Bahrain's Investcorp acquires stake in China's renewable components manufacturer Jianuo

Transaction marks the company’s first controlling buyout in world's second largest economy

Set up in 1982, Investcorp has grown to become one of the leading alternative asset management companies in the region. Photo: Investcorp

Bahrain’s Investcorp, the alternative asset manager that counts Mubadala Investment Company as its biggest shareholder, has bought a controlling stake in China-based Shandong Jianuo Electronics (Jianuo) as it seeks to boost its portfolio in the world’s second-largest economy.

Jianuo, based in Shandong and China’s Greater Bay Area, provides speciality premium components used in fast-growing, high-end applications such as electric vehicle power management, battery charging infrastructure, solar and wind power generation and 5G base station infrastructure.

It is also an advanced manufacturing partner to a wide group of global providers of alternative energy solutions including in the US, Europe and Japan, Investcorp said on Wednesday.

It did not disclose the total value of the deal but said the latest transaction marks the company’s first controlling buyout in China.

“The shift to a low-carbon economy will create entirely new industries and value chains within the next five to 15 years, and Jianuo is right at the heart of that evolving trend,” Hazem Ben-Gacem, co-chief executive of Investcorp, said.

“This acquisition reflects our strategy of investing in innovative and growing midsized companies and offering investors high-quality alternative investment opportunities in future-focused industries that are key to the global energy transition efforts.”

Countries are boosting investments in clean energy technology as they aim to achieve net-zero emission targets in the coming decades.

The US, the world’s largest economy, and China plan to become net-zero economies by 2050 and 2060, respectively. The EU, one of the biggest trading blocs, aims to reach the target by 2050.

Investment in renewable energy technology hit a record of $1.3 trillion last year.

However, that figure must rise to about $5 trillion annually to meet the key Paris accord target of limiting temperature increases to 1.5°C above pre-industrial levels, Abu Dhabi-based International Renewable Energy Agency said in its World Energy Transitions Outlook 2023 preview in March.

“We look forward to partnering with Jianuo’s founders, management and over 400 employees as we embark on the next phase of Jianuo’s growth journey,” said Duncan Zheng, head of private equity China at Investcorp.

“Jianuo is well-positioned to expand and deepen its strong relationships with leading global renewable energy players through its extensive R&D capabilities and proprietary manufacturing know-how in producing innovative speciality components.”

Last year, Investcorp and Hong Kong-based private investment office Fung Capital set up a $500 million fund to invest in mid-cap companies across China’s Greater Bay Area.

The fund, which was announced during the Future Investment Initiative in Riyadh, will focus on buyouts of companies in the Guangdong province, Hong Kong and Macau, Investcorp said at the time.

In 2021, Investcorp also made investments in Linkedcare, a Chinese software and supply chain management services start-up to expand its Asian portfolio of investments. Its other investments in China include instant food maker Mo Xiaoxian.

Set up in 1982, Investcorp has grown to become one of the leading alternative asset management companies in the region. It oversees $50 billion in assets, including those managed by third parties.