Cordiant Digital raises £185m for ‘internet plumbing’ pipeline

The nascent market in digital infrastructure funds expands after Cordiant completes its C-share issue a day after rival Digital 9 raised £175m in a quick return to the market.

Cordiant Digital Infrastructure (CORD ) has raised £185m in a C-share placing four months after flotation and just a day after investors snapped up £175m of shares in competitor Digital 9 Infrastructure (DGI9 ).

CORD raised £370m in its oversubscribed initial public offering (IPO) in February but an £800m pipeline of investment opportunities encouraged Canadian fund manager Cordiant Capital back to the market for more.

The additional fundraise came in below its target of £250m as the trust issued 185m C-shares at 100p each. This is in contrast to Triple Point-managed DGI9, which failed to hit target at IPO but saw its subsequent raise this week oversubscribed.

CORD, which is targeting a 9% total return investing in the ‘plumbing of the internet’, will deploy the cash into assets as diverse as data centres, telecoms owners, and fibre-optic networks in the UK, Europe, and North America.

Last month, the trust announced it had acquired a platform business in the Czech Republic and a fibre-optic network in Norway.

Shonaid Jemmett-Page, chair of the fund, said yesterday the initial money raised had already been invested which showed ‘the abilities of the investment management team to execute the investment strategy, deliver attractive total returns to shareholders, and make a positive impact on societies’.

Shares in CORD dropped below their issue price after launch but recovered to a high of 105.5p in May. They are up a penny to 104p today.

Although CORD missed its fundraising target, analysts have been positive about the prospects for the rapidly-expanding digital infrastructure trend.

Last month Investec analyst Ben Newell said digital infrastructure ‘represents a compelling and unique investment opportunity with strong secular drivers’.

He said the assets in the sector have ‘low obsolescence risk and typically benefit from lengthy contracts, with high renewal uptake, and inflation escalators’.

‘We believe there are significant opportunities for growth and this is underpinned by increases I the number of global internet users, data consumption, data transfer speeds, and an increased volume of data causing increase demand for storage,’ said Newell.

 

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