DigitalBridge: Investing in a digital future

This article is sponsored by DigitalBridge.

Meet the woman who, in 2021, helped her team close both the third-largest infrastructure fund of the year and DigitalBridge’s second flagship vehicle, DBP II, at $8.3 billion, exceeding the target raise by over $2 billion.

Why is digital infrastructure such an exciting sector to be working in, and what led you to this point in your career?

I joined DigitalBridge in 2019 having worked in the real asset space for quite some time, initially focused on the energy sector and later in a broader infrastructure role. Coming to DigitalBridge has been a fantastic opportunity for me, and I consider myself to be in an enviable position because digital infrastructure represents such a prominent growth area. As we have seen, digital infrastructure is benefitting from a very powerful set of tailwinds, and we don’t see that changing any time soon.

As 5G, cloud and other underlying drivers propel the industry, institutional investors are keen to increase allocations to digital infrastructure. From my vantage point as global head of capital formation and investor relations, this makes my job a lot easier. There are a lot of investors that have previously dipped their toe in digital waters with more diversified managers, but who now recognise that digital infrastructure is its own asset class that can benefit from a specialist manager with years of operating experience and global customer relationships in order to drive alpha.

How do you expect digital infrastructure to fare in a more challenging economic environment?

There are certainly now headwinds that all industries are facing, in the form of rising inflation, rising interest rates and supply-chain issues.

While it is becoming slightly more challenging, the way we play defence is to build strong, resilient platforms, and to opportunistically add to those platforms with bolt-on acquisitions. We also work very closely with our portfolio companies in terms of financing. We take advantage of the securitisation market, where we have been pioneers on the tower and data centre side, and more recently in other sectors, locking in long-term debt rates. We don’t have current maturities coming due at any of our investee businesses and that’s really important. In terms of supply-chain management, we are working to ensure that all companies have more than a single-source vendor, and we are building up inventory in order to satisfy future demand we see coming.

In short, yes, there are headwinds, but those headwinds can be managed. And at the same time, demand for digital infrastructure has never been stronger, so we continue to be well positioned for growth.

How is ESG evolving in the context of digital infrastructure and how are you approaching these challenges as a firm?

I sit on the ESG committee so I have a front-row seat to the robust programme that DigitalBridge has put together and which we continue to augment. We first carry out extensive due diligence on all of our portfolio companies across geographies and sectors, which includes a deep dive into their ESG programmes, creating a checklist of any deficiencies and plans for improvement. Each business then reports back on certain metrics on a quarterly basis, so that we can ensure we are tracking progress.

Meanwhile, the industry as a whole is targeting net zero by 2050, but that is not good enough for us. We believe it is imperative we bring those deadlines forward; Marc Ganzi, our CEO, announced a net zero 2030 initiative just around a year ago. All of our portfolio companies, as well as DigitalBridge as a firm, will need to hit that goal, and so we are working very closely with our investee businesses on the sourcing of renewable power.

The green credentials of data centres are becoming ever more important to hyperscale and enterprise customers, so there is real value in transitioning these assets and transitioning them now. The shift to clean power is an increasingly significant component of the way in which we are supporting the companies we back.

And what is your approach to diversity, equity and inclusion?

We have a separate DE&I committee that reports into our ESG committee and that group is looking to recruit and onboard individuals from diverse backgrounds who might not otherwise have the opportunity to work in private equity. Our objective is to double the percentage of employees from underrepresented groups.

There are four pillars to our DE&I programme which helps us to attract, retain and reward talented people from all backgrounds who can help advance our business: 1) mentorships, 2) internships, 3) recruitment, and 4) careers and compensation. We work with a number of organisations, including Sponsors for Educational Opportunity, to help source candidates at an analyst and associate level. We have a mentorship programme that is supported up and down the organisation – including by our CEO – and we work closely with junior team members in terms of their career progression.

In that sense, DE&I is a very important component of who we are and what we want the firm to be. At the same time, we are working with portfolio companies on their own DE&I initiatives, helping them to recruit diverse candidates to boards and other roles within their respective organisations.

What tips do you have when it comes to retention?

We have very high levels of retention and I think a lot of that is a testament to the culture of the firm. Everyone matters. Everyone has a voice and people feel empowered. It is an organisation without a great deal of hierarchy and even the most junior team members feel they can make themselves heard – that they can have an impact. That is a powerful motivator and very important in terms of retention.

Are you advocates of targets or quotas?

We are not advocates of targets or quotas. We are advocates of hiring the best talent, whilst recognising that a diverse workforce is beneficial to everyone. Having diverse viewpoints around the table leads to better decision making and better results. But, first and foremost, we believe in hiring the best talent.

What advice would you share with a young woman entering the infrastructure industry?

Find yourself a sponsor, someone who will support you in your career, and then lean into that relationship. At the same time, you need to advocate for yourself. It may be a generalisation, but women often don’t self-advocate well. You can’t just rely on others. You need to be on the front foot.

What are the next steps for DigitalBridge and what role do you see yourself playing in that future?

We currently have $47 billion of assets under management and I expect that to continue to grow. In addition to our value-add and core-plus strategies, we now have private credit and ventures. In the past year, we have completed fundraising for our second flagship fund, closing at $8.3 billion, exceeding our target by over $2 billion. Our debut fund closed on a little over $4 billion in 2019. It is also worth noting that we have generated over $11 billion of co-investment and direct investments to date.

I am proud of our team’s efforts in growing our assets under management and I look forward to continuing to launch new strategies with different risk profiles across the digital infrastructure ecosystem. We want to be the beneficiary of more interest in digital infrastructure and sharing our knowledge as a specialist investor and manager.

As you say, digital infrastructure is an attractive and competitive space. Beyond specialism, how else is DigitalBridge differentiated with investors?

Our operational prowess and the relationships we have cultivated with MNOs and hyperscalers over the past 20-plus years certainly resonate with investors. That also lends itself to proprietary deal sourcing. We generally don’t compete in auctions. In addition, we are prolific with co-investment opportunities. There are lots of managers that say they generate co-investment; we actually deliver. It’s a very important part of our programme.

How has your strategy evolved between your first and second flagship funds?

The strategy has been very consistent, with the exception of the fact that our global strategic customers wanted us to follow them into new regions, and into developed Asia in particular. To date, we have made three investments in Asia. In expanding our geographical remit, we have listened to our customers and the move has also been validated by our LPs, who have been looking for that exposure as well.

Any further plans for geographical expansion?

Not at the moment. We have our headquarters in Florida, an office in New York and a back office in Los Angeles. We also have a London office and more recently we opened a Singapore office. For now, that feels right. But never say never. We are always looking at ways to expand the existing platform into areas that offer growth.