Asian fund management group First Vanguard Assets intends to raise a Pacific Rim-focused water, wastewater and related infrastructure fund in partnership with Asian conglomerate Zhongzhi Enterprise Group.
The fund is targeting $500 million and aims for a first close before the end of 2009. It will invest in existing water infrastructure plants and facilities in Pacific Rim countries, although it will primarily focus on China, including Hong Kong and Macau. It will acquire and operate water assets together with Zhongzhi.
Richard Yin, founder and chief investment officer of First Vanguard, said in a statement that water infrastructure strikes a balance between risk and reward thanks to its long-term concession structure and stable income stream.
Demand for water resources is growing due to economic and population growth, although water supply is continually compromised by excessive pollution, urbanisation and climate change, First Vanguard said. It estimates that water, waste water and industrial water treatment are the biggest components of the global water market, currently valued at up to $450 billion.
Founded in 2004, First Vanguard currently manages two funds focused on private equity and real estate investments in Asia. It has offices in China and Hong Kong.
Zhongzhi was set up in 1995 and specialises in urban water and hydropower, real estate, infrastructure, mining and financial investments. It is headquartered in Beijing with offices across the country.
First Vanguard and Zhongzhi did not respond to requests for comment at press time.