Recent merger and acquisition activity within the water sector has indicated that there are a number of opportunities for investors within the industry, it has been claimed.

Martin Cholwill, manager of the Royal London Equity Income Trust, said that the takeover approach for Kelda Group revealed that the value of the proposed transaction of the firm is “broadly in line” with earlier deals

The takeover also suggested that “there is more to go for in the quoted water sector”, Mr Cholwill said, adding that Kelda’s “operational excellence” is likely to be appealing to infrastructure funds.

Meanwhile, Pennon’s water and waste management business offers “strong growth potential” but Severn Trent’s problems with the industry’s regulator does not make it an attractive investment, he suggested.

In related news, Simon Chinnery, client advisor of UK institutional business at JP Morgan Asset Management, recently suggested that infrastructure assets were becoming increasingly “mainstream” investments.

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