Water infrastructure is under immense pressure due to a mixture of forces, including climate change, urban population growth, aging infrastructures, rising costs and tightening budgets. Together, these increase the strain on water utilities.

Because they perform a dual role, water systems are a special kind of infrastructure, providing water services while also reducing risks to other services from natural hazards such as floods and droughts. For investors, this, combined with the slew of big predicaments facing water systems, can create new business opportunities.

David Grumhaus, president and CEO of Duff & Phelps Investment Management, is seeing a large amount of activity related to enhancements to water infrastructure systems, “whether these are new systems being built — not something that happens a lot in the United States — or existing systems being rebuilt or upgraded,” he says.

These changes are trying to address a handful of big issues, inclu