PGIM Real Estate has closed a $2 billion fund to back data center developments around the world.
The investment manager said it had completed fundraising for the Global Data Center Fund (GDCF), which makes investments across North America, APAC, and Europe.
News of the fund was first reported in May 2024, though it has been active since 2023, when it raised an initial $450 million.
Morgan Laughlin, PGIM’s global head of data center investments, leads the fund. Laughlin described the fundraising as “an important milestone that reflects strong investor confidence in the sector and our strategy.”
He said: "Data centers are at the heart of the digital framework that is playing an increasingly critical role across our economy and society. In line with the recognition of the importance of digital infrastructure in our modern lives, global investors are rapidly increasing their exposure to the sector.”
So far, the fund has committed $450 million of equity capital to data center investments, and PGIM said GDCF retains a strong pipeline of opportunities “that is expected to allow it to deploy the remaining capital within the next 18 months.”
It said it is pursuing “a build-fill-sell” investment strategy, “focused on the low latency hyperscale segment of the global data center sector, targeting opportunistic investment returns.” It plans to form joint ventures with data center operators to build new facilities.
PGIM has invested in several JVs with Equinix in Australia and the US to fund the development of hyperscale data centers under the colo firm’s xScale brand. With Equinix planning to expand its xScale portfolio across additional sites across the US (see DCD Magazine issue 57 for details), it is possible that new collaborations between the pair could be in the pipeline.
As well as raising capital amongst institutional investors, PGIM Real Estate entered into a distribution partnership with a leading global private bank to raise assets globally for the fund, the company said.
Raimondo Amabile, PGIM Real Estate co-chief executive officer and global chief investment officer, said: “We see a significant opportunity to develop expertise in the data center space and create a wider digital infrastructure platform. Data centers, and other associated digital infrastructure, offer a generational investment opportunity as the digital demands of our societies and economies continue to expand at an astounding pace.”
PGIM has been investing in data centers regularly for more than a decade. It previously owned a portfolio of US data centers alongside Digital Realty which it later sold to Menlo Equities.
Last year, it acquired land in Munich, Germany, for the development of a data center. Bought for its closed-end value-add fund European Value Partners (EVP) II, the investment firm said the site can offer 30MW.
