Investing in the future...

Summit Global Management is an investment firm located in San Diego, CA that specializes in water related companies. They have a couple interesting documents explaining their focused circle of competence.

Summit Capital

Some interesting points:
1. China holds 21% of the world's population and 7% of its renewable water sources.
2. Urban area are expected to contain two-thirds of the populace by 2030.
3. Population growth is expected to be 1.16% compounded between 2000 and 2025. At that rate in 18 years there will be 8 billion people.
4. Water demand increased by 1.96% from 1900 to 2000, but in the US, over the last thirty years, the rate jumped to 4.73%.
5. The American Water Works Association, an international non-profit whose members study, or work within, the water industry, estimates $250 billion will need to be spent over the next thirty years simply to replace aging American pipes.
6. China recently put forth $128 billion as the cost of future water infrastructure needs.
7. U.S. water utility shares lag international peers, yet they are (typically) twice as expensive on a price to book basis.
8. M&A in the water industry did not reach the conglomerate scale until 1999, when Vivendi purchased U.S. Filter for $6.2 billion.

We take water for granted, but a fresh, clean glass of aqua is far more valuable than the newest IPhone. And we are still fairly dependent on nature to provide us with access to renewable sources. Look at Australia, where they should be far more conscious of water shortages: http://news.bbc.co.uk/1/hi/world/asia-pacific/3992231.stm.

80% of Sydney's water supply comes from a single source, the Warragamba dam. God forbid an extended drought or an infrastructure failure; there isn't much of a hedge.

A more current article on Australia's situation:
http://www.reuters.com/article/environmentNews/idUSSYD7417520070516.