The Islamic-compliant super fund has diversified its socially and environmentally responsible investment options by enabling access to investments in water rights.
“In Australia, water rights are freely traded in an open market with the twin objectives of ensuring economically efficient water use and environmental sustainability," said Crescent Wealth head of investments, Mas Harris.
“The market is well established and regulated, which gives us assurance as investors that we are entering a market with good governance, stability, and transparency.”
Mr Harris explained that water rights can help investors reduce volatility in their portfolios.
“Australia is one of the driest continents in the world in terms of water assets, and we see this as a great potential investment over the longer term as the market develops and matures further,” he added.
Crescent Wealth is investing in water rights via funds managed by Riparian Capital Partners (RCP), which invests in perpetual water rights entitlements and then sells or leases annual water allocations available under these entitlements.
Commenting on the new partnership, RCP managing partner, Nick Waters, said the major long-term drivers of water entitlement value were factors that influenced irrigators' capacity to pay for water.
“These include productivity gains farmers are able to achieve on their operations and through moves to higher value cropping systems which enable farms to produce more value per megalitre of water.
“We are also seeing some pretty clear long-term trends playing out around climate change with lower rainfall patterns and higher temperatures which are relatively supportive of water values going forward,” Mr Waters said.
The vast majority of water rights traded in Australia are located in the Murray-Darling Basin area which contains approximately 66 percent of Australia's irrigated farmland.
