GIC backs Germany's Techem Group in deal valued at S$9.9 bllion

Independent Singapore

5 days ago

SINGAPORE: Singapore's sovereign wealth fund GIC is taking a leading role in real estate decarbonisation by investing in Techem. This move aligns with the fund's innovative findings on climate adaptation. GIC joined Partners Group, TPG Rise Climate, and Mubadala in the investment in an enterprise value (EV) of around €6.7 billion (S$9.99 billion).
EV measures a company's total value. This includes its capitalisation, short- and long-term, as well as any cash equivalents on the company's balance sheet.
GIC's recent research shows a changing economic landscape: global annual revenues from climate adaptation solutions are expected to rise from US$1 trillion today to US$4 trillion by 2050. Notably, US$2 trillion of this growth is directly linked to global warming, which is often ignored in traditional industry forecasts.
Boon Chin Hau, GIC's Chief Investment Officer for Infrastructure, views Techem as a prime example of this new opportunity. 'We're not just investing in a company but in a key solution to global carbon challenges,' he explains. This investment reflects a wider strategic vision where climate adaptation becomes a trillion-dollar market. See also GIC bracing for low returns due to trade war
The potential of this investment is significant. GIC predicts that the investment opportunity across public and private markets will grow from US$2 trillion today to US$9 trillion by 2050. Of this, US$3 trillion comes from growth directly connected to global warming, highlighting the economic need for climate solutions.
Techem has 62 million connected devices in 18 countries and manages energy services for 13 million homes. This matches the type of scalable, technology-based solution that GIC sees as essential. The real estate sector produces 40% of global CO2 emissions, making this investment both financially sound and environmentally necessary.
While GIC's model cautiously assumes that adaptation demand will respond to events, the fund believes growing awareness of climate risks could prompt quicker action. Techem's digital infrastructure, which includes AI-driven analytics and smart meters, represents the innovative solution that could drive this progress.
The investment leverages Techem's solid growth history. Since 2018, it's grown its revenues to over €1 billion, with earnings before interest, taxes, depreciation, and amortisation (EBITDA) rising by 50%, metrics that fit well with GIC's forward-thinking investment approach.
'Our partnership with Partners Group, TPG, Mubadala, and Techem's management team will accelerate the business's strategy, unlocking future growth,' Hau emphasises, underlining how the investment connects technological progress with climate adaptation.
The deal, expected to finalise in the second half of 2025, places GIC at the centre of a transformative economic opportunity. As buildings worldwide get ready for stricter environmental regulations, Techem's digital infrastructure becomes a vital asset in the US$4 trillion climate adaptation market.
In the complicated world of global infrastructure investing, GIC has once again shown its skill in finding value at the key intersection of technology, sustainability, and strategic insight, turning climate challenges into investment chances.
Commenting on the deal, Matthias Hartmann, CEO of Techem, stated: 'The new ownership consortium is ideal for Techem because it ensures continuity while also providing fresh impulses for the implementation of our strategy.'
'We look forward to working with them with on the next phase of our growth story as we capitalise on our momentum to further expand our position as the leading platform for the digitalisation and decarbonization of the building sector in Europe and beyond,' he adds.