“Water, water, everywhere.” I will not get all poetic this week, however, you do not often get the chance to quote Samuel Taylor Coleridge in an article about a fund launch.
Thematic Asset Management is a name unfamiliar to most readers I imagine. It was recently launched by six ex-members from the Pictet thematics team, who left in 2018.
Rather than set up on their own they decided to launch the new company under the banner of boutique asset management specialist Natixis.
The Thematic Water fund is one of four initial funds, all of which have a common investment process.
Simon Gottelier and Arnaud Bisschop are the managers and analysts of this fund and they have five key reasons why they think the case for water is still strong: population growth and urbanisation; underinvestment in infrastructure; increasing water quality regulation; link to industrial economy; and that water is a building block of climate change adaptation.
Ultimately they believe there is a supply/demand imbalance in the water market and that there can be no economic growth without water.
This fund will not just invest in water utilities.
Indeed, one key change from their previous fund is the ‘20 per cent’ rule. In their old fund, 20 per cent of turnover had to be water-related for a company to be considered.
They have relaxed that rule to enable them to invest in more dynamic growth companies that they consider will be important water players of the future.
The fund has been seeded with approximately €35m (£30m).
When you consider their old water fund was approaching €6bn you can see there is room for growth – though the managers intend to cap the fund at a smaller level.
Although specialist in nature, this launch could form an interesting part of your global equities exposure.
One final point: you need water to be able to sustain life.
Ben Yearsley is a director of Shore Financial Planning
