Digital Colony Management’s final close on its digital infrastructure-dedicated fund on $4.05 billion succinctly demonstrates the sector’s rising status as an attractive investment proposition, with an ever-increasing number of investors and fund managers recognising its potential.
But, while Digital Colony Partners serves to underscore digital infrastructure’s rise, it certainly isn’t the sole highlight this year; nor is digital infrastructure the sole extent of technology’s interaction with the asset class.
As Anthony Day, DLA Piper’s intellectual property and technology partner, pointed out in a recent study published by the law firm: “Demand for big data, cloud computing, artificial intelligence and the Internet of Things is rising significantly”.
It is these technologies and how they relate to infrastructure that Paris-based InfraVia Capital Partners is seeking to invest in, taking an innovative approach by launching the InfraVia Growth Fund. The vehicle, which was launched in October and has a €300 million target, will invest in tech companies operating in the transport, logistics, telecoms, utilities, health and energy sectors.
On a more global level, the ‘digital agenda’ is also an area of focus for the G20 in 2020, GI Hub chief executive Marie Lam-Frendo, told Infrastructure Investor in a recent interview.
As such, it was one of the reasons why GI Hub, the only G20 initiative dedicated to infrastructure, launched its first international competition, the InfraChallenge, “calling for digital innovations that can be applied to solve economic or social infrastructure issues”, according to its website. Other factors that led to the launch included digital solutions’ ability “to create more and sustainable infrastructure”, Lam-Frendo explained.
Also, “there has been a clear rumbling within the infrastructure community, for a couple of years now, and the infrastructure and tech worlds need to be better linked”, she added. “Historically, as an industry, we have been very slow to digitise.”
While that is generally true, there are fund managers who have been picking up the pace.
In 2018, Macquarie Infrastructure and Real Assets hired Peter Durante for the newly-created role of head of technology and innovation. Aside from identifying mega trends, most of his team’s time is spent on managing assets MIRA already owns.
“Our remit here is everything from the immediate, tangible and frankly, not particularly exciting stuff that can be done now to add value – like basic energy efficiency – all the way through to helping our portfolio companies assess their business plan through things like digital transformation and process automation,” Durante explained in an interview.
As we wrote in our November Deep Dive about Google’s parent partnering with Ontario Teachers’ Pension Plan to launch Sidewalk Infrastructure Partners: “Alphabet’s entry into the asset class foreshadows a potential disruption that will force investors to choose between betting on tech or being disrupted themselves.”