With Canada identified as a perfect haven for the hottest new global development, data centres, Fengate Asset Management is going all in with the largest-ever Canadian investment in the sector.
Last month Fengate, a frequent development partner with LIUNA, announced it was spending $1.8 billion to expand its investment in eStruxture Data Centers.
EStruxture currently has a portfolio of 15 data centres across Canada and an executive with Fengate said in response to emailed questions the firm plans to spend more than $300 million on expansion on both the East and West Coasts of Canada.
‘Front row’ seat
George Theodoropoulos, managing partner at Fengate, said his firm has been an investor in eStruxture since 2017 and has had a “front row seat” in the data centre firm’s rise to become Canada’s largest in the sector.
He said the significant growth in computing services, the Internet of Things, artificial intelligence and machine learning are creating a huge wave of data requiring infrastructure to support it.
It is estimated consumers and businesses will generate twice as much data in the next five years as was created in the past decade, he noted.
“EStruxture is already the largest Canadian data centre platform, and Fengate’s investment will accelerate its growth to keep up with skyrocketing demand,” stated Theodoropoulos. “Importantly, with eStruxture bringing more state-of-the-art data centre facilities online, this will drive innovation, foster economic development and support the digital transformation of businesses across the country.”
LIUNA’s Pension Fund of Central and Eastern Canada is participating in Fengate’s investment in eStruxture. The investment includes capital from a group of institutional secondary investors co-led by Partners Group, a global private markets firm, and Pantheon, a leading specialist global private markets and secondaries investor.
Fengate is investing on behalf of Fengate Infrastructure Fund III, Fengate Infrastructure Fund IV and their affiliated entities.
“A number of our global investors were so excited about this deal that they wanted to be part of the deal announcement in June,” said Theodoropoulos.
The Fengate executive said Canada is emerging as one of the best places in the world for data storage for several reasons, including the fact data centres require powerful cooling systems and Canada’s relatively cool climate offers a natural advantage for efficient cooling.
He said Canada also has relatively inexpensive power, strong national and international fibre connectivity, stable government, stringent laws protecting the security and privacy of personal and corporate data, and highly skilled labour.
LIUNA did not immediately respond to requests for comment on its investment or the deal’s potential to provide work for its members.
Comprehensive expansion plan
EStruxture’s current portfolio of data centres includes facilities in Montreal, Toronto, Calgary and Vancouver.
Theodoropoulos said while the firm is committed to a “comprehensive and phased expansion plan, the exact timetable remains flexible to adapt to market demands and operational milestones.”
Further details of the expansion will be available in due course, he said. EStruxture will remain focused on Canadian projects.
EStruxture has the support of prominent financial institutions and a strong balance sheet, Theodoropoulos said, which allows the firm to embark on new large-scale projects without delay.
It also has strong alliances with major network, cloud and service providers with access to the largest carrier hotels in Canada and all of the major internet exchanges including QIX, TorIX, YYCIX and VANIX.
Almost all of eStruxture’s facilities are in regions with renewable energy sources, Theodoropoulos said, which is important given the sector’s heavy energy consumption.
eStruxture also invests in advanced free cooling technology to reduce energy consumption and improve efficiency.
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