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An Investment Manager Draws on the Growth of Digital Infrastructure


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An Investment Manager Draws on the Growth of Digital Infrastructure


THE CLIENT: A global investment manager headquartered in Europe

USERS: Investment director and investment associate ("investment team")

Demand for data center space has remained strong, as have investment and M&A activity. Investment managers looking to capitalize on this growth are arming their teams with deep sector insights to support their decision-making.

The digital world has become critical to daily life, as the COVID-19 pandemic proved. Driving a digital transition requires investment in infrastructure – data centers, fiber networks and wireless communication towers that can support data growth and connectivity needs by improving network density, speeds and reliability. Data centers serve a variety of functions and are essential for housing both edge and cloud workloads. Wireless communication towers are the last mile for all mobile devices and serve as the main connection hub for 5G, fixed wireless and edge computing.

451 Research, the technology research arm of S&P Global Market Intelligence, estimates that the compound annual growth rate of data center capacity globally to be 9% from 2021-2027. A majority of this development will be built to continue servicing public cloud providers, as companies leverage hybrid infrastructure with assets in the public cloud, along with hosted applications in both company-owned data centers and third-party colocation facilities. Given the rapid digital transformation of the global economy, investment managers monitor the data center industry for relevant opportunities, as it has shown steady and consistent growth in the past.

This global investment manager headquartered in Europe was looking for attractive opportunities in the digital infrastructure space, in particular with data centers. However, the team responsible for identifying and vetting different opportunities lacked access to detailed and reliable data needed to effectively assess potential investments. Members of the team wanted to find a trusted provider to support their efforts.

Pain Points

Members of the investment team were experiencing workflow challenges related to obtaining research and insights on different markets and data center facilities. They had been working with a number of consulting firms that would undertake desk research to collect information on individual countries of interest. Team members needed a broader, global view that would enable them to assess multiple countries at once. In addition, they lacked access to information on private companies and spent many hours manually researching these companies, gathering and standardizing financials and inputting the data into proprietary valuation models. A more efficient, automated and scalable approach was needed that could provide ready access to:   

  • Deep sector insights on data center markets delivered by industry experts.
  • Asset-level data specific to data center properties, such as rack capacity and utilization, compiled through site visits.
  • A list of European digital infrastructure funds and an understanding of portfolio-level asset performance.
  • Extensive financial data on private companies.
  • Robust tools to assist with valuations based on comparable companies to a target investment.

This information would enable the team to identify potential investments within Europe and elsewhere and make comparisons across facilities early on in the process. The head of the team was familiar with 451 Research and knew that the group analyzes technologies, services and companies across the digital infrastructure space. The team reached out to learn more about the solutions being offered.  

The Solution

Specialists from 451 Research discussed how the investment team could assess the technology landscape, understand challenges and opportunities, source deals and more by tapping into a number of the group's proprietary solutions. At the core of the offering for data centers is the Data center KnowledgeBase that includes site-level records for ~8,360 multi-tenant colocation and wholesale data center facilities from over 1,900+ providers across 115 countries and 375 markets[1]. In addition, the quantitative research team at 451 Research maintains financial information on each provider in the KnowledgeBase, which is used to track changes in facility investments, services sold and revenue. The data is available on the S&P Capital IQ Pro desktop. This robust platform provides a one-stop solution for essential intelligence, with access to unrivaled data, tech-forward productivity tools for investment analysis, news and research. With this extensive data center intelligence and analytical tools on the S&P Capital IQ Pro platform, the investment team would be well positioned to:

Assess the supply and capabilities of data center facilities

The Data center KnowledgeBase enables users to assess expansion potential and new construction activity in the data center market across geographies. With asset-level data for 8,630+ colocation and wholesale data center facilities globally, it provides 100+ data points per facility, including:

  • The percentage of operational square footage being utilized that shows what is available to sell.
  • The percentage of available power being utilized that shows how much is available for other potential users.
  • The percentage of available racks being utilized that also shows what is available for other potential users.

Dig deeper on data centers in specific regions

Multi-tenant Leased Data center Market Reports help users understand the growth of various data center hubs around the world. Detailed reports by region include:

  • A market summary detailing the market history and drivers, data center locations, pricing, costs and power trends.
  • Logistics data center (LDC) supply and demand detailing utilization, supply additions, investment activity and the announced mid-tier data center (MTDC) pipeline.
  • A competitive overview detailing data center market share leaders and services dynamics within markets.
  • Market challenges

New reports can also be commissioned on a customized basis.

Tap into data center analyst expertise

On demand analyst inquiry provides access to 451 Research’s entire quantitative data center team for questions about the data or the methodologies being utilized.

Visualize data center locations in the mapping tool

The mapping tool enables users to view data center locations and the proximity of power and renewable stations to help fuel investment decisions.

Evaluate the financials of both public and private companies

Premium Financials Dataset provides standardized data for 5,000+ financial, supplemental and industry-specific data items for 150,000+ companies globally, including 95,000+ active and inactive companies across multiple industries. Data is available at numerous frequencies and point-in-time representations of a financial period include press releases, original filings and restatements.

Private Company Dataset covers 50+ million company profiles, 9.6+ million with recent financial statements, 85+ million details on private company professionals, 3+ million corporate structures relationships and 1+ early stage companies supported by data from Crunchbase.

Analyze comparable companies to a target investment

A smart screener enables users to gather fund insights based on investment criteria and capture asset data with valuation metrics and multiples.

Quick Comps helps identify the ideal universe for trading comps.

Competitors zeros in on peer groups for particular companies, and pre-built valuation templates help quickly analyze potential investments.

Value target investments

An Excel Add-in and suite of office tools seamlessly powers proprietary models and streamlines presentations. Users can access a library of hundreds of ready-to-use valuation models and templates, or partner with S&P Global Market Intelligence’s financial modeling specialists to build their own. It is possible to integrate data from Excel to PowerPoint or Word and refresh formulas in Excel with just one click.

Key Benefits

Members of the investment team quickly saw the value in having 451 Research's global data center expertise and details on products, technologies, strategies and trends used by companies building and managing advanced, resilient and efficient data centers. They subscribed to the information that was discussed and had several training sessions on how to efficiently use the S&P Capital IQ Pro platform for data access and valuation modeling. Specialists also helped develop Excel templates to monitor key performance indicators in the team's digital portfolio, plus a detailed screener to see where digital infrastructure resides by region. Today, team members are benefiting from having: 

  • Ready access to valuable information that saves time and is more cost effective.
  • A comprehensive picture of data center facilities and locations to understand the market landscape.
  • More clarity about addressable demand by location to evaluate market dynamics.
  • Details on technology deal trends, comparables and proprietary 451 Research estimates, valuable as a benchmark when assessing investments.
  • Ongoing market monitoring to gain deep insights into the risks and opportunities presented by disruptive technologies and new market participants.
  • Granular financial data at a country level that includes small private firms in addition to the larger players.
  • Easy-to-use analytical tools to screen and value facilities.
  • An extensive selection of prebuilt model templates, reports and charts to streamline workflows.
  • Strong ongoing support from seasoned professionals.

Explore how to access the data sets discussed in this case study.

[1] Coverage as of January 2022.

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