Month: January 2022

Melody Investment Advisors Closes on $1.95 Billion Communications Infrastructure Fund

Source: PR Newswire

NEW YORK, Jan. 18, 2022 /PRNewswire/ — Melody Investment Advisors LP (“Melody”), an alternative asset manager focused on mission-critical communications infrastructure, announced today the final close of Melody Communications Infrastructure Fund II (the “Fund”) at $1.95 billion. The Fund was significantly oversubscribed and exceeded its target of $1.5 billion by nearly 30%.

Omar Jaffrey, sole Founder and Managing Partner of Melody, said, “We thank our investors and are excited about the opportunities we see in the market as we believe demand for network usage will grow exponentially. We have a world-class team of partners and professionals at Melody, and are confident that our experience, deep sector expertise in identifying investments in communications infrastructure and active approach to value creation will allow us to focus on delivering superior results to our investors.”

Current Fund investments include CTI Towers, a leading owner and manager of wireless towers in the US, Harmoni Towers (formerly Uniti Towers), one of the largest tower builders in the US, and a growing cell sites and easements portfolio managed by Symphony Wireless, a cell sites and telecom easements acquisition platform.

“We are grateful to our investors for their support and commitment, as well as to our clients who we believe will benefit from new investments in Melody’s portfolio companies,” said Chester Dawes, Chief Operating Officer and Chief Financial Officer at Melody Investment Advisors. “With a deep team, robust infrastructure and focus on risk management, we look forward to continuing to execute our investment strategy.”

Investors in the Fund are geographically diverse and include several large institutional infrastructure investors, including public and private pension funds, sovereign wealth funds, foundations and endowments, fund of funds, insurance companies and charitable trusts.

Atlantic-Pacific Capital served as the exclusive global placement agent. Kirkland & Ellis LLP acted as legal counsel.

About Melody Investment Advisors
Melody Investment Advisors LP is an alternative asset manager led by sole Founder and Managing Partner, Omar Jaffrey, focused on communications infrastructure. The firm seeks to invest through direct asset ownership as well as by developing innovative financing solutions to complex problems for leading global communications companies. To learn more about Melody, visit www.melodyinvestmentadvisors.com.

Cordiant Capital Logo

Cordiant Digital Infrastructure invests last of C share proceeds and announces new placing

Source: Quoted Data

Cordiant Digital Infrastructure invests last of C share proceeds and announces new placing – The board of Cordiant Digital Infrastructure (CORD) has announced that, following the full allocation of available capital to the acquisitions of Emitel and the assets of DataGryd Datacenters (described below), the net proceeds of the C share issue undertaken in June 2021 have been fully committed and, accordingly, the C shares will be converted into ordinary shares.

In addition, the board is pleased to be in a position to enhance its dividend guidance for the financial year commencing 1 April 2022, increasing it to 4p per ordinary share, and to announce a proposed placing of new ordinary shares under its placing programme. 

This comes as CORD has a pipeline of attractive opportunities under active due diligence and negotiation in excess of €2bn in North America and Western Europe alongside organic expansion opportunities within its portfolio. The placing will be launched at a price of 106 pence per ordinary share, representing a discount of 6.6% to the closing price of 113.5 pence per share on 4 January 2022 and a premium of 4.3% to the unaudited cum-dividend net asset value per share of 101.6 pence as at 30 September 2021 (and a premium of 5.9% to the unaudited ex-dividend net asset value per share of 100.1 pence as at 30 September 2021).

Steven Marshall, chair of Digital Infrastructure at Cordiant Capital Inc. said: “I am delighted that we have been able to secure these great assets to complement our investment in CRA. With completion of these acquisitions, the company will achieve full investment into a trio of desirable digital platforms at attractive pricing, which, on a pro forma basis have circa £95m of estimated underlying high quality 2021 EBITDA, establishing a robust platform for growth and accelerating planned delivery of a 4 pence dividend years ahead of the schedule announced at the time of the IPO.”

Shonaid Jemmett-Page, chairman of the Company, added: “These are transformative developments for Cordiant Digital Infrastructure. The board is delighted, on the back of the acquisitions, to be in a position to authorise both Conversion of the C Shares and an increase in dividend guidance. The announced placing of ordinary shares will assist in financing our exciting Emitel acquisition and also enable the Company to continue to pursue its active pipeline of opportunities in North America and Western Europe alongside expansion opportunities within existing investments.

Background

Following its launch in February 2021, as the first dedicated digital infrastructure investment company on the London Stock Exchange, Cordiant Digital Infrastructure will, following completion of the acquisitions, have assembled a portfolio of three attractive digital infrastructure platforms, which collectively comprise:

–       about £95m of estimated 2021 EBITDA

–       about 300,000 square feet of existing and potential raised floor (or equivalent) data centre capacity

–       about 1,200 communications towers and sites

–       two significant fibre networks (leased and owned fibre-optic cable)

–       two national wireless sensor networks serving ‘smart city’ and utility applications

Fritzsche’s Top 10 Themes for 2022

In my old analyst days we always used to start the year with a “Top 10” list which consisted of key themes to watch.  While that consisted of a 20+ page report – and this piece will linger ~ 1000 words – I thought I would give it an attempt!  So here is my shot at Top 10 themes to watch in 2022, in CliffsNote version of course.

  1. WIFI GETS A WHOLE LOT BEEFIER – With the 6GHz spectrum WiFi now has access to, this group should not be underestimated. Recall in 2020, the FCC voted to allow 1,200MHz of spectrum in this band – increasing the spectrum available to WiFi by 5x.   
  1. EXPECT MORE FIXED WIRELESS ACCESS NEWS FLOW – While we believe fiber is always the preferred solution (see Theme # 10), expect FWA to get more airtime in 2022.  Both T-Mobile and Verizon have started to break these sub numbers out.  It is no wonder that carriers would talk about another revenue line as the pressure to find growth in ‘traditional’ wireless only continues to grow.
  1. SMALL CELLS WILL SEE MORE LOVE – 2021 was not the year of the small cell.  There is very little debate here.  Yet recall the spectrum we are now calling mid-band (C-Band; 3.45GHz) used to be called high-band.  Most RF engineers agree this spectrum is best supported through greater densification of small cell infrastructure.  Why has this not happened yet?  Digesting two spectrum auctions in a year put a lot of pressure on the carriers.  The fastest, most expedited way to get the spectrum live was to put equipment on towers. This will continue (see Theme # 9) but if physics still works, densification is key.  And small cells will have their time in the sun.
  1. PRIVATE NETWORKS AT THE BASE OF THE HOCKEY STICK –  We expect the private 5G network size to experience the MOST growth of any silo of communications infrastructure in the next year and decade.  In 2020, the estimated market size of this sector was $1.2B.  Some industry experts expect it to see a CAGR of close to 40% between now and 2028. Industries embracing this concept include: manufacturing, utilities, transportation and logistics and many more.  Our view has always been 5G will be first embraced by the enterprise – not the consumer. Private networks support this view. Key actors to watch are AWS and Microsoft.   How they play in the proverbial sandbox with the carriers (see Theme # 8) will be telling. 
  1. FURTHER BLURRING OF THE COMMUNICATIONS INFRASTRUCTURE SILOS WILL BE SEEN – American Towers’ recent purchase of Coresite was yet another domino to fall in the blurring of the lines between the communications and infrastructure spaces.  We expect many more to fall.  What will be most interesting is to see if the data centers actually take the lead here.   
  1. NEW HORSES WILL STAND ON THEIR OWN IN A MEANINGFUL WAY IN COMMUNICATION INFRASTRUCTURE SPACE  – In the past there was basically just three main “buckets” of digital infrastructure: fiber, towers / small cells, and data centers. But looking at the coming deal flow – it is clear that many new silos will emerge.  Key horses to watch include (but are not limited to): in-building wireless, edge players and the renaissance of the satellites.   In fact, I predict that the 2023 Top 10 list will have themes dedicated to each of these silos! 
  1. MIDBAND SPECTRUM = THE “YUMMIEST” PART OF THE LAYER CAKE – T-Mobile once described the spectrum bands as a beautiful wedding cake – low band being the base layer, midband being the middle and mmwave being the top layer of the cake.   The middle band is key to holding the cake together.  An analogy could be made it will also be key to holding together the 5G plans for many carriers! In 2021, the industry went through two major midband spectrum auctions, freeing up an additional 380 MHz of midband spectrum.  While the US still lags some of its international peers in terms of the amount of midband spectrum, we expect it to become the ‘work horse’ of each of the carriers’ 5G networks.  The $90B paid in C-Band auction offers evidence of this!
     
  2. THE TECH / TELECOM TIES THAT BIND: FRIEND OR FOE?  – Expect more and more cloud / telecom announcements in 2022.  The recent Google and Verizon commitment to bring the ‘power of the cloud’ to mobile could provide interesting clues as to future paths.  However, one has to wonder if telecom must watch their back and if the two groups may actually be “frenemies”.  Recall, in December, AWS announced a service to help enterprises “set up and scale private 5G mobile networks.”   
  1. TOWERS: THAT WONDERFUL MOAT IS ONLY GETTING THICKER – Tower stocks had a great year, up 33 percent in 2022.  While the macro risk of higher interest rates always looms, we expect the continued tailwinds (new spectrum deployments, 5G rollouts and new carrier builds) to offset these risks.  There is much more wood to chop in towerland in 2022.
  1. A ‘FIBER RICH’ DIET IS NOT A FAD – EXPECT IT TO BE HERE FOR MANY (MANY!) YEARS TO COME – Fiber, fiber, fiber.  We have written much about this but it continues to be true in almost every segment of the Communications Infrastructure space.  Simply put, more is needed.  More fiber to the home, more fiber to backhaul and fronthaul wireless connections, more fiber to feed small cells, more fiber deep architecture for cable players and more fiber to support further data center deployment.  With regulatory tailwinds supporting this rollout, fiber enthusiasm will only continue to grow. Now the supply chain just needs to ‘behave’ to allow this!