By Chanyaporn Chanjaroen
Aug. 27 (Bloomberg) -- FourWinds Capital Management, which manages about $1.4 billion in natural-resource funds, started a private-equity fund investing in waste-management companies.
The Waste Resource Fund began this month with $40 million, Chris Armitage, the U.K. head for the Boston-based firm, said Aug. 25 in an interview in London. The fund has three local- government pension funds, from the U.K. and Norway, as investors, he said.
“We’re looking at innovative ways to make money in more than one way from a waste business,” said Armitage, who spent more than 20 years in pension management before joining FourWinds in 2006. The new fund will buy stakes of 25 percent to 40 percent in existing companies to help them expand, he said.
Waste-management companies are drawing investors as more governments act to promote recycling, curb landfills and protect the environment. Waste Management Inc., the biggest U.S. trash hauler, tried to buy Republic Services Inc. before scrapping its bid in October. Biffa Ltd. was bought in April 2008, less than two years after U.K. water company Severn Trent Plc spun it off.
“The opportunities are enormous for companies investing in areas where there is supply constraint, such as landfill, and strong demand, because of population growth and increasing wealth,” Armitage said.
The 41-company Bloomberg World Environmental Control Index added 7.1 percent this year, led by Rino International Corp., a Chinese maker of wastewater treatment equipment. The shares have jumped almost fourfold.
Still, Paris-based Suez Environnement SA, Europe’s second- biggest water company, reported a 13 percent drop in first-half profit yesterday after the world recession curbed demand for waste collection and treatment.
FourWinds may introduce another fund investing in waste- management infrastructure, Armitage said.
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