Allianz: investments in water infrastructure on the rise across the US

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Alina Donets, vice president and portfolio manager at Allianz Global Investors joined us for the Evenco International Fund Forum in Helsinki.

Donets spoke about the issues surrounding US water infrastructure – a network system that is in poor shape. And how replacing obsolete water infrastructure is now providing significant opportunities for institutional investors.

Alina quoted that “The majority of the piping system in the US was put into place some 80-110 years ago, meaning that today it is at the end of its useful life”. But because of this, comes investment opportunity, as “whenever a pipe bursts, the infrastructure needs to be replaced”.

Investments in water infrastructure have picked up since last year. Donets mentioned that “for a long time, societies were reluctant to acknowledge the urgent need to replace their old water pipelines, but this is now changing.”

Interest has grown in water investments, in particularly for Sweden’s AP Funds. One example of this is AP3’s investments in water infrastructure, which rose to around SEK 4bn by the end of 2018. AP7 for example, gave Irish fund manager KBI Global Investors a SEK 1.5bn mandate to invest in water infrastructure.

Donets also stated that emerging markets are also creating opportunities in the field, such as increased investments in water treatment, so people in these regions have access to clean water and sanitation.

Allianz Global Water Strategy fund is now investing in a series of companies who operate in the water supply chain. Companies within this portfolio need to invest 20% of their revenues into water related markets.

By the end of 2018, Allianz water strategy team were managing assets worth USD 562.3m across the US and Europe.

Source: AM Watch

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