Digital Colony expands European footprint with UK acquisition

Investment in Stratto is an ‘excellent first step’ as the speciality manager seeks to build a small cell platform and nears final close on its inaugural digital infrastructure fund.

Telecoms speciality manager Digital Colony has made its first investment in the UK market acquiring a majority stake in Stratto, a small mobile network services provider.

Stratto’s existing shareholders, which include institutional investor consultant BiscayneAmericas Advisors, as well as members of the management team rolled a portion of their ownership stake into the new capital structure. Financial details of the transaction were not disclosed and a spokesman for Digital Colony declined to comment.

A joint venture between Los Angeles real estate investor Colony Capital and telecoms infrastructure company Digital Bridge, Digital Colony funded its investment in Stratto, which installs and maintains small antennas and other components that allow in-building distributed network coverage, through its inaugural fund.

Earlier this month, Colony Capital said Digital Colony Partners had exceeded its $3 billion target by $300 million and was expected to reach final close soon. The firm has committed $229 million of its own capital to the fund.

The firm’s foray into the UK market comes four months after Digital Colony acquired Digita Oy, a Helsinki-based television and radio broadcast tower operator.

“Our investment in Stratto is an excellent first step for Digital Colony in the UK market as we seek to build a small cell platform and expand our European footprint,” Marc Ganzi, managing partner at Digital Colony, said.

Digital infrastructure is seen by many as having high growth potential as access to mobile networks increase and industries move to cloud-based data management.

In addition to small cell networks, Digital Colony also targets investments in macro towers, data centres and fibre networks.