Keppel Capital’s data center fund raises US$1.1B, with AIIB as investor

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Keppel Capital Holdings closed its Keppel Data Centre Fund II (KDC Fund II) with US$1.1 billion in commitments, with Asian Infrastructure Investment Bank (AIIB) secured as an investor, Keppel Corp. and AIIB said in a filing to SGX Friday.

AIIB has invested US$100 million into KDC Fund II via a parallel fund structure and US$50 million via co-investments, the filing said.

KDC Fund II will focus on strategic investments in the data center sector in Asia Pacific and Europe, the filing said, adding the fund will tap on Keppel Data Centres Holdings’ expertise in developing and operating data centers for finding opportunities in both greenfield and brownfield assets. . 

The fund, launched in December 2020, has attracted investments from sovereign wealth funds, financial institutions, insurance funds and pension funds, the filing said.

KDC Fund II will be managed by Alpha Investment Partners, a private fund manager under Keppel Capital, the filing said.

Alvin Mah, CEO of Alpha, said in the statement: “Working together with Keppel Data Centres, we are able to tap on the Keppel Group’s know-how in data centre operations excellence, sustainable technology and energy-efficiency to develop better and greener data centres, which is an increasing imperative for data centre operators. This will allow us to set our portfolio above the others to offer a wider range of services to our clients and more compelling returns to our investors.” 

Dongik Lee, AIIB director general for the banking department in region one, pointed to digitisation as a “mega-trend” reshaping markets and businesses, particularly in the wake of the Covid-19 pandemic. 

“Our partnership with KDC Fund II and Alpha will foster the development and enhancement of hard digital infrastructure to bridge the digital divide by mainly investing in colocation data centers that mostly serve Emerging Asia,” Lee said in the statement.

The AIIB is a multi-lateral development bank focusing on sustainable infrastructure development; it has been capitalized at US$100 billion, and has a AAA rating from major international credit-rating agencies.