DigitalBridge Group (DBRG) Goldman Sachs Communacopia + Technology Conference 2024 summary

Strategic evolution and investment approach

• Transitioned from a REIT to an asset-light asset manager to accelerate growth and improve earnings, reducing debt from $17 billion to $300 million and focusing on holistic digital infrastructure solutions.

• Emphasizes alignment by investing personal capital alongside public and private investors, with public shareholders benefiting from carried interest as funds mature and assets are divested.

• Manages $86 billion in assets across 46 companies, with $34 billion of equity, targeting consistent carried interest payouts over the next 3–11 years.

• Deploys capital across greenfield and brownfield projects, maintaining discipline and favoring long-term, contracted assets over chasing low-yield acquisitions.

• Focuses on flexibility, offering a range of solutions beyond data centers and fiber, including energy and credit products for middle-market companies.

AI, infrastructure, and market outlook

• AI is viewed as a multi-year infrastructure opportunity, with current CapEx in hyperscale rising from $186 billion in 2023 to over $250 billion projected by 2026.

• Monetization of AI infrastructure is expected around 2028–2029, following a similar arc to public cloud, with significant investment needed in fiber, mobility, and edge computing.

• Fiber demand is surging, especially for dark fiber and redundant routes, with enterprise and mobile applications expected to drive a 3x increase in data usage over public cloud levels.

• Holistic infrastructure solutions and ecosystem investments are prioritized, leveraging relationships with major tech and telecom customers.

• Edge computing, private cloud, and public cloud are the fastest-growing data center segments, while retail colocation and managed services are considered less attractive.

Asset monetization and capital recycling

• Maintains an active investor stance, regularly monetizing assets when premiums to NAV are available, having returned over $8 billion in DPI through eight exits in 24 months.

• Notable exits include the sale of Wildstone at a significant premium, with a focus on creating win-win outcomes for buyers and LPs.

• Switch, a private cloud data center business, has doubled EBITDA post-acquisition and may return to public markets, benefiting from a large land bank and renewable power.

• M&A activity is balanced with disciplined greenfield development, with recent deals in towers, fiber, and data centers across global markets.

• Asset sales are driven by value realization, not by a need to hold for extended periods, ensuring capital is recycled efficiently.