1. London Shop Plans Water, Carbon Funds July 07, 2009 --Robert MurrayCF Partners, the private London firm focused on environmental investing in commodities, will open to outside investors by launching an unusual water infrastructure fund and a carbon relative-value hedge fund. Partner Simon Glossop said the water strategy will launch either late this year or early in 2010; the relative-value fund—the firm’s second carbon strategy but its first available to external clients—will roll out before the water fund. Glossop told AIN he wanted to set up his own water fund in order to find a new way to invest his own money in the commodity. As the world’s population rises, he believes water will increasingly pose a supply problem. “In a shortage situation, water is more valuable than oil when you really cut to the chase,” said Glossop. “As a commodity, and as an issue, it’s not going to go away.” Most existing water funds are essentially long/short equity strategies, observed Glossop. By contrast, CF Partners’ fund “will look to get as close as possible to water as the underlying commodity asset class,” he said. The fund will invest in pipelines, dam projects and desalinisation processes, and will also seek to increase efficiency by investing in maintenance and repair companies tasked with reducing leakage from pipelines. The fund will also have the ability to short water-based equities. The fund will have a private equity-like structure and is likely to employ a lockup, though Glossop was unable to provide a time horizon for the investment opportunity. He expects to receive investment from institutions and high-net-worth individuals. He declined to give a target for asset-raising, but said the strategy would require a significant sum. Glossop is looking to hire a portfolio manager to work with him on the water fund. Separately, the relative-value CF Carbon Fund will seek to benefit from pricing inefficiencies and dislocations in the carbon markets to return 20% net each year. The firm is seeking to hire co-portfolio managers for the strategy. Glossop declined to provide more details of this fund before launch. CF Partners’ existing fund is a closed private fund using a value-based approach to carbon investing, with a medium-term time horizon. Glossop declined to provide a figure for assets under management.