London, July 4, 2016. Resonance, a real assets investment management firm affiliated with Fidante Partners, today announced the third close of Resonance Industrial Water Infrastructure Limited. Commitments of US$300 million from six institutional investors from the UK, US and Nordics, demonstrate investor appetite to participate in the US$53 billion global industrial water treatment industry, which is expected to grow at 8.6% per annum until 2020.
This is the first institutional fund exclusively focused on financing industrial water infrastructure projects in Europe, south east Asia, China, Australia and New Zealand.
The fund provides equity capital to finance the design and build of specialised industrial water treatment plants co-located with industrial users. Its industrial partners operate water treatment plants under long term contracts using the industry-standard build, operate and transfer (BOT) framework. Operator partners use the latest water treatment solutions and have proven track records in operating industrial plants.
Industrial users benefit from outsourcing water treatment because they reduce capital expenditure requirements, transfer operating risk and can rely on the extensive and up-to-date knowledge of plant operators to optimize their water treatment processes and water cycle management. In addition, the fund exploits the financing gap produced by the financial crisis.
Resonance expects to further deploy the fund’s capital by building a diversified portfolio of 10 to 15 water assets, typically US$10-50m in size, in Europe, south east Asia, China, Australia and New Zealand.
These investments will contribute to delivering greater sustainability in local water resources by reducing industrial pollution of water courses, increasing the supply of fresh water to industry, and recovering valuable by products e.g. salts, metals and energy. As a signatory to the UN Principles for Responsible Investment (UN PRI), Resonance will manage the fund in accordance with its responsible investment policy.
Nick Wood, CEO and founder of Resonance, describes the investment opportunity: “Demand for outsourced water treatment services is being driven by increasing government regulation of discharged water and by water scarcity. In certain regions, industrial businesses are increasingly concerned that they cannot obtain enough water to operate their facilities reliably. Firms continue to invest in new facilities to meet these challenges.”
Phil Peters, managing director at Fidante Partners Europe, said: “We have had a lot of interest from institutional investors in this opportunity. Pension funds, endowments, and funds with an ESG policy are looking for strong investment ideas, and this appeals because of the water industry’s investment characteristics and growth potential. Real assets continue to be an area of growth for us.”
One of the fund’s investors, Mikael Angberg, CIO of AP1, commented on its commitment to the fund as part of its wider strategy of promoting sustainable investment: “Water scarcity and water treatment issues are cornerstones of AP1's resource efficiency-focused sustainability strategy. We are therefore very excited to be partnering with Resonance in the first institutional fund exclusively focused on financing industrial water infrastructure projects.”
Vikram Aggarwal, alternatives investment manager at BAE Systems Pension Funds Investment Management, said: “This investment represents a compelling way of marrying attractive risk-adjusted returns with delivering socially useful outcomes. Generalist infrastructure funds have historically overlooked this area, mainly because projects are considered too small and bespoke. However, we are delighted to partner with the Resonance team, who have the expertise and commitment to do such deals and provide capital to an under-served part of the market.”
Lydia Whyatt, the managing director of water investments at Resonance, with more than 10 years’ experience investing in the water sector, originated this investment theme and brought it to Resonance. She also put together an experienced team to execute it, including Herman Cai in Hong Kong and Michael Froud in Singapore. Both have extensive water industry, operating and investment experience.
Lydia commented: “The team’s experience and relationships with its partners, which include water plant operators and technology providers, mean that Resonance can reliably identify strong investment opportunities for the fund. The first investment of the fund is in a coal-to-chemical waste water reuse plant in China.”
In addition, the Resonance team works closely with Amane Advisors, a leading global advisory firm focused on the water industry. The founder of Amane, Thierry Noel, strongly believes that this fund brings much needed capital to industry for financing of water assets: “I am pleased to be able to bring capital to the water industry and financing solutions meeting the specific requirements of the water market. We worked closely with Lydia, Nick and the team to make this happen, and I am delighted to see it up and running”. Amane provides Resonance with access to a network of over 120 water and waste industry professionals worldwide with offices in the UK, France, China, Bahrain, the USA and Singapore.
For further information, please contact:
Louise Collins, Fidante Partners (Europe)
firstname.lastname@example.org, Tel: +44 (0)20 7832 0961
Gay Collins, Montfort Communications
email@example.com, Tel: +44 (0)7798 626282
Resonance Asset Management
Resonance Asset Management Limited was founded in 2012 by Nick Wood, a former senior executive at Man Group plc, where he was founder and CEO of Man Environmental Capital Opportunities.
Resonance is an alternative asset management firm focused on originating, distributing and managing real asset investment funds for institutional investors. The firm invests in long term, cash generative real asset investments that deliver yield and diversification that is valuable to institutional investors.
Resonance has approximately US$450m of AUM in renewable energy and water treatment assets.
Resonance Industrial Water Infrastructure Limited is an unlisted company registered with the Guernsey Financial Services Commission as a collective investment scheme. The Fund is managed by Resonance Asset Management Limited.
Resonance Asset Management Limited is authorised and regulated by the Financial Conduct Authority.
Further information about Resonance can be found at www.resonanceassetmanagement.com
More information about the Fund for potential industrial partners is available at www.resonancewaterfund.com
Fidante Partners (Europe)
Fidante Partners is an alternatives investment management company that partners with specialist asset management firms to deliver compelling opportunities to an international investor base.
Fidante Partners supports 15 specialist asset managers, located in Australia and the UK, managing US$31.8 billion (as at 31 March 2016) across numerous asset classes including fixed income, equities and alternative asset strategies. Fidante Partners is fully owned by Challenger Limited in Australia, an ASX-listed investment management firm established in 1985 with AUM of US$43.9bn (as at 31 March 2016).
Amane Advisors is an advisory firm dedicated to the water industry. Profound industry experience makes it possible to provide focused and effective expertise to many clients ranging from global corporations, to technology start-ups, investors, operators, engineering firms, institutions and public agencies.
Amane Advisors is the advisory arm of Global Water Intelligence, the world leader in market intelligence in the water industry.
For more information, please consult www.amaneadvisors.com
 Source: Global Water Intelligence Report 2015