Tareno AG - Tareno Waterfund

Tareno AG
www.tareno-waterfund.com
Morningstar RatingTM
Class R1 EUR
Class W EUR
Morningstar Category:
Overall Rating per 30/11/15
December 2015 | Basel | EN
0
© [2015] Morningstar Switzerland GmbH. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content
providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, completely or timely. Neither Morningstar nor its content providers
are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
0
Tareno AG
Contents
Chapter 1: Who is Tareno Ltd.
Page 2
Chapter 2: Key data
Page 5
Chapter 3: Why water
Page 8
Chapter 4: Investment process
Page 14
Chapter 5: Investment topics
Page 18
Chapter 6: Fund Management Team and fund details
Page 25
1
Tareno AG
Chapter 1
Who is Tareno Ltd.
2
Tareno AG
Tareno AG
Tareno was established in the year 2000 by five finance experts as an asset
management company operating on a partnership basis.
The team has now grown to 30 persons. In addition to its Basel office, Tareno set
up a subsidiary in Luxembourg in 2005 – Tareno (Luxembourg) S.A. In 2012 Tareno
also opened an office in Zurich.
Tareno is an asset management company that operates independently of the
banks. It holds a license from the Swiss Financial Market Supervisory Authority
FINMA, is a member of the Swiss Association of Asset Managers (VSV), and is an
associated participant at SWX Swiss Exchange.
Tareno manages assets totaling some CHF 2.1 billion.
Like Tareno AG itself, Tareno Waterfund is aligned to three underlying principles:
individuality, independence, and sustainability.
Tareno AG, Basel
3
Tareno AG
The Tareno Waterfund – an investment in the future

Benefit from water as a megatrend – a strategic investment.

The investment universe consists mainly of mid-cap stocks, with a strategic exposure in the emerging markets.

Stock selection takes a bottom-up, value-oriented approach with macro thematic views.

Our industry fund is based sustainably in the areas of infrastructure, utilities, engineering, filter & separation and processing
technology.

The "purest" Swiss-registered SICAV Waterfund: We set the requirement of maintaining at least 66.7% of investments in stocks
whose income is highly dependent on the topic of water.
4
Tareno AG
Tareno Waterfund – Awards
2014
2013
Morningstar Rating
S&P Capital IQ
Gold Fund
Grading
Citywire Euro Stars «The
Guide to Europe’s 250 Top
Fund Managers» Rank 15
and 16
2015
Lipper Fund Awards
2015 Germany
Morningstar Rating
InvestmentEurope Fund
Manager of the Year
Awards 2014
InvestmentWeek Sustainable Investment Awards
2014
Citywire Rating + for Fund
Manager Josef Bollag and
Sybille Wyss
Citywire Rating A for Fund
Manager Josef Bollag and
Sybille Wyss
Morningstar Rating
5
Tareno AG
Chapter 2
Key data
6
Tareno AG
Performance per 30.11.2015
Performance R1 in EUR (indexed)
Performance (left scale)
Index
In %
Yearly performance in % (right-hand scale)
Performance R1 EUR
Benchmark: MSCI Daily Net TR World EUR
Source: Bank Vontobel AG. Past performance is not a guide to current or future performance. The performance data do not take account of the commissions and costs incurred on issue and redemption. The
return of the fund can be a result of currency fluctuations rise or fall.
7
Tareno AG
Allocation and key data per 30.11.2015
58% Large Caps
Statistics
36% Mid Caps
Alpha
0.0%
4% Small Caps
Beta
1.0
Correlation MSCI World
0.9
Volatility p.a.
15.9%
Tracking Error
7.6%
39% USA
PTR (per 30.06.14)
68.4%
11% United Kingdom
VaR (95%, monthly)
-8.8%
Number of positions
35
2% Liquidity
8% Hong Kong
6% Italy
6% South Korea
6% Switzerland
5% Cayman Islands
5% Bermuda
13% Others
1% Liquidity
8
Tareno AG
Revenues per Region
28%
EMEA
42%
AMERICAS
30%
APAC
(>14% China)
9
Tareno AG
Chapter 3
Why water
10
Tareno AG
Facts

75% of Earth’s surface is covered by water, but only
3% of the earth’s total water supply is fresh water

Agriculture is the largest consumer of water (70%)
followed by industry (20%) and residential (10%)

Every person uses an average of 2‘700 liters of
water per day (incl. sanitation, food and industrial
production of consumer goods)

To produce 1 kilogram of bread needs 1‘000 liters of
water, 1kilogram of beef needs 16‘000 liters
Water overall: 1.39 Mia km3
(Cube with a lenght of 1‘116 km)
Freshwater overall: 35 Mio. km3,
nearly 3% (Cube with a lenght of 327 km)
Useable Freshwater: 9 – 12‘000 km3, 0.0009%
(Cube with a lenght of 21.5 km)
11
Tareno AG
Poorly managed supply versus growing use

Water lost due to leakage, theft and inadequate billing practices is typically 30 – 50%

1.1 billion people still lack adequate access to reliable water supply and 2.6 billion people lack access to sanitation,
mostly in Asia in Africa

5 million people die every year from water-related illness

By 2050, untreated wastewater will contaminate one-third of global annual renewable freshwater

Industrial usage is expected to rise by 55 % by 2025
Source: sxc.hu
12
Tareno AG
Globally, water consumption is growing 2 times faster than population
growth
 World’s population has more than tripled in the 20th
century – but global water consumption has grown sixfold
 In 1995, over 400 million people lived in countries
experiencing water stress or water scarcity
 By 2025, that number is expected to rise to 4 billion –
over half the world’s population
Water stressed regions continue to spread
Demand for water rises constantly Independent of economic growth
Source: World Resources Institute, Washington, D.C.
13
Tareno AG
The global water industry
Global Spending on Water on the Rise
Globale Water Market – USD 500 bn
Forecast Compound Annual Growth Rate 2010 - 2016
10.0%
Data in bn USD
140
120
8.0%
15
15 10 10
100
6.0%
80
4.0%
60
5
60
40
2.0%
20
Growth Rate (left scale)
Spending by 2016 (bn USD)
0.0%
0
Infrastructure
Water treatment Desalination
for industrial use
Water reuse
382
Quelle: GWI, Money Morning Staff Research
 According to estimates, the water industry generates
USD 500 billion in revenue.
382 bn - Utilities
60 bn - Bottled Water
 Expenditure along the value chain is expected to grow by
between 6.5% and 9.4% up to 2016.
15 bn - PoU Equipment
12 bn - Pumps/Pipes
10 bn - Filtration
10 bn - Irrigation
 Applications in the area of industrial wastewater
treatment offer the most potential for growth.
5 bn - Metering
Quelle: Tareno Estimation 2015
14
Tareno AG
Water as a growth driver
1. Water shortages
Population growth
Industrialization
 The UN estimates the daily water requirement for
hygiene and nutrition to be between 20-50 litres.
 75% of the water used in industry can be attributed to
electricity generation.
 Roughly one in six people (894 million in total) have less
than 20 litres available per day.
 15-18 billion cubic metres of water are contaminated each
year by the production of fossil fuels.
 By 2015, there will be at least 23 cities with over 10
million inhabitants – 19 of which are in emerging
countries
 China is aiming to produce 12 million tonnes of biodiesel
by 2020. The volume of water required for this is roughly
equivalent to the amount of water that flows through the
Yellow River in a year.
 In 2025, there will be 1.8 billion people living in regions
suffering from water scarcity.
 Only 20% of all agricultural land is farmed using irrigation
systems. However, this 20% produces 40% of the world's
agricultural raw materials.
15
Tareno AG
Water as a growth driver
2. Water quality
3. Infrastructure
Households
 Less than 35% of all towns in the emerging countries
have water treatment plants.
 36% of the global population, some 2.5 billion people,
do not have access to sanitary facilities.
 Around 770 million people worldwide do not have
access to clean drinking water.
Industry
 Industrial wastewater contaminates considerably more
water than that used in the production process. One litre
of wastewater contaminates around 8 litres of fresh
water.
 22% of water extracted globally is used by industry. The
annual volume is expected to rise from 752 million cubic
metres in 1995 to 1,170 million m3 in 2025.
 Some major cities lose between 250-500 million cubic metres
of drinking water each year due to damaged pipes. This
equates to the water requirements of around 20 million
people.
 Leak rates of up to 50% are not uncommon in communal pipe
systems.
 In the US in 2010, actual investment fell short of investment
requirements by USD 54 billion. Experts believe that this
shortfall will rise to USD 84 billion by 2020, and as much as
USD 143 billion by 2040.
 25% of the world's population lives by the coast, which means
that sea water desalination is a key issue.
 Hydroelectric power accounts for 30% of the renewable
energy market. In the US, 90% of all power stations have been
in operation for more than 30 years. It is essential that
investments be made to maintain them.
 In the US, the market for water treatment products will
grow by around 6% per year up to 2017.
 A key driver here is the strict regulation by the
authorities (ballast water).
16
Tareno AG
Chapter 4
Investment process
17
Tareno AG
Investment process 1/3
Determining the investment universe
Evaluation process
Portfolio construction
Worldwide investment universe
Investment fundamentals
• Listed companies only
• Companies related to the water industry
• Minimum market capitalisation: USD 100 m
Investment universe 250 «water»-Companies
18
Tareno AG
Investment process 2/3
Determining the investment universe
Evaluation process
Portfolio construction
250 «water» companies
Fundamental
analysis
Selection
Subindustry
Technical
analysis
- quantitative
- qualitative
 Scoring-Model
 Economic cycle
 Tareno Water index
 Momentum
 Scoring-Model
80 «water» companies
19
Tareno AG
Investment process 3/3
Determining the investment universe
Evaluation process
Portfolio construction
Tareno Waterfund
Portfolio construction
 Mid Cap Bias
 High relation to water
(we invest at least 66.7% of the portfolio in
companies which derive 50% or more of their
revenues from directly water-related areas)
 Emerging market exposure
 Liquidity requirements
 30 to 50 items
20
Tareno AG
Chapter 5
Investment topics
21
Tareno AG
Who actually uses water – and what for?
WATER CONSUMPTION
10%
20%
70%
70% Agriculture
70% AGRICULTURE
53% Livestock farming
16% Crops
9% Fruit
9% Coffee, tea, tobacco
8% Edible oil
5% Sugar
20% Industry
10% Households
20% INDUSTRY
10% HOUSEHOLDS
60% Mining
29% Showers
15% Oil & gas
25% Garden
9% Chemistry
8% Textiles
8% Miscellaneous
14% Washing
12% Toilets
10% NRW
10% Cooking /
drinking water
Source: elcowater.org, Peer (Partnership for European Environmental Research), Government of Australia, www.go-green.com
22
Tareno AG
Investment topics
End markets
• Industry
• Construction
industry
Zero liquid
discharge
Process water
Filtration
Sanitary
facilities
Pipelines
Real estate
Separation
Treatment
Efficient
irrigation
• Agriculture
Supply
Transport
• Public sector
23
Tareno AG
Investment topics – Industry
•Industry
Ballast water is taken on board ships to provide stabilization and guarantee seaworthiness during
unladen journeys. The water is loaded into ballast tanks or into the empty space between the two hulls
of double-hulled ships.
Organisms introduced from foreign ecosystems cause damage amounting to billions of dollars.
As a result of the introduction of new guidelines for the treatment of ballast water, the market is
expected to grow from USD 200 million today to around USD 5 billion by 2017.
Around 50,000 ships will need to be treated, which represents a major logistical challenge.
Ballast water undergoes various filtration steps. The tiniest microorganisms are finally neutralized with
UV radiation.
Source: hasenpusch-photo.de
Source: flickr / Gemma Grace
Source: Hyde Marine Inc.
Source: atg UV Technology
24
Tareno AG
Investment topics – Construction
•Construction
The US housing market is emerging from its trough.
Applications for construction approvals are on the rise (803,000 in August 2012, +25% compared to the
previous year).
August 2012 saw the start of construction for 730,000 new houses, which is equivalent to a year-onyear increase of 30%.
The manufacturers of sanitary facilities are required to design their products efficiently when it comes
to water consumption.
Particularly sought after in this area are the products of Watts Water, Pentair, A.O. Smith and Geberit.
Private houses are increasingly being fitted with "intelligent" electricity, gas and water meters.
Source: Geberit / Medien
Source: A.O. Smith
Source: Itron
Source: Watts Water
25
Tareno AG
Investment topics – Public sector
Ensuring the water supply involves mastering a number of major challenges. Pipeline infrastructures are
frequently outdated and in need of renewal.
In large parts of the world, this infrastructure has yet to be put in place.
•Public sector
For regions suffering from water scarcity, alternatives need to be found, such as seawater desalination,
for example.
The treatment of water is also becoming increasingly important.
Investment has been reined in due to squeezed budgets, but the pressure is continually on the rise.
Companies active in this sector include American Waterworks, Manila Water, Beijing Enterprises,
Sembcorp, Hyflux, Xylem and KSB.
Source: Energy Recovery
Source: US Army Corps of Engineers
Source: Andritz
Source: YSI Inc. / Xylem Inc.
26
Tareno AG
Investment topics – Agriculture
Agriculture is the largest consumer of water; more than 70% of consumption is accounted for by this
sector.
The use of gravity-flow irrigation remains the most common method of irrigation – out of some 563
million hectares of irrigated land, only 8% is irrigated with efficient systems.
•Agriculture
Out of some 220,000 sprinkler devices installed in the US, 50% are more than 10 years old and in need
of replacement.
Persistently high prices for agricultural commodities are driving further investment on the part of
producers.
The market leaders in the area of sprinkler devices are the US companies Valmont and Lindsay.
Source: Getty Images.ch
Source: Lindsay Corp.
Source: Lindsay Corp.
Source: Lindsay Corp.
27
Tareno AG
Chapter 6
Fund Management Team and fund details
28
Tareno AG
Fund Management
Joseph U.
Bollag
Fund Manager
since inception
External Research
Janney Montgomery Research
Group
Robert W. Baird Ltd.
Research Group
Sybille
Wyss
Co-Fund Manager
since inception
Boenning & Scattergood Inc.
Raiffeisen Centrobank AG
Research Group
Stefan
Schütz
Analyst
since inception
Oddo Securities
DBS Vickers Securities (UK) Ltd.
Olivier
Schmitt
Fund Trading
since May 2012
Tamara
Jovanovic
Fund Trading
Since July 2013
29
Tareno AG
Tareno Waterfund – Advisory Board
Top-class Advisory Board with experts from both research and industry:
Albert M.
Baehny
Andrew
Seidel
Prof. Dr. Rik
Eggen
Chairman of the Board of Geberit, former CEO of
Geberit
CEO and Chairman of the Board of Directors of
Underground Solutions Inc.; former CEO of US-Filters
Deputy Managing Director of Eawag
30
Tareno AG
Tareno Waterfund – fund details per 30.11.2015
Share class
R1 EUR
W EUR
R1 H CHF
W H CHF
R1 USD
W USD
Inception date
10.09.2007
06.01.2008
03.01.2013
03.01.2013
19.12.2014
19.12.2014
Launch price
100.00
94.62
100.00
100.00
100.00
100.00
Currency
EUR
EUR
CHF
CHF
USD
USD
Hedged
No
No
Yes
Yes
No
No
Share class volume
57.0 m
46.2 m
7.7 m
21.5 m
0.6 m
8.2 m
Net asset value
173.56
185.61
148.15
151.61
99.29
100.04
First subscription minimum
EUR 1
EUR 100’000
CHF 1
CHF 100’000
USD 1
USD 100’000
Subsequent subscr. minimum
none
none
none
none
none
none
Management fee
1.8%
1.0%
1.8%
1.0%
1.8%
1.0%
Valor
3381228
3381232
20252456
20252495
26140330
26140338
ISIN
LU0319773478
LU0319773635
LU0866520306
LU0866532574
LU1143080999
LU1143081534
31
Tareno AG
Tareno Waterfund – fund details per 30.11.2015
Data
Fund type
Luxemburg SICAV – UCIT IV
Categorie
Sector fund
Domicile
Luxemburg
Fund size in EUR
138.3 m
Investment Manager
Tareno AG
Management Company
Vontobel Management S.A.
Auditors
Ernst & Young S.A.
Custodian
RBC Investor & Treasury Services
Administrator
RBC Investor & Treasury Services
Subscription / Redemption
daily at NAV
Performance fee
none
Registration
CH, LUX, AUT, DE, LI, FR & ES
32
Tareno AG
Contact
Tareno AG
Josef Bollag
Sybille Wyss
Switzerland
St. Jakobs-Strasse 18
CH - 4052 Basel
Phone
Fax
+41 (0)61 282 28 00
+41 (0)61 282 28 28
EMail
[email protected]
[email protected]
Internet
www.tareno.ch
www.tareno-waterfund.com
33
Tareno AG
Disclaimer
Sources:
Getty
stockfreeimages.com;
sxc.hu;Bilder
flickr /stammen
Gemma Grace;
hasenpusch-photo.de;
Marine Inc; atg
UV Technology; Geberit / Medien; A.O.
DieImages.ch;
in der Präsentation
verwendeten
aus folgenden
Quellen: Hyde
trinkwasser.ch;
au-schoppernau.at;
Smith;
Itron; Watts Water;d-pixx.de;
US Army Corps
of Engineers; Andritz;
YSI Inc. / Xylem Inc;; Lindsay Corp;
internetgarden.de;
wasser-info.ch;
basisches-ionisiertes-wasser.de;
e-costinha.ch; foto.germanblogs.de;
World
Resources Institute,
Washington,fotogemeinschaft.de;
D.C; elcowater.org, Peersxc.de;
(Partnership
for European Environmental
Research), Government
of Australia,
www.govitavortex.com;
aura-klang.at;
readersdigest.ca;
fotogemeinschaft.de;
april-design.de;
wassergreen.com;
Environmental Business
Journal, Frost &|shakesby.net
Sullivan, Global Water
Intelligence; World|Bank,
Center for Strategic
International
Studies,
UNICEF;
hilft.de |acecrc.sipex.aq
|tobiaspfau.de
|weidner-waser.de
fontaene.de
| Worldand
Bank,
Center for
Strategic
Center
Strategic andStudies,
International
Studies,
UNESCO,
Aspen Institute,
U.S. GAO, World
Water Council
; Goldman
ITT Industries,
McKinsey,
and for
International
UNICEF;
Center
for Strategic
and International
Studies,
UNESCO,
AspenSachs,
Institute,
U.S. GAO,
World Nalco,
Stanford
Research, US Filter
estimates;
Company
WaterGlobal
IndustryWater
Equity Intelligence,
Bulletin (Stanford
Washington
Research
Group), September
WaterWashington
Council ; Environmental
Business
Journal,
Frostreports,
& Sullivan,
Goldman
Sachs,
ITT Industries,
2005;
Bloomberg;
McKinsey,
Nalco, Stanford Washington Research, US Filter estimates; Company reports, Water Industry Equity Bulletin (Stanford
Washington Research Group), September 2005; Bloomberg |
Past performance is no guarantee of future trends. The performance data do not take account of the commissions and costs incurred on issue and
Die historische Performance stellt keinen Indikator für die laufenden oder zukünftige Performance dar. Die Performancedaten
redemption.
lassen die bei der Ausgabe und Rücknahme der Anteile erhobenen Kommissionen und Kosten unberücksichtigt |
This information has been furnished to you upon request and solely for your information and may not be reproduced or redistributed to any other person.
It is not intended as an offer or solicitation with respect to the purchase or sale of shares of the Sicav. Please be aware that investment funds involve
investment risks, including the possible loss of the principal amount invested. For a detailed description of the risks in relation to each share in the
investment fund, please see the prospectus.
Investements of the Luxemburg Variopartner SICAV-Tareno Waterfund should be made due to the fund's latest prospectus, the statutes, the latest annual
report and, if applicable, the half-yearly report. These documents are available free of charge from the domicile of the fund at 33, rue Gasperich, L-5826
Hesperange, Luxemburg, or from Vontobel Fonds Services AG, Dianastrasse 9,
CH-8022 Zürich, Switzerland and Bank Vontobel AG, Zürich, Switzerland.
34