IPI Partners, a digital infrastructure private equity firm, structured as an equally owned joint venture between ICONIQ Capital and Iron Point Partners, today announced the final closing of its second fund, IPI Partners II at $3.8bn. Indeed, IPI Partners II attracted demand well in excess of its $1.5bn target size and is more than double IPI Partners’ first fund which closed at $1.5bn. IPI Partners’ exceptional capital raise demonstrates the insatiable demand for digital infrastructure and, in particular, data centers.
Portfolio Companies – IPI Partners
IPI Partners has primarily invested in the data center and fiber sub-sectors of digital infrastructure, where it acquires, develops, leases, and operates these assets. Since inception, the firm’s data center portfolio has leased 480 megawatts of power capacity, with a total potential to lease 880+ megawatts of power capacity.
IPI Partners II began investing in 2020, and most recently closed on the acquisition of SUPERNAP Italia, a Milan-based data center platform. Below we highlight notable investments that IPI Partners has made in the digital infrastructure sector from both Fund I and Fund II.
IPI Partners – Fund I – Digital Infrastructure Companies
IPI Partners raised its first digital infrastructure fund in 2016 with $1.5bn in equity commitments.
STACK Infrastructure – Fund I
In March 2018, IPI Partners acquired three Infomart data centers, from ASB Real Estate, in Silicon Valley, Northern Virginia, and Portland, which it subsequently re-branded as STACK Infrastructure. Specifically, these data centers were purchased for $575m, equating to 17.8x EBITDA.
Through follow-on acquisitions of operating data centers and development sites, STACK Infrastructure has amassed a portfolio with the potential to reach 1,237 megawatts of power capacity. Specifically, these data centers are located in Atlanta (67 megawatts), Chicago (37 megawatts), Dallas-Fort Worth (462 megawatts), Columbus (42 megawatts), Northern Virginia (258 megawatts), Phoenix (150 megawatts), Portland (120 megawatts), and Silicon Valley (101 megawatts).
In terms of leasing, STACK Infrastructure had significant tenant wins in 2020, particularly in the hyperscale segment. Firstly, the company signed leases with Microsoft Azure in Silicon Valley (32 megawatts) and Chicago (18 megawatts). Secondly, STACK Infrastructure secured agreements with LinkedIn in Portland (5 megawatts) and Northern Virginia (3 megawatts). Notably, given the company’s hyperscale tenant focus, its typical lease terms are long-duration, being 10+ years on average.
T5@Alliance Hyperscale Data Center – Fund I
In October 2017, IPI Partners formed a joint venture with T5 Data Centers and Hillwood to develop T5@Alliance, a hyperscale data center campus for the Dallas-Fort Worth market. Specifically, upon completion, this facility offered 70 megawatts of power capacity across 700k sqft.
IPI Partners – Fund II – Digital Infrastructure Companies
IPI Partners’ second digital infrastructure fund has $3.8bn in equity commitments and began investing following its first closing in December 2019.
SUPERNAP Italia – Fund II
In February 2021, IPI Partners acquired SUPERNAP Italia, a 40-megawatt data center facility located near Milan, from Accelero Capital. Additionally, publicly-traded data center operator Switch (NYSE: SWCH), another SUPERNAP Italia shareholder, also exited the investment at this time.
Notably, Accelero Capital and Switch invested €300m into the construction of SUPERNAP Italia before selling it to IPI Partners.
Dark Fiber and Infrastructure (DF&I) – Fund II
In June 2020, IPI Partners purchased Dark Fiber and Infrastructure (DF&I), a wholesale provider of dark fiber and conduit networks to carriers and enterprise customers. Specifically, DF&I focuses on facilitating hyperscale access to key peering markets in the U.S. Indeed, Northern Virginia is an important market for the company.
DF&I’s dark fiber provides its customers with a diverse, all underground, low-latency option to connect data centers in Northern Virginia to telecom companies in the Northeast United States. Additionally, IPI Partners has committed further capital to DF&I to enable the company to expand into new U.S. markets.
Limited Partners (LPs) – IPI Partners
Beyond ICONIQ Capital and Iron Point, IPI Partners has secured notable Limited Partners (LPs) for its second digital infrastructure fund. Below we highlight five sizable equity commitments to IPI Partners II:
- New Jersey Division of Investment: commitment of $150m to IPI Partners II
- New Mexico State Investment Council: commitment of $100m to IPI Partners II
- State of Connecticut Retirement Plans & Trust Funds: commitment of $100m to IPI Partners II
- Teachers’ Retirement System of Louisiana: commitment of $50m to IPI Partners II
- Employees’ Retirement System of Rhode Island: commitment of $30m to IPI Partners II
ICONIQ Capital – Financial Sponsor of IPI Partners
ICONIQ Capital, founded in 2011 and San Francisco-headquartered, is a private investment firm with assets under management (AUM) of $62bn. The group serves as the family office for several well-known technology entrepreneurs and their families. Additionally, Henry Kravis (co-CEO of KKR) and Aditya Mittal (CEO of ArcelorMittal) both serve on the board of ICONIQ Capital. Overall, ICONIQ Capital owns 50% of IPI Partners.
Iron Point Partners – Financial Sponsor of IPI Partners
Iron Point Partners is a real estate private equity firm that invests broadly across real estate sectors, including data centers. The firm has raised $6.4bn of equity capital through five funds. Iron Point targets opportunistic investments and has deployed over $850m of equity in the data center sector since its founding. Overall, Iron Point owns 50% of IPI Partners.