Water – How and Why to Invest

Water - How and Why to Invest

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1 Response

  1. Avatar Bryan Matthew says:

    As an investor of HICL the infrastructure fund for some years, I notice that very recently (May in fact) they took close to a 40% equity stake in Affinity Water which is supposed to be the UK’s biggest water only supply company. I think HICL paid close to £270m for their stake.

    I was a bit nervous of the investment as I had been comfortable with HICL’s strategy of buying into mature PFI/PPP projects with a long pipeline of income, but this does indicate a shortage of just investments out there and greater competition for what is availble.

    However Affinity seems to have a lot going for it -profits of around £60m per annum, it has a long record (130 years) and it supplies the part of the country (SE) where population growth is expected for the next 25 years+, is not responsible for waste water and sewage (unlike other water companies) and is regarded well by OFWAT.

    I think Morgan Stanley had been the benefical owner of Affininity and sold it for a total of £1.6bn.

    Perhaps such a stake in such a company is good business and fits what HICL’s investors want which is low risk, long term high payouts. The talk is that they will next look at the gas and electricity regulated assets too…

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Water – How and Why to Invest

by Mike Rawson time to read: 5 min
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