SDC Capital Partners, a digital infrastructure-focused private equity firm, has closed its inaugural fund on its $400 million hard-cap.
Commitments from limited partners – the majority being university endowments, pension funds, private foundations and family offices – helped the New York-based firm exceed its initial $300 million target for SDC Digital Infrastructure Opportunity Fund I.
Jeff Eaton, of Eaton Partners, which served as placement agent for the fundraising, said the success of SDC’s inaugural fund is partly due to institutional investors seeking specialised fund managers with expertise in certain assets.
“We’re in the early innings of seeing investor appetite for those type of strategies,” Eaton told Infrastructure Investor, adding that LPs with more mature portfolios in the asset class are seeking managers that can target more niche investments. Their motivations are driven in part by promising growth industries and, depending on the sector, higher returns.
“You are seeing some of those big generalist funds do data and IT infrastructure, but we think it’s an area that’s ripe for more specialised managers,” Eaton said. “A lot of investors are seeing this is a big part of our economy and they don’t have exposure to it. They are starting to look for best-in-class investment opportunities.”
SDC has made three investments from the fund so far, including a 280-acre data centre in Virginia.
According to a statement, the firm targets investments ranging from $20 million to over $100 million with a focus on data centres, network/fibre and wireless infrastructure globally. It is “control and structure agnostic with respect to its investments”, the firm said.