Pathfinder had launched its global water fund, which would raise between $40 million and $50 million from investors to invest in international, regional, thematic and specialised water indices, he said.
The indices comprise companies, ranging from utilities to industrial, that service the water industry in activities such as water filtration, storage, distribution and irrigation.
Pathfinder would invest in 64 different companies in 17 countries, Mr Brownsey said.
One of the investments, sixth-largest on the list, would be in Valmont Industries, of Nebraska.
Valmont made Valley Irrigation equipment, the large radial irrigators seen on the drive north to Christchurch, he said.
Pathfinder was also investing in a Singapore company which made membranes for desalination plants in Asia and the Middle East.
Other investments included some in companies providing water and removing waste water commercially.
"Water is a global commodity. You can't have sustainable development without water access."
There were no companies in New Zealand in which Pathfinder could invest, but the fund would consider any opportunities here. Most companies were publicly owned by local or central government.
There were two prongs to the future of the global water industry, Mr Brownsey said.
In countries like China, India and Southeast Asia, forecast huge increases in the population meant water would become scarce without a better use of the resource.
In Western countries, infrastructure was old and needed updating.
It was estimated the United States lost 26.5 billion litres of clean drinking water daily from leaky pipes.
The United States needed to spend $US51.6 billion ($NZ72.1 billion) a year on water infrastructure for the next 20 years, Mr Brownsey said.
Globally, $US576 billion a year was spent on water infrastructure and that was estimated to exceed $US1 trillion a year by 2025.
Water indices had typically outperformed leading international market indices and Pathfinder believed its fund would be no exception, Mr Brownsey said.
The fund's benchmark would be the Dow Jones Global Developed Index, representing broad international equity exposure to the world's developed markets.
There were at least 10 examples of international, regional or specialised water indices, including the Standard and Poor's Global Water Index, the Palisades Global Water Index and the Palisades US Water Index, Mr Brownsey said.
In the past six years, those three water indices had outperformed the global equity benchmark on average about 5% a year.
"Now globally regarded as a strategic asset, the demand for water is escalating due to growth in the global population, farming intensity, agricultural practices and infrastructure needs.
"This fund gives investors access to that demand, while providing a diversified investment by tracking not just one index but a family of water industry indices."
Diversification helped reduce volatility of returns.
The perception of water being abundant was incorrect, he said.
About 97% of all water on earth was salt water and a further 2% was locked in ice, he said.
Only 1% was fresh water and that had to be distributed to a world population of 6.9 billion people.
Of the fresh water used by humans, more than 70% was used in agriculture.
It took 1300 litres of water to produce one kilogram of wheat and 1000 litres of water to produce one litre of milk, Mr Brownsey said.
Industry was also soaking up the water supply as living standards in developing countries rose.
The fund would use an active, rules-based currency hedging programme to manage the exchange rate risk that New Zealand investors assumed by investing in offshore companies, Mr Brownsey said.
Investments would be made in US dollars.
Water also proved to be topical this week with the Government.
Agriculture Minister David Carter warned those attending the Irrigation New Zealand conference they should not believe they would get unfettered rights to irrigate without considering environmental effects.
"Yes, there are good examples where environmental enhancement has been built into the design of irrigation schemes. There are some excellent examples of schemes proactively managing the effects of land-use intensification," Mr Carter said.
"But we also have some very poor press on this issue. You and I have a responsibility together to gain and retain the community's trust."
Every time a dairy farmer was in the news for an effluent discharge breach, that trust was eroded, Mr Carter said.
He expressed "deep disappointment" at the results of the Dairying and Clean Streams Accord snapshot report for effluent management.
Fresh water was the greatest competitive advantage New Zealand had. A huge amount of rain fell on New Zealand's landmass. Even with the variations of climate change, it was likely New Zealand would receive more rain rather than less in the future, he said.
Unfortunately, Niwa research suggested the additional rainfall was likely to come at times it was not wanted. Southland this week was an example of that.
"Right now, a considerable part of the country is dealing with drought. The fact rain doesn't fall in the right place at the right time means we must store it. This to me is obvious. But water management is not only about storage. It is about efficient distribution, better allocation and better utilisation."
Mr Carter pledged to push the water agenda and deliver it with the message of long-term economic growth. But it would not be a case of "irrigation at any cost", he said.
GLOBAL WATER FUND
> Manager: Pathfinder Asset Management.
> Target: $40 million to $50 million within 18 months.
> Fees: 1.3% per annum, which includes all costs. No performance fee. Executive directors investing six-figure sums in the fund.
> Chairman: Sandy Maier.
