The development of investment markets to trade water supplies can do much to alleviate the growing global scarcity of clean water, a report by hedge fund experts has found.

The report, by researchers at Man Investments, a global leader in hedge funds, calls for greater privatisation of water assets. While acknowledging that such a move is controversial, it says privatisation will generate capital, urgently needed to improve infrastructure.
As water becomes increasingly scarce in many parts of the world, opportunities arise for investment managers, including hedge funds.
Co-authors, Thomas Della Casa, head of research at Man Investments, and research specialist Mark Rechsteiner observe that water use around the world is rising faster than population growth due to urbanisation, industrialisation and dietary changes in emerging markets. Widespread pollution has exacerbated demand problems.
“Hedge funds are, in general, only now discovering the water market but they lead the investment community in this respect,” says Antoine Massad, chief executive officer, Man Investments Middle East Limited.
“In global investment terms, the water sector has been under-represented compared with much smaller sectors, such as clean technologies and renewable energy,” says Casa.
The report finds that, in aggregate, there is enough water for the world’s populations but that distributing it is the big problem.