Matthew J. Diserio, President of Water Asset Management, joined Keith Black, Managing Director of RIA Channel, to discuss investments in the water sector.
Water Asset Management has been investing in the sector for almost two decades. The firm invests in real assets and infrastructure in global companies that ensure water quality and water supply through listed equity and private equity. There are a number of tailwinds for investors in this sector, as water scarcity is increasingly an issue, especially in the Western US. The sector has relatively few companies, so they can have substantial pricing power. In addition, the Inflation Reduction Act brings billions of dollars of new spending into the water sector.
The public equity strategy invests in water and wastewater utilities and companies that provide water-related equipment and technologies, such as pumps, pipes, meters, and chemicals. Other investments include water rights and aquifer storage.
The private equity strategy acquires farmland with water rights. Once a farm is purchased, water conservation measures are implemented on each farm through more efficient irrigation and switching to crops with lower water consumption. The conserved water can be sold or leased to farmers and local communities.
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