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Macquarie and The London Fund co-invest in VIRTUS for European data centre expansion

Written by Thu 12 Jan 2023

Macquarie Asset Management and The London Fund have agreed to co-invest in a significant minority stake of VIRTUS Data Centres, a London-based hyperscale data centre platform.

VIRTUS is a European subsidiary of ST Telemedia Global Data Centres (STT GDC), a Singapore-based data centre provider. The investment will see Macquarie take a 40% stake in VIRTUS.

Bruno Lopez, President and Group CEO of STT GDC, emphasised that the investment from Macquarie is a reflection on the company’s expertise in the data centre industry: “This is an exciting milestone for STT GDC. Macquarie Asset Management’s investment is a testament to the strength and scalability of our data centre business.”

STT GDC currently manages eleven data centres in the Greater London region, featuring a combined capacity of over 180 MW.

“This substantial capital injection coupled with our partners’ unique expertise will help us accelerate our expansion into the European Economic Area to capture the enormous opportunities ahead and cement our leadership in the industry,” added Lopez.

With the new investment, the company intends to expand its European footprint to new markets in Germany, Italy, Poland, and Spain. The two companies have an ambitious strategy to scale operations throughout the continent, with a £2 billion investment in target markets planned over the next five years.

“Through this long-term investment, coupled with our sustainability expertise, we intend to help drive their ambitious expansion across continental Europe where we believe there will be sizeable growth opportunities for data centre players during the next decade,” said Nathan Luckey, a Senior Managing Director within Macquarie Asset Management’s Real Assets team.

Investments from Macquarie Asset Management have been heating up the data centre markets in South America, as well as in Europe. Through a majority ownership in US-based Aligned Data Centres, Macquarie supported the acquisition of Latin American data centre company Odata in December.

“We are excited to have an experienced data centre investor in Macquarie join STT GDC to support not only our growth plans, but also our continued innovation and commitment to ensure our facilities are future-proofed with sustainability at their core,” said Neil Cresswell, Chief Executive Officer of VIRTUS.

The investment also marks The London Fund’s first infrastructure investment. The London Fund is a collaboration between two Local Government Pension Scheme pools – Local Pensions Partnership Investments and London CIV.

“With this investment, we’re pleased to be supporting a key global player in a rapidly growing sector, enhancing London’s digital ecosystem, whilst also proving that commercial success and a commitment to net zero can be compatible business goals,” said Richard Tomlinson, Chief Investment Officer of Local Pensions Partnership Investments.

The VIRTUS investment supports The London Fund’s Positive Social Outcomes promise by supporting London’s digital ecosystem through a data centre platform, which matches its electricity consumption to 100% renewable energy procurement alongside its wider commitment to efficient water and energy usage and net zero by 2030.

“This is one of our first direct investments in the digital infrastructure space, and, given the essential role it plays in supporting global connectivity by offering an alternative to travel and commuting, represents a pivotal investment on behalf of our clients in their journey to net zero,” said Vanessa Shia, Head of Private Markets at London CIV.

The co-investment was completed on 22 December 2022 following the satisfaction of customary closing conditions.

Phil Peters, Head of Macquarie Asset Management’s Client Solutions Group, said: “The London Fund’s objective of investing in assets that have positive benefits for Londoners very much aligns with our responsibility and opportunity to drive positive change for all our stakeholders through our investments.”

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Written by Thu 12 Jan 2023

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