CPPIB commits $350m for Asia telecoms exposure

The Canadian pension has backed a $1bn data centre fund managed by a subsidiary of Singapore-based Keppel Capital.

Canada Pension Plan Investment Board has allocated $350 million to a data centre fund being raised by a subsidiary of Keppel Corporation that has now reached more than $1 billion in commitments.

CPPIB's commitment, and an additional $150 million option, to the Alpha Data Centre Fund puts the vehicle at double its $500 million target. The fund is managed by Alpha Investment Partners, a wholly owned subsidiary of Singapore-based Keppel Capital.

ADCF is aiming to develop a portfolio of new and existing data centres in Asia Pacific and Europe. When fully leveraged and invested, the fund is expected to have $2.3 billion of assets under management.

As the fund seeks to originate investment opportunities, it will collaborate with Keppel Data Centres Holding, a joint venture between Keppel Telecommunications & Transportation, Keppel Land and two other Keppel subsidiaries.

“The continued strong growth in data requirements globally has driven demand for quality data centre space, particularly in the Asia-Pacific region where digital infrastructure is relatively underdeveloped,” said Jimmy Phau, CPPIB managing director and head of real estate investments in Asia. “By investing alongside the Alpha Data Centre Fund, CPPIB is able to gain exposure into this critical sector.”

In December 2016, ADCF made its maiden acquisition for a 60 percent interest in a data centre in Frankfurt Germany and In July this year, it purchased a 70 percent stake in the Keppel DC Singapore 4 facility.

CPPIB's commitment to the Asian communication infrastructure space follows its co-investment in March with KKR to invest $953 million in Indian telecoms business Bharti Airtel. The Canadian pension manager's fund totalled C$326.5 billion ($260.7 billion; €220.9 billion) as of 30 June.