,” says Hubert Aarts, manager of the The Pax Global Environmental Markets Fund, which has been investing in water since 2002.
- Broad universe… The universe for public equity water investments is broad, more than 250 companies with a combined market cap of around $1 trillion, according to PAX.
- Cyclical… The universe includes cyclical plays such as water infrastructure of pipes, pumps, and meters that see increased demand with infrastructure spending commitments or new environmental regulations.
- Defensive… Companies that supply chemicals and products for water treatment with repeat purchase models have more steady and predictable earnings.
- The cities… investing in water infrastructure.
- More ImpactAlpha… water coverage.