Carlyle bets $1bn on US cell towers with Tillman Infra deal

Data centres, towers and fibre were once seen as value-add, but the Carlyle Group’s newest commitment of up to $1 billion towards Tillman Infrastructure, a top US-based private cell tower platform, is described as an investment in “an attractive core infrastructure asset class”, underlining the ongoing shift in these assets’ status.

Joshua Pang, a managing director and head of digital infrastructure at Carlyle, told Infrastructure Investor that the assets’ long-term characteristics and the industry in which they operate were highly attractive to the firm.

“We like this investment because Tillman’s portfolio includes some of the most sought-after core infrastructure assets,” he said. “Their towers are highly engineered, modern towers designed to meet the demands of top US carriers such as AT&T, Verizon, T-Mobile and others. The overall industry and market tailwinds are very strong and are supported by macro trends in the US mobile communications market, such as mobile data proliferation, cloud computing and internet usage outside the home and office.

“This platform has become the number one new tower builder in the country, and customers have trusted the Tillman team to be their long-term partners in serving consumers and businesses across the US. The tower sector is one of the most stable and resilient sectors globally and has grown through the past two recessions – we think it’s a premium, defensible growth industry.”

Carlyle declined to state which fund the investment would be drawn from. However, as first reported by Bloomberg, Infrastructure Investor understands the group has been planning the launch of an open-ended vehicle to target core infrastructure assets within the 8-10 percent return range, with its flagship global infrastructure strategy targeting returns of between 12 and 15 percent.

The digital infrastructure strategy led by Pang, who joined from his role as a managing director at Blackstone, sits within Carlyle’s global infrastructure platform. Digital infrastructure is relatively new to the strategy, although Carlyle has invested in two deals prior to this $1 billion commitment to Tillman.

“Involta Data Centres is a US-based asset with 12 data centres across attractive regional markets. We closed that deal about seven months ago and we’re excited about the next era of growth. We also invested in a fibre business called Wyyerd Fibre Group, completed just over a year ago, which is also continuing to build premium, modern infrastructure across the Western US,” Pang explained.

All three of the assets in question have strong ESG characteristics, according to Carlyle. While the firm was not able to provide specific details as to how the assets will benefit their surrounding environments, it was able to provide more background on the ethos of the Tillman deal.

“Tillman is building towers that help narrow the digital divide, by focusing on developing infrastructure in more rural and sparse or suburban markets where communities have been underinvested and underserved,” said Pang.