New York-based Water Asset Management has so far pulled in $30 million for its second water-focused real assets fund, according to a June 16 regulatory filing.
The filing showed that the fund, Water Property Investor II (WP II), secured its first sale on June 8 and is accepting minimum investments of $5 million.
No target was identified in the filing but WAM president and co-founder Matthew Diserio told Agri Investor in November that the firm’s second fund would have a target of $300 million. He said the fund would solicit commitments of between $10 million and $30 million from sovereign wealth funds, pension funds, family offices and endowments.
“We see a growing opportunity and demand both due to the drought and the growing awareness that access to historical water resources is no longer as reliable,” he said. “A lot more farmers are interested in collaborating with a firm like ours that is focused on developing more reliable water resources.”
In a report on water-related impact investing opportunities published last year, family-office network The ImPact and environmental NGO the CREO Syndicate wrote that WP II would help facilitate greater efficiency and transparency in the agricultural water consumption and utilization market in the western United States.
“Water Asset Management purchases land that has senior water rights and sells or leases a fraction of those rights to willing buyers, such as nearby cities and towns, industrial companies, or environmental consumers that are facing water quality or quantity problems,” the report’s authors wrote.
WAM’s previous real assets fund, Water Property Investor I (WPI), closed on $100 million in 2014 and targeted a net internal rate of return of 17-22 percent with a portfolio consisting of 70 percent water-rich agricultural properties and 30 percent stand-alone water resources, according to the firm’s website.
For example, WPI purchased 2,724 acre-feet equivalent of effluent water credits in Prescott, Arizona for $67 million, according to a US Geological Survey report. The project is currently being marketed to land owners and commercial real estate developers, WAM said on its website.
Founded in 2005, WAM maintains offices in New York and San Francisco. In addition to the WP real assets funds, the firm also has two funds dedicated to water-related equities.