DigitalBridge Group (NYSE: DBRG) makes its money by first, raising capital from private equity firms, sovereign funds, pension funds and other sources and then investing and managing that pool of capital in active and passive shared infrastructure that yield long term returns. The company collects fees for managing that capital investment. The model is not unlike other big infrastructure investment firms like Blackstone (NYSE: BX), KKR (NYSE: KKR) and Brookfield Infrastructure Partners (NYSE: BIP) that invest in a range of asset classes. The difference is that DigitalBridge is focused solely on digital infrastructure.
The company’s 2Q24 financials showed that the company is growing. DBRG reported fee revenue of nearly $79 million, up 18 percent year-over-year, driven by higher fee earning equity under management or FEEUM. Fee-related earnings (FRE) were $26 million, up 20 percent compared to 2Q23 while fees associated with the distribution and servicing of its investment were nearly $20 million, up by $14 million YoY.
The company claims that it holds the position as the leading global asset manager in AI and digital infrastructure with portfolio assets under management (AUM) up 17 percent YoY to $84.5 billion. FEEUM of $32.7 billion was up 12 percent YoY. A big part of the company’s activity is raising capital. DBRG achieved new capital formation of $1.2 billion in 2Q24, reaching $3.4 billion or roughly 50 percent towards its goal of $7 billion by year-end 2024.
“As the leading global asset manager dedicated to investing in digital infrastructure, DigitalBridge is building AI’s ‘cloud-trained, edge-delivered’ future,” comments Marc Ganzi, DBRG CEO. “AI Infrastructure starts with data centers, where we manage the largest private global data center portfolio – diversified across six leading platforms – and extends to the entire network, where fiber, towers and edge infrastructure become increasingly critical as Gen AI apps and workloads proliferate.”
Ganzi pointed out that in Q2, the company’s direct exposure to “these powerful tailwinds” continued to drive 18 percent YoY growth in management fee revenues, with expanding margins “as the business continues to scale.”
In its 2Q24 presentation, the company showed that it is well positioned in data centers to handle the projected AI growth demand. Today, the company has investments in six data center platforms – Vantage and Scala for public cloud/hyperscale applications, Switch for private cloud applications, and AtlasEdge, Databank and AIMS for edge compute and network interconnection applications.
Across its six data center portfolio companies, the company currently operates a total of 173 data centers with over 4 GW capacity in 84 markets and 75 campuses comprising over 20 million sq ft. With AI as a driver, DBRG has 93 data centers in development with an aggregate capacity of over 7.5 GW in more than 90 markets globally across its six data center companies.
The company expects to invest about $35 billion in development capex over the next five years. Ganzi points out that this investment is not being done on speculation. Rather, he states that each of the data centers being constructed have building permits and ‘Will Serve’ letter commitments for power to each site. More important, he says that there are customer leases in place for when the data centers are completed and operational.
By John Celentano, Inside Towers Business Editor
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