As more municipalities turn to private capital to modernize their aging infrastructure, investors like Marcus Siezing, CIO and co-president of the Dillon Trust Company, are increasingly targeting water-related investments, from utilities to efficiency technologies to land rights—despite it being “a politically sensitive area to make money in.”
“We continue to educate ourselves in water,” Siezing told Institutional Investor. “We look at everything from water technology to … land rights.”
Seizing, who oversees Keswick Management, the family office that manages the investments and legacy assets for the Clarence Dillon family and trust, is evaluating a range of companies in the sector, from water efficiency companies — e.g., firms that provide water conservation, rainwater drainage, leak detection, and treatment technologies — to water utilities and land rights.
This move from the Dillon Trust comes at a time when underinvestment in water and wastewater is providing possible entry points for allocators, according to a new report from Mercer. Goldman Sachs notes that while commercial water markets are growing and seeing innovation, the world is facing worsening shortages that are becoming more acute, widespread, and prolonged.
This long-term investment theme for Dillon sprang from its agricultural operations. As part of its farmland play, the family office had been looking into rainwater drainage, land rights, and fertilizing machinery. “Any business where water is an input in your operations is good risk management,” said Siezing.
Now, Siezing is considering other opportunities like rainwater storage and plumbing technologies for cities, though some municipalities don’t allow private companies to provide rainwater collection. “So, there are some issues,” he admitted.
A “Politically Sensitive” Asset Class
The finalist for II’s family office investor of the year award admitted that investing in this asset class is “a politically sensitive area to make money in.” In addition to the municipal issues, he also noted that no politician is simply going to give private investors carte blanche to profit from controlling water rights.
Keswick Management provides tax accounting, compliance, supporting investments, and tax legal planning for the Dillon family, but not concierge services (“We don't stock the fridges and all of those little things,” Siezing clarified. “The family members do that themselves”). The 20-person entity, which has four on the investment team day-to-day, works with some outsourced service providers and investment managers.
“Coming from Northern Sweden, I describe our job like a hockey lineup: Our job is to make sure we have the best players on the ice at any time,” he said.
