Since 2020, the concept of ESG and influence investment in China's local market tends to heat up.

On February 1, a consortium of investment institutions announced that it would acquire DuPont's clean technology company.

The buyer's consortium is composed of investors from the United States, China and Saudi Arabia. The Chinese organization is green capital, an influential private equity investment fund.

Founded in 2016, Lvdong capital team established a joint venture with WL Ross, Baowu steel and China Merchants Group, which led the bankruptcy reorganization of Chongqing Iron and Steel Co., Ltd. with a lot of profits.

If the project of DuPont Clean Technology Co., Ltd. is successfully delivered, this will be the first overseas acquisition and merger transaction project of greenpower capital.

Since 2020, the concept of ESG and influence investment in China's local market tends to heat up. Some market participants have proposed that the era of normalization and mainstream of ESG and influence investment has come.

In this "investment outlook" series, Bai Bo, chairman and CEO of green capital, shares the investment opportunities brought by "carbon neutrality", the risk control of private equity investment, and the development of local influence investment.

The following is Bai Bo's oral statement:

The beginning of the new year is always a window to look back and look forward to. In the past year, green capital has done a lot of industry research on new materials and advanced manufacturing, logistics and transportation, new energy, industrial Internet and environmental protection services, and obtained many insights from the front line. On the investment side, we have not only annotated the old projects, but also invested a lot of new projects. Especially in the field of biological manufacturing, we have seen a lot of opportunities and started to invest in the layout.

Recently, we have just announced our intention to acquire DuPont clean technologies. For green capital, the special significance of the transaction is that we hope to introduce a series of advanced technologies and management experience of the company more completely under the vision of carbon neutral, combine with the high-quality development goals of China's industry and energy chemical industry, and promote international cooperation in green technology and investment.

When it comes to carbon neutrality, there has been a lot of market attention recently. Bill Gates once said that it's easy to underestimate the changes in the next decade. In the past, people always thought that carbon neutrality was far away and had nothing to do with the present. In fact, the impact of carbon neutrality has been reflected, and it is not only the energy industry, but also industry, transportation, construction and other aspects of economic operation. As an investment institution, this trend can not be ignored.

I firmly believe that carbon neutrality is the main line of future value investment. Taking the industrial sector as an example, traditional heavy industry and many general manufacturing industries are major energy consumption and carbon emissions. How to effectively "reduce carbon" is a good investment direction in the next 3-5 years. Looking down, there are many opportunities to subdivide the circuit. There are opportunities from upstream raw materials to production processes (including new processes, new processes, automation, intelligence, etc.), to terminal sales, recycling and waste disposal.

Even financial technology and blockchain technology can be effectively applied to promote low-carbon emission reduction of enterprises. Of course, in this process, we need to further identify which opportunities are policy driven, which are market driven, and which are suitable for VC / PE investment.

For investment, risk is permanent, we have been trying to pursue asymmetric risk return. For investors, the biggest risk is the lack of awareness of the industry. The lack of cognition may lead us to fall into the old thinking and ignore the turning point of the industry, and may also let us miss the potential new technology and new trend. So, we are always on the way to study.

Influence investment is still a new thing in China. For more than four years, green capital has often faced some doubts: "will influence investment sacrifice financial returns?" "Is impact investment just propaganda?"

Of course not. Driven by digital technology, biotechnology, material technology and financial technology, it is not difficult to make a good business judgment while taking into account green benefits. Perhaps compared with others, we have done some more work, but in exchange for "fish and bear's paw", why not.

China is the largest developing country and manufacturing country in the world. Our resource carrying capacity is very limited and can not achieve sustainable economic growth according to the existing model. So we need influence investment more than any other country. If China can set an example in this field, it can not only promote carbon neutrality, but also lead the international trend, which is very meaningful.

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