Searches and Hires

Canada Pension Plan allocates up to $500 million to data center fund

Canada Pension Plan Investment Board, the C$326.5 billion ($262 billion) Toronto-based pension fund, committed $350 million to a fund managed by affiliates of Singapore-based Keppel Group that invests in data center facilities in the Asia-Pacific region and Europe.

A London-based spokeswoman for CPPIB said the Canadian pension plan has the option to invest another $150 million in the Alpha Data Centre Fund, launched in July 2016 by Alpha Investment Partners, the private fund management arm of Keppel Capital.

A Singapore-based spokeswoman for Keppel Capital said the Alpha Data Centre Fund had its final close this month, with the $350 million CPPIB allocation and the option for an additional $150 million effectively doubling the fund's initial targeted close of $500 million.

A joint Keppel-CPPIB news release said the fund, when fully leveraged, will have assets under management of $2.3 billion.

The fund has made initial acquisitions of Keppel-owned data center facilities in Germany and Singapore.

The CPPIB spokeswoman said the pension fund's $350 million investment in the Alpha Data Centre Fund is CPPIB's first in the data center segment of the real estate market.

In materials CPPIB emailed regarding the investment opportunities, it called data centers "a unique asset class traditionally with high barriers to entry, higher yields and lower volatility than other traditional asset classes, providing a complementary blend to existing real estate exposures."

Jimmy Phua, CPPIB's Hong Kong-based head of real estate investments, Asia, said in the release: "The continued strong growth in data requirements globally has driven demand for quality data center space, particularly in the Asia-Pacific region where digital infrastructure is relatively underdeveloped."