CDPQ, Ares and Schroders to Finance Growth in Vantage Data Centers EMEA
Vantage Data Centers is expanding its EMEA platform with €750m financing from Ares Management, Caisse de depot et placement du Quebec (CDPQ) and Schroders Capital.
Ares’s infrastructure debt and alternative credit strategies and CDPQ are providing up to €300m each, together with a €150m contribution from Schroders Capital in financing, alongside incremental equity to help Vantage grow its EMEA data centre portfolio.
At present, the Vantage EMEA portfolio comprises 14 campuses, serving key markets in Europe and South Africa. Once fully developed, the portfolio aims to generate 751MW of combined IT capacity.
Roopa Murthy, head of Ares infrastructure debt Europe, said: “We are pleased to support Vantage in their next stage of growth, delivering mission-critical digital infrastructure across EMEA in a sector experiencing significant demand.”
Eli Appelbaum, co-head of Ares European alternative credit, said: “This innovative financing demonstrates Ares’ ability to deliver a scaled solution to a high-quality platform with robust cashflow characteristics.”
Marc Cormier, EVP and head of fixed income at CDPQ, said: “This additional flexible capital will fuel Vantage’s strategic capabilities in Europe and builds on CDPQ’s track record in the telecommunications and digital infrastructure sectors.
”We remain committed to investing in the growth of critical digital infrastructure, which forms the backbone of interconnected economies while generating long-term value.”
Augustin Segard, co-head of infrastructure debt investments and fund manager at Schroders Capital, said: “This investment reflects our commitment to supporting transformative projects in the digital infrastructure space, where we have demonstrated our expertise in providing long-term financing solutions for critical infrastructure.”
Nick Haslehurst, CFO of Vantage Data Centers EMEA, said: “Vantage appreciates the support of Ares, CDPQ and Schroders Capital to enable our strategic growth across EMEA.
“With the unprecedented scale that we are seeing with high performance computing, including AI, and digital transformation through cloud adoption, Vantage is well positioned to continue expanding our footprint with high-quality and sustainable data centres to keep pace with customer demand.”
In January, funds managed by DigitalBridge and Silver Lake led a $6.4bn (€5.9bn) investment into global hyperscale data centre campuses provider Vantage Data Centers.
Vantage Data Centers said at the time that the equity investment, in addition to a previously announced €1.5bn to be invested by AustralianSuper in Vantage EMEA will help accelerate and extend the firm’s “strategic capabilities across North America and EMEA”.
Earlier today, CDPQ put out a press release announcing that along with Ares Management and Schroders Capital, they are providing EUR 750 million financing for expansion of Vantage Data Centers’ EMEA platform:
Ares Management’s Infrastructure Debt and Alternative Credit strategies (Ares), CDPQ, and Schroders Capital’s Private Debt and Credit Alternatives team announced today that they have concluded an agreement to provide up to EUR 750 million [approx. CAD 1.1 billion] in financing to Vantage Data Centers, a leading global provider of hyperscale data center campuses, to expand the company’s EMEA platform. Ares and CDPQ are providing up to EUR 300 million respectively, and Schroders Capital is contributing up to EUR 150 million. Proceeds of the financing, alongside incremental equity, will support the growth of Vantage EMEA’s high-quality data center portfolio.
The Vantage EMEA portfolio is one of the fastest growing hyperscale data center platforms in the region and is currently comprised of 14 campuses, serving key markets in Europe and South Africa, including London, Frankfurt, Berlin, Milan, Warsaw, Zurich, Cardiff, Dublin and Johannesburg. Once fully developed, the portfolio aims to generate 751MW of combined IT capacity, contracted over the long term to global cloud service providers and top-tier internet providers that require rapidly scalable, reliable and efficient high computing power.
“Vantage appreciates the support of Ares, CDPQ and Schroders Capital to enable our strategic growth across EMEA,” said Nick Haslehurst, CFO of Vantage Data Centers, EMEA. “With the unprecedented scale that we are seeing with high performance computing, including AI, and digital transformation through cloud adoption, Vantage is well positioned to continue expanding our footprint with high-quality and sustainable data centers to keep pace with customer demand.”
“We are pleased to support Vantage in their next stage of growth, delivering mission-critical digital infrastructure across EMEA in a sector experiencing significant demand,” said Roopa Murthy, Head of Ares Infrastructure Debt Europe. “This innovative financing demonstrates Ares’ ability to deliver a scaled solution to a high-quality platform with robust cashflow characteristics,” said Eli Appelbaum, Co-Head of Ares European Alternative Credit.
“As AI adoption and the demand for cloud capacity continue to accelerate, Vantage has developed a market-leading position through a diversified global platform of data center campuses,” said Marc Cormier, Executive Vice-President and Head of Fixed Income, CDPQ. “This additional flexible capital will fuel Vantage’s strategic capabilities in Europe and builds on CDPQ’s track record in the telecommunications and digital infrastructure sectors. We remain committed to investing in the growth of critical digital infrastructure, which forms the backbone of interconnected economies while generating long-term value.”
“The digitization of our lives has made us increasingly reliant on digital infrastructure. This investment reflects our commitment to supporting transformative projects in the digital infrastructure space, where we have demonstrated our expertise in providing long-term financing solutions for critical infrastructure,” comments Augustin Segard, Co-Head of Infrastructure Debt Investments and Fund Manager at Schroders Capital. “We are excited to contribute to the growth of Vantage EMEA's high-quality portfolio to help it meet the increasing demand for data centers, while generating long-term value for our investors.”
Vantage is focused on environmental stewardship and is committed to reaching net zero carbon emissions by 2030. In 2022, Vantage signed The Climate Pledge as part of its ongoing commitment to reduce its environmental impact through regular GHG measurement and reporting, the implementation of decarbonization strategies in line with the Paris Agreement, and neutralizing any remaining emissions (Scope 1, 2 and 3). More information is available in Vantage’s 2022 ESG Report.
1 Hyperscale data centers are significantly larger than regular enterprise data centers, exceeding 5,000 servers and 10,000 square feet, and providing at least 40MW of IT capacity.
ABOUT ARES MANAGEMENT CORPORATION
Ares Management Corporation (NYSE: ARES) is a leading global alternative investment manager offering clients complementary primary and secondary investment solutions across the credit, real estate, private equity and infrastructure asset classes. We seek to provide flexible capital to support businesses and create value for our stakeholders and within our communities. By collaborating across our investment groups, we aim to generate consistent and attractive investment returns throughout market cycles. As of March 31, 2024, Ares Management Corporation's global platform had approximately $428 billion of assets under management with approximately 2,900 employees operating across North America, Europe, Asia Pacific and the Middle East. For more information, please visit www.aresmgmt.com.
ABOUT CDPQ
At CDPQ, we invest constructively to generate sustainable returns over the long term. As a global investment group managing funds for public pension and insurance plans, we work alongside our partners to build enterprises that drive performance and progress. We are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at December 31, 2023, CDPQ’s net assets totalled CAD 434 billion. For more information, visit cdpq.com, consult our LinkedIn or Instagram pages, or follow us on X.
CDPQ is a registered trademark owned by Caisse de dépôt et placement du Québec and licensed for use by its subsidiaries.
ABOUT SCHRODERS CAPITAL
Schroders Capital provides investors with access to a broad range of private market investment opportunities, portfolio building blocks and customised private market strategies. Its team focuses on delivering best-in-class, risk-adjusted returns and executing investments through a combination of direct investment capabilities and broader solutions in all private market asset classes, through comingled funds and customised private market mandates.
With $93.7 billion (£73.5 billion; €84.8 billion)* assets under management, Schroders Capital offers a diversified range of investment strategies, including real estate, private equity, secondaries, venture capital, infrastructure, securitised products and asset-based finance, private debt, insurance-linked securities and BlueOrchard (Impact Specialists).Schroders Capital’s Private Debt and Credit Alternatives (PDCA) strategies comprise Real Asset Debt, Structured & Corporate Credit, Specialty Finance and Impact Lending. Led by Michelle Russell-Dowe and Stephan Ruoff, the team oversees US$30 billion in assets under management with more than 100 investment professionals.
* Assets under management as at 31 December 2023 (including non-fee earning dry powder and in-house cross holdings.)
As a reminder, Vantage Data Centers was founded in 2010 and acquired by Digital Bridge, PSP Investments and TIAA Investments in 2017.
This deal is a great private debt deal for CDPQ partnering up with Ares Management and Schroders Capital to finance the growth of Vantage EMEA’s high-quality data center portfolio.
As of now, the Vantage EMEA portfolio comprises 14 campuses, serving
key markets in Europe and South Africa. Once fully developed, the
portfolio aims to generate 751MW of combined IT capacity.
Digital infrastructure remains a very hot area in infrastructure and Vantage Data Centers is a global leader in hyperscale data centers.
I would recommend you read its company blog posts here to gain an appreciation of what they do.
I particularly liked this interview with chief operating officer of Vantage Data Centers Chris Yetman on why not all data center providers are created equal (read it).
I also enjoyed reading this post on how AI is reshaping the modern data center.
There are structural reasons why data centers will continue to grow and need financing and CDPQ's EVP and Head of Fixed Income Marc Cormier outlines them in the press release:
“As AI adoption and the demand for cloud capacity continue to accelerate, Vantage has developed a market-leading position through a diversified global platform of data center campuses. This additional flexible capital will fuel Vantage’s strategic capabilities in Europe and builds on CDPQ’s track record in the telecommunications and digital infrastructure sectors. We remain committed to investing in the growth of critical digital infrastructure, which forms the backbone of interconnected economies while generating long-term value.”
The scale of the deal is also attractive as Ares’s infrastructure debt and alternative credit strategies and CDPQ are providing up to €300m each and another €150m contribution from Schroders Capital totals €750m in financing.
When you are the size of CDPQ, you want to write €300m tickets in private debt financing to get the most bang for your due diligence buck.
And having two strong partners -- Ares and Schroders -- on this deal also helps.
Below, Biztech Asia recently had the privilege of interviewing Giles Proctor, Chief Operating Officer, APAC, of Vantage Data Centers—a global leader renowned for pioneering data center innovation, setting new industry benchmarks, and achieving remarkable advancements in reliability, efficiency, and sustainability. With a strong presence across North America, EMEA, and Asia Pacific, Vantage has emerged as a key player in the data center market (great interview).
Also, hear from Ares’ Co-Heads of European Credit Blair Jacobson and Mike Dennis and Head of Product Management and Investor Relations Andrea Fernandez on Ares’ European Direct Lending business which was launched over 16 years ago as a first mover in the market and has now grown to include numerous originating offices and significant investments across the continent.
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