Aqua Resources Fund Limited is a Guernsey domiciled, closed-ended investment fund established to provide capital appreciation through exposure to a diversified portfolio of water-related investments.
The Manager seeks to accomplish the Company's investment objective and policy by:
- seeking exposure to water-related investments on a global basis;
- seeking portfolio diversification by investing across the broad value chain of water-related projects and investments; and
- seeking to control risk through such portfolio diversification, investment vehicle selection and implementation of risk control strategies.
No assurance can be given, however, that the Company will achieve its investment objective, and investment results may vary substantially over time and from period to period.
No New Investments
It is the general policy of the Company not to make new investments. It is the intention of the Company to continue to meet its existing capital commitments. The Company may support follow-on commitments in existing investments subject to prior approval by the Board of directors.
Investments may be made within a diverse range of water-related sectors including infrastructure, technology, recycling and treatment and in water-related projects such as waste water treatment, water distribution and infrastructure, water-to-energy, clean water, desalination, and others. Investment will comprise primarily direct stakes in unquoted water-related companies and projects. A target threshold of at least 60 per cent. water-related activity will be set for an investment to be considered "water-related".
As and when the Company releases its investments, the Company may, at the sole discretion of the Board of directors, either: (i) return capital to shareholders; or (ii) retain proceeds in order to meet the Company’s follow-on commitments in existing investments or other obligations of the Company from time to time.
Full details of the Company's investment objective and policy (as amended in November 2012) are set out in the circular published by the Company on 20 September 2012.
The Company has implemented its investment policy via its investment strategy. Using global research and sourcing, the Company has built a portfolio focused on investments that offer water-related returns. In certain cases, investments may have broader applicability and possibility for regional or global scalability.
Front-end and back end water businesses
Water-related investment opportunities that have been evaluated include both front-end and back-end water business.
Front-end water businesses are companies that focus on areas such as extracting and delivering available water to end users, providing the necessary quality level from the end user, controlling leakage, and assuring stable supply and pressure. Examples of front-end water businesses include those businesses involved in the supply and maintenance of pipes, pumps, equipment, metering, filtration, disinfection, purification and distribution.
Back-end water businesses are companies that focus on areas such as treating and recycling used water, assuring quality levels necessary to bring recycled water back into the system and disposing of unusable water and other areas. Examples of back-end water businesses include businesses involved in water recycling, waste water treatment, waste water disposal, clean water, desalination and irrigation. In addition, water-to-energy is a back-end business area that uses water and technology to generate power. Examples include hydro-electric and tidal power.
Demand and supply side opportunities
The Company reviews both demand side and supply side water opportunities. Demand is driven by agriculture, industry, and household use of water. Examples include:
- in agriculture: precision irrigation, rainfall and runoff recovery, recycling;
- in industry: recycling, waste water treatment, flow equipment; and
- in household: metering, recycling, retrofitting, quality management.
Supply side opportunities include recycling, infrastructure (distribution, reservoirs and leak management), water transportation, and environmental technologies.
Direct investment strategy
By focusing on direct, actively-managed stakes in unquoted investments, the Company seeks to distinguish itself from other water investment vehicles which are generally focused on public equity investments. In this way, the Company seeks to offer access to the broader universe of active water investment strategies and specifically water-related returns.
The strategy of direct stakes in unquoted investment, combining water-related companies and projects on a global level, is designed to offer returns linked to global water supply and demand and to water as a value proposition. This strategy can be clearly distinguished from many water investment portfolios which are limited to public equity investments. The Directors consider the Company’s strategy to be a competitive advantage in the universe of water investing.