The most crippling factor within the global agricultural sector is the unbroken access and supply of fresh water. This is an element that cannot be replaced, regardless of the price that is now being attributed to it.
For example the continuous supply of fresh water for irrigation is fundamental for the growth of up and coming and established exports markets alike. DOMINIK GRAF’s Water Fund provides an opportunity for investors to directly invest in the ownership of this precious resource, providing returns through via open-ended management of this increasingly diminishing resource.
The fund invests in water entitlements globally using the accepted long-term buy and hold ethos. This allows capital gains to accumulate as water is priced to reflect its increasing scarceness. Designated volumes of water are allocated to our funds water entitlement portfolio on an annual basis and being solid on this basis to agricultural and urban users alike, in turn providing a yearly investment yield. This fund is the reality of the times that we are living and operating in and represents a unique and effective way to gain exposure to the world’s most vital resource.
Our fund provides the much needed bridge for virgin resources of equity capital globally while remaining in synergy with initiatives worldwide that appreciate the true value of useable water allowing it to be traded freely without bounds.
Since 2005 countries including Australia, South Africa and United States to name a few, have forged ahead with establishing a regulatory framework for the trade of water entitlements which are traditionally referred to as water rights. This has been progressive and now there is a clear process in place to decouple water entitlements from land titles which has heightened the market for water for the purpose of development and investment. This is supported by a rigid regulations, infrastructure and market mechanisms which allow the effective trading of water.
Water as a commodity runs through a highly competitive market to the most efficient economic use. This translates to the most productive and profitable agricultural/ manufacturing concerns having to bid in order to meet their increasing demand for this resource over their less successful peers.
What are Water Entitlements?
A water entitlement is the unending rights to the access and sharing of clearly defined water resources such as a river or aquifer as an example. Being regulated, registered and issued by governments in nature they are similar to land titles.
As a holder of a water entitlement is allocated a specified volume of water per year, this is referred to as their water allocation. This can be leased and/or sold to end users ranging from urban, commercials through to agricultural.
DOMINIK GRAF believes strongly that this sector will benefit from ongoing and long-term capital growth which is being driven by the following;
- Fresh water is a finite resource
- Supply and demand
- Every growing populations
- Ever increasing demand put on rates of productivity within the irrigated agricultural forum globally
The growing scarcity of fresh water and its place as a critical factor in the production of everything that humanity needs to survive; the production of food, drinking water, production of energy etc. All these crucial factors are increasing exponentially. With increased per capita incomes that inherently need a more diverse diet and secure clean finite supply chains.