Criterion Investments Ltd. today announced the launch of Criterion Water Infrastructure Fund, the first and only actively-managed water fund for Canadian investors.

The fund will invest in equity securities of companies across multiple sectors of the global water industry, including water supply and treatment, water technology, environmental services and packaged water.

The investing will be managed by Geneva-based Pictet Asset Management SA, a leading European investment firm and manager of the world’s largest water-focused fund.

“Water represents a fundamental global investment theme that hasn’t been sufficiently available to Canadian financial advisors and their clients until now,” said Ian McPherson, president of Criterion, in a news release. “The fund taps into the substantial, predictable capital expenditures required to meet the global need for safe water. We’re excited to bring such a compelling solution to the Canadian market and delighted to partner with a true industry leader in Pictet.”

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The key drivers of the global water industry include:

  • demographics – less than 1% of the world’s total water sources are usable and demand for water grows twice as fast as the world’s population;
  • water infrastructure – it’s estimated up to $1 trillion must be spent over the next five years just to cover basic global water needs in the developed world and emerging markets;
  • climate change – changing weather patterns are resulting in events that significantly impact water supply, such as storms, flooding and droughts;
  • health awareness – polluted water is one of the world’s largest health concerns with over 1 billion people using unsafe water sources.

“The solution to the world’s water crisis begins with the outsourcing of key water services to the private sector,” said Phillipe Rohner, senior fund manager at Pictet. “This process already represents a US$260 billion market and is growing at 6% per annum. We are seeing tough new water directives and regulations worldwide that will continue to drive massive spending and ultimately the price of water.”

Canadians are not immune to rising water stress. In 2006, about two million British Columbia residents were warned against drinking their tap water, after storms contaminated key reservoirs. In Toronto, taxpayers are faced with a 9% water rate hike every year for the next five years to pay for decaying water and sewage pipes.

Criterion Water Infrastructure Fund aims to provide investors with global diversification, significant growth potential, enhanced risk-adjusted returns as well as income in the form of a target yield of 5% per annum. Available as both a currency-hedged and unhedged solution, the fund will be accessible through licensed financial advisors in all provinces across Canada.

Criterion is an affiliate of VenGrowth Asset Management Inc., one of Canada’s premier managers of private equity and alternative investments.