Key topics and selected invest­ment oppor­tu­ni­ties in the water sector for 2026

2025 was a challen­ging year. Uncer­tainty about geopo­li­tical develo­p­ments and trade relations weighed on the invest­ment environ­ment. This was felt by many service and techno­logy provi­ders in the water sector, both in terms of results and share prices. However, the global water sector remains struc­tu­rally attrac­tive. Regula­tory requi­re­ments, the repla­ce­ment of ageing infras­truc­ture, climate adapt­ation and the incre­a­sing demand for water in industry and digita­lization are driving invest­ment along the entire value chain.

The end markets for water, construc­tion, industry, agricul­ture and the public sector are certainly cyclical. However, the decisive factor is that the headwinds are never struc­tural. The small-scale nature of the sector, which has a strong regional and national character, means that these cycles repea­tedly open up attrac­tive invest­ment oppor­tu­ni­ties. For long-term investors, this results in oppor­tu­ni­ties based on funda­mental trends.

Infras­truc­ture: Clean water as a global priority

The global demand for clean drinking water is constantly incre­a­sing. Popula­tion growth, urbanization and incre­a­sing water stress mean that large-scale water infras­truc­ture projects are becoming more and more important.

An example of this is Webuild a global leader in the field of large-scale water infras­truc­ture projects. Under the term “Clean Water”, the company bundles activi­ties such as the construc­tion of desali­na­tion plants and modern waste­water treat­ment plants in various parts of the world. This area is becoming incre­a­singly strate­gi­cally important for Webuild and now accounts for around 25% of incoming orders.

The trend towards invest­ment in clean water is there­fore clearly intact. It is driven not only by the struc­tural increase in demand, but also by govern­ment invest­ment programs and stricter regula­tory requi­re­ments. For compa­nies with technical exper­tise, project experi­ence and a global presence, this creates long-term growth oppor­tu­ni­ties, parti­cu­larly in the area of efficient, safe and sustainable water infras­truc­ture.

Building and climate resili­ence: protec­tion against extreme weather events

The increase in heavy rainfall, flooding and droughts is bringing the issue of climate resili­ence incre­a­singly into focus. Invest­ments in rainwater manage­ment and sustainable drainage systems are central to this.

Advanced Drainage Systems is the market leader in storm­water manage­ment in the USA. Many industries incre­a­singly need to use rainwater harve­sting systems to reduce their depen­dence on scarce municipal water resources. The company benefits from this trend in the long term.

Another relevant player is Georg Fischer. The company is often mista­kenly perceived as a tradi­tional pipe manufac­turer, but actually has a techno­lo­gical edge in fittings, valves and control systems. These are key compon­ents that are crucial for efficient, safe and durable water networks.

Data centers and digita­lization: water as a key resource

The growth of data centers remains a key issue, parti­cu­larly in the USA. Digita­lization, cloud compu­ting and artifi­cial intel­li­gence are driving the expan­sion of infras­truc­ture and there­fore also the need for water for cooling, fire protec­tion and treat­ment.

Here we see oppor­tu­ni­ties at ANDRITZ a global market leader in water treat­ment, especi­ally in the areas of sludge treat­ment and waste solutions.
The US pump manufac­turer Gorman-Rupp has an undere­sti­mated exposure to data centers and AI appli­ca­tions. Among other things, the company supplies pumps for fire protec­tion systems and liquid cooling systems.

Will data centers dry up the world?

This question is often asked. The short answer is: No.

Although the water requi­re­ments of data centers are estimated to be around 1,000 million cubic meters per year by 2030, this amount is manageable in a global context.

For compa­rison:

• The currently largest desali­na­tion plant(Shoaiba in Saudi Arabia) can produce this amount of water within a year.
• This amount of water flows through the Rhine near Basel in around 11 days.
• The Great Lakes evapo­rate this amount of water within about 60 hours.
• The daily preci­pi­ta­tion on land masses corre­sponds to this amount in around 5 minutes.

The decisive factor is there­fore not the absolute quantity of water, as the global water supply remains constant. Rather, it is about efficient use, treat­ment and distri­bu­tion – and it is precisely in these areas that the Tareno Global Water Solutions Fund makes targeted invest­ments. Because: “Water scarcity is not a law of nature, but the result of a lack of infras­truc­ture – and that is precisely why it is investable.”

Conclu­sion: Think long-term. Invest in a targeted manner.

The water sector remains charac­te­rized by long-term struc­tural drivers: Infras­truc­ture needs, climate adapt­ation, urbanization and digita­lization. The Tareno Global Water Solutions Fund will continue to focus on compa­nies that impress with their techno­lo­gical exper­tise, market leader­ship and robust demand prospects.

Our approach remains unchanged: long-term thinking, disci­plined invest­ment and targeted invol­vement in areas where water solutions create sustainable economic and social added value.