Spire Capital continues to have high conviction in select pockets of global private markets (i.e. ‘sweet spots’). This includes working in partnership with Valterra Partners LLC (‘Valterra’), to find attractive direct co-investment opportunities within the field of private equity infrastructure. More specifically, this means investment opportunities attached to essential services, underserved end-markets and long-term secular demand trends (e.g. data consumption).
As the world progresses through COVID-19 crisis, the resiliency of “Core” infrastructure assets is being tested as air travel, vehicle movements, energy demand and port throughput are all materially impacted. Meanwhile, data is proving to be essential to all sectors of the economy through the disruption. Data volumes in 2022 are forecast to be 3x those recorded in just 2017 and 11x 2012 as data intensity increases and use cases multiply. Internet users, connected devices and speeds continue to increase significantly, creating significantly more demand for data infrastructure services. The assets that provide the access to data (towers, fiber and datacenters) are increasingly being viewed as critical infrastructure to the economy. Data centres are increasingly being viewed as infrastructure assets because they possess many of the same key attributes as traditional core infrastructure investments including long term contracts, stable and predictable cash flows, high free cashflow generation and stable underlying demand drivers.
For the last 12 months, Spire Capital has been working with Valterra to better understand the global landscape for data and the infrastructure that enables its transmission. Data Centres sit at the centre of the data infrastructure system as the point where crucial storage and computing takes place. In particular, data centres at the “edge”, i.e. close to major metropolitan areas and thus close to end consumers, are increasingly important as the internet architecture undergoes a significant transformation as a result of the requirement for zero latency from many users.
In early-June 2020, Spire Capital finalised due diligence on Valterra’s US data centre strategy and associated co-investment opportunity with 1547 COLO. Spire Capital has strong conviction that retail colocation services offered within high-quality data centres in attractive edge-market locations is the optimum way to capitalise on the secular demand trends for data.
To provide Australian investors with access to 1547 COLO, Spire Capital has created the Spire US Data Centre Colocation Fund (AUD) (“the Fund”). The Fund will invest in 1547 via an underlying investment entity (Valterra Data Holdings LLC) created and controlled by Valterra Partners, a specialist lower mid-market private equity firm based in New York. The Fund will invest pari passu with Valterra’s interest in 1547 COLO. The Fund was established in June 2020 and serves as an AUD denominated Australian unlisted unit trust. The Fund will be a fully paid-in structure whereby 100% of capital commitments will be called upfront.
For more information relating to this Fund, please Contact Us