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All Things Fishy Go Wall Street

In just a few days savvy investors will be able to put their money where there mouths are by investing in the world’s first investment fund devoted strictly to fish.

Amundi Japan (which manages a $35 billion fund) is hoping to raise at least $500 million in investment dollars on the back of a booming global appetite for fish. Its pitch is straightforward: As demand for fish grows, the richer those who engage in the industry of fishing become. That includes fishing boat and engine makers, processing plants, chains of seafood and sushi restaurants and, especially, aquaculture or fish farms.

Twinned with the fact that the most-populous countries on the planet – China, India and Brazil – are still growing and growing slightly wealthier, thus more desirous of healthy eating, and it’s looking bad for the planet’s dwindling fish stocks.

That’s not to say there’s not money to be made off fish and all if its ancillary businesses; Amundi’s managers are predicting investors will double their money within six years, as demand continues to grow.

Researchers at Amundi, a merger formed by French-based Credit Agricole and Societe-Generale’s asset management businesses, suggest global seafood consumption will grow from 110 million tons today to more than 132 million tons by 2030. Its public mutual fund will be available for investment beginning August 9 and begin operating on August 20.

The downside, of course, is that as demand for fish goes up the supply goes down. Contrary to some popular opinion, fish are not an infinite resource. Such cynics (realists?) as the World Wildlife Fund predict that at the current rate of taking the world’s bluefin tuna stocks, for example, could expire by 2012 and that all the fish we currently know will be gone by 2050, replaced by fish we currently refuse to take because they are hard to catch or have no taste or jellyfish, the cockroach of the sea.

Critics compare the investment opportunity to offering a rainforest depletion fund or a real estate development project in the middle of a panda refuge.

The so-called “themed investment” fund is the product of investment bankers watching the headlines. “There’s a reasonably good correlation between per capital GDP growth and consumption of fish in emerging markets, which are growing fast with huge populations, so we thought this could be an interesting investment story,” Amundi’s chief investment officer Masato Degawa told the WSJ.

Statistics bear him out: According to the U.N.’s Food and Agriculture Organization, global fish consumption per person has increased to more than 35 pounds a year in 2007 from 23 pounds in 1980. During the same period total production of fish around the globe increased from 72 million to 140 million tons. In China, for example, the average consumption of fish per person increased by nearly five pounds to 58 pounds per person between 2001 and 2007.

The world’s leaders in per-capita-fish-consumption are all in Asia: Despite its rapacious seafood appetite, Japan ranks fourth in the world, with each Japanese eating more than his/her bodyweight in fish, about 155 pounds a year.

The planet’s highest rate is in the Maldives, where each person eats 336 pounds a year! But don’t let those numbers confuse: Japan is still the world’s leader in fish eating. It’s 127 million people eat more than 20 billion pounds of seafood each year, while in the Maldives, its 1,200 islands boasting just 335,000 people, takes just 112 million pounds.

What about the bluefin tuna, which everyone but the Japanese seems to think, is endangered. Tuna fishers and processors are viable investments according to Amundi. “We are not the police,” said Degawa

Some of the news reports of the unique fund as reported in business journals around the globe caution that there may be one potential “sticking point” to the investment: Overfishing.

Hopefully the fund’s salesmen will caution potential investors that if there are no more fish in the sea there won’t be much need for fishing boats, fishing rods or even seafood markets. To that end, Amundi predicts that the bulk of its fish fund investments will be in fish farming, a booming industry, since levels of caught fish have evened off since 1990.

The Last Fish in the Sea?

When I was growing up a fish dinner equaled just one thing: Fish sticks. Or, on very rare occasion, a trip to the local Howard Johnson’s for an all you can eat Friday feast of fried shrimp.

Today, thanks to an expanded palate and the notion that fish is better for you than red meat, we’ve come to expect far more. Walk the fish section of any supermarket and you find dozens of fish from all over the world laid out on the crushed ice, some caught in the wild, some farmed, often boasting tags of the faraway nations they come from. In restaurants we now expect far more than a ‘fish of the day,’ anticipating a page full of options ranging from mollusks to white fish, red fish, cephalopods and more.

So when you read headlines announcing that fisheries are fast becoming depleted – that seven out of ten of the world’s major fisheries are already over exploited, that by 2050 all of the fish species that we currently know will be gone from the seas – it should come as no big shock. The ocean is not finite, its fishes not unlimited. And a major responsibility for that change should be laid at our feet, each and every one of us fish-eaters. Our big and still-growing demand around the world is a huge part of the problem.

On Monday, the U.N.’s Food and Agriculture Organization will issue a “State of the World Fisheries and Aquaculture” report; I’ve had an advance look and what’s inside this biannual report is not too surprising: The world’s wild catch is in steep decline and fish farms are taking over as the world’s prime supplier of seafood.

The environmental group Oceana is releasing a simultaneous report called “Hungry Oceans: What Happens When the Prey Is Gone,” focusing on three threats to the smaller species of the world’s seafood supply:

– Over fishing of prey species is going unregulated, including immense stores of squid and krill. Whole schools of fish that feed tuna, whales and other long-lived animals and drive migrations are caught in nets, particularly by industrial fishing vessels.

– Fish farms are driving the need for small species, which are turned into oil or feed. They use more of the ocean’s protein than they produce. An estimated 4 to 11 pounds of prey fish are consumed to grow 1 pound of farmed salmon.

– Warming ocean temperatures in the past century – and projected to rise in the coming decades – affect sea life survival. Changes in temperature and prevailing currents may sweep away newly hatched eggs and larvae, and hurricanes can wipe out a generation of larval fish.

Oceana also reports that climate change is also interfering with the timing of life cycles. The food for seabirds and salmon, for example, must be available when they need it. If not, seabirds don’t reproduce or their offspring die, and salmon don’t survive when they get to the ocean. Oceana has lobbied for bans on commercial fishing of krill in the Antarctica, Japan and British Columbia and the Gulf of St. Lawrence in Canada.

Where do all these reports point? Moderation. Choosing wisely. Eating more vegetables.

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