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Infrastructure Investor Awards 2021: Digital Investor of the Year

A string of deals in North America, Europe, Latin America and Southeast Asia propelled KKR to the head of the digital infra pack in 2021.

The coronavirus pandemic was truly a coming-of-age moment for digital infrastructure. Assets including data centres, telecommunications towers and fibre networks look more and more like core infrastructure the longer that working-from-home patterns persist.

Leading the charge in 2021 was KKR, which continued to build on an impressive track record in the sector by executing on a string of digital deals in mature economies and developing countries alike. The list of transactions is extensive and reflects KKR’s broad ambition and commitment to the sector.

One of the most significant of these came late in the year, when KKR joined with Global Infrastructure Partners to purchase CyrusOne and take the business private. The company was the third-largest global data centre provider at the time of the deal, which had an enterprise value of approximately $15 billion.

KKR also invested in MetroNet, the largest fibre-to-the-home platform in North America, and did several deals in Europe, including investments in Italian fixed-line telecoms network FiberCop and Netherlands FTTH platform Open Dutch Fiber, the latter a new business that aims to deliver high-speed fibre connections to at least one million homes by 2025.

As well as these acquisitions, KKR also completed the successful divestment of its 49.99 percent stake in French telecommunications company Hivory, and a partial exit from mobile towers and submarine data cable operator Telxius, selling its tower portfolio to American Tower. Combined, the two exits realised more than $5 billion in proceeds for KKR’s investors.

What’s more, KKR also demonstrated its conviction on the future of digital infrastructure with some bold moves into developing markets.

Colombian first

In July 2021, the firm announced the launch of what was billed as Colombia’s “first independent digital infrastructure company”, investing $500 million to take a 60 percent stake in the fibre-optic network previously owned by Telefónica Colombia. The local firm retained a 40 percent minority stake, with KKR’s investment set to quadruple the number of homes in Colombia with access to fibre broadband.

That deal built on a similar transaction announced in February 2021 where the firm partnered with ONNET Chile, another subsidiary of Spain’s Telefónica, to carve out and establish a company to manage Chile’s first open-access wholesale fibre network.

Outside Latin America, KKR invested in Pinnacle Towers in the Philippines, a market that few others have ventured into. “We will use Pinnacle as a platform,” Michael de Guzman, a managing director at KKR, told Infrastructure Investor in February 2021.

“The company is in advanced talks with the Philippines’ top telcos to build more towers. And it’s a first-mover situation, where we feel if we’re one of the first to invest in this sector we can secure contracts.”

This last deal was made from KKR’s inaugural $3.9 billion Asia-Pacific infrastructure fund, the largest pan-regional infrastructure fund raised for the region at the time of its closing in December 2020. The firm has ambitions to deploy further capital from that vehicle into the telecoms and digital infrastructure sectors in Asia-Pacific.

It is a long list of successes, amounting to a very strong period of digital dealmaking from KKR in 2021. The fund manager moved to secure multiple assets across different sectors in enormously varied geographies, making it little wonder that the firm secured the most votes as our Digital Infrastructure Investor of the Year 2021.

SECOND PLACE: Stonepeak

THIRD PLACE: CDPQ