Keppel launches second data centre fund with over US$500m first close

THE asset management arm of Keppel Corporation has launched a second data centre fund, which will focus on making strategic investments in the "fast-growing" data centre sector in the Asia-Pacific and Europe.

Keppel Data Centre Fund II has attracted initial capital commitments from various financial institutional investors, and achieved its first close of more than US$500 million, Keppel Corp said in an exchange filing on Wednesday morning. The fund has a target size of US$1 billion.

The new fund is managed by Alpha Investment Partners, a private fund manager under Keppel Capital - the asset management arm of Keppel Corp. It will also leverage Keppel Data Centres Holdings' expertise in developing, operating and maintaining data centres to capture investment opportunities in greenfield and brownfield data centre assets.

"The Covid-19 pandemic has accelerated the pace of digitalisation for many businesses and governments alike and further spurred the growth of the data centre sector," said Alvin Mah, chief executive officer of Alpha Investment Partners.

"In line with Keppel's Vision 2030, which puts sustainability at the core of the group's strategy, KDC Fund II will, wherever possible, tap on the Keppel Group's know-how in sustainable technology and energy-efficiency to develop greener data centres," he added.

Keppel Corp said that one of the key business imperatives for data centres is the reduction of carbon emissions, as data centres consume large amounts of energy to power as well as cool computing equipment.

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It added that the new fund, and Keppel Data Centres will tap the expertise of other business units in the group, such as Keppel Infrastructure and Keppel Renewable Energy, in aspects such as cooling and use of renewable energy to enhance its data centre solutions.

Keppel Capital's first data centre fund, Alpha Data Centre Fund, was launched in 2016. Its current portfolio spans over 1.38 million square feet of gross floor area, with investments in countries such as Singapore, Malaysia, Indonesia, Germany, Australia and China.

Keppel Corp said the first closing of its new fund is not expected to have any material impact on the earnings per share and net tangible asset per share for the current financial year.

Keppel Corp shares closed unchanged at S$5.29 on Tuesday.