Cordiant Capital has targeted a £300m raise for a digital infrastructure investment trust, as it looks to “capitalise on the surging growth in data consumption and traffic”.
The investment manager will look to issue up to 300 million ordinary shares at 100p each through an initial placing and offer for subscription.
Subscription shares will be issued for nil value to IPO investors subscribing for ordinary shares on the basis of one subscription share for every eight ordinary shares subscribed.
Cordiant Digital Infrastructure will mainly invest in operating digital infrastructure assets, with a predominant focus on data centres, mobile telecommunications/broadcast towers and fibre-optic network assets, primarily located in the UK, the EEA, the United States of America and Canada, it said.
The company will seek to provide investors with a net asset value total return of at least 9% per annum alongside an initial dividend of 1p per share in the first full financial year, 2p to 3p in the second full financial year and progressively rising yearly to at least 4p in the fifth full financial year.
Chair Shonaid Jemmett-Page said the Covid-19 pandemic had “starkly highlighted… the need for substantial investment in digital infrastructure in the developed world”, adding that “the increasing digitisation across societies has the potential to have a transformative impact on the global climate and societal challenges that we face”.
Cordiant said it had identified and is evaluating a pipeline of investment opportunities worth around €1.5bn in areas such as US data centres, Scandinavian fibre and European mobile towers.
The manager noted that digital infrastructure assets exhibited a number of attractive features, including recurring long-term contracts (often with built in escalator clauses) with predictable cashflows, limited obsolescence risk and location-based barriers to entry.
It said that a number of traffic patterns and sector trends, including the adoption of 5G technology, would provide an economic tailwind that could last for more than a decade.
Cordiant Digital Infrastructure will focus on the middle-market, it added, which is an area where platforms can be acquired at attractive entry prices and the size of the platform grown through capital expenditure and bolt-on acquisitions.
The firm added that it was a sector specialist, with its digital infrastructure investment team having an average 20 years’ of experience in the digital infrastructure, communications technology and Internet sectors.
Chair of digital infrastructure at Cordiant Steven Marshall was formerly president of American Tower’s US tower division and has previously been CEO of National Grid Wireless and chair of the Wireless Infrastructure Association.
Marshall said: “The paramount need for more and enhanced digital infrastructure has become apparent to us all in recent months. However, investing in these assets requires sector expertise and knowledge.
“The Cordiant team has decades of industry and investment experience and we believe that the opportunities that we are originating are compelling.
“Cordiant Digital Infrastructure Limited will be the first dedicated digital infrastructure investment trust, providing diversified exposure to the attractive growth and income characteristics of the asset class.”
Cordiant runs infrastructure private equity and infrastructure private credit strategies through limited partnerships and managed accounts. It boasts global insurance companies, pension plans and family offices as clients.