Premier environmental power and water was created by changing the name and investment mandate of the Premier smaller companies fund.
Premier believes that developed and emerging market countries will improve the efficiency of their energy and water use, and increase production of renewable energy as governments tackle the problem of declining energy and water resources.
The firm also sees population growth and rising affluence in emerging markets as driving demand for improved drinking water, better sanitation and alternative energy. Fund managers Kevin Scutt and Claire Burgess believe that as water and power are essential services, they are less susceptible to economic slowdown.
Scutt joined Premier in July 2005, having previously worked for Insight Investment, analysing companies in the utilities sector. He also specialised in utilities and managed segregated pension schemes over 13 years at Hill Samuel Asset Management.
Burgess joined Premier in December 2008, having previously managed a UK smaller companies fund at Rothschild Asset Management. She has also worked for Foreign & Colonial.
Scutt and Burgess run the Premier energy and water trust and Premier renewable energy fund, so the latest offering is not new territory. They have built the new fund initially with substantial positions in the Chinese water sector on the back of China’s plans for national guidance on tariffs for water supply and a budget increase for wastewater treatment.
They are also investing in clean energy including wind, solar, hydro, waste to energy and nuclear power.
Premier has noticed that the governments of many developed countries are looking at ways to lower the cost of subsidising renewable energy. This means that firms involved in energy efficiency – using less power to perform the same task – and demand response – regulating consumption of electricity in response to supply – could stand to benefit.
This fund is likely to appeal to investors looking to diversify through an environmental investment theme rather than investors with a particular ethical stance. The IM Wheb sustainability fund, launched in 2009, shares some common ground but differs from the Premier fund in that it has only a small allocation to Asia of around 6 per cent.