The Hamburg-based investment company DTCP has closed its second fund focussing on digital infrastructure (DIV II) with a volume of 1.6 billion euros. As CEO Vicente Vento explains in an interview with Börsen-Zeitung, the new vehicle primarily exploits the „massive demand for new data centres" and the necessary infrastructure for data transport, „meaning fibre optic cables as a backbone". The fund is based on a global investor spectrum from Germany (30%) and Europe (35%), the USA (20%), the Middle East, and South Korea, but only invests in Europe. According to Vento, there is an "extremely exciting market“ there, especially when it comes to setting up new data centres. "In future, demand will focus more and more on data centres with high-performance chips that are able to process a growing number of AI applications, for example in large language models,“ says Vento.

The new fund, with which DTCP, which was spun off from Telekom a few years ago, has now also made itself independent of the former parent company on the investor side. It has eight times the volume of its predecessor vehicle DIV I, which still had Telekom as its sole investor. „We received the funding commitments at a very difficult time,“ emphasises the manager. This is because the fundraising took place in a phase of rapidly rising interest rates and growing crisis signals for real estate assets.

In the now highly competitive data centre market, the new DTCP fund focuses on medium-sized data centres „that we can still develop", says Vento. This distinguishes the investment company from some others, which focus more on acquiring existing data centres, for example, where there are already long-term customer contracts or which are already operational. In this segment, returns are in the mid single-digit percentage range. "We are aiming for a 15% net yield. This means we offer investors an attractive risk/return profile,“ emphasises the DTCP boss. The young company underlines its credibility with the management's many years of expertise in the development of telecoms infrastructure. DIV I has now been repaid, with a net return of 18%, according to Vento.

Two thirds of DIV II is already invested. The portfolio includes two assets in the Netherlands, including the radio tower business of the former T-Mobile NL, which was acquired together with Cellnex, and a stake in Open Dutch Fibre, in which DTCP is working together with KKR. In addition, there is the investment in the data centre operator Maincubes, which is developing sites in Frankfurt and Berlin. DTCP initially acquired a minority stake in Maincubes, but has now taken over the majority. „We are aiming to acquire controlling majorities more frequently in future,“ emphasises Vento, but does not rule out further minority investments.

As an infrastructure investor in the mid-market segment, DTCP is operating its new fund with lot sizes of 150 million to 250 million euros in equity and is applying „rather conservative" leverage. According to Vento, it is usually between 60% and 80% of the investment sum. While a high level of debt is considered acceptable for established data centres, especially if they have long-term contracts with large customers, the debt sustainability is more limited for smaller properties that still need to be developed.

DTCP sets the planned holding period at five to seven years, which can be considered the lower average in the infrastructure sector. The investor often goes in at a very early stage, when sites still largely have to be developed. "We take care of the necessary electricity and also the fibre optic connection,“ explains Vento. Both are relatively scarce and expensive resources for modern data centres, as AI applications have a high energy consumption and require a very powerful infrastructure for data transport.