Pictet Asset Management, the institutional division of the Swiss private bank Pictet & Cie, has publicly launched the Pictet Water Opportunities Fund, a Cayman-domiciled investment com
Pictet Asset Management, the institutional division of the Swiss private bank Pictet & Cie, has publicly launched the Pictet Water Opportunities Fund, a Cayman-domiciled investment company targeted at sophisticated, qualified investors with a long-term investment horizon.
The fund builds on Pictet’s experience and expertise in water and follows the EUR3.2bn PF (LUX)-Water Fund, which has become the largest fund in the sector since its launch in 2000.
Managed by Hans Peter Portner and Philippe Rohner, the fund focuses on both public and private equity investment in high-growth companies that have a minimum 80 per cent exposure to water, either in revenues or in profits, compared with 20 per cent for the PF(LUX)-Water Fund.
‘Water is an extremely rich investment theme,’ says senior fund manager Portner. ‘There is an increasing demand for water worldwide, but globally the water infrastructure is completely outdated.
‘Investors have largely overlooked the demand characteristics of water. Total consumption due to population growth and industrialisation has increased ninefold since 1900, while demand continues to increase at the rate of about 2 to 3 per cent per annum, twice as fast as the world’s population.
‘Industry fundamentals remain solid despite recent volatility. Valuation levels are well supported by low bond yields. While sub-prime credit problems in the US are likely to cause further weakness in the US housing market, leading to weaker consumer spending, it should keep interest rates low. This should provide excellent opportunities in US-related technology stocks where valuation levels have become attractive once more.’
Investors purchase the Liquid share class, which offers quarterly liquidity. The fund reserves the right to limit net redemptions/subscriptions to 10 per cent of net asset value at the discretion of the fund’s board.
Private equity investments will be held in a separate Special Situations share and will be issued periodically to existing holders of the Liquid shares. Their liquidity will depend on the realisation of the underlying private equity investments. Both share classes are issued in both euros and US dollars.
The Liquid share class will generally consist of at least 30 holdings, representing about 60 per cent of total fund assets. The balance, represented by the Special Situations share class, will target between 10 and 20 private equity investments.
‘Water services are being privatised around the world,’ Portner adds. ‘About 8 per cent of the world’s water companies are currently in the private sector, a proportion that could double by 2015.
‘About 60 per cent of the listed companies in our universe are in Europe, 20 per cent in North America and 20 per cent in Asia. We are targeting companies operating throughout the water cycle – supply and treatment services, technology and packaged water.’
The Pictet Group, headquartered in Geneva, employs more than 2,700 staff. Pictet Asset Management, which includes all group’s operating subsidies and divisions that carry out institutional asset management, managed assets totalling some USD126bn at the end of last year, and has offices in Dubai, Frankfurt, Geneva, Hong Kong, London, Madrid, Milan, Montreal, Paris, Singapore, Tokyo and Zurich.
