Investor demand for exposure to digital infrastructure rises

After successfully assisting the first Guernsey-incorporated digital infrastructure fund to list on the London Stock Exchange, Ocorian client director. Ian Smith reflects on what it means for Guernsey’s wider funds sector

Ian Smith, Director, Estera Guernsey (29255201)
Ian Smith, Director, Estera Guernsey (29255201)

AS MANY of us know all too well, Covid-19 has brought about periods of strict lockdown. And for those of us unaccustomed to working from home or being shut indoors for such long periods, good Wi-Fi connection has become a non-negotiable.

This sentiment is representative of the wider need for substantial investment in digital infrastructure. From faster fibre-optic networks to expanding 5G coverage, the pandemic has emphasised how much modern life relies on this critical ‘plumbing of the internet’. The increasing digitisation across societies has the potential to have a transformative impact on the global climate and societal challenges that we face. However, this all requires significant funding.

At Ocorian, we support funds from their inception right through the entirety of their life cycles. In February this year, our Guernsey and UK teams assisted Canadian asset manager Cordiant Capital Inc. to list the newly incorporated Cordiant Digital Infrastructure Ltd on the specialist fund segment of the London Stock Exchange (LSE) as a Guernsey incorporated fund. Notably, the fund is Guernsey’s first dedicated digital infrastructure investment fund listed on the LSE.

Cordiant intends to capitalise on the surging growth in data consumption and traffic based on current data traffic patterns and trends, with the fund’s principal activity to invest in mid-market digital infrastructure assets in the UK, Europe and North America. Seeking net returns of nine per cent, Cordiant have already identified an investment pipeline of around 1.5bn euros, with the fund focusing predominantly on data centres, mobile telecommunications/broadcast towers and fibre-optic network assets.

Cordiant’s IPO is extremely exciting for the UK investment landscape as it introduces an asset class that taps directly into rising investor demand for exposure to the fast-growing digital infrastructure sector. With an initial fundraising target of £300m. from its IPO, high demand saw the fund far surpass this to successfully raise £370m.

We were delighted to support Cordiant throughout the IPO process and we continue to provide a full suite of fund administration, accounting, reporting and regulatory services to the fund. The Cordiant mandate builds upon our Guernsey and UK team’s strong track record of providing cross-jurisdictional administrative services to innovative alternative investment funds listed on the LSE.

On Ocorian’s involvement, Cordiant’s managing director, Stephen Foss, added: ‘We could not have reached this point in our IPO without Ocorian. We’ve benefited from the group’s extensive experience in supporting funds throughout IPO processes and it has been a seamless process. We look forward to life as a listed company and continuing our working relationship with Ocorian.’

Guernsey continues to innovate

Guernsey continues to play a key role in the international funds scene and facilitating Guernsey’s first LSE listed digital infrastructure fund is another positive step for the industry.

In recent years, Guernsey’s funds sector has seen the creation of the world’s first regulated green investment product in the Guernsey Green Fund, and Guernsey-based The International Stock Exchange (TISE) launched a new market segment, TISE GREEN, which aims to enhance the visibility of investments which make a positive impact on the environment.

These recent developments continue to build upon the expertise in Guernsey’s funds sector and should only help attract further investment. As an experienced fund administrator with a large Guernsey presence, Ocorian provides sufficient scale and expertise to service funds throughout their growth journeys.

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