PAG Group, an Asia-focused private equity firm, through its PAG Real Estate strategy, and Kris Kumar, formerly the founder and CEO of Bridge Data Centres, today announced the launch of a company to invest in the digital infrastructure sub-sectors of data centers and fiber within the Asia-Pacific region (Digital InfraCo). Specifically, the company will target the acquisition, development, ownership, and operation of assets in the data center verticals of colocation, cloud, hyperscale, and enterprise, as well as network and fiber assets.
Digital InfraCo – Data Centers, Fiber – PAG Real Estate, Kris Kumar
The Digital InfraCo business will be structured and branded to commence operations in September 2021. Strategically, PAG Real Estate notes that Asia’s data center market and, in particular, the hyperscale sub-sector is currently underserved.
To-date, PAG Real Estate has made ~$2bn in investments in data center assets and land holdings. To this end, in the short- to medium-term, PAG Real Estate has plans to invest $10bn, through a combination of debt and equity, into the data center and fiber sub-sectors of digital infrastructure. Specifically, Digital InfraCo envisions a 5- to 7-year time horizon to make these investments.
Digital InfraCo’s board of directors will be led by Kris Kumar, as Chairman of the company. Kumar was previously the founder and Chief Executive Officer (CEO) of Bridge Data Centres, which was ultimately merged with Chindata Group (NASDAQ: CD) in July 2019. Prior to this role, Kumar was the Senior Vice President and Regional Head of Asia-Pacific for Digital Realty.
PAG Real Estate – Overview
PAG is one of Asia’s largest private investment managers with $40bn of assets under management (AUM). The group’s strategies include private debt, public markets, real estate, private equity buyout, and growth funds.
PAG’s Real Estate business grew out of Secured Capital Japan, founded in 1997 by Jon-Paul Toppino. The company’s initial focus was real estate and distressed asset investing in the Japan market.
PAG Real Estate invests in both i) core plus / value add real estate and ii) opportunistic real estate. The firm’s two distinct fund series are:
- Secured Capital Real Estate Partners (SCREP): opportunistic real estate fund. Specifically, its latest vintage, SCREP VII, has $2.75bn in capital commitments
- PAG Real Estate Partners (PREP): core plus / value add real estate fund. Specifically, its latest vintage, PREP II, has $2.25bn in capital commitments
Gobi Acquisition Corp – PAG Group
In July 2021, PAG Group consummated the initial public offering (IPO) of Gobi Acquisition Corp (NASDAQ: GOBI). Gobi is a special purpose acquisition company (SPAC) which generated gross proceeds of $250m.
Gobi Acquisition Corp states that its business strategy is to complete a business combination (i.e., M&A) with a company “that has a strong connection to Asia Pacific”. Further, the SPAC details that its acquisition focus is “sector agnostic and opportunistic”. Therefore, Gobi Acquisition Corp could potentially acquire data center or fiber assets in the Asia-Pacific region.
Overall, Gobi Acquisition Corp represents one additional funding mechanism for PAG Real Estate to purchase seed data center or fiber assets for its new Digital InfraCo venture.