Impax Asset Management, specialised in environmental markets and related resource efficiency sectors, has reached a new high in assets under management at the end of 2016.
The company has reported AUM of £5.06bn (€5.83bn) as of 31 December 2016, up 12% quarter-on-quarter.
Impax expects water infrastructure investment to continue to rise up the agenda in 2017 in both developed and emerging markets as pollution incidents and extreme weather continue to hit the headlines.
The company has been researching and investing in listed water companies since 1999. It runs a dedicated Water Strategy since 2008.
According to Impax, the water period currently talllies around 250 investable companies with a total market cap of £655bn.
“Increasing water pollution incidents such as the contamination of the water supply in Flint, Michigan (where thousands of children have been exposed to lead contamination), highlight the urgency of upgrading ageing water infrastructure to prevent serious health issues.
“New infrastructure in rapidly developing countries is also aimed at improving public health. China’s 13th Five Year Plan commits 2 trillion yuan (US$330bn) to tackle water pollution,” Impax underlined.
Another issue highlighted by Impax remains water leakage which forms a major problem in urban areas.
The manager argued 15 to 25% of water is lost every day in the US from pipe leaks and that London loses 180 million gallons per day from ageing water infrastructure.
“Such high levels of wastage during periods of drought and shortages is triggering significant long term capital spending commitments. For example, in the Sao Paolo region in Brazil, the quoted water utility is investing BRL 4.3bn ($1.3bn) over 10 years in a programme to combat water loss,” Impax pointed out.
The manager added that specialised water equipment suppliers provide attractive investment opportunities, evolving in a narrow competitive landscape and often showing a strong price power.
“As their technologies have applications across multiple sectors and geographies they deliver diversified revenue streams to Water portfolios which have been resilient through the economic cycle,” Impax said.