Why Data Centres Are Europe’s Investment Vanguard

Analysis and themes

The survey identifies data centres as Europe’s most promising asset class, thanks to:

Cloud and AI Expansion: Businesses migrating to cloud services and AI applications are fueling demand for high-performance facilities.

Regulatory Requirements: EU digital sovereignty rules necessitate localised data storage, further boosting regional investment.

Countries like Ireland and the Netherlands lead with strong data center markets, though emerging hubs in Poland and Spain offer new opportunities for investors seeking lower costs and regulatory flexibility.

Recent Investment Examples:

While specific historical data on portfolio allocations to data centers by asset managers is limited, recent trends indicate a significant increase in investments in this sector. The surge in digital transformation, cloud computing, and AI technologies has made data centres a focal point for alternative asset managers seeking stable, long-term returns.

Blackstone’s Strategic Move into Data Centres:

• Investment Details: In the second quarter of 2024, Blackstone invested $33.7 billion, marking a 73% increase from the previous year. A notable portion of this investment includes $7.5 billion in debt financing for CoreWeave, an AI-focused cloud services provider.
• Strategic Rationale: Blackstone anticipates approximately $2 trillion in generative AI-related investments over the next five years. CEO Stephen Schwarzman has expressed the firm’s ambition to become the largest investor in AI infrastructure globally, with a portfolio that includes $55 billion in data centres and $70 billion in pipeline developments.

Fengate Asset Management’s Acquisition of eStruxture Data Centres:

• Investment Details: In mid-2024, Toronto-based Fengate Asset Management acquired a controlling stake in eStruxture Data Centres, a deal valued at C$1.8 billion (US$1.3 billion). Fengate now owns over two-thirds of eStruxture’s equity, investing C$1.2 billion in equity and assuming the remainder as debt.
• Strategic Rationale: Fengate’s CEO, Lou Serafini, emphasized confidence in the growing demand for data storage, especially with the rise of AI applications. Established in 2017, eStruxture operates data centers across 15 locations in Canada, covering 760,000 square feet, positioning Fengate to capitalize on the expanding digital infrastructure needs.

Marketing Strategies Employed by Asset Managers

Thought Leadership and Educational Content
Asset managers leverage thought leadership to position themselves as experts in the evolving data center market.

Example: Digital Realty

Their “Unleashing the Edge” campaign uses webinars, white papers, and localized case studies to educate investors about the untapped potential of secondary markets like Warsaw and Madrid.

Mediums Used: Blogs, webinars, and LinkedIn campaigns.

Investor Transparency and Data-Driven Storytelling
Managers use visual dashboards and detailed metrics to communicate the financial and operational performance of data centres.

Example: Blackstone

Blackstone provides real-time updates on its investments, including energy efficiency metrics, tenant demand, and ROI projections, framing their data centres as key enablers of AI and digital infrastructure.

Mediums Used: Investor portals, newsletters, and annual reports.

Highlighting Technological Innovations
Marketing campaigns emphasise the role of technology in improving efficiency and scalability within data centres.

Example: Microsoft (via Azure)

Microsoft promotes its AI-optimized cooling systems and liquid cooling technologies, showcasing how these innovations reduce energy use by up to 30%. This messaging appeals to investors seeking cutting-edge infrastructure.

Mediums Used: PR campaigns, video content, and sustainability webinars.

Conclusion: Fortresses of the Digital Age

The increasing allocation to data centres by asset managers reflects a strategic response to the digital economy’s rapid expansion. By effectively marketing these investments, firms not only attract capital but also position themselves as leaders in the evolving landscape of alternative assets.