In July, US global investment company and hedge fund Citadel LLC, announced their intent to acquire Japanese energy startup, Energy Grid. Details of the deal were undisclosed, though it represents the first major step into Japan’s wholesale energy market by the Miami-based firm.
The deal comes in the wake of Citadel CEO Ken Griffin’s bullish statements on Japan back in June 2023 and Citadel’s reopening of an office in Tokyo (the firm originally closed its Tokyo office in 2008 after Lehman Brothers shuttered).
At the time, Griffin, speaking to the NIKKEI, noted: “It’s actually a very exciting time to be involved in Japan because of this shift in Japanese companies being much more focused on generating success for their shareholders and growing their businesses globally.”
Established in 2021, Energy Grid is a provider of risk management solutions to Japanese businesses, helping them navigate price volatility in the energy sector, in particle the electricity market.
Citadel’s commodities division led the deal. The large alternative investment team has experience mitigating commodity supply and demand risks, including volatility in natural gas and electricity.
“Energy Grid has cemented its reputation as a trusted partner to the Japanese power industry,” said Sebastian Barrack, head of commodities at Citadel, following news of the partnership.
“We will strengthen this partnership by integrating Citadel’s experience in customer-led transactions and risk management with Energy Grid’s local expertise,” Barrack added.
Yohei Jozaki, CEO of Energy Grid, said, “This strategic transaction with Citadel marks a pivotal moment for Energy Grid to build on our success and realize our vision of building a stable and efficient power market in Japan.”
Looking ahead, Jozaki expressed an intention to leverage Citadel’s reputation in finance and operations “to expand trading volumes and offer longer-term risk management opportunities to more market participants.”
Japan is the world’s fourth-largest importer of oil, much of it coming from the Middle East. Moreover, the country’s electricity sector was disrupted in 2011, following the 2011 Great East Japan Earthquake and Fukushima nuclear disaster, which saw electricity generation via nuclear drop from 25% to a fraction of supply today.
