Data Center Industry pumped with billions of dollars by global investors
Find out why Data Centers are being pumped with billions of dollars by global investors, which, consequently, is generating a huge amount of capital.
The surge in investment reflects the rise of a global economy powered by digital infrastructure, a trend that has been accelerated by the COVID-19 pandemic and the shift to internet delivery platforms to support online learning, entertainment, and distributed work.
Much of this capital will accelerate the global growth of data centers and cloud computing, supporting demand for digital infrastructure beyond the mature markets in the United States and Europe. Recent announcements have a distinctly international flavor, with funds from Sweden, Japan and Singapore backing experienced data center operators and executives.
EQT AND EDGECONNEX
EQT Infrastructure will make additional investment in EdgeConneX, the data center platform that EQT acquired last year using its Infrastructure IV Fund. EQT will effectively double its investment in EdgeConneX by using its new EQT Infrastructure Fund V to bring in fresh capital, leaving the two funds with equal ownership stakes in the company.
While details of the investment were not itemized, the EQT Infrastructure V fund has already raised $12 billion, suggesting that its backing could mean billions of dollars to support EdgeConneX and its program to build new data centers and acquire assets and operators.
EdgeConneX has been a leading player in edge computing, building data centers at key network “pain points” closer to users to improve performance – solving the “Netflix problem” for network operators. The company’s streamlined construction methodology has helped the company build a healthy business with hyperscale operators that covet accelerated speed-to-market.
Since its acquisition, EdgeConneX has announced plans to expand into India, acquired an Israeli company that develops underground data centers, and accelerated its regional buildouts in the U.S EQT said that additional growth and development opportunities have been identified for EdgeConneX, “such as winning additional customer contracts, expanding the business’ footprint through a proactive build approach in key markets and pursuing accretive M&A. EQT Infrastructure V’s participation will help to capture these opportunities and secure support and execution of EdgeConneX’s full potential plan that was developed over the last year.”
PAG REAL ESTATE FORMS DIGITAL INFRASTRUCTURE FIRM
PAG Real Estate, a leading Asia-focused private investment manager, has tapped data center industry veteran Kris Kumar to launch a regional digital infrastructure platform that may invest up to $10 billion in the sector.
PAG Real Estate has invested more than $33 billion in Asia, including $2 billion in data center and telecom holdings. The new company will focus on colocation, cloud, hyperscale and enterprise data centers as well as network and fiber assets in the Asia-Pacific region. PAG says it has “well-laid plans to invest US$10 billion over the short to medium term.”
Kumar led Asia-Pacific operations for Digital Realty and was the founder and CEO of Bridge Data Centers, an Asia-focused platform that merged with ChinData. Kumar recently retired, but is now back in builder mode.
“With PAG’s entrepreneurial approach, decades of experience, superior investment track record and ready access to a competitive cost of capital, my perennial enthusiasm for the sector quickly resurfaced, to lift me out of my year-long retirement,” said Kumar.
“I am looking forward to helping build a platform company on the strong foundation of an already-substantive investment by PAG in the sector over the last four years,” said Kumar. “I strongly believe in our vision of becoming a diligent, customer-focused, and profitable digital infrastructure investor/operator in the region. We are assembling a strong team with a diverse skill set and best-in-class investment and operational experience, to execute this vision.”
Clearly, data centers are having huge impacts on capital, with many big announcements made this year alone. Change can cause a lot of uncertainty but it seems that data centers are remaining resilient.