NZ Super Fund moves into North American data centres with CIM Group

The fund will invest $70m immediately in the company’s existing portfolio of six metropolitan data centres, with a further $45m available for future co-investments.

New Zealand Superannuation Fund has made its second foray into data centres with a commitment to co-invest up to $115 million in North America alongside CIM Group.

The fund will invest $70 million immediately into an existing portfolio of six data centres in North American metropolitan areas. It will deploy the capital alongside the Los Angeles-headquartered CIM Group’s existing funds and investors.

The data centres are located in San Francisco, California; Toronto, Ontario; Orangeburg, New York State; Chicago, Illinois; and Cheyenne, Wyoming.

A further $45 million will be available to invest in CIM Group’s pipeline of data centre opportunities as they arise. CIM Group will manage all the investments on behalf of NZ Super Fund.

This is the fund’s second investment in data centres. In 2012, it acquired a 39 percent stake in New Zealand information technology company Datacom, which has a network of data centres in its home country and Australia.

Speaking to Infrastructure Investor, NZ Super Fund’s head of external investments and partnerships Del Hart said it had been looking to gain access to opportunities in North America and had identified CIM Group as a potential long-term partner.

“We kicked off discussions with CIM in the broader context of [establishing] an ongoing relationship, and this opportunity was one of a number of things CIM were looking at that was of interest to us,” she said. “We conducted a comprehensive review of the attractiveness of the sector at that time, and that led to us proceeding with this investment.”

Hart said the investment was “very highly aligned” with NZ Super Fund’s strategy of building scalable and sustainable investment platforms. She added that the fund was confident about the assets’ risk-adjusted return profile and growth potential.

On whether this could lead to further expansion in digital infrastructure, Hart said: “Our preference is to learn from our investments before we expand our footprint, so this could potentially lead on to something bigger, but we’ll take that as it comes.”

Digital infrastructure as an asset class is proving increasingly popular among investors. Infravia partner Bruno Candès recently told Infrastructure Investor: “This is mainstream infra right now. No one is questioning it. The question now is where the right opportunities are, not whether this is infrastructure.”