In a significant development for the global water technology sector, Mubadala Investment Company and Glenwood Private Equity have successfully concluded their co-investment in NanoH2O Co., Ltd., marking a strategic entry into the rapidly expanding desalination market. The transaction, which received all necessary regulatory approvals and met closing conditions in early December 2025, positions the newly independent company for accelerated global expansion at a time when water scarcity challenges are intensifying worldwide.
Build the future you deserve. Get started with our top-tier Online courses: ACCA, HESI A2, ATI TEAS 7, HESI EXIT, NCLEX-RN, NCLEX-PN, and Financial Literacy. Let Serrari Ed guide your path to success. Enroll today.
From Corporate Division to Independent Global Player
NanoH2O’s journey from a corporate division to an independent entity represents a textbook example of successful corporate carve-out strategy. Originally established as a division of LG Chem in 2014 and operating under the name LG Water Solutions, the company has evolved into a specialized provider of reverse osmosis membranes for desalination and brackish water treatment. The Seoul-headquartered firm became fully independent earlier in 2025, setting the stage for this landmark investment that will fuel its next phase of growth.
The company’s product portfolio centers on reverse osmosis technology, which has emerged as the most energy-efficient method for large-scale desalination compared to traditional thermal processes. This technological advantage has enabled NanoH2O to build a truly global business model, with more than 95 percent of its revenue generated outside Korea. The company serves a diverse customer base spanning municipal water authorities and industrial clients across multiple continents, addressing the mounting global demand for clean water solutions.
Strategic Rationale Behind the Investment
For Glenwood Private Equity, a leading Korea-based investment firm with a cumulative assets under management of $3.3 billion, the NanoH2O investment aligns perfectly with its specialized focus on corporate carve-outs. The firm has built its reputation on identifying and partnering with high-quality businesses that major conglomerates consider non-core to their operations, then supporting these companies to reach their full potential as independent entities.
“Our investment in NanoH2O reflects Glenwood’s strong conviction in identifying and partnering with high-quality businesses that are considered non-core or less core within their respective conglomerates through corporate carve-outs,” said Sangho Lee, CEO of Glenwood PE. “We remain deeply committed to supporting NanoH2O in advancing sustainable solutions to global water challenges and accelerating the Company’s growth and global impact together with our investment partners, including Mubadala.”
Glenwood PE has demonstrated significant expertise in the carve-out space, having executed four major deals in 2024 alone, including the acquisition of LG Chem’s diagnostics unit and SKC’s polyurethane materials division. The firm’s track record shows an ability to transform overlooked divisions into market leaders, with its investments typically achieving substantial value creation through operational improvements and strategic repositioning.
For Mubadala Investment Company, Abu Dhabi’s sovereign wealth fund managing assets worth $330 billion across six continents, the NanoH2O investment represents a strategic alignment with its broader commitment to sustainability and addressing global challenges. The investment reinforces Mubadala’s position as a long-term investor in technologies that contribute to environmental sustainability while generating attractive financial returns.
Mohamed Albadr, Head of Asia at Mubadala, emphasized the strategic importance of the investment: “We have strong conviction in NanoH2O’s technology leadership and long-term growth potential. This investment aligns with our strategy to partner with companies advancing solutions to global challenges and reinforces our long-standing commitment to South Korea and the broader Asian market. In partnership with Glenwood PE, we look forward to supporting NanoH2O’s international growth and reaffirming its position as a global leader.”
The Convergence of Water Security and Decarbonization
The timing of this investment reflects a growing recognition among institutional investors that water security and climate change are deeply interconnected challenges requiring urgent technological solutions. Abdulla Mohamed Shadid, Head of Energy and Sustainability at Mubadala, articulated this perspective: “Water security and decarbonization are converging as global priorities, and reverse osmosis membranes are essential to delivering water at scale with lower energy intensity.”
Shadid highlighted NanoH2O’s competitive advantages, noting that the company “stands out for its proven technology, global footprint and a replacement-driven business model that rewards continuous innovation.” He emphasized that the investment would enable NanoH2O to connect with growing demand in the Middle East and North Africa region, as well as other key markets globally, supporting the company’s expansion and long-term sustainable value creation.
The Middle East and North Africa region currently dominates the global water desalination equipment market, accounting for approximately 49.6 percent of global revenue. Countries in this region face severe water scarcity and have made substantial investments in large-scale desalination projects, creating a natural growth opportunity for NanoH2O’s products and services.
Understanding Reverse Osmosis Technology’s Market Position
Reverse osmosis has emerged as the dominant technology in the global desalination industry, and understanding why provides crucial context for NanoH2O’s market position. The technology works by applying pressure to force water through semi-permeable membranes that filter out salt, minerals, and other impurities, producing fresh water suitable for drinking and industrial use.
The energy efficiency advantage of reverse osmosis over thermal desalination methods is substantial and well-documented. Current seawater reverse osmosis systems use approximately 3 kWh per cubic meter of water produced, representing a dramatic improvement from the 20-30 kWh per cubic meter required in the 1970s. This tenfold reduction in energy consumption has been a key driver of reverse osmosis technology’s adoption worldwide.
Research published in leading scientific journals demonstrates that energy consumption in reverse osmosis can be reduced even further, with studies showing that 69 percent of excess energy in current systems can be eliminated using state-of-the-art methods, and up to 82 percent with future technologies like batch reverse osmosis. These efficiency improvements translate directly into lower operational costs and reduced carbon footprints for desalination facilities.
The technology’s advantages extend beyond energy efficiency. Reverse osmosis systems require smaller physical footprints than thermal plants, can be modularized for easier scaling, and operate at ambient temperatures, eliminating the need for large-scale heating infrastructure. These characteristics make reverse osmosis particularly attractive for both municipal water authorities and industrial facilities seeking reliable water supplies.
Global Water Desalination Market Dynamics
The investment in NanoH2O comes at a pivotal moment for the global water desalination industry. Multiple market research firms project robust growth trajectories for the sector, driven by escalating water scarcity, population growth, and climate change impacts on traditional freshwater sources.
According to industry analysis, the global water desalination market is estimated at $19.03 billion in 2025 and is expected to reach $34.58 billion by 2032, growing at a compound annual growth rate of 8.9 percent. Other market research indicates even stronger growth potential, with projections showing the market could reach between USD 40 billion to USD 58 billion by 2033, depending on adoption rates and technological advancements.
Several key factors are driving this market expansion. First, freshwater scarcity has become a critical global challenge, with the International Water Management Institute reporting that 1.2 billion people lack access to clean water, and the World Wildlife Federation projecting that two-thirds of the world’s population may face water shortages by 2025. This acute scarcity is pushing governments and private sector entities to invest heavily in alternative water sources.
Second, coastal urbanization and industrial development in water-stressed regions are creating sustained demand for desalination capacity. The Middle East and Africa region leads global desalination adoption, accounting for over 50 percent of global capacity, with countries like Saudi Arabia, the United Arab Emirates, and Qatar operating some of the world’s largest facilities.
Third, technological improvements in membrane technology and energy recovery systems are making desalination increasingly cost-competitive with traditional water sources. Modern energy recovery devices can recuperate up to 60 percent of the pressure from concentrate streams, pushing production costs below USD 0.50 per cubic meter in large-scale facilities.
The industrial segment of the desalination market is experiencing particularly rapid growth. Semiconductor manufacturing facilities, pharmaceutical plants, and other high-tech industries require ultra-pure water and are increasingly adopting zero liquid discharge systems that can recycle more than 95 percent of process water, driving double-digit growth in industrial desalination orders.
Regional Growth Opportunities and Market Expansion
NanoH2O’s global footprint positions the company to capitalize on growth opportunities across multiple geographic markets, each with distinct drivers and characteristics.
In the Middle East and North Africa, water scarcity is an existential challenge driving massive infrastructure investments. Saudi Arabia, for example, targets 1.4 billion cubic meters per year of desalination capacity by 2030 under its National Water Plan, while Egypt has commissioned what is described as the world’s largest reverse osmosis station. The region’s combination of severe water stress, available capital, and government commitment to water security creates an ideal environment for NanoH2O’s expansion.
The Asia-Pacific region presents a different opportunity profile. Rapid urbanization, industrial growth, and increasing environmental regulations are driving demand for water treatment solutions. China’s desalination industry is expanding due to urbanization and water scarcity, with coastal cities investing in seawater desalination plants. Industrial applications are particularly promising, as semiconductor manufacturing migrates to water-stressed areas in Asia, requiring closed-loop water systems.
North America represents a mature but growing market, with steady expansion driven by water scarcity, rising industrial demand, and stringent environmental regulations. States like California, Texas, and Arizona are investing in desalination infrastructure to address chronic water shortages exacerbated by climate change and population growth.
Latin America is emerging as a growth market, with countries like Chile investing heavily in desalination to support mining operations in arid regions, while coastal cities in Brazil and Mexico explore seawater desalination to supplement municipal water supplies.
One decision can change your entire career. Take that step with our Online courses in ACCA, HESI A2, ATI TEAS 7, HESI EXIT, NCLEX-RN, NCLEX-PN, and Financial Literacy. Join Serrari Ed and start building your brighter future today.
Mubadala’s Strategic Focus on Sustainability
The NanoH2O investment aligns with Mubadala’s broader portfolio strategy emphasizing sustainability and energy transition. As a sovereign wealth fund, Mubadala has positioned itself as a long-term investor in companies developing solutions to global environmental challenges, while maintaining its commitment to generating sustainable financial returns for the Government of Abu Dhabi.
Mubadala’s responsible investing policy emphasizes the integration of climate and environmental, social, and governance principles into investment decision-making. The fund has been an early mover in renewable energy, establishing Masdar in 2006, which has grown into a global leader in developing utility-scale renewable energy projects worldwide with nearly 4GW of gross capacity either in operation or under development.
In 2024, Mubadala reported strong financial performance with assets under management growing 9.1 percent year-on-year to AED 1.2 trillion, with annualized returns of 10.1 percent over five years. The fund’s portfolio has been constructed to navigate market cycles and scale future-focused sectors, including clean energy, semiconductors, and advanced manufacturing, all aligned with national priorities.
The investment in NanoH2O represents a natural extension of this strategy, combining exposure to a critical environmental challenge with the potential for attractive financial returns driven by growing global demand for water solutions.
Glenwood PE’s Carve-Out Expertise
Glenwood Private Equity has built a distinctive investment strategy focused on corporate carve-outs, a niche that requires specialized expertise and operational capabilities. The firm’s approach involves identifying valuable business units within large conglomerates that are underperforming or receiving insufficient attention due to their non-core status, then acquiring and transforming them into focused, independent companies.
The firm’s track record demonstrates the potential of this strategy. In previous transactions, Glenwood PE acquired PI Advanced Materials, which commands more than 30 percent of the global market for polyimide film used in mobile devices and battery applications. Through strategic investments and product diversification, Glenwood helped reduce the company’s dependence on smartphone materials from 86 percent to 51 percent of sales, positioning it for sustainable long-term growth.
The firm has also demonstrated its ability to scale operations post-acquisition. Following its planned acquisition of LG Chem’s water filter business for approximately $692 million, Glenwood committed to investing an additional $200 million to expand manufacturing capacity, aiming to position the business as a leading global player.
Glenwood PE’s investment approach has attracted significant interest from institutional investors. The firm recently increased its third blind fund to $1 billion as pension funds in Korea, North America, and Europe sought commitments, reflecting confidence in the firm’s strategy and execution capabilities. The National Pension Service, the world’s third-largest pension fund, and the Korean Teachers’ Credit Union have been consistent investors across Glenwood’s fund vintages.
The Business Model Advantage: Replacement-Driven Revenue
One of NanoH2O’s key competitive advantages lies in its replacement-driven business model, which provides revenue visibility and recurring income streams. Reverse osmosis membranes have finite operational lifespans and require regular replacement to maintain water quality and system efficiency, typically every three to seven years depending on feed water quality and operating conditions.
This replacement cycle creates a predictable, recurring revenue stream from the installed base of customers. As NanoH2O expands its global market share in new desalination plant installations, it simultaneously builds a growing base of future replacement demand. This business model characteristic is particularly attractive to long-term investors like Mubadala and Glenwood PE, as it provides revenue stability and growth visibility.
The replacement market also rewards continuous innovation, as customers seek performance improvements with each replacement cycle. Companies that can demonstrate enhanced permeability, better salt rejection, improved fouling resistance, or longer membrane life can capture premium pricing and market share gains in the replacement market.
Energy Efficiency as a Competitive Differentiator
Energy consumption represents one of the largest operating costs for desalination facilities, typically accounting for 30-50 percent of total operating expenses. Consequently, membrane technologies that enable lower energy consumption deliver significant economic value to customers while also reducing the environmental impact of desalination operations.
Research demonstrates that high-efficiency energy recovery systems can reduce specific energy consumption from 4.5 kWh per cubic meter to 2.5 kWh per cubic meter. For a plant producing 100,000 cubic meters of water per day, this represents daily energy savings of 200,000 kWh, translating to annual cost savings exceeding $7 million at typical electricity rates.
NanoH2O’s focus on energy-efficient membrane technology positions the company to capture value from this trend. As energy costs rise and carbon pricing mechanisms become more prevalent globally, the economic advantage of more efficient membranes will increase, potentially accelerating replacement cycles as operators seek to reduce energy consumption.
Furthermore, the integration of renewable energy with desalination is gaining traction as a pathway to sustainable water production. Several countries are developing solar-powered desalination plants, including the UAE’s Hassyan seawater desalination plant in Dubai, which will be fully powered by solar energy. These projects require membranes optimized for variable energy input conditions, creating new technical requirements and market opportunities.
Implications for the Global Water Technology Sector
The Mubadala-Glenwood investment in NanoH2O signals growing institutional investor confidence in the water technology sector and could catalyze additional capital flows into the industry. As sovereign wealth funds and major private equity firms demonstrate their commitment to water security solutions, other institutional investors may follow, potentially accelerating innovation and capacity expansion across the sector.
The transaction also highlights the value that can be unlocked through corporate carve-outs in the water technology space. Many large industrial conglomerates maintain water treatment divisions that could potentially achieve higher valuations and growth trajectories as independent, focused companies with dedicated management teams and strategic investors.
For the desalination industry specifically, the investment provides validation of reverse osmosis technology’s long-term growth prospects and the sustainability of membrane-based solutions. This could encourage additional research and development investments in next-generation membrane materials and configurations, potentially accelerating the pace of technological improvement.
Looking Ahead: Strategic Priorities and Growth Trajectory
With the investment now complete, NanoH2O is positioned to accelerate its growth strategy across multiple dimensions. The company is expected to expand its manufacturing capacity to meet growing global demand, potentially including new production facilities in strategic markets. Geographic expansion will likely focus on high-growth regions including the Middle East, North Africa, and Asia-Pacific, where water scarcity challenges are most acute.
Product development and innovation will remain critical to maintaining NanoH2O’s competitive position. The company is likely to invest in next-generation membrane technologies that deliver enhanced performance characteristics, including higher water permeability, improved fouling resistance, and longer operational lifespans. These improvements would strengthen NanoH2O’s value proposition in both new installations and the replacement market.
Strategic partnerships and channel expansion will also be important growth enablers. Collaborations with engineering, procurement, and construction firms that design and build desalination facilities could expand NanoH2O’s market access. Similarly, partnerships with equipment manufacturers and system integrators could accelerate adoption of the company’s membrane technology across diverse applications.
The backing of Mubadala and Glenwood PE provides NanoH2O with more than just financial resources. Both investors bring extensive networks, operational expertise, and strategic insights that can accelerate the company’s growth trajectory. Mubadala’s presence in Middle Eastern markets could facilitate business development in the region, while Glenwood’s experience in scaling carve-out companies can inform operational improvements and market positioning strategies.
Conclusion: A Strategic Investment in Water Security
The successful completion of Mubadala and Glenwood Private Equity’s co-investment in NanoH2O represents more than a financial transaction; it reflects a strategic bet on the growing importance of water security in an increasingly water-stressed world. As climate change intensifies, populations grow, and industrial water demand rises, technologies that enable efficient, cost-effective water treatment will become increasingly critical to economic development and human welfare.
NanoH2O, with its proven reverse osmosis membrane technology, global customer base, and now strengthened balance sheet and strategic backing, is well-positioned to play a significant role in addressing this global challenge. The company’s focus on energy-efficient desalination aligns with broader sustainability imperatives, making it an attractive partner for governments, municipalities, and industrial customers seeking reliable water supplies with manageable environmental footprints.
For the investment community, the transaction demonstrates the growing opportunity set in water technology and infrastructure. As traditional freshwater sources become increasingly constrained, the desalination industry and related water treatment technologies will likely see sustained growth, creating opportunities for investors who can identify and support companies with differentiated technologies and strong market positions.
The partnership between a sovereign wealth fund committed to sustainability and a private equity firm specializing in operational transformation creates a compelling combination of resources and capabilities. This collaboration, focused on a company providing essential technology for water security, exemplifies how capital can be deployed to generate both financial returns and positive environmental impact, addressing one of the most pressing challenges facing humanity in the 21st century.
Catch Up With Our Other Headlines
4th December, 2025
South Africa’s Economic Growth Moderates to 0.5% in Q3 2025 as Mining Sector Propels Recovery
Kenya’s November 2025 Inflation Eases to 4.5% as Transport Costs Surge Despite Stable Fuel Prices
Ready to take your career to the next level? Join our Online courses: ACCA, HESI A2, ATI TEAS 7 , HESI EXIT , NCLEX – RN and NCLEX – PN, Financial Literacy!🌟 Dive into a world of opportunities and empower yourself for success. Explore more at Serrari Ed and start your exciting journey today! ✨
Track GDP, Inflation and Central Bank rates for top African markets with Serrari’s comparator tool.
See today’s Treasury bonds and Money market funds movement across financial service providers in Kenya, using Serrari’s comparator tools.
Photo source: Google
By: Montel Kamau
Serrari Financial Analyst
4th December, 2025
Article, Financial and News Disclaimer
The Value of a Financial Advisor
While this article offers valuable insights, it is essential to recognize that personal finance can be highly complex and unique to each individual. A financial advisor provides professional expertise and personalized guidance to help you make well-informed decisions tailored to your specific circumstances and goals.
Beyond offering knowledge, a financial advisor serves as a trusted partner to help you stay disciplined, avoid common pitfalls, and remain focused on your long-term objectives. Their perspective and experience can complement your own efforts, enhancing your financial well-being and ensuring a more confident approach to managing your finances.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Readers are encouraged to consult a licensed financial advisor to obtain guidance specific to their financial situation.
Article and News Disclaimer
The information provided on www.serrarigroup.com is for general informational purposes only. While we strive to keep the information up to date and accurate, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
www.serrarigroup.com is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information on the website is provided on an as-is basis, with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
In no event will www.serrarigroup.com be liable to you or anyone else for any decision made or action taken in reliance on the information provided on the website or for any consequential, special, or similar damages, even if advised of the possibility of such damages.
The articles, news, and information presented on www.serrarigroup.com reflect the opinions of the respective authors and contributors and do not necessarily represent the views of the website or its management. Any views or opinions expressed are solely those of the individual authors and do not represent the website's views or opinions as a whole.
The content on www.serrarigroup.com may include links to external websites, which are provided for convenience and informational purposes only. We have no control over the nature, content, and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorsement of the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, www.serrarigroup.com takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
Please note that laws, regulations, and information can change rapidly, and we advise you to conduct further research and seek professional advice when necessary.
By using www.serrarigroup.com, you agree to this disclaimer and its terms. If you do not agree with this disclaimer, please do not use the website.
www.serrarigroup.com, reserves the right to update, modify, or remove any part of this disclaimer without prior notice. It is your responsibility to review this disclaimer periodically for changes.
Serrari Group 2025
