POWERED BY MOMENTUM MEDIA
Sovereign wealth fund increases stake in key data centre owner and operator
The Future Fund has upped its stake in CDC Data Centres under a deal worth over $2 billion.
In a statement on Tuesday, the country’s sovereign wealth fund said it has inked a deal with the Commonwealth Superannuation Corporation for the purchase of a 12.04 per cent stake in CDC alongside its partner Infratil.
Under the deal, the Future Fund will acquire an additional 10.46 per cent stake in CDC, taking its total holding to 34.55 per cent, while Infratil will gain an additional 1.58 per cent solidifying its position as the largest shareowner with a 49.75 per cent holding. CSC will maintain a 12.04 per cent stake in the data centre owner and operator.
The deal, reported to be worth $2.05 billion, is expected to help the sovereign wealth fund achieve its mandated target return of CPI plus 4 to 5 per cent over the long term, the fund’s chief investment officer, Ben Samild, said.
“Infrastructure assets such as CDC provide attractive risk-adjusted returns and local currency exposure that protect the portfolio from volatile international conditions,” Samild said.
“Technological advancement is one of the significant themes we see shaping the investment outlook and we expect data centres to play an important and long-term role in the economy of the future.”
The Future Fund recently updated its investment mandate, which alongside a return target of CPI plus 4 to 5 per cent also obliges the fund to heed national priorities.
Namely, the mandate, announced in November, introduces requirements for the sovereign wealth fund to consider national priorities such as the energy transition, housing supply, and infrastructure development. While the government insists that the fund’s core obligations to maximise long-term returns remain unchanged, critics have argued that the rationale for the changes is unclear.
The Future Fund has been investing in CDC since 2019, with the most recent investment taking place in December when it offered CDC additional equity funding to support its multi-year development pipeline and meet growing customer demand for data centre campuses.
“We are delighted to be able to increase our investment in such a high-quality Australian business with a proven track record in building and operating critical infrastructure,” said James White, director of Infrastructure at the Future Fund.
“The rapid adoption of AI and the continuing digitisation of the economy have been and will continue to be powerful drivers of economic growth and investment returns.”
In a separate statement, CDC said the deal - a testament to its "pre-eminent market position" - has boosted its value to some $17 billion.
“I am thrilled to have the continued strong financial backing and support of Future Fund, Infratil and CSC,” CDC chief executive officer and founder Greg Boorer said.
“The strategic importance of these shareholders and their long-term horizon means that CDC is best positioned for making the right moves to lock in long term growth in the relevant markets".
CDC is currently expanding its footprint with major developments, including a $2.7 billion data centre campus in Melbourne and a new Sydney campus, adding ~1GW of capacity to meet growing demand.
“The future is brighter than ever, and we are excited to embark on this next chapter of our journey,” Boorer said.
“We will drive forward with the same passion and determination that have defined our success to date and continue to expand our capacity to deliver cutting-edge digital infrastructure."
AUTHOR
Maja Garaca Djurdjevic
Recommended for you
Young Australian are key stakeholders in priority recommendations industry funds have made in their pre-budget submissions.
UniSuper’s CIO has flagged the potential for a 10 per cent or greater market correction, but stated the fund will seize it as a buying opportunity.
The $53 billion fund’s balanced options saw high single-digit returns in 2024, supported by sharemarket strength.
AMP is here to play again, says Alexis George, after the firm released its latest financial update, revealing how the sale of its advice business dented its profits.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
2
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.78 3 y p.a(%)
3
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
4
Global X GlobalX FANG+ ETF
30.80 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
28.31 3 y p.a(%)
