Data centers and cloud computing are the infrastructure of the tech revolution. Like conventional transportation infrastructure, the segment provides long-term income generation, yet exposure to tech ensures long-term growth in scale.
This week, one of Canada’s leading public pension funds Caisse de dépôt et placement du Québec (CDPQ) bought a stake in Montreal-based eStruxture, a cloud and carrier-neutral data center provider. The deal was part of a C$600 million in equity and debt financing that also involved Fengate Asset Management, with lending provided by Deutsche Bank Credit Solutions and Direct Lending as well as several banks. The funding is helping the business acquire Aptum Technologies’ Canadian data center business as well as expansion projects throughout Canada.
Although not a strategic development fund, CDPQ backs Québecois business to help develop the provincial economy. Supporting data center growth enhances the infrastructure of the digital economy.
Speaking to Global SWF, Maarika Paul, CDPQ’s EVP and Chief Financial & Operations Officer, said: "CDPQ is unique in the sense that it has a dual mandate: to optimize commercial returns for our clients, and to contribute to the economic development of Québec. Investments in Québec represent circa 17% of our portfolio and have always done very well for us, given our market insights."
Data centers and cloud computing are a significant and growing part of some SOIs' tech portfolios. From 2017, global investment in data centers and cloud by SOIs exceeds US$6 billion. Global SWF’s 2021 Annual Report notes that in 2020, GIC was the leading investor in this sector with much of its investment was devoted to a US$1 billion joint venture with Equinix to develop and operate hyperscale data centers in Japan to support the workload deployment needs of a targeted group of hyperscale companies, including the world's largest cloud service providers. The venture follows on from a similar deal signed in 2019 by the partners for hyperscale data centers in Europe, indicating a long-term partnership in the sector.
Canadian pension fund OTPP has also sought to develop its exposure to data centers, having made a substantial allocation to Compass Datacenters in 2017. It led a US$ 360 million funding round for Singapore-based Princeton Digital Group which has built a portfolio of 18 data centers across four countries – China, Singapore, Indonesia, and India - and serves top hyperscalers, internet and cloud companies.
SOIs are also seeing the value of bolstering domestic data center infrastructure as a strategic national investment. Mubadala took a stake in UAE-based Group42, an artificial intelligence and cloud computing company, via the integration of Injazat and Khazna Data Centers. Meanwhile, Future Fund announced in early 2020 its first direct investment in data centers, having acquired a 24.1% stake in Canberra Data Centre (CDC).
