WATER FUND
Utility & Infrastructure
HIGH SECURITY WATER LICENCES ARE ON PAR WITH PROPERTY TITLES.
We were an early mover in the Australian water rights segment.
We were an early mover in the Australian water rights segment. Our earliest investments were made during the 2013 financial year.
After extensive due diligence, we deduced that high security water entitlements in Australia had many of the same attributes as property title.
During the 2016 calendar year, we observed that even though there was record rainfall recorded in the Murray Darling Basin, the prices of high security water entitlements were unchanged, even though temporary water licences had dropped by 80% in some instances.
A STABLE POLITICAL & REGULARITY ENVIRONMENT ENSURES CERTAINTY OVER THE LICENSING REGIME.
ONGOING EXCESS DEMAND PROVIDES A SUITABLE MIXTURE IF GROWTH & YIELD.
We took the view that if high security water licences were flat during the wettest year since the 1950’s, that the risk profile with this asset class was asymmetrical. We then made additional significant investments in high security water entitlements.
Post making the investment, the eastern states of Australia almost immediately returned to drought-like conditions.
After experiencing substantial excess returns, we decided to lock in the profits.
By the time we exited the Water fund in October 2018, clients received a total net return of 30% on their capital over an 18-month hold period. This total return – net of all fees – to clients made the Water Fund one of the stand-out investments for the period.
Murry-Darling Basin (MDB) is the world’s largest ‘cap and trade’ water market as a result of Australia’s bi-partisan National Water initiative (2007).
*The performance was calculated as at 31 December 2018. Past performance is not necessarily indicative of future performance.