Blackstone (NYSE: BX), headquartered in New York, is a highly diversified, alternative assets investment firm with over $1 trillion (with a T!) of total assets under management, as of the end of the first quarter 2024.
In its 1Q24 earnings call last week, Steve Schwarzman, Blackstone Chairman and CEO, comments, “Our portfolio is in excellent shape, and our limited partners continue to benefit, and we’ve positioned their capital, emphasizing new neighborhoods, such as digital infrastructure, logistics and energy transition. The firm’s thematic approach to deployment is informed by the real time data and insights we gather from our global portfolio, which helps us to identify trends early and build conviction around our ideas.”
Schwarzman points out that digital infrastructure is one of the firm’s highest conviction investment themes today. “Just as we recognized the rise of e-commerce nearly 15 years ago and started buying warehouses, we anticipated a paradigm shift around demand for data centers, driven by growth in content creation, cloud adoption and most importantly now, the revolution underway in artificial intelligence,” he says. “Others now know that AI requires exponentially more computing power and capacity than was previously imagined.” Blackstone plays in the digital infrastructure business through two key portfolio companies: QTS Data Centers, and Phoenix Tower International.
Schwarzman says Blackstone early on identified QTS, based in Overland Park, KS, the fifth largest US data center at the time, as a well-positioned but poorly trading public company with tremendous long-term potential. Blackstone entities acquired and took private QTS for $10 billion in 2021.
He highlights that QTS’s lease capacity has already grown sixfold in less than three years. Today, Blackstone claims that QTS is the largest data center company in North America with 50 data centers and six more under construction. “We are building a variety of other data center platforms around the world as well. In total, Blackstone vehicles now own $50 billion of data centers globally, including facilities under construction,” Schwarzman says. He adds that there is an additional $50 billion in prospective future development pipeline, with a $100 billion potential opportunity.
Phoenix Tower International, headquartered in Boca Raton, FL, owns and operates over 100,000 shared infrastructure assets, including more than 27,000 towers, in the U.S., Latin America and Europe. With Blackstone’s financial backing, PTI acquired in March, 1,900 sites in Ireland from Cellnex Telecom, Inside Towers reported.
Schwarzman notes that Blackstone is also actively investing in other companies in AI-related areas. He says that the firm is both buying and financing several firms that design, build and service data centers, and that it recently financed a cloud infrastructure business supporting AI development.
More importantly, Blackstone recognizes the growing demand for power to support data center operations. “Now we’ve transitioned to addressing the sector’s growing power needs, leveraging our sizable energy infrastructure platform, which includes the largest private renewables developer in North America,” Schwarzman emphasizes.
By John Celentano, Inside Towers Business Editor
Reader Interactions