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- Vysarn (ASX:VYS) creates Vysarn Asset Management as part of a corporate expansion strategy
- The company has appointed a former JP Morgan executive to head the entity
- Vysarn is seeking to enter the lucrative but controversial water trading market
- VYS listed on the ASX in 2019 and weathered COVID-19 fairly well
- Shares last traded at 19 cents
Mine dewatering and water engineering solutions player Vysarn (ASX:VYS) has today announced the creation of a new asset management division under its corporate umbrella, called Vysarn Asset Management (VAM).
In two words, Vysarn has its eye on one market: water trading.
“By leveraging the company’s extensive in-house intellectual property VAM intends to target investment opportunities in water, infrastructure assets and associated opportunities to control, own and toll water,” the company wrote on Friday.
Former JP Morgan exec at the helm
To get the company there, Vysarn has appointed a heavy-hitter Managing Director, former JP Morgan Executive Director Richard Lourey.
Mr Lourey has worked for the world’s largest investment bank (since it acquired UBS) across roles in London, New York, and Melbourne. In London, he acted as Head of Asia, ex-Japan.
But Mr Lourey’s key role that Vysarn has its eyes on is his status as a mover and shaker in Australia’s water market. He established our nation’s first dedicated water fund and headed fund manager Tyndall-tied entity Australia Real Assets.
He also acted as a Director of AWARE Water, an Australian water investment company. That company advertises itself as a provider to agriculture.
Rapid growth
Australian water markets have grown rapidly over the last thirty years, according to the government regulator. A 2020-21 report estimated water market turnover in Australia was worth an eye-watering $6 billion.
Vysarn is WA-based, with a focus on WA water markets.
“Vysarn has unparalleled insight into the water opportunities and challenges in Western Australia,” Mr Lourey said ahead of his commencement in November.
“It is a privilege to be given the opportunity to realise these opportunities for the benefit of our shareholders, traditional owner partners and future investors in the Vysarn funds.”
Market not everyone’s cup of tea
But the industry is not without controversy. The east coast Murray Darling Basin water market inquiry, headed by the ACCC, caused a great stir at the time.
Ultimately, recommendations were put in place to introduce stronger safeguards protecting the resource, which prompted legislation. The government continues to prioritise the establishment of a new digital market hub.
In short, entities trade water allocation rights, which are tracked by the Bureau of Meteorology. The BOM notes that the value of the market can hit up to $7 billion.
In Australia’s largest state of WA, 4344 megalitres have been traded in the most recent data, with a volume-weighted average price of $34.49/ML.
Canberra-based Department of Agriculture noted in an April 2023 market outlook that 2023-24 year ahead pricing for the Murray Darling Basin is set to hit an average price much higher at $80/ML.
VYS shares last traded at 19 cents.
