CPPIB invests $350m in Singapore data centre fund

The Canada Pension Plan Investment Board (CPPIB) has committed US$350m (€295m) to the Alpha Data Centre Fund (ADCF), based in Singapore, with an option to lift that to US$500 million.

CPPIB is co-investing with Alpha Investment Partners and Keppel Data Centres – both part of the large Singapore conglomerate, Keppel Group.

With CPPIB’s latest commitment and option, ADCF has received up to US$1bn in co-investments. This is double the fund’s initial target size of US$500m.

Jimmy Phua, CPPIB’s managing director and head of real estate investments Asia, said in a statement: “Continued strong growth in data requirements globally has driven demand for quality data centre space, particularly in the Asia-Pacific region where digital infrastructure is relatively underdeveloped.

“By investing alongside the Alpha Data Centre Fund, CPPIB is able to gain exposure into this critical sector, in partnership with the Keppel Group, a well-respected partner.”

Phua said the partnership would enable the pension fund to make use of Keppel’s established relationships and “broad technical expertise with a focus on sustainability”.

When fully invested, the fund could have assets under management of as much as US$2.3bn.

Alpha, the private fund management arm of Keppel Capital, launched the fund in July 2016 and it has attracted strong institutional interest from investors seeking quality alternative asset classes.

Christina Tan, CEO of Keppel Capital and managing director of Alpha, said: “The fund is a prime example of how we can harness synergy and expertise across the Keppel Group to create value and deliver enhanced returns to investors.”

Tan said successful closing of the data fund was testament to Keppel’s ability to grow its capital platform with investments from global institutional investors.

The fund has made several key acquisitions in Frankfurt, and has a 70% stake in what is known as a carrier-neutral data centre in Singapore.

The ADCF aims to develop a quality portfolio of greenfield and brownfield data centre assets in Asia Pacific and Europe, capitalising on strong demand in this asset class in key cities within the two regions.

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