With the rise of AI, both data centers and financial firms are faced with increased demands for everything from capital to capacity. Julie Brewer, Ed Diffendal, and Fentress Boyse explore how new technologies like high-performance computing are influencing the approach data centers are taking to financing—and what they need to consider moving forward.
Even in an increasingly constrained market, the data center industry is immersed in a seemingly endless ocean of opportunities to grow. Financial strategy plays a big role in whether data centers will rise to the top, flow with the tide, or get caught in the undertow.
AI’s Impact on Financing
It’s no secret that AI has significantly impacted the data center market. From capacity (which is growing larger and larger to accommodate the continually evolving opportunity that is AI) to leasing (where end users are looking more and more to partners to help them achieve the scale and resource access that are critical to high-performance computing), data centers are facing unprecedented demands.
What may be less obvious is the impact AI is having on the financing market—which is not all that different than what’s happening across the other elements of the data center ecosystem. Increased capacity and capital required to support AI workloads is putting pressure on utility and supply chains. The same is true for the capital markets, where this increase in development is putting pressure on different capital pockets, one of which is the real estate capital market that is navigating weakness in commercial real estate. We’re seeing a high demand for financing to accommodate the continual surge in demand for higher-density, higher-powered data center infrastructure. So, larger and denser deployments mean chunkier demands for the equity and debt financing for which operators like EdgeCore need to compete.
The Importance of Partnerships
As we’ve seen with other sectors—from utility companies and power plants to environmental and community organizations—collaboration between the digital infrastructure industry and other groups is the key to the future success of everyone involved. EdgeCore worked hard to establish a clear vision of target markets and business goals, and Partners Group worked equally hard to establish a thoughtful entrepreneurial governance approach to add resources to the growth plan. By joining forces, EdgeCore has been able to leverage Partners Group’s financial expertise across the spectrum (on subjects like ESG, supply chain, capital markets, debt financing, and performance measurement and management) while Partners Group has been able to leverage EdgeCore’s expertise in and deep understanding of data centers (one of the most attractive and promising capital-intensive assets to investors and lenders).
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ABOUT THE AUTHOR
Julie Brewer brings deep experience in finance and asset management within the data center industry and leads EdgeCore’s finance organization, including strategic financial planning, capital markets, accounting, procurement, treasury, and investor relations.
Prior to joining EdgeCore, Brewer held roles of progressive accountability at CoreSite Realty Corporation, most recently as Vice President, General Management, of CoreSite’s Los Angeles and Denver markets. In that role, Brewer was accountable for revenue generation, profitability, strategic planning, and capital allocation across a two billion USD portfolio of data center assets. Before joining the general management team, Brewer was a member of CoreSite’s finance organization, where she focused on mergers and acquisitions, capital structure, investor reporting, and underwriting.
Brewer earned her B.S. in Commerce from the University of Virginia.
Ed Diffendal is Managing Director, Private Infrastructure Americas. He is a member of the Private Infrastructure Investment Committee and the Board of Directors of the firm’s portfolio companies—EdgeCore, Enfragen, Milestone Equipment, Esentia, and Resilient Infrastructure Group—and has 26 years of industry experience.
Prior to joining Partners Group, Diffendal was CEO of United Bridge Partners, a private transportation infrastructure investment company, where he pioneered the use of fully private infrastructure capital for replacement transportation projects. Previously, he was Managing Director at the American Infrastructure Fund, where he focused on transportation, midstream oil and gas, and asset intensive real property infrastructure.
He holds a B.A. and M.A. in Economics from Stanford University and an MBA from the Tuck School of Business at Dartmouth College.
Fentress Boyse is a Member of Management of the Private Infrastructure Americas business unit at Partners Group. He has been with Partners Group since 2014. Boyse focuses on the origination, execution, and ongoing value creation activities for lead direct infrastructure investments in the communications, energy, water, and services sectors. He is on the Board of Directors and is Senior Investment Leader for Partners Group’s investment in EdgeCore Digital Infrastructure. Prior to joining Partners Group, Boyse worked at Citigroup, where he focused on project and infrastructure financings.
He holds a B.A. in International Studies from Johns Hopkins University and an M.A. in International Finance and Energy Studies from Johns Hopkins University’s Paul H. Nitze School of Advanced International Studies (SAIS).
