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Blue Owl adds $10.5B to its data center portfolio

Blue Owl is acquiring digital infrastructure fund manager IPI Partners, along with its portfolio of data centers and pipeline of LPs.

Blue Owl’s latest deal addresses LPs’ frenzied demand for data centers.

On Monday, the $192 billion alternative asset manager announced its plans to acquire IPI Partners, a digital infrastructure fund manager. The deal reflects increased LP demand for exposure to the industry and heightened competition among asset managers to attract the capital flowing into the space.

The IPI Partners acquisition places Blue Owl in competition with some of the most active data center investors—like Blackstone and Macquarie Asset Management—adding a portfolio of 82 data centers, $10.5 billion in AUM and its existing LP base to Blue Owl’s platform. IPI’s managing partner Matt A’Hearn will act as Blue Owl’s head of digital infrastructure under the agreement.

In recent years, the race among the world’s largest tech companies to adopt and develop artificial intelligence has fueled the demand for AI-compatible data centers, which generate the computational power needed to support these models.

Investor demand for exposure to the space has grown in tandem. From 2014 to 2023, digital infrastructure funds, dedicated largely to data centers, cell towers and their operators, brought in an average of 52% of all capital raised across infrastructure, according to a PitchBook analyst note.

PE managers have, in turn, struck massive data center-related deals, particularly in the past year. In September, for example, Blackstone and the Canada Pension Plan Investment Board, agreed to buy Australian data-center operator AirTrunk at a $16 billion valuation—the largest PE deal in the space on record.

Earlier this year, Blue Owl executed a joint venture agreement with data center campus developer Chrisia Technology Parks and PowerHouse Data Centers to build data centers for cloud-based AI specialist CoreWeave.

Blue Owl will pay around $1 billion for an 80% equity stake in IPI Partners. The acquisition is expected to close in Q4 2024 or Q1 2025.

Featured image by Gerville/Getty Images

  • jessica-hamlin-headshot.jpg
    Senior funds reporter Jessica Hamlin writes about limited partners for PitchBook News, based in New York. Jessica is also the lead writer of the Capital Pool weekly newsletter. Previously she wrote about private equity for Institutional Investor in New York. Jessica is a graduate of the Grady College of Journalism and Mass Communication at the University of Georgia.
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