Strategic Capital Fund Management, an investment manager, today announced the formation of a new data center developer in North America and Europe, named Datasphere, which aims to deploy $1.5bn+ of debt and equity capital into the sector and is led by Bryan Marsh, a former Vice President at Digital Realty. Presently, Datasphere has received initial commitments of up to $500m of equity capital from its U.S. based investment partner, which Dgtl Infra understands to be PIMCO (see below).

Overall, Datasphere’s $500m of equity will support $1.5bn+ of data center investments, implying a ~$1bn debt financing need by Datasphere. Therefore, the company is targeting a loan-to-cost (LTC) ratio of ~66.7% for its data center acquisitions and developments.

Datasphere – Overview

Datasphere will acquire, develop, and manage fully and partially stabilized data center facilities, including through sale-and-leaseback transactions. Geographically, Datasphere is aiming to deploy its capital in both North America and Europe.

The company will target technology, communications, cloud service providers, enterprise, and public sector tenants.

Management

Bryan Marsh, Chief Executive Officer at Datasphere, previously had responsibility for 8 million sqft of data center space across Digital Realty’s U.S. Central Region. At Digital Realty, Marsh negotiated leasing deals with Microsoft, Rackspace, IBM, and LinkedIn, each with $100m+ in total contract value.

Private Placements – Datasphere

Below we highlight two relevant companies affiliated with Strategic Capital and Datasphere which have recently raised equity capital through private placements of securities. In aggregate, through these private placements, the following two entities have sold over $300m of equity during 2021.

Strategic Datasphere REIT, LLC

Strategic Datasphere REIT, LLC is an entity affiliated with Strategic Capital Fund Management and PIMCO’s private funds group. In August 2021, the Strategic Datasphere REIT entity sold a total of $294m in securities.

Strategic Data Center Fund, LLC

Strategic Data Center Fund, LLC is an entity affiliated with both Bryan Marsh and Jim Condon (Managing Partner of Strategic Capital). In January 2021, the Strategic Data Center Fund entity sold a total of $18.5m in securities.

Transaction Advisors – Strategic Capital

Strategic Capital’s financial advisors and placement agents were Barclays Capital and PJ SOLOMON. Additionally, Strategic Capital’s legal advisors were Morrison & Foerster and Barnett Bolt Kirkwood Long Koche & Foster.

Mary Zhang covers Data Centers for Dgtl Infra, including Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), CyrusOne (NASDAQ: CONE), and CoreSite Realty (NYSE: COR). Within Data Centers, Mary focuses on the sub-sectors of hyperscale, enterprise / colocation, cloud service providers, and edge computing.

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