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The new fund will fall under the umbrella of CRA Management (Clean Resources Asia), which is run in Singapore by CLSAÆs resident eco-warriors Anthony Wilkinson and Andrew Pidden.
This is the third fund launched by CRA Management and follows in the footsteps of the $121 million Clean Resources and the $26 million Clean Water Asia Fund, which also focuses on water infrastructure.
This new equity-oriented fund is different from its stable-mates because it is a long-only product. The original fund had the wider scope to be able to short shares in overvalued water companies plus those possibly facing penalties due to not fulfilling their aquatic obligations, perhaps due to impurities in their product. This new fund has been seeded with a $35 million investment by a London-based firm whose identity has not been disclosed.
The fund will buy into Asian companies which are involved in water supply and distribution and waste water treatment. According to the fund managers, the water sector in Asia is now valued at a forward price-to-earnings ratio of eight times with earnings per share growth of over 30%.
In zen-style, the fund's CIO Andrew Pidden points out an underlying paradox that he experiences with water, that, "with the underlying raw resource literally drying up, the prospect of expansion in the industry is very strong". Before starting CRA Management, Pidden worked at the hedge fund Alcor, an operation which is now embraced within the CLSA Capital Partners fold.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.
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SGX’s new framework for Spacs will likely provide investors with a much-needed channel for direct deals, but the verdict is still out on whether it will bring liquidity to the bourse.