Who owns your water and how they’ll try to keep it

If water privatisation is ended, one group in particular is going to lose out: the water companies’ shareholders. Safe to assume then, that they’ll be at the front of the pushback against such a move.

So who are they? And how can they protect their position?

We’ve mapped out the ownership of both the nine regional companies and the overall national system, so you can find out which billionaire, bank, investment fund, foreign government or pension fund is cashing in each time you take a shower of drink a glass of water.

Click on the name of your water company to find out who it is owned by:

Anglian Water Northumbrian Water Severn Trent South West Water Southern Water Thames Water United Utilities Wessex Water Yorkshire Water

Many investors own stakes in more than one company. The table below brings those together and weights investors’ stakes by the value of the various water companies, which differ significantly in size. This shows the biggest water profiteers in the country as a whole and may be useful to people looking to link up local campaigns. Our research, conducted with the GMB union, has found that overall just 20 investors own almost two thirds of the supply.

Click here to jump straight to analysis below the table of who owns your water and how they may move against threats to their investments.

Top 20 water shareholders

ShareholderCountryWater companyTotal proportion of water industry held (%)Description
CK HutchisonCayman IslandsNorthumbrian, Southern7Multinational conglomerate run by family of Li Ka Shing
Ontario Municipal Employees Retirement System (OMERS)CanadaThames6Pension plan for public sector workers in Ontario, Canada
YTL CorporationMalaysiaWessex5Multinational conglomerate run by Yeoh family
Canada Pension PlanCanadaAnglian4Canada’s national pension fund and social insurance programme
Commonwealth Bank of AustraliaAustraliaAnglian, Severn Trent, United Utilities, South West4Bank
Government of SingaporeSingaporeYorkshire, Severn Trent, United Utilities4Sovereign Wealth Fund
Corsair CapitalUSYorkshire3Private Equity firm
Institutional investors advised by JP Morgan Asset ManagementUSSouthern3Investment funds
Deutsche BankGermanyYorkshire, Severn Trent, United Utilities, South West3Bank
LazardUSSevern Trent, United Utilities, South West3Investment fund
Universities Superannuation Scheme UKThames, South West2Pension scheme for UK university staff
Government of Abu DhabiUAEThames2Sovereign Wealth Fund
BlackrockUSSevern Trent, United Utilities, South West2Investment fund
UBSSwitzerlandSouthern, Severn Trent, United Utilities, South West2Bank
Government of ChinaChinaThames, Severn Trent, United Utilities2Sovereign Wealth Fund
Government of KuwaitKuwaitThames2Sovereign Wealth Fund
British Columbia Investment Management CorporationCanadaThames2Investment fund for pensions and insurance schemes of public sector workers in British Columbia
BT Pension Scheme (managed by Hermes)UKThames2Pension fund
HermesUKSouthern2Investment fund
New South Wales public sector pension schemes AustraliaYorkshire1Pension funds

Source: company accounts, annual reports, ownership documents and corporate databases

Click here to download a spreadsheet with the full figures and workings. Get in touch with any queries

Who are the shareholders and what power do they have?

First, we should note a couple of things we’re not doing here:

We’re not looking at tools or strategies available to people looking to end privatisation. Click here for an overview of the many, many areas that have sent companies packing in the last fifteen years.

And we’re not looking here at how the water supply should be organised – we’re just focusing on the players involved in the current, privatised system. Options range from ‘big state’ nationalisation to more local, less state-centred, supplies run by the people who use them. Click here for examples from around the world of supplies run with varying degrees of popular participation and the challenges involved.

The system Thatcher and Blair built

When we ask ‘who owns your water’, we’re really asking who owns the shares in the nine companies that provide water and sewerage throughout England (Scotland and Northern Ireland’s water supplies are publicly-run, Wales is not-for-profit – none have shareholders). This gives them control over the direction of those companies, and a right to receive cash returns from profits made (and how: £6.5 billion in dividends paid out between 2013 and 2017).

Thanks to the seriously radical way England’s water was privatised, the companies themselves own all the pipes, reservoirs, treatment plants and so on that together make up the water and sewerage system. Many other places just contracted out management of the system but this would have been far too half-hearted for the Thatcher government that pushed through privatisation in 1989.

To make the water companies even more attractive to global capital, the New Labour government decided in 2002 to amend the licences under which they ran the supply. As a result, the companies cannot lose those licences to a rival unless the government has given them “at least 25 years’ notice”. In the words of a paper from the University of Greenwich: “there is thus no prospect of any competition in the foreseeable future unless the laws are changed”.

This means anti-privatisation campaigns cannot just wait for the companies’ licences to end to replace them, as has happened elsewhere in the world. The current contracts have to be broken.

Added to this, the attitude of the regulator Ofwat hasn’t exactly been stringent. In the last thirty years, prices have been allowed to rise 40% above inflation.

So these companies have been extremely attractive to people looking for good investments for their cash. The big ones sit in the FTSE 100 list of biggest UK companies, valued higher than Marks & Spencer and other household names. Selling a product that everyone needs without facing any competition turns out to be a pretty good business model.

As with other privatisations, water was sold off with the spin that we could all own shares in the new companies. The ensuing ‘shareholder democracy’ would give us far more power to hold the companies accountable.

Thirty years on, almost two thirds (63%) of the overall supply is owned by just 20 organisations, each managing billions of pounds of investments across the world. In total, at least 85% is owned by so-called ‘institutional investors’. It’s not even possible for members of the public to buy shares in six of the companies as they have been bought out and taken off the stock market. Only Severn Trent, United Utilities and South West Water remain on the stock exchange (the latter through it’s owner the Pennon Group).

Let’s look at this bevy of investors in a bit more detail.

Super-rich dynasties

Northumbrian Water and Southern Water ‘customers’ will be glad to know they’ve been helping one of the richest families in the world get even richer. Sitting atop the overall list of water profiteers is CK Hutchinson group, the sprawling conglomerate run by the family of Li Ka Shing, at last count the 23rd richest person in the world. CK Hutchinson is run from Hong Kong but registered in the Cayman Islands, one of the many tax havens used by the group (click here for our investigation into their Northumbrian Water tax dodge).

Water isn’t the only UK business CK Hutchinson have cashed in on. As well as outright ownership of Northumbrian Water, plus a small stake in Southern Water, they have interests in energy (UK Power Networks, Northern Gas Networks, Wales and West Utilities), ports (Thamesport, Harwich International, Felixstowe), retail (Superdrug, The Perfume Shop, Savers) and the 3 mobile telephone network.

That gives them huge wealth but also provides a range of possible targets for campaigners looking to take back their water.

Meanwhile, anyone in Somerset or Dorset should get to know the Yeoh family. Their Malaysian-headquarted YTL corporation owns Wessex Water, among other investments in a vast investment portfolio (more details here).

The pillars of capitalism

All the investors we’re talking about here represent big capital of one sort or another. But some are really big. England’s water has attracted the biggest banks in the US (JP Morgan), Germany (Deutsche Bank), Australia (Commonwealth) and Switzerland (UBS), as well as some of the biggest money managers.

Blackrock is the world’s biggest investment fund, while Lazard, Hermes, Vanguard and the rest aren’t tiny (check the lists below to see which have stakes in your regional company). Blackrock manages assets worth around £5 trillion and has stakes in pretty much every big company and government you can think of, either through investment in company shares or corporate or government bonds (not to mention currency). Vanguard boasts around £4 trillion of wealth it manages, while Hermes’ and Lazard’s roughly £400 and £170 billion in assets aren’t too shabby.

For all their recent talk of ethical investment, they remain amoral institutions with one overriding priority: to maximise the returns to their investors. The bigger the returns, the bigger their cut. And they’re big: Blackrock’s CEO Larry Fink just joined the billionaire’s club.

Foreign governments and public pension funds

Hang on, a quarter of England’s water is publicly-owned! Well, sort of. A quarter is owned by public sector workers’ pension funds (mostly overseas), or foreign governments’ investment funds.

Pension funds managing the retirement savings of public sector workers have piled into most of England’s water companies. Most of these are from overseas, mainly Canada. The Ontario Municipal Employees Retirement System (OMERS), managing the pensions of public sector workers in the Canadian state, is the second biggest water shareholder, thanks to holding over a quarter of Thames Water, the biggest water company.

Whatever the ethics of their individual members, these are institutions that owe their financial success to sound capitalist principles. OMERS, for example, is a huge global investor that prioritises returns for its members. They also own ports across the UK, London’s City Airport, Scotland’s gas distribution and Camelot, the National Lottery operator. Each business is characterised by maximising profits and aggressive tax avoidance schemes that channel money offshore.

Public sector workers in the Canadian state of British Columbia also own a stake in Thames, while their counterparts in the Netherlands and the Australian state of New South Wales hold chunks of Thames, Severn Trent and Yorkshire Water.

Closer to home, local government pension funds in Greater Manchester, London, West Yorkshire, Merseyside and Lancashire together own 7.5% of Anglian Water (which provides to the East of England).

Taking their stakes without compensation would necessarily reduce the value of these pensions. Not necessarily a reason against doing that, but an issue to consider and prepare for.

Meanwhile, the UK state may not want much to do with England’s water, but others are only too keen to get in on the action. The Sovereign Wealth Funds of Singapore, China, Abu Dhabi and Kuwait all have stakes in companies, while the fourth biggest shareholder overall is the Canadian Plan Investment Board, the state-appointed social insurance programme.

Rounding out the list of the top 100 (detailed in the spreadsheet linked to above) are other, private, pension funds, plus the Universities Superannuation Scheme, which manages the retirement savings of UK university staff and which has a stake in Thames Water.

What’s the damage?

How valuable are the stakes this motley crew of investors hold? That depends on who you ask.

Estimates by the Social Market Foundation, in a report commissioned by four of the water companies, are predictably high – up to £44 billion across England. That’s based on what they would receive for them if they sold them willingly to other investors.

The We Own It campaign group, on the other hand, reckon they should be worth zilch, arguing that investors should receive no compensation, given the amount they have made over the years.

It’s a crucial question as paying shareholders the full whack they demand could damage the financial viability of the new service. We’re talking big money, especially when you start to combine investors’ stakes in different companies. At the top of the table, Li Ka Shing’s CK Hutchinson Holdings’ total holdings come to around £3 billion, taking into account stakes in both Northumbrian and Southern Water, for example.

To be clear: the figures below do not show the ‘real’ value of shareholders’ investments, simply what they feel their stakes are worth, and what they may demand if privatisation is ended (and of course, such demands can be resisted or negotiated).

Top twenty shareholders’ stakes in the overall, national supply, using valuation method favoured by water companies**

ShareholderValue (£ billion)
CK Hutchison3.1
Ontario Municipal Employees Retirement System (OMERS)2.6
YTL Corporation2.2
Canada Pension Plan1.8
Commonwealth Bank of Australia1.8
Government of Singapore1.6
Corsair Capital1.4
Institutional investors advised by JP Morgan Asset Management1.4
Deutsche Bank1.3
Lazard1.3
Universities Superannuation Scheme 1.1
Government of Abu Dhabi0.9
Blackrock0.9
UBS0.9
Government of China0.9
Government of Kuwait0.9
British Columbia Investment Management Corporation0.8
Hermes (BT Pension Scheme)0.8
Hermes Investment Management0.7
New South Wales public sector pension schemes 0.6

Tooling up

Shareholders are not likely to give up their water cash cow without significant compensation – or at least without a fight. So what do the shareholders have in their armoury? Let’s assume the usual tools that big corporations can call on for support in protecting their interests.

To start with, there are significant protections for shareholders in UK and EU law, and between them the companies and their owners must have some pretty slick corporate lawyers.

They’ll also have large political contact books ranging across the parties. Supportive think tanks and market analysts have already been trying to pick apart arguments made for ending privatisation.

And the regulator Ofwat is a product of privatisation. It was established in 1989 and is an integral part of the system. Whatever form a new service took, the role of Ofwat, if it still existed, would change significantly. As such we can assume it won’t be too keen on it ending, especially as it is currently chaired by Jonson Cox, the former boss of Anglian Water.

And if they face mass protests, as has happened elsewhere in the world. the companies and their owners will also be counting on support from the police and state security services .

And given some of the investors are themselves states, diplomatic trade-offs could also come into play.

More specific remedies that may be available:

Foreign treaties

Over three quarters of the shareholders of English water are based overseas. In many ways that’s by the by. What does it matter if the person ripping you off for your water is British or not?

But being based outside the UK can provide legal remedies unavailable domestically. So-called Bilateral Investment Treaties protect the rights of investors from one state investing in another. The UK has been a keen advocate of these (full list here) .

One notorious example of the consequences of these treaties was tobacco giant Philip Morris suing the government of Uruguay after it tried to restrict cigarette marketing, using a treaty signed between the US and Uruguay.

And they have been used to protect water profiteers too. Anglian Water was among a group of companies that used a Bilateral Investment Treaty to demand multimillion pound compensation after Argentina froze water rates following its 2001-2 financial crisis.

These treaties work both ways. Looking at the shareholders lists again, CK Hutchison Holdings Limited, YTL Corporation Berhad and the Sovereign Wealth Funds of Abu Dhabi and China may have access to such a treaty through the relevant country.

The newly-signed CETA deal between the EU and Canada also contains investor protection mechanisms, as, presumably, would any post-Brexit trade deals with the EU or the US. In such scenarios almost all of the major shareholders would have access to such mechanisms to delay things in courts for as long as possible.

Market power

As we’ve seen, English water is owned by a variety of big players in the global economy. How would they use their financial muscle? Many of the investment funds invest huge amounts in company and government bonds.

In the current economic context, a post-privatisation supply would likely look to fund itself by borrowing from the capital markets. But that would mean trying to raise capital from many of the same funds that are currently water company shareholders. Would Blackrock and the others play ball? Or would they refuse to lend, or demand higher interest rates – and tell colleagues in other funds to do the same? That would have knock on effects for the cost of the new supply.

Hands on the reins

A great strength of the companies’ position is they have control of the system. An obvious point, but it allows them to up their game whenever privatisation is questioned. Facing rising criticism, companies and the regulator have recently agreed to hold prices steady – or in some cases lower them – over the next five years. Shareholders of some of the companies, notably Thames Water, have even agreed to forgo dividends for the moment. How long this restraint lasts remains to be seen.

Who else is in the game?

Shareholders are just one of the groups that would lose out from an end to privatisation. Company management would fight hard to keep their social status and outsized pay packets (nine water CEOs made £58m in the five years between 2013 and 2017). So toowould the various analysts and trade bodies that have made their living from the water and sewerage ‘market’ over the last thirty years. Suppliers to the industry too.

England’s water supply is infamously loaded with debt as companies have funded investment by borrowing more. Anti-privatisation campaigns also need to consider how the banks and investment funds that currently lend the companies money would react to moves to end privatisation. What compensation could they demand, and how willing would they be to lend to the new supply? Similar questions arise to those in the market power section above, especially as some of the lenders may be the same institutions that own shares in the companies.

Individual company ownership tables

Anglian Water

ShareholderType of investorCountryProportion held (%)
Canadian Pension PlanPension fundCanada33
28 Australian pension funds advised by IFM investorsPension fundAustralia32
Commonwealth Bank of AustraliaBankAustralia20
Dalmore CapitalInvestment fundUK8
Greater Manchester, Lancashire County, London, Merseyside and West Yorkshire Local Government Pension FundsPension fundUK8

Click here to go back to the top of the report

Northumbrian Water

ShareholderType of investorCountryProportion held (%)
CK HutchisonMultinational conglomerateCayman Islands80
Li Ka Shing FoundationCharity FoundationHong Kong20

Click here to go back to the top of the report

Severn Trent***

ShareholderType of investorCountryProportion held (%)
BlackrockInvestment fundUS7
LazardInvestment fundUS5
Legal & GeneralFinancial services companyUK4
VanguardInvestment fundUS3
Standard Life AberdeenInvestment fundUK3
Maple-Brown AbbottInvestment fundAustralia3
InvescoInvestment fundBermuda2
Deutsche BankBankGermany2
State Street CorporationInvestment fundUS2
Government of NorwaySovereign Wealth FundNorway2

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South West Water***

ShareholderType of investorCountryProportion held (%)
LazardInvestment fundUS10
Banque PictetBankSwitzerland6
BlackrockInvestment fundUS5
Ameriprise FinancialFinancial Services companyUS5
Capital GroupInvestment fundUS5
Rare InfrastructureInvestment fundAustralia5
AxaFinancial Services companyFrance5
UBSBankSwitzerland4
InvescoInvestment fundBermuda4
Legal & GeneralFinancial Services companyGB3

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Southern Water

ShareholderType of investorCountryProportion held (%)
UBSBankSwitzerland22
Institutional investors advised by JP MorganInvestment fundUS40
Motor Trades Association of Australia and Prime superannuation funds, managed by Whitehelm CapitalPension fundAustralia8
HermesInvestment fundUK21
Ck HutchinsonMultinational conglomerateBermuda5
Unknown “infrastructure investment companies”Investment fundUnknown5

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Thames Water

ShareholderType of investorCountryProportion held (%)
Ontario Municipal Employees Retirement System (OMERS)Pension fundCanada27
Universities Superannuation Scheme (USS)Pension fundUK11
Government of Abu DhabiSovereign Wealth FundUAE10
Government of KuwaitSovereign Wealth FundKuwait9
British Columbia Investment Management CorporationPension fundCanada9
BT Pension Scheme (managed by Hermes)Pension fundUK9
Government of ChinaSovereign Wealth FundChina9
QICInvestment fundAustralia5
Fiera InfrastructureInvestment fundCanada5
Stichting Pensioenfonds ABPPension fundNetherlands4
Stichting Pensioenfonds Zorg en WelzijnPension fundNetherlands2

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United Utilities***

ShareholderType of investorCountryProportion held (%)
LazardInvestment fundUS8
BlackrockInvestment fundUS5
Norges BankBankNO3
JK HoldingsMultinational conglomerateJP2
VanguardInvestment fundUS1
Government of NorwaySovereign Wealth FundNO1
Legal & GeneralFinancial services companyGB1
State Street CorporationInvestment fundUS1
Deutsche BankBankDE1
Bank Of New York MellonBankUS1

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Wessex Water

ShareholderType of investorCountryProportion held (%)
YTL CorporationMultinational conglomerateMalaysia100

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Yorkshire Water

ShareholderType of investorCountryProportion held (%)
Government of SingaporeSovereign Wealth FundSingapore34
Corsair CapitalInvestment fundUS30
Deutsche BankBankGermany23
New South Wales public sector superannuation schemesPension fundAustralia13

Click here to go back to the top of the report

* As well as the nine companies detailed here there are six smaller companies that supply water (but not sewerage) to certain regions. Click on the links below to find out who they are owned by.

Affinity Water Bristol Water Portsmouth Water South East Water South Staffordshire Water Sutton and East Surrey Water

** Values listed here are how much the companies and shareholders may expect to receive, given historical sale prices, if they sold willingly in the market. They are calculated by adding a 30% premium to the current market value of the shares. Market values of the six companies’ shares that are not listed on a stock market have been estimated using the share prices of the three ‘publicly-listed’ companies, weighted by the regulator Ofwat’s estimation of the ‘Regulatory Capital Value’ of each company. See the spreadsheet for more details.

*** Severn Trent, South West Water and United Utilities list their shares on the London Stock Exchange. As such they each have thousands of shareholders. We have listed the top ten for each company here. See the spreadsheet, linked to at the top of the report, for the top 100.

Photo by pan xiaozhen on Unsplash