AIIB’s $150m brings Keppel data centre fund to $1.1bn close

The partnership with Keppel will help bridge the digital divide across APAC, where disparities in data centre penetration ‘are wide’, AIIB’s Sergio Perez says.

Singapore-based asset manager Keppel Capital has secured a $150 million commitment from the Asian Infrastructure Investment Bank for Keppel Data Centre Fund II, with the fund reaching a $1.1 billion final close.

Launched in December 2020, the vehicle – which will invest in the data centre sector in Asia-Pacific and Europe – also attracted commitments from sovereign wealth funds, financial institutions, insurance funds and pension funds across Asia and Europe.

Of AIIB’s total commitment, $100 million was invested through a parallel fund structure, with the remaining $50 million through co-investments.

AIIB senior investment officer Sergio Perez said the bank’s partnership with the fund and fund manager Alpha Investment Partners – a subsidiary of Keppel Capital – would help bridge the digital divide across the Asia-Pacific region by mainly investing in co-location data centres largely serving emerging markets.

“The digitalisation mega-trend is reshaping global markets and business operations, and this trend has been accelerated by the covid-19 pandemic, further highlighting the importance of data centres, which are essential components of the digital ecosystem and attractive investment targets,” Perez told Infrastructure Investor.

“Multilateral development banks have been investing in digital infrastructure in the past, but such investments are becoming more essential nowadays with the acceleration of 5G technology and other high-speed [and] supercomputing digital infrastructure due to the pandemic.

“With the final close of KDCF II, a development fund making strategic investments in the fast-growing and attractive data centre sector, AIIB’s investment will help support the healthy growth of digital infrastructure across the Asia Pacific region.”

He pointed out that, despite the region being one of the fastest growing in data consumption and data centre market development, many emerging markets across Asia still lacked their own domestic data infrastructure.

“The disparities in data centre penetration among countries with different income levels are wide. This reflects shortcomings in the investment climate where major global investors have largely shunned investing in emerging and frontier economies,” Perez added.

“This partnership benefits AIIB’s geographical diversification, given the diverse potential pipeline covering Southeast Asia and east Asia, among other regions across Asia-Pacific.”

In a statement, Alpha chief executive Alvin Mah said the fund would utilise Keppel Group subsidiary Keppel Data Centres’ expertise to develop “better and greener” data centres: “This will allow us to set our portfolio above the others to offer a wider range of services to our clients and more compelling returns to our investors.”

In April 2020, Keppel Capital secured a $150 million commitment from AIIB for the Keppel Asia Infrastructure Fund. The fund reached a $1 billion final close in November last year.