China-focused Albamen completes its first renewables sale

Sembcorp has paid 3.3bn yuan for a portfolio of 10 renewable energy projects that Albamen Capital will continue to manage on behalf of the Singapore-based energy provider.

Singapore-headquartered energy provider Sembcorp Industries has completed its acquisition of China-focused asset manager Albamen Capital’s renewables portfolio for 3.3 billion yuan ($494.5 million; €460.9 million).

The deal, which was first announced by Sembcorp in November last year, encompasses 10 renewable energy projects from Albamen’s Fund I – previously known as CGN Capital Partners Infrastructure Fund III – with Albamen expected to continue managing the portfolio’s assets on behalf of Sembcorp. The assets are solar and wind projects totalling roughly 600MW, all located near Beijing, across the industrialised provinces of Shandong, Hebei and Henan.

Albamen’s managing partners Ray Fung and Conrad Yan declined to comment on the rate of return for the portfolio but said it was “significantly” better than the returns for comparable renewable portfolios in the European market.

“The Chinese market is a little bit different from the Western market. Some people tend to say that it is ambiguous but, in our view, it is just obscure. If you know Chinese and you can communicate in the language, and you understand how the government thinks in China, then [the market] is essentially pretty predictable,” Yan told Infrastructure Investor.

“It’s probably one of the best kept secrets in the world, even though China is very large. There are a lot of people operating under the myth that China is dominated by SOEs [state-owned enterprises] and there is no room for private capital… they have not [taken the time] to understand [the market]. Sembcorp knows it can benefit from this partnership [with Albamen] by working with us to continue to build a presence in China.”

The firm expects to continue focusing on China’s renewables and digital infrastructure sectors, exploring not just the production of green energy but the development of technology that will improve the efficiency of energy consumption as well.

“Our strategy is evolving. The renewables trend for China is huge but that’s only within the context of the broader energy revolution [the country is undergoing] and this is what Albamen is investing in,” Fung said.

“[We’re focused on how best to] invest our clients’ and our partners’ capital to make the world a better place, starting with China and its renewable and digital infrastructure, and bringing the two together.”

“We really want to fight climate change and you cannot fight climate change without [investing] in China,” Yan added.

The firm was formed in 2020, following the winding down of JIDA Capital Partners, another fund manager that Fung had previously helped to found. JIDA initially partnered with the private equity arm of energy firm China General Nuclear Power to launch CGN Capital Partners Infrastructure Fund III in 2015 and planned to also launch a renewables-focused vehicle together before parting ways in 2019.

Manulife Investment Management, the assets management arm of Canada’s largest insurer, bought a 49 percent stake in Albamen in November 2020.