Month: October 2020

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Introducing the Global X Data Center REITs & Digital Infrastructure ETF (VPN)

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Source: GlobalXETFs

 

On October 29th, 2020, we introduced the Global X Data Center REITs & Digital Infrastructure ETF (VPN) on Nasdaq. VPN seeks to invest in companies that operate data center REITs and other digital infrastructure expected to benefit from the development of 5G and next generation communication networks.

Data Centers & Cellular Towers: The Backbone of Our Digital World

A confluence of multiple digital technologies are expected to define this decade: billions of internet connected devices will transmit zettabytes of data across blazing fast 5G networks, which will be stored or analyzed in the cloud by sophisticated artificial intelligence algorithms.

As much as these technologies appear to occur effortlessly and out of thin air, they require an extensive network of physical infrastructure and hardware. Cellular towers transmit and receive radio signals to wireless devices, while data centers host servers that store and process information. Together, they form the backbone of the digital and wireless technologies that we use daily.

For investors, data centers and cellular towers marry elements of growth-oriented technology investing, with income-oriented real estate. As disruptive technologies like the Internet of Things, Artificial Intelligence, and Video Games & Esports require vast amounts of data storage and processing, demand for data centers and cell towers could continue to surge, along with hardware that powers these structures. Yet many of these companies operate as real estate investment trusts (REITs), distributing at least 90% of their taxable income to shareholders as dividends. With interest rates at record lows and stalling global economic growth, data centers and cell towers could offer attractive growth and income characteristics to investors’ portfolios.

Data Centers: The Cloud is on the Ground

Data centers are traditionally large, windowless, warehouse-like buildings that host their tenant’s networked computer servers. In exchange for regular rent payments and fees, data centers provide physical space, cooling, power management, and security to their tenants, but rarely own or operate their own servers. Unlike other REITs, data center leases are primarily based on power capacity usage ($/kW) rather than square footage. This business model gives tenants significant flexibility to scale their infrastructure and computing needs.

With widespread digitalization across the economy, a data center’s tenants can range from big tech companies, to government agencies, financial services firms, or health care providers. A large and growing share of data center revenue comes from leasing to hyperscalers like Google, Amazon, Facebook, IBM, Alibaba, Oracle and Microsoft. While these companies often directly own and operate their own data centers, they also lease facilities from data center providers such as Equinix, Digital Realty, CyrusOne, CoreSite Realty, QTS Realty, Switch, GDS Holdings, NextDC, KeppelDC, 21Vianet Group, and SUNeVision Holdings.

Like much of the real estate world, the physical location of a data center plays an important role in its ability to command premium rents. First, approximately 20% of the data center costs come from power usage, a cost that is typically passed on to tenants. Therefore, locating a data center in an area that offers low energy costs can be attractive to customers. Second, the proximity of data centers to populous areas can greatly reduce latency, or the time it takes for information to travel to and from the data center – a feature that is particularly important for disruptive technologies like online gaming and remote surgery. Third, access to multiple internet service providers (ISPs) and internconnection across multiple tenants can play an important role as well, creating a ‘network effect’ within the data center itself. Given that it can take years to permit, build, and lease a new data center, existing properties in attractive locations can command high rents, and competition is somewhat limited. In addition, high switching costs associated with moving, re-installing, and testing servers in a new location means lease renewal rates are quite high.

Wholesale vs. Retail Data Centers

Data center operators primarily focus on either wholesale or retail offerings.

Wholesale: Wholesale data center providers offer limited services – space, cooling, security, and power – to sophisticated tenants that manage their own networking equipment, either for their own uses or to sub-lease to their own customers. Wholesale contracts tend to be longer term (often 5 to 15 years) and include built in fee escalators and options for renewal.

Retail Colocation: Retail data center operators focus on leasing to numerous smaller and less sophisticated clients. These providers offer more built-out solutions, including racks, cages, and cabling, and typically offer shorter term contracts in the range of 3 to 5 years.2 A single retail operator may have dozens of clients in a single data center.

Cellular Towers: Wireless Highways

Similar to data centers, cellular towers own and operate critical physical infrastructure for the digital world, including wireless and broadcast communications towers. In the U.S., cell towers lease vertical space on the tower and land underneath primarily to major telecom providers like AT&T, Verizon, the T-Mobile/Sprint merged entity, and, more recently, Dish Network.3

Even though the number of potential customers is limited to a handful of telecoms, the need for towers is greater than ever with the rapid accent of smart phones and the internet of things. Today, there are approximately 128,000 macro cell towers in the U.S., but each tower only has so much range and capacity. A typical cellphone has only enough power to reach a tower up to 5-7 miles away, and a single LTE cell can only manage around 200 connections per 5MHz of spectrum before speed begins to stall.4,5 With 3.2 billion  active smartphone users globally – and counting – tower demand is expected to remain robust.6 But construction and permitting hurdles often limit expansion, making existing towers increasingly valuable. For example, suppliers of macro cell towers in the US added approximately 8% tower capacity from 2019 to 2020.7 But that lags substantially behind the 29% growth of mobile data per smartphone in North America.

Given that wireless towers face data and capacity constraints, tower operators are increasingly developing small cell networks or small low-powered-antennas (nodes) to alleviate congestion. Small cells are often attached to utility poles or streetlights and connected to fiber optic cables to enhance connectivity in densely populated areas.9 Some estimates expect small cells in the U.S. to grow four-fold from about 100,000 in 2020 to 800,000 by 2026 as new technologies like 5G and autonomous vehicles rapidly accelerate data demands.10,11

Tower rents vary by property location, leased vertical square footage on the tower, and the weight on tower. Cell tower leases generally range from 5–10 years.12 Importantly, most contracts are non-cancellable and have escalators that increase lease payment by approximately 3% annually.13 Largely fixed operating costs support these long-term contracts. Most costs come from monitoring the tower, insurance, taxes, utilities, maintenance. In some cases, ground rent is a cost, depending on whether the tower provider owns or rents the land beneath the tower. But these costs tend to be fixed whether a tower has one tenant or five – so as the number of tenants increases, revenue grows, but costs remain relatively flat. A single cell tower often hosts four or five telecom tenants, so the multi-tenant structure helps diversify long-term revenue streams and increases profitability.

Digital Infrastructure Hardware: Powering the Shift to Digitalization

The world’s growing reliance on connectivity and cloud computing makes digital infrastructure more important than ever. Memory and processing power are fundamental pillars of this ecosystem, so as demand for data centers grows, so too should demand for the hardware that goes inside them. In fact, semiconductor revenue within the server segment grew by approximately 12% annually since 2018.

For decades, servers were powered by central processing units (CPUs) that efficiently computed single threads of information. But with data centers expected to handle complex AI algorithms or billions of daily internet queries, processors are evolving. In recent years, graphic processing units (GPUs) became the state of the art hardware due to their ability to process multiple computations simultaneously.15 In the future, data-centric designs, known as data processing units (DPUs), could be the next generation of computational chips. DPUs enable a variety of data center solutions, including storing, computing, and data security at the highest speeds while lowering cost and time by analyzing data at the edge.16

As you can tell from the description above, data center hardware ages quickly as computing requirements evolve. Amazon, for example, estimates a 4-year useful life for their AWS servers.17 A hyperscale data center holds at least 5,000 servers, and can often reach hundreds of thousands of servers, representing tens of millions of dollars in IT hardware. Therefore, the strong demand for data center hardware stems from both the addition of new data centers around the world, as well as the ongoing maintenance and upgrades within existing data centers to support the latest technologies.

Digital Infrastructure: Real Estate with Income & Growth Potential

From a portfolio perspective, digital infrastructure can offer compelling growth and income characteristics amid the current environment. With interest rates near zero in most major developed economies and a stalling macroeconomic backdrop, investors are increasingly looking for alternatives to fixed income that can provide meaningful yield and upside opportunity.

The spread between the Fund from Operations (FFO) yield for data centers and cellular towers versus the 10-year US Treasury has generally increased over the last three years to approximately 300 basis points. FFO offers a better way to determine a real estate investment’s operating cash flow than earnings because depreciation and amortization (non-cash expenses) are deducted from net income. A rising spread versus 10-year US Treasuries can indicate that digital infrastructure is exhibiting improving valuations.

Beyond income, digital infrastructure could continue to experience strong growth as it is well-positioned to benefit from the changing economic landscape. Traditional real estate segments such as shopping malls, offices, and apartment buildings face secular disruptions from emerging technologies and new consumer behaviors.  Accelerated by the COVID-19 pandemic, consumers are increasingly opting to shop online, work from home, and socialize via video and gaming apps. These changing patterns are shifting real estate demand from large public areas and towards our private residences. Occurring in parallel with this shift is increasing demand for the digital infrastructure that powers this remote connectivity.

Digital infrastructure sits at the intersection of numerous disruptive trends, from increasing connectivity through the growth of 5G and the internet of things, to the rise of big data and artificial intelligence, and the transition to software delivered seamlessly through the cloud. We believe that such infrastructure is therefore essential to 21st century growth and can play a multi-faceted role in investors’ portfolios that could offer income and growth characteristics.

Related ETF

VPN: The Global X Data Center REITs & Digital Infrastructure ETF (VPN) seeks to invest in companies that operate data center REITs and other digital infrastructure supporting the growth of communication networks.

 

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UBS Asset Management Makes Strategic Minority Investment in Tillman Infrastructure to Accelerate U.S. Tower Rollout

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Source: BusinessWire

Funds managed by UBS Asset Management (UBS-AM) on behalf of a large US pension plan have made a strategic minority investment in Tillman Infrastructure (Tillman), a leading developer and owner of telecommunication tower infrastructure throughout North America. This investment enables Tillman to accelerate its rollout plans to meet the mobile network operator’s demand for thousands of new telecommunication towers over the next few years.

Founded in 2016 and based in New York, Tillman builds, acquires, owns and operates a portfolio of nearly 1,000 cell towers with over 1,250 more sites under various stages of development. Tillman is one of the largest tower builders in the US and tenants on Tillman sites include all major carriers including AT&T, Verizon, and T-Mobile, as well as regional carriers and Wireless Internet Service Providers (WISPs).

Perry Offutt, Head of Infrastructure Americas at UBS-AM, said: “Over the last few years, Tillman Infrastructure has built an impressive US cell tower platform. We consider this an opportune time to secure exposure to a sector that has proven its resilience. On behalf of our UBS-managed account with a large US pension plan, we are proud to join the other investors in Tillman to support the company’s continued strong growth.”

Tillman Infrastructure President and Chief Financial Officer, Suruchi Ahuja, said: “We are fortunate to have the support of several marquee financial partners and are excited to add UBS-AM as the latest investor into Tillman Infrastructure. We have a significant pipeline of tower sites under development and we are better financially prepared now than ever to meet the continued demand that we are seeing from the mobile operators and WISPs. We continue to focus on being a true partner to our customers as they focus on expanding their coverage and capacity across the nation.”

Morgan Stanley & Co. LLC acted as the exclusive placement agent to Tillman. Sullivan & Cromwell LLP acted as legal counsel to Tillman, and White & Case LLP acted as legal counsel for UBS-AM.

ABOUT TILLMAN INFRASTRUCTURE

Tillman Infrastructure (TI) is a rapidly growing cellular tower and telecom infrastructure company, which owns and builds assets across the United States. Tillman provides both the financial capability and operational expertise to rapidly build and manage many thousands of sites nationwide. Tillman Infrastructure is a subsidiary of Tillman Global Holdings (TGH), a global holding company focused on long-term value. TGH is an investor, owner and operator of digital infrastructure assets. For more information, visit tillmaninfrastructure.com.

ABOUT UBS ASSET MANAGEMENT

UBS Asset Management’s Real Estate & Private Markets business is one of the largest asset managers in real assets worldwide, currently managing around USD 114 billion globally. Real Estate & Private Markets Direct Infrastructure platform invests globally across the key infrastructure sectors including energy, utilities, transportation, telecommunications and social infrastructure. Established in 2007, its dedicated team of specialists operates out of five international offices and manages over USD 5 billion in institutional client commitments.

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Line graph with images of viruses floating around it

Quantifying How COVID-19 is Accelerating Digital Transformation

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Source: eWeek.com

 

eWEEK NETWORKING ANALYSIS: Digital service providers forecast to increase private connectivity 5x between 2019 and 2023, driven by greater demands from enterprises to close digital gaps at the edge.

At eWEEK, we report on advances in conventional data centers and in cloud services providers, but we don’t report on interconnection centers often enough. That changes here in this article.

Data center interconnect (DCI) hardware and software connects two or more data centers together over short, medium or long distances using high-speed packet-optical connectivity. There is little data storage in a DCI facility; data in “flight” is directed and redirected in microseconds. In this cloud-based, web-scale world, access to that flow of data is a critical challenge.

The news: The latest Global Interconnection Index (GXI), an annual market study published this month by Redwood City, Calif.-based Equinix, shows that the COVID-19 pandemic has had a major effect on how businesses are planning their digital infrastructure initiatives during the next three years. According to the report, digital service providers—such as telecommunications, cloud and IT services, content and digital media and technology providers—are forecast to increase private connectivity bandwidth 5x by 2023, driven by greater demands from enterprises to close digital gaps at the edge.

Bandwidth predicted to grow by 45% in next three years

The report also predicts that overall interconnection bandwidth, the measure of private connectivity for the transfer of data between organizations, will expand by a 45% compound annual growth rate (CAGR) from 2019 to 2023. The expected growth is driven by digital transformation, and specifically by greater demands from enterprises extending their digital infrastructure from centralized locations to distributed edge locations. 

This comes as businesses scale and support real-time interactions by strategically interconnecting workflows closer to and across people, things, locations, cloud and data. The capacity of this connectivity, Equinix said, is equivalent to 64 zettabytes of data exchange, which is enough bandwidth for every human on the planet (7.8 billion) to transmit their full DNA sequence in an hour.

The GXI Vol. 4 delivers insights by tracking, measuring and forecasting growth in interconnection bandwidth—the total capacity provisioned to privately and directly exchange traffic, with a diverse set of partners and providers, at distributed IT exchange points inside carrier-neutral colocation data centers. 

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Astra Capital Management logo

DartPoints Acquires Metro Data Centers

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Source: BusinessWire

DartPoints, an owner and operator of edge colocation data centers, announces its acquisition of Metro Data Centers (MDC), a full-service provider of interconnection and data center solutions in Dublin, OH serving the Central Ohio region. The acquisition expands DartPoints’ footprint with high-tier data center infrastructure capabilities. The facility offers colocation, cloud and carrier-neutral connectivity solutions, fortifying DartPoints’ mission to develop carrier-neutral edge interconnection points in markets that need it most.

In August 2020, DartPoints revealed its strategy to build and acquire edge interconnection and colocation facilities in the Southwest, Southeast, Upper Midwest and Mid-Atlantic regions. The company’s strategy focuses on delivering lower cost, high performance solutions in tier 2 – 4 markets which are not optimally served today. DartPoints will continue to execute its strategy through acquisitions and deploying edge colocation data centers in order to develop regional carrier-neutral aggregation points. The acquisition of MDC expands DartPoints’ regional presence and offers customers edge colocation solutions that are not available in the market today.

The MDC acquisition demonstrates DartPoints’ strategy across markets offering growth locally and regionally. MDC allows DartPoints to accelerate its ecosystem into Central Ohio leveraging its existing strategic partnerships. The region offers robust connectivity solutions, and its strategic geographic location is attracting a growing number of cloud services and content service providers (CSPs).

“The acquisition of MDC is a prime example of how we are executing on our strategy for regional growth aimed at improving interconnectivity,” adds Scott Willis, CEO of DartPoints. “MDC’s solutions enable DartPoints to immediately deliver our capabilities into this exciting market and surrounding locations. The MDC team has a long history of bringing innovative solutions to their customers, and we look forward to having them continue their work as a part of the DartPoints team.”

“We are excited to join the DartPoints team to expand services to our existing customers, as well as additional customer segments which need improved network performance,” comments Rob Kopp, co-founder and president of Metro Data Centers. “Our team is fully committed to integrate our solutions with the expanding DartPoints’ portfolio of interconnection points and providing communities in Central Ohio with innovative and best-in-class solutions.”

In June 2020, DartPoints announced its Eastern Iowa edge colocation data center interconnection point was ready for service. In August 2020, the company announced enhancements to its regional interconnection capabilities in Texas with LOGIX Fiber Networks. DartPoints and LOGIX Fiber Networks are both portfolio companies of Astra Capital Management.

For more information about DartPoints and its expanding edge colocation and data center interconnection capabilities, visit www.dartpoints.com.

About DartPoints
Founded in 2012, DartPoints is a leading developer, owner and operator of carrier-neutral edge colocation and data center interconnection points. By aligning with adjacent, rural, developing and underserved markets, DartPoints catalyzes and cultivates digital ecosystems to assure these markets are optimized, centralized and comprehensively interconnected. This enables a more reliable and transformative digital experience, empowering these markets to harness major market capabilities and deliver real-time content and applications with enhanced speed, performance and cost efficiency. To learn more, visit www.dartpoints.com.

About Metro Data Center
Metro Data Center (MDC) is a carrier-neutral, fiber rich full-service data center, equipped to provide solutions with efficiency, reliability and superior service. MDC offers over 22,000 SF of ‘high tier’ infrastructure, supporting a fully redundant N+1 environment. To learn more, visit www.metrodatacenter.com.

About Astra Capital Management
Astra Capital Management is a Washington, DC-based, private equity firm that invests in growth businesses in the communications and technology services sectors. Astra targets highly scalable companies with proven business models that have positive free cash flow and significant growth potential. Post investment, Astra works closely with managers to drive value creation through strategic repositioning, revenue growth and operational enhancements. To learn more, visit www.astracapitalmgmt.com.

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Edge Presence logo

DataBank Announces Strategic Investment in EdgePresence

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Source: PRNewswire

DataBank, a leading provider of enterprise-class colocation, connectivity, and managed services, today announced that it has made a $30M strategic investment in EdgePresence, an owner and operator of multi-tenant, modular data centers, providing space, power, bandwidth, and interconnection across key U.S. markets.  

EdgePresence’s Edge Data Centers (EDCs) are modular, purpose-built data centers, comprehensively and compactly designed to include critical power, monitoring, physical security and cooling. Located at targeted locations at the base of cell towers, key real estate, and enterprise campus locations, these EDCs will enable DataBank to colocate its customer workloads at the “far edge” to further reduce latency and improve performance for select applications. This modular capability complements and expands DataBank’s edge strategy and comes just weeks after it announced a tripling of its footprint with the acquisition of Zayo Group’s zColo data centers.

“With the continued expansion of 5G and internet infrastructure, we are seeing the need for geographic specific colocation solutions,” said Raul K. Martynek, DataBank’s CEO. “EdgePresence’s modular installations will allow DataBank to deploy these targeted solutions for specific applications and use cases where traditional data center options are not optimal.  The combination of DataBank’s expanded footprint with zColo facilities and EdgePresence modular solutions will allow us to offer customers almost unlimited geographic flexibility for their IT infrastructure.”

The announcement is yet another example of the convergence of digital infrastructure and the ecosystem benefits of DataBank’s lead investor Digital Colony.  EdgePresence has partnered with fellow Digital Colony portfolio company Vertical Bridge, the largest private owner and operator of communications infrastructure and locations in the United States.  EdgePresence is currently deploying at over a dozen Vertical Bridge locations.  The combination of Vertical Bridge, DataBank and EdgePresence assets will accelerate the deployment of novel infrastructure solutions for cloud, content and technology customers.   

“EdgePresence has been establishing an important beachhead at the ‘far edge’ since 2018,” said Doug Recker, the company’s founder and president. “By joining forces with DataBank, we’ll act as a force multiplier for their edge data center strategy, helping to bring data centers closer to the data pools being created by users, enabling next-generation, data-localization strategies and applications for 5G and IoT.”  

EdgePresence will continue to be run by Recker and his existing team, and collaborate with DataBank’s leadership team to expand its modular data center solutions.

“I couldn’t be more pleased to welcome Doug and his team to the DataBank family,” said Kevin Ooley, DataBank President and CFO.  “And I look forward to leveraging their innovative capabilities to further advance our Data Center Evolved™ strategy.”

About DataBank

DataBank is a leading provider of enterprise-class data center, cloud, and interconnection services, offering customers 100% uptime availability of data, applications and infrastructure. DataBank’s managed data center services are anchored in world-class facilities. Our customized technology solutions are designed to help customers effectively manage risk, improve their technology performance and allow them to focus on their core business objectives. DataBank is headquartered in the historic former Federal Reserve Bank Building, in downtown Dallas, TX. For additional information on DataBank locations and services, please visit www.databank.com or call 1(800) 840-7533.

About EdgePresence

EdgePresence, an owner and operator of multi-tenant, edge computing points-of-presence (PoPs), providing space, power, bandwidth, and interconnection, is currently deploying its edge data centers (EDCs) across markets throughout the U.S. Edge Data Centers are purpose-built edge micro data centers, comprehensively and compactly designed to include critical power, distribution, physical security and cooling. EDCs are anchored at the base of cell towers, key real estate, and enterprise campus locations enabling us to deploy within 12 miles from end users. This can be called the “far edge.” EdgePresence is serving as a turnkey solution for businesses looking to implement a flexible and dynamic edge compute strategy, nationally. Along with its Cell Tower partners, EdgePresence will build, deploy and operate hundreds of micro edge data centers across the United States.

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Goldman Sachs logo

Goldman’s Infrastructure Arm Makes $500 Million Data Center Bet

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Source: DataCenter Knowledge

 

The unit is investing $500 million in former Digital Realty executive Scott Peterson’s venture Global Compute Infrastructure.

The New York-based firm’s infrastructure arm, part of its merchant bank, agreed to invest an initial $500 million in Global Compute Infrastructure LP, a platform helmed by Scott Peterson, the former chief investment officer at Digital Realty Trust Inc.

“We think the industry has tremendous tailwinds amid continued penetration of cloud service providers,” Scott Lebovitz, global co-head and co-CIO of Goldman’s infrastructure investment group, said in an interview. Digital migration trends, already under way before the Covid-19 pandemic hit, have accelerated, he said.

Including debt, Global Compute will have a roughly $1.5 billion war chest to do deals in North America, Europe, Latin America and Asia Pacific. As future opportunities arise, Goldman and its fund investors may contribute additional capital toward the venture, Lebovitz said.

Data center transaction valuations have risen in recent years as the sector won favor with institutional investors in part because of expected ongoing growth. Lebovitz said Goldman Sachs has confidence in Global Compute’s operating expertise in various areas. Peterson, Global Compute’s chief executive officer, oversaw some $17 billion in deal volume across both organic development and mergers and acquisitions during his tenure at Digital Realty.

“There’s so much capital chasing deals, but based on the breadth of our track record, we believe we can find, evaluate and underwrite transactions as well as serve the critical needs of our customers,” Peterson said in an interview.

Peterson and Global Compute Chief Operating Officer Chris Kenney were longtime executives at real estate investment trust Digital Realty. Another Digital Realty veteran, Stephen Taylor, is Global Compute’s head of Europe.

Global Compute separately agreed to acquire ATM SA, a Polish data center and communications infrastructure business, from a group led by MCI and Mezzanine Management. Both Microsoft Corp. and Alphabet Inc. have announced plans to invest heavily in Poland.

Following the Global Compute investment, Goldman’s third infrastructure fund — at $2.5 billion – is now more than 70% deployed. The firm is preparing to raise a fourth fund, likely dubbed West Street Global Infrastructure Partners IV LP, early next year, according to people with knowledge of the matter. A Goldman spokeswoman declined to comment on fundraising plans.

Global Compute isn’t Goldman’s first foray into data centers. Its special situations arm previously owned a stake in AirTrunk, which it sold earlier this year to an arm of Macquarie Group Ltd.

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InstarAGF Agrees to Acquire LS Networks

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InstarAGF Asset Management Inc. (“InstarAGF”), today announced it has entered into a definitive agreement to acquire 100% of LS Networks (the “Company”), a leading fiber-optic bandwidth infrastructure services provider in the Pacific Northwest, from a collective of Oregon rural electric cooperatives. The Company’s current management team will continue to lead the business, which will remain headquartered in Portland, Oregon.

LS Networks delivers essential digital reliability, quality and capacity to large and small commercial and individual customers in rural and urban communities to support family, business growth and sustainability. The Company’s carrier-grade network includes over 7,000 route miles of fiber and extended reach throughout the Pacific Northwest serving national and international carriers, ISPs, data centers, schools, governments, healthcare organizations and businesses. LS Networks also provides Ethernet and dark fiber transport to towers, with existing connectivity to more than 500 on-net towers, with near-net proximity to an additional 800 towers throughout the region.

“LS Networks is a premier essential digital infrastructure platform with an established operating history, deep, diverse customer relationships and attractive growth profile,” said Jack Bittan, Partner, InstarAGF. “We are delighted to partner with the leading provider of innovative solutions in the Pacific Northwest to help extend competitive fiber connectivity and advanced technologies to bridge the digital divide in our communities.”

“As a long-term investor and owner of essential infrastructure businesses, InstarAGF’s purpose as an organization is to enrich people’s lives,” said Gregory Smith, President and Chief Executive Officer, InstarAGF. “We share the Company’s core values and look forward to building on its heritage of investing in local communities and enhancing critical digital infrastructure services, which are more important than ever before to our economy, well-being and future.”

“Central Electric Cooperative and InstarAGF share a mutual interest in seeing LS Networks reach its full potential,” said Dave Markham, President and CEO of Central Electric Cooperative and Chairman of LS Networks. “Under InstarAGF’s leadership, the Company is positioned well to successfully expand on its core mission to provide high-speed connectivity throughout the state of Oregon and beyond.”

“We are very excited to welcome InstarAGF to the LS Networks family,” said Byron Cantrall, President and Chief Executive Officer, LS Networks. “We have a proud history of connecting rural and underserved communities to advanced technologies and innovating to address the evolving needs of our current and future customers for fiber-based networking solutions. We are grateful for the longstanding support and vision of our shareholders as LS Networks positions for our next phase of growth and connectivity, which includes expanding our high-quality network and service offering regionally and working hard to exceed our customers’ expectations.”

Financial terms of the transaction were not disclosed. The transaction is expected to close in early 2021, following the satisfaction of customary closing conditions, including required regulatory approvals. LS Networks was advised on the transaction by Stifel and Davis Wright Tremaine LLP. InstarAGF was advised by Wells Fargo Securities, LLC and DLA Piper LLP.

About InstarAGF Asset Management
InstarAGF is an independent alternative asset management firm focused on North American middle-market opportunities in the infrastructure sector and other alternative real asset categories. InstarAGF’s growing footprint spans North America with a portfolio that includes aviation infrastructure, district energy, renewable energy, midstream energy services, and specialty ports and logistics businesses that deliver essential services and value to communities, partners and investors, helping us to fulfil our purpose of enriching people’s lives. InstarAGF is a signatory to the United Nations-supported Principles for Responsible Investment. For more information: www.instaragf.com

About LS Networks
Headquartered in Portland, Oregon, LS Networks operates the largest locally owned and operated fiber-optic network in the Pacific Northwest. For more than 15 years, LS Networks has served rural, urban and underserved communities with high-speed connectivity and market-leading bandwidth that is transforming the regional telecommunications landscape for customers and partners. With a mission to be the most trusted provider of digital infrastructure through a focus on quality and innovation, LS Networks is proud to invest in local communities and create opportunities for businesses and citizens. For more information: www.lsnetworks.net.

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extenet systems logo

ExteNet Systems Welcomes John Hancock as a Strategic Investor

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John Hancock-led Consortium to Acquire Approximately 30% of ExteNet

SOURCE: PRNewswire

CHICAGO, Oct. 15, 2020 /PRNewswire/ — ExteNet Systems, a leading provider of mobility and fiber connectivity solutions, and the largest private owner and operator of DAS and small cell networks in the United States, today announced that long-term institutional investor John Hancock Life Insurance Company (U.S.A) is leading a consortium that will acquire approximately 30% of the Company. John Hancock will join existing major investors, Digital Colony and Stonepeak Infrastructure Partners. ExteNet will utilize the capital investment from John Hancock to fund its future growth as it scales for 5G network densification and addresses advanced connectivity needs of its customers including mobile network operators (MNOs), carriers, property owners and enterprises.

“We are pleased to welcome John Hancock to ExteNet’s investor group,” said Marc Ganzi, Executive Chairman of ExteNet. “Communications infrastructure is leading global digital transformation, and we are in the early stages of a decade-plus 5G investment cycle. John Hancock is a perfect partner for ExteNet as we continue to provide best-in-class digital infrastructure solutions for our customer base and lead the transformation to 5G.”

“ExteNet has been a pioneer in wireless infrastructure, deploying mission critical networks and innovative 5G capabilities to its customers throughout the United States.  We look forward to our partnership with John Hancock to support the next chapter of growth,” said Brian McMullen, Senior Managing Director at Stonepeak.

“With our strong track record of providing market-leading, shared digital infrastructure and services for our customers, ExteNet is perfectly positioned to excel in our commitment to deliver tomorrow’s connectivity today,” said Jim Hyde, President and CEO at ExteNet. “I am excited to work with our newest partner, John Hancock, as we continue to build next-generation infrastructure and innovative solutions, including outdoor and in-building 5G, nationwide.”

ExteNet’s executive management team structure is expected to remain unchanged post-transaction, with Marc Ganzi, President and Chief Executive Officer of Colony Capital, Inc. (NYSE: CLNY) and CEO of Digital Colony, continuing to serve as the Executive Chairman, and Jim Hyde continuing as the President and CEO of the company.

PJT Partners served as financial advisors to the Company and its existing investors. TAP Advisors served as financial advisors to John Hancock. Simpson, Thacher & Bartlett LLP provided legal representation to ExteNet, and Paul, Weiss, Rifkind, Wharton & Garrison represented John Hancock. The transaction is subject to various regulatory approvals. Financial terms of the transaction were not disclosed.

About John Hancock and Manulife
John Hancock is a unit of Manulife Financial Corporation, a leading international financial services group that helps people make their decisions easier and lives better. We operate primarily as John Hancock in the United States, and Manulife globally, including Canada, Asia and Europe. We provide financial advice, insurance and wealth and asset management solutions for individuals, groups and institutions. Assets under management and administration by Manulife and its subsidiaries were CAD$1.2 trillion (US$0.9 trillion) as of June 30, 2020. Manulife Financial Corporation trades as MFC on the TSX, NYSE, and PSE, and under 945 on the SEHK. Manulife can be found at manulife.com.

One of the largest life insurers in the United States, John Hancock supports more than 10 million Americans with a broad range of financial products, including life insurance, annuities, investments, 401(k) plans, and education savings plans. Additional information about John Hancock may be found at johnhancock.com.

About ExteNet Systems, Inc.
Lisle, IL-based ExteNet Systems, Inc. is the nation’s largest privately-held provider of converged communications infrastructure and services addressing outdoor and in-building wireless, fiber and other advanced connectivity needs of its customers. Our customers include mobile network operators (MNOs), real estate owners, property managers, wholesale carriers, enterprises, municipalities and rural carriers. Our outdoor small cell and DAS networks are deployed in a variety of urban, suburban and rural environments while indoor networks are deployed in iconic sports and entertainment venues, convention centers, commercial office buildings, college campuses, healthcare facilities, hotels and resorts, and transit systems nationwide. For more information, please visit https://extenetsystems.com/.

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image of planet earth with graphical overlay depicting interconnected lights and dots

Europe’s first digital infrastructure ETF launched via HANetf

Source: InvestmentWeekUK

Europe’s first digital infrastructure and connectivity ETF has been launched via the HANetf platform, the firm’s sixth thematic ETF to date.

Sponsored by Quikro, the Digital Infrastructure and Connectivity UCITS ETF (DIGI) targets companies which are “positioned to benefit most from the explosive growth of the digital infrastructure virtuous circle of expanding users, data, applications and bandwidth”.

DIGI tracks the Tematica BITA Digital Infrastructure and Connectivity index, which has been developed between Tematica Research and HANetf, and comprises over 80 global equities “at the forefront of the digital infrastructure revolution”.

The fund is focused on six sub-themes, following “the journey of data as it travels from storage to end-user”, which includes data centres, digital connectivity, digital services and intellectual property, data networks, digital transmission and digital processing.

According to Cisco Systems, global internet traffic is expected to grow 370% by 2022, as the number of users, devices per user and the amount of data per device all increase, which this ETF seeks to benefit from.

The 11th ETF on the HANetf platform, DIGI is listed on the London Stock Exchange and has a total expense ratio of 0.69%.

Omar ElKheshen, CEO of Quikro, said: “The roll-out of 5G, Cloud, IoT, VR, and other disruptive technologies, in addition to permanent lifestyle changes linked to Covid-19, will continue to accelerate the trend towards further digitisation and virtual communication.

“With that arises a growing and insatiable need for digital infrastructure to support everyday digital activities and the immense amount of data flowing behind them.”

Christopher Versace, chief investment officer at Tematica Research, added: “By 2022, new and existing applications are expected to drive mobile data traffic alone to 930 exabytes per year, an 11,300% increase over 2012, which equates to all the movies ever made crossing global mobile networks every five minutes.

“5G and other disruptive broadband-enabling technologies will foster new rich data applications such as semi-autonomous and autonomous vehicles that will ultimately drive network congestion and require further infrastructure investment buildout. This in turn will fuel development of new applications and data, otherwise known as the virtuous digital circle.”

Nik Bienkowski, co-CEO of HANetf, said: “The Digital Infrastructure and Connectivity UCITS ETF focuses on some of the most exciting and transformational themes in the world today and allows investors to invest in this long-term megatrend of exponential growth in traffic using digital infrastructure.

“We are delighted to have worked with Quikro and Tematica on the development of this exciting new ETF.”

International Monetary FUnd Insignia against wall

IMF urges infrastructure investment to boost post-COVID growth

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Source: Reuters

WASHINGTON (Reuters) – The International Monetary Fund on Monday said member governments should seize a low interest rate opportunity to invest in infrastructure to drive recovery from the coronavirus pandemic and a shift toward greener energy.

The IMF said in chapters from it fiscal monitor that its research shows public investment in infrastructure, including investments in health care systems, digital infrastructure and addressing climate change can pay back more than two to one in economic growth within two years.

The full Fiscal Monitor will be presented at the IMF and World Bank annual meetings, which get underway next week and will provide an updated assessment of the pandemic’s effect on the global economy.

The IMF said increasing public investment by 1% of GDP in advanced and developing economies would grow their GDP by 2.7%, creating 7 million jobs directly, and between 20 million and 33 million jobs overall when considering the indirect macroeconomic effects.

“Even before the pandemic, global investment had been weak for over a decade, despite crumbling roads and bridges in some advanced economies and massive infrastructure needs for transportation, clean water, sanitation, and more in most emerging and developing economies,” IMF Fiscal Affairs Director Vitor Gaspar said in a blog post.

He added that “low interest rates globally also signal that the time is right to invest” despite the Fund’s frequent warnings about a massive buildup of debt in developing countries.

Some countries with tighter financing conditions will have to take a more gradual approach to scaling up infrastructure development, but the improved growth prospects could pay off if projects are well-managed and set the stage for future growth.

“Investment is now urgently required in sectors critical to controlling the pandemic, such as health care, schools, safe buildings, safe transportation, and digital infrastructure,” The IMF said in its report.

The Fund said public investment in infrastructure is feasible and can be delivered quickly if governments invest in maintenance of infrastructure, review and restart projects that were shelved at the start of the pandemic, speed up projects in the pipeline and plan immediately for a post-pandemic investments.

It said official aid for adaptation to climate change would pay back more than 100% in growth, and there is a need to double a currently planned $10 billion to adapt countries to climate change to around $25 billion.

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