Digital Infrastructure Report

The Internet of Things, and the environment of seamless cloud connectivity that it represents, will not be possible without the continued rollout of 5G, which requires vast network capacity improvements, denser networks and more data centres at the ‘edge’. Technological progress aside, however, and digital infrastructure investors also have a significant opportunity to bridge the social divide – creating value in more ways than one.

It’s a misnomer to think the covid crisis of the past 15 months is the sole reason for digital’s appeal to private capital. The digital transformation was well underway beforehand. But the pandemic has accelerated it and shone a bright light on how essential it is to be digitally connected whether you are in a central business district or in a remote rural location – it has become the fourth utility.

Consider this statistic. The GSMA estimates the number of mobile internet users will reach 5 billion by 2025, up from 3.8 billion in 2019. This requires cash. The EU Commission, for instance, estimates that the level of broadband to the home connectivity will require investment of €65 billion to €100 billion.

So, it’s hardly surprising that, amid covid lockdowns and, post-pandemic, remote working seemingly set to remain a permanent feature, private capital’s focus on digital infra has sharpened even further.

Digital infrastructure has proven itself ‘the fourth utility’ as the covid-19 lockdown has prompted an explosion of videoconferencing for work and streaming for leisure. The infrastructure has been tested but is rising to the challenge and, in the process, underlining its mission-critical nature. As the world demands ever-greater connectivity, it will require ever-greater investment in the infrastructure that makes that happen.

Our first digital infrastructure report focuses on the sector’s transition from what was perceived as a risky venture-capital play to what is now a burgeoning institutional asset class, with opportunities and innovation being driven by an explosion in data demand.