The investment trusts investing in the data centre boom
Analysts comment on trusts with exposure to data centres and clean power.
When Donald Trump arrived in the UK for his second state visit last month, his entourage of business leaders announced billions of dollars of new spending on tech, AI and infrastructure such as data centres and efficient new sources of clean power in the UK.
Annabel Brodie-Smith, Communications Director at the Association of Investment Companies (AIC), said: “The announcements by the likes of Microsoft, Nvidia and Google during President Trump’s state visit highlight the significant investment in both data centres and the associated power infrastructure in the UK.
“But that is only part of the story. Countries around the world are racing to build the same digital and energy capacity for fear of being left behind in the global AI revolution. The question is, how can investors capitalise on this digital spending boom?
“The closed-ended investment trust structure is particularly well-suited for investing in hard to sell assets like data centres and energy infrastructure. Investors can buy and sell their shares on the stock market while their fund managers can take a long-term approach to their portfolio.”
The AIC asked analysts how private investors could take advantage of this investment boom in the UK and around the globe. Their answers are collated below.
In the UK, new data centres will have to be developed in sites that can connect to the power grid and be supplied with reliable and, ideally, low carbon energy.
Ashley Thomas, Infrastructure & Renewables Research Analyst at Winterflood Securities
What are the UK opportunities?
Tritax Big Box REIT and International Public Partnerships
Ashley Thomas, Infrastructure & Renewables Research Analyst at Winterflood Securities, said: “In the UK, new data centres will have to be developed in sites that can connect to the power grid and be supplied with reliable and, ideally, low carbon energy. The greater power requirements of Graphics Processing Units chips used for AI means a data centre offering high-performance computing capabilities could see a four-to-five-fold increase in power requirements compared to a traditional data centre.
“This means that securing power and a grid connection has become vital when evaluating a data centre location or project – it is no coincidence that alongside tech and AI executives, the Chair of National Grid was also present at the King’s state banquet.
“Within the UK investment trust sector, the funds with exposure to the data centre theme include Tritax Big Box REIT – which in January 2025 acquired a 74-acre site at Heathrow, called The Manor Farm site, to develop a 107megawatt (MW) data centre, on land currently used for open industrial storage, with scope to add a 40MW second phase data centre.
“In addition, Tritax Big Box REIT has formed a joint venture with a leading European renewable and low carbon power generator that will provide the grid connection for the Manor Farm site, aiming to start in late 2027. Working with an energy generating partner in this way allows Tritax Big Box to start operating around ten times more quickly than if it needed to apply for access to power direct from the grid.”
“Tritax Big Box REIT has also built a pipeline of additional grid connection agreements across the UK which could provide around 1,000MW of power for further data centre opportunities which could be delivered from 2028 onwards. Historically, data centres were 10 to 50MW in size but over 300MW facilities are now being built.”
Ashley Thomas, Infrastructure & Renewables Research Analyst at Winterflood Securities, said: “Another investment trust in this space is International Public Partnerships (INPP). Data centre power demand is forecast by the National Energy System Operator to increase more than fourfold over the next ten years, at that point many of the existing thermal and nuclear plants will have been retired.
“New low carbon baseload power generation is therefore essential, and this week Centrica announced an agreement with X-Energy (in which Amazon is a shareholder and customer) to deploy up to 6,000MW of X-Energy’s new build small nuclear reactors in the UK. The initial site is in Hartlepool and first power production is expected in the mid-2030s.
“Centrica is also a co-shareholder along with INPP (which will invest £250m) in the 3,200MW Sizewell C nuclear newbuild project, which should deliver enough power for around 7% of the UK’s demand.
“While the Sizewell C facility itself is estimated to deliver power from the mid-to-late 2030s, thanks to the funding model for construction it should start to generate positive shareholder returns for INPP from 2026 onwards. It is expected to represent around 10% of INPP’s net asset value by 2030.”
Where are the overseas opportunities?
Sequoia Economic Infrastructure Income, Pantheon Infrastructure and Cordiant Digital Infrastructure.
Iain Scouller, Managing Director of Investment Funds - Research at Stifel, said: “Sequoia Economic Infrastructure Income and Pantheon Infrastructure invest broadly across the infrastructure sector and one area in which they have sizeable investments is data centres.
“They are both able to invest in UK data centres and overseas projects. Sequoia has 12.1% of its portfolio in data centres. Sequoia has provided financing for the construction, expansion, or refinancing of 39 individual data centres, providing over 348MW of data centre capacity, across both established and emerging digital hubs in Europe and North America.
“Meanwhile, Pantheon Infrastructure has £31m, 5.7% of its net assets, invested in Vantage Data Centers, a provider of wholesale data centre infrastructure to large enterprises and hyperscale cloud providers in the USA. It also has a £37m, 6.8% of NAV, investment in CyrusOne, which operates more than 50 high-performance data centres representing more than four million sq ft of capacity across North America and Europe.”
Ben Newell, Analyst at Investec, said: “Pantheon Infrastructure also has significant exposure, with investments in CyrusOne (alongside private equity giant KKR, around 7% of its portfolio) and Vantage Data Centers (alongside DigitalBridge, around 6% of its portfolio). CyrusOne operates over 50 high-performance facilities across North America and Europe.
“Meanwhile, Vantage runs 37 campuses across five continents, serving global hyperscalers and large enterprises. Pantheon Infrastructure’s exposure extends through its power and renewables holdings, including Calpine, a major gas-fired power producer, and its most recent investment, Intersect Power, a US renewables developer. Both are well-positioned to benefit from rising energy demand driven by the demand for data centres.”
Ben Newell, Analyst at Investec, said: “The rapid expansion of AI and cloud computing is fuelling unprecedented global demand for data centres. Cordiant Digital Infrastructure has constructed a portfolio that includes 22 data centres, in addition to mobile and broadcast towers and fibre networks. Its holdings include a 37% stake in DataCenter United, a leading Belgian operator, Hudson Interxchange, an interconnect facility in New York, and a portfolio of data centres in the Czech Republic through CRA, its digital infrastructure platform.
“Data centres and cloud comprised around 15% of Cordiant’s revenue in the year to 31 March 2025. Cordiant Digital Infrastructure’s portfolio companies are pursuing ambitious growth agendas; DCU recently secured €120m of senior debt to fund expansion and acquisitions, while CRA is developing a new 26MW, state-of-the-art facility outside Prague, with permits granted and groundworks commencing in July 2025.”
Risks include being able to get planning permission to build the centre. In the London area, it’s proposed that some of these are built on greenbelt land and this is likely to prove controversial with local residents.
Iain Scouller, Managing Director of Investment Funds - Research at Stifel
What are the risks of investing in data centres?
Iain Scouller, Managing Director of Investment Funds - Research at Stifel, said: “Risks include being able to get planning permission to build the centre. In the London area, it’s proposed that some of these are built on greenbelt land and this is likely to prove controversial with local residents.
“The projects also require significant amounts of water, which can be problematic in areas where water supply is already tight. Many of these construction projects may be at risk of delays and cost over-runs. The projects may also use relatively high levels of debt, which can be a risk in itself. Hot weather can also be a problem – in their accounts Sequoia say extreme heat could impact the cooling systems at some of their data centres.”
Ashley Thomas, Infrastructure & Renewables Research Analyst at Winterflood Securities, said: “There are four risks to investing in data centres:
“Project delays. As with many large construction projects (particularly those requiring grid connections), project timeframes could experience delays, particularly given supply chain tightness within elements of critical equipment for example, power transformers.
“Valuation is also a concern. Given the large amount of capex being directed in the sector, this is a popular investment theme with valuations that - in general - have increased materially over the past couple of years, for example, the share price of Digital Realty Trust in the US has doubled since the beginning of 2023.
“And there is clear concern over ESG / green credentials – powering data centres 24/7 with carbon free electricity is currently difficult, albeit growth in battery duration and deployment of other long duration energy storage will help. But we have seen in the US that the expected growth in electricity demand, driven in part by data centre demand, is increasing expectations of future gas fired power generation and with it the carbon intensity of the power grid.
“Regulation is an issue. Power to drive data centres will require material investment in both power generation and grid investments. Given this increased investment, there has been public and regulatory discussion regarding the fair allocation of any cost increases, over and above direct grid connections, and how data centres should be charged for emergency grid access if they have self-generation.”
- ENDS -
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Notes to editors
- The Association of Investment Companies (AIC) represents a broad range of investment trusts and VCTs, collectively known as investment companies. The AIC’s vision is for closed-ended investment companies to be understood and considered by every investor. The AIC has 294 members and the industry has total assets of approximately £267 billion.
- For more information about the AIC and investment trusts, visit the AIC’s website.
- Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investment company shares, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all.
- To stop receiving AIC press releases, please contact the communications team.
- The Association of Investment Companies (AIC) represents a broad range of investment trusts and VCTs, collectively known as investment companies. The AIC’s vision is for closed-ended investment companies to be understood and considered by every investor. The AIC has 294 members and the industry has total assets of approximately £267 billion.
- For more information about the AIC and investment trusts, visit the AIC’s website.
- Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investment company shares, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all.
- To stop receiving AIC press releases, please contact the communications team.
