UK's DDQ launches 6-year note for water investment

LONDON, July 28 (Reuters) - U.K-based fund manager DDQ said on Monday it has launched a 100 percent capital protected medium term note that will give investors exposure to water firms.

The note which will invest in the S&P Global Water Index .SPGTAQUA, will mature in 2014, DDQ said in a release.

"The fundamentals for water suggest rising demand and shortage of supply worldwide-creating substantial opportunities for profitable investment," said Mark Mathias, chief executive at DDQ.

"Established major water companies can benefit from the growth in privatisation of water services around the world."

DDQ said around 11 percent, or almost 700 million, of the world population is supplied by private water companies -- this is expected to reach 1.15 billion by 2015.

"Investors can benefit from the huge investment in water infrastructure needed in both developed and developing countries."

DDQ said demand for clean water will be a dominant theme for years to come, and the imbalance between demand and supply will create profitable investment opportunities.

"Only 2.5 percent of all the water on the planet is fit for human use. During the twentieth century we witnessed a marked increase in water use, due in part to population growth."

Rising demand for food will lead to greater use of water in agricultural irrigation, it said.

Increased urbanisation in countries such as China and India and rising incomes in developing countries will spur changes in consumption habits, DDQ said.

"A deficient and ageing water supply and water treatment infrastructure requiring substantial government-supported investment. Major water companies are well placed to benefit from this investment."

Top 10 constituents of the S&P Global Water Index include France's Veolia Environment (VIE.PA), London-listed-based United Utilities (UU.L), U.S.-based Danaher Corp (DHR.N) and Japan's Kurita Water Industries (6370.T).

(Reporting by Pratima Desai; editing by Clare Black)