Earnings call transcript Q2 2023

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Operator

Greetings, and welcome to the DigitalBridge Group, Inc.

Second Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

to Managing conference Investor Director like host, to Relations. now White, Severin and would turn over the your I Head of

Severin White

earnings Good second welcome and conference XXXX morning, call. to everyone, quarter DigitalBridge’s

today from Jacky harbor, and CFO. and Speaking on we our the the is get our Wu, the Marc cover quickly can Company I’ll then CEO; Ganzi, safe call started.

is All of DigitalBridge to may discussed of undertakes statements that our could it differ results materially. information business and financial intend events performance Some involve not that regarding August on operations such and no number and the today of be XXXX, future we the call cause forward-looking make risks statements uncertainties a to update considered circumstances. and for as X, duty and today, or does actual

that risk XXXX, please For most year-ending Form June XX-K more information, for the quarter for with to and XX, December the our be recent ending XXXX. refer the discussed our SEC XX-Q filed the with will filed SEC XX, for in factors the Form

Great.

key Let’s our an impacts Marc turn generative on discuss back to Marc for XXXX. our providing results update our it over on will we’re and the of seeing start early some to financial Jacky from with ecosystem. outline AI objectives

turn I’ll Marc Ganzi, our over that, the With to call CEO. Marc?

Marc Ganzi

Thanks, Severin.

an us my a billion by AI. I Today, the the the anniversary particularly five-yard and three facing I digital about meet as DigitalBridge. demand we year. were driven this rotation focused took on of business X of to want very infrastructure for transformation. early signs COVID recognizing to key I’ll of XXXX, in positioned investment, I the Gen that hard $XX-plus first of priorities different profile. on in over helm more the very work and been we quarterly call that and demand of section the persistent outlined by depths new has the at growing line third the as that Today, of When all as summer the unprecedented we had we’re start beginning CEO talk of We’ve see today.

We’re what our and more how it impacts and companies how importantly, impacts about portfolio it DigitalBridge really our we’re investments. seeing excited and

stay let’s touch X focused priorities. top and So, those on

First, full we fundraising. activated management starting investment strong from that income co-investment growth platform up FEEUM, InfraBridge, our growth. driven was with and second XX%, Higher with quarter fee In level of segment the quarter, core, generated and up credit with a in XX%. which along FRE year-over-year

pleased billion I’m in to Most of commitments. importantly, remain accrue on report and coming months, capital new Partners DigitalBridge our core and to our Series and the half three flagship the for over to XXXX. balance formation. track committed co-investment achieve between $X.X latest objectives that credit we incremental new was with capital past to fundraising

is deliver big the quarter, to by This a statements sufficient on back simplification, it expect tremendous news to that here financial to deconsolidate to additional followed On business our later is a sheet. financial DataBank and recap final receive this thereafter capital simplification, the from our shortly milestone balance commitments will close. we

highlight across performance. final key here. growth I portfolio On demonstrated development all want also sustained four priority, verticals. the to We CapEx

investment-grade at data deliver apart. sets customers, concentration centers very telco Our meet billion we’ve it’s counterparty really successfully next the our high $X build long-term by supported over DigitalBridge tech attractive or portfolio a whether of to and routes, to to customer demand across leg yields company’s Year-to-date, capacity contracts fiber ability deployed new risk. towers, on with on

into simplification our we before progress the and get fundraising financials. detail let’s So,

please. Next slide,

formation. capital New

generating quarter. This we’ve billion As KPI the came for About pleased report and to since XXXX, initial $X.X billion us seminal raised to be this will brings I’m last $X.X from I that, in earlier highlighted half $X.X co-investment we the data year-to-date. year, one will the flagship of billion Switch, which Partners most fee income center Series, which $XXX next-generation once million of syndications, DigitalBridge positioned finalize of our We’ve notably platforms best an to is compute. commitments start for also initial completed close.

would see quarter, year. Last growth quarter. FEEUM and we expected structural more the highlighted I platforms of this co-investment grow inside how itself this manifests continue That to as our in to into that flow

and add of expect FEEUM digital companies need scale Gen portfolio as our us with balance from all came with co-investment on for three be strategies, and liquid pace. of The capital to turn drive steady a our should AI, You our does for increases continue infrastructure helps and so fundraising AUM core, digital I’m of going. They globally, advent contributors strategies. the to demand FRE. the those we’re progress at to credit in at pleased which where continue which strong very

this more for allocating puts interest signs by of our strong. just the time right this in understand we’re AI Gen track So, remains hit infrastructure digital demand portfolio generative our helping we’re year. our institutional more on as seeing companies, investment to to needed clients, early us AI that to of them and at fundraising And Institutional demand. spending targets satisfy with implications driven on the

Next slide, please.

$XX quarter. right, prior year. organic from the the of billion manage, tracks InfraBridge equal we and the by we’ve combination a on billion over AUM. formation the driven billion with FEEUM, up contribution capital growth highlights Similarly, the last the in the up rate, year, that assets That’s annual over ended in our an that $XX XX% solid We $XX of up acquisition. last NAV growth quarter AUM, XX% slide this which FEEUM and prior So, seen was year-over-year representing to

we look the to So, over as we the organically forward course here revenues platforms and on you -- to grow of scale, our progress to continue continue as our updating year. as continued earnings

please. Next slide,

is behind for So, fundraising This two deconsolidation. number the topic XXXX.

with the shortly, DataBank process. recap sufficient our financial close to commitments from So in statements inside capital business commitments additional deconsolidate to that us I’m to will we’ve report million this quarter. provide received pleased We’ll $XXX which

us expect to numbers later during We report final QX.

XX% ownership generate sheet, this big $XX to framework. we interest. formation everyone portfolio capital across DataBank. on reduce leasing below over that and a has has of our $X-plus team into Xx completed, is permanent the allocation over billion how recapitalizing pipeline of for responsible pro better the AI-driven for back milestone of and vehicle to us the I We that once which what’s our balance least our grown into our steepest proceeds at and So, DigitalBridge underscore can’t can incremental capital DataBank. was even placed the is jump year-over-year recycle kudos this capital And rata at the will seen the new and million

stake So, that continue at our press in thrilled business, forward proud time, the stake to corporate about to back really to with a feel that at maintain objectives. we’re end team of significant and and our We own same going main deconsolidate forward we’re the day, this. the and excited

of the to end the down, one at go. one day, So,

is the we’re seeing committed and pleased up progress there. before we’re deconsolidation this and finalizing Vantage of next, Vantage with confident SDC year. Consequently, of the end the SDC to we remain

and on progress we’ll will of DataBank those both good quarter, done really initiatives, this the end in get So, the SDC -- year. by finish two up Vantage of

please. slide, Next

continued initiatives verticals, So, across key my to MRR all of I of highlight is for This by organic four the we’re portfolio the across investment-led is swim our want growth and of last portfolio the legs XXXX. three the up the performance. our seeing key in lanes. stool growth. for driven

dramatic about are as up densification cells. carriers increase, will XX% our see And how ‘XX. in small growth year-over-year centers, you we’d But we in back Towers as and half small in driving like. telcos substantial also certainly drive deliver XG up sustained I last proliferate world’s double-digit Fiber XX% That’s those off, with serve tech year-over-year. networks up into they and XG investment growth, data cells networks we pays First, the portfolio, seen above. nonetheless, portfolio world. higher of didn’t the manifesting our around numbers CapEx. talked the And and a quarter quite value this of the seeing year in as growth believe and has their this companies the development leading growth supporting XX%. itself ‘XX

$X year-to-date, growth attractive compute and customers very a development beyond. billion drive companies to I enforces supporting continues this infrastructure challenging that believe the despite at this portfolio. grow continues capital Even to deployed our and those by our the our customers in with steadily connectivity this to for ability performance of macro for consistent of we’ve returns some and we’re expand last XXXX year’s digital along new into our will deploying portfolio deliver headwinds. Demand environment. importantly, yields and exceed So year, for need more

it turn Jacky to our like So, cover with that, Jacky? I’d to to over financials.

Jacky Wu

Marc, morning, and good you, Thank everyone.

morning, our to the addition in quarter is filed supplemental second earnings, report our of reminder, we a this of available a Shareholders which section website. As within release the financial

On raised, we capital rest a additional key Page the highlights which you year. quarter had can up by new positively metrics, our expect for XX, with quarter performance have trended year-over-year, second significantly see of highlighted strong and all momentum the

the or XX. benefiting simplifying $X.XX Page our progress $XX and platform was our from asset-light to Total corporate distributable share growth Turning continued management structure. earnings per investment million company of in

platform strong a last same billion grew Assets in quarter, the from billion, $XX under $XX same driven the year. the the XX% year, from InfraBridge year. to to fundraising, management under acquisition equity increase earlier deployments Fee-earning this management by second and which continued XX% increased by last period increased period

robust products pipeline second seasonally capital in have prior years, year. the of strong building anticipate second We the formation we investment fundraising in the multiple been very has which a with to similar a of half stronger year momentum half and for

growth, Company driven and management corporate strong the The XX. our continued of saw page investment simplification to business of our year-over-year structure. expansion Moving by

increase quarter, revenues which year. period second same from the million, $XXX a the X% For consolidated represents last were

year, Company’s with adjusted the Total million, of and by Wafra’s interest from result management principal previously includes aligns space. InfraBridge year. alternative investment now almost redemption platform contributions this in primarily which XX% in closely the investment EBITDA grew February the of of our $XX a in ownership which period following the peers investment was of As revenues reported XXXX income, our minority management more from in same public company carried last and as May the of noted, acquisition

to increases year. to of same Investment income, period fee-earning digital segment earnings investment from million increased respectively. distributable XX% Fee additional grow to earnings same million, new continues last $XX increased the and excluding the $XX Page under its Company fee-related to management investment XX. and increased incentive equity year, by and strategies representing from fees, earnings management to period million The by XX% last management XX% $XX generated InfraBridge. from the Moving acquisition

business management investment previously As our we we as momentum to mentioned, continue our I the pipeline. fundraising execute expect on in strong

to associated unrealized including to page interest we Beginning included analysis XX. quarter, disclosures have realized of the new Company’s expenses. carried interest allocations this and versus Turning designed the simplify help income, carried

For interest our million. exceeds that the second quarter, our unrealized at the increasing vehicles, income to as DigitalBridge return in This is generates the rate $XX due the carry managed which fair to preferred hurdles manager. funds value investment a of carried interest was

Other We expenses. management million, to management fundraising. the have same $X million included from also were compared $X quarter to for year, placement new additional last over disclosure period mainly expenses the due other in investment surrounding fees investment

expenses at some cases, of fee fee new placement reminder, not yet earn a which capital in recognized upfront may raised revenues. incurrence As are

and Company’s share previously ownership earnings following reduced The of of digital investment, XX%. XX. to page declined our which revenues DataBank due recapitalization ownership the from to operating Company’s the XX% to announced lower Moving

operating to second the deconsolidate half this on to from continue year. stay the segment financial We in our statements of target

$XXX Turning Since annualized XX. strong our increased to management growth million, increased achieved revenues the of million. million $XX from second $XXX of page million fee-related investment fee XXXX, earnings and to $XXX from quarter to business. in quarter We another high-margin our

our of Looking at right million. the side page, fee rate $XXX run the revenues were

FRE or previously and guidance fee exceed are our provided track We revenue to on ranges. meet

to continue distributable through we the FRE to we the increase. flow fundraise, to earnings scale of As and expect Company’s

completed capital year, in debt. of reached the expected structure will another million $XXX simplify our of We operating year this Coupled Company’s the Company’s almost this with have XX. to repaying of the be the corporate deconsolidation page completed segment milestone convertible to to we our target Turning progress in by April notes. fully

over our $XXX to balance continues for liquidity, securitization sheet reduction, including million addition available with accretive levels to maintain from revolver. liquidity strong of our In $XXX full uses debt our million the

platform, a in our first and this three year investors partner the solidifying and this made continue positive distributable position of In in earnings fundraising will growth in statement I committed with improve, summary, And are building our raise I forward to Marc our pipeline digital remains and led Company’s back our long-term to deconsolidated progress this financials look operating half capital pleased that, highlighted turn scaling very We Company generate to powerful segment choice investment the by by success. management with asset-light quarter machine on it with the as Marc. space. during we’ve shareholder strong half to to of this of the the second the year. the DigitalBridge’s infrastructure operating near-term to

Marc Ganzi

Jacky. Thanks,

areas and one it’s playbook I AI engagement impacts with infrastructure the to level both and the ultimately, center how the with want of our This portfolio private the and particularly of This generative quarter in data active in implications it subject some executing for customers, the and most cover the one digital vertical. public is today, DigitalBridge. number at of investors digital

here, slide new the examples that AI incorporated of of AI we’ve unlocks. with contrasting number generative of kind cases On use capabilities a traditional the

So will AI for from example, These traditional breakthroughs and get media, better. text of accelerate the optimizes only short generative your AI, seeing we’re recommendations prompts. with actual by films of production Netflix kind while

really in layer being compute. And pretty a that So, the seeing we’re it’s is into shareholders. incorporate platform creativity to a to capabilities, ultimately generative walk software compelling. DigitalBridge second, those new is more lots what AI. today unlock translates you but for through enterprise re-architected that but new and arithmetic this DigitalBridge exciting of I’ll new lot does how every capabilities, Well, translate of

energy really AI KW. important an observation idea, burns about Generative it new Just a compute-hungry. you like a and digital into And is doesn’t as AI takes to time calories, the human turn infrastructure. creative think Gen it that’s burn

forward. go let’s So,

Next slide, please.

the OpenAI’s ChatGPT, or in But XXX record AI, speed two Just of users set. heard on you or of around opportunity That you context for it LLM, hitting earlier year. have generative technology, of many adaptation gives this incredible the large a this the seen sense to active fastest does it give model you have any chart. consumer had months. language what million adaptation is happened

XXX XX X that really times Instagram users. million contextualize to took global than million These times XXX TikTok. X.X was ChatGPT hit blew So and than faster to that, users are platforms. getting significant faster Uber was It over away. to years And them

rapid seeing we’re So, adaptation.

certainly tell, But try while How that’s the we frame comparing do something where could it relative is big early it’s on way that to investors’ about to I’ve as do started. scale? be? one number It’s today, cloud what minds really this question know to been trying to they what public and to And investment opportunities. contextualize too

is their we’re service to decade least is going as over of as Based we contextualize and XX believe conversations market again, the with believe to at this providers about they over And building big opportunity center which capacity two-thirds billion requirements, really gigawatts. believe about CEOs So, around drive we the where Ultimately, cloud public large get has they at go, this to we is ago. public the business was -- about been $XXX XX cloud representing annual customers cloud, and gigawatts. the years, a data to to can that, close a is with market. believe the set think marketplace we where AI leasing feedback from on the will ramping our getting networks to opportunity and last today, to space XX be

literally amount time power the of to X-inning in share frame the always size consumed that the can investment first DigitalBridge wallet it’s against game. of the the potential the ultimately, inning take. just we’re period, and baseball So, important a of And

please. Next slide,

It’s I workloads of I So, to described want a Gen hungry, highlight AI as is. briefly but compute that two combination why factors. really

consume Intel X the is are AI see generations. The AMD chips, and producing, that the power new you On chip power left, of exploding. Xx NVIDIA, specialized to prior GPUs

put literally toaster. latest So, that the power as context, much chips into as consume a to

hard second models, your this have wrapped the of like let’s of The get a AI give latest with models shot. size it Large the GPTX trillion. reaching almost billions ChatGPT around, really driver mind the is language $X to and models is but parameters

is the consequently, years. power to next increasingly AI these dominated center be data center by It’s result So AI the is rise ultimately, be that the estimated set and consume over by data consumption will power dramatically workloads. XX% consumed XX -- of

access be day, a next-generation also needs cooling is DigitalBridge portfolio the great we very of key that where power is with the companies to having having the can throughout important. space networks. world space, and end workloads at key power is believes those have of available And differentiator. where advantage, a realized So, the that this meets competitive And available

Next slide, please.

is know power we that So, hungry. Gen AI

that at I of ecosystem. Scala, center AI public ways. campuses, by generation itself Switch It that. term that owned think Vantage all XXX-, training, which get XXX-megawatt data of or clouds. centers which in some principally are two in large we does are manifests or next private the power and is data These density, XXX-megawatt campuses. happen here great building translate The starts portfolio cloud But the principally model companies will key how with into the

today, but with left, the building it power customer the this future, higher fit the needs power is facility, past. of This not footprint. the the of is of On per that means generation be megawatts the same in the it centers of next instead XXX of megawatts and the megawatts power the drawing of density, will XX data future,

to be be GPUs, with drawing going more on traditional So per-rack fairly shift draw rack center server. filled the higher racks, which or why? basis the can Well, XX to less. power see compared XX each a KWs data density inside, in or power-hungry can KWs on is This a power as in substantial a delivered there’s with middle, density you that

key power. factor relevant that or other The to is low-cost cloud access trained

training ultimately but to which closer training wrapped has AI machine-to-machine is or the a sensitive got as or mind models applications, to based happen AI get applications. not environment. the either your which to consumer-based, is of is in as you’ve around location And enterprise-based ultimately, delivery happen around latency user, that place, end can latency low one

is cloud uptime concentrated With capacity, large in about these different think for workloads not ability latency. it’s example, two and megawatt about to the It’s in So, access invest a capacities. two in Reno that training, i.e., about where it Switch and foot low-cost amount a of and capacity have footprint. This million competitive XX we’ve power a end of got XXX% is in advantage at the green, square day. we the in large an

reasons are and becoming increasingly digital at access of was power This Your the scale we so is in factor. the to bought one density size cost key and why lowest efficiency success Switch. a infrastructure relevant,

slide, happen a seeing consumers cloud ready please. enterprises Next once training models the model process and by trained, cloud, today. called in be of AI machines, just inference. to is which I a But is the it’s described utilized how you’re lot where activity AI

delivered. applications entire will As years, important AI to for investors and inference and around. of their AI AI-powered are get This edge network the concept Gen next become clear. models relevance growing over the wrapped deployed minds few is all an is proliferate the

enterprise. from to phones, Ashburn, Virginia the efficient Miami. to latency or not or on live either. your back consumer send speed The By the or applications, trained live matter. and use and they forth Boston models way, device can’t the to and laptops we we It’s to use our For the the AI our actual phone close need data

longer life battery want than minutes. you X If

or years. day, three network. ultimately ultimately, data increasingly mobile, So become at combination and either end but cell centers, the network towers a and robust going a is over a to relevant it your robust desktop laptop you five And includes is of the that cells to next fiber, need small using your the edge of

DigitalBridge providers, metro to up our is up. which And whole things network larger and it of do center. to the cloud digital enterprise edge already, why and that in why like seen that of delivered. fiber requires revenues Gen all fiber that in pick service is the seeing interest capacity this not the fiber delivers. fiber inbound selectively That to infrastructure create from order the in is pick honest, of pieces ecosystem, We’re AI you’ve the be data orchestration is some with matters, are just and from where growth magnitude

Next page.

we delivered and take step edge this Let’s for a take how cloud back are at a look future. trained positioned

on about and It basis. edge of As been see, network buying XX% compute platforms workload and you operates of serves the across to our can AUM. core XX% building well-defined to the the profiles portfolio This center global increasingly a an represents we’ve data landscape. hybrid from

cloud for trade We and demand through are mentioned well earlier. operators and positioned to Scala as Vantage, public private serve I Switch, cloud

AIMS to to one going on capitalize got set the like AI, Then portfolio in DataBank, industry, are to Across companies, our we the level, board, as and we’ve of next the the AtlasEdge the say. fleets layer. next newest delivered Gen edge

power So talked means we’ve important our serve workloads. large high basis. investing, importantly, what be That’s X today facilities a about the data the density X portfolio of got on to and you’re successful. the significant end we’re at new latency, these numbers access understand and years incredible been really customers the meet we’ve cooling have hopefully state-of-the-art seeing the It’s up we amounts to But that to to is our that to most of centers the these earlier and bar. low demands a want fiber, It’s that day, why that doing for companies. you’re last renewable at ourselves leasing that setting and seeing

outsized taking We wallet. are

Next slide, please.

like and It’s our evidence AI So, tangible of the inning. around of some early we’re to very already about seeing impact by business. the talking finish I’d Gen

strong a we’re for DigitalBridge demand for sure there it I’m to in driver the batting years. that our described portfolio anecdotal companies evidence, set ecosystem me to this coming not and recently in practice. is is very is Someone be but I totally important still that, buy

the So, in supply on we’re with LPs. with seeing what let’s conversations side our start

tailwind they’re a referenced number about getting we LPs that talk topics a particularly demand As one-on-one today. to is across high And of I that about leader clear covering this held the represent to the to is level going relates while us for credit in is fundraising and There years looking AI. investment other this talked not flagship greater we’re the few portfolios, some just with and speed products we’ve to implications over of just detail. involved one We’ve engagement next in topic in on on core the as of earlier, DigitalBridge it’s up in. our but this LPs key another our and a today of it believe, number thought in global product, the and that key topic. meetings And the infrastructure they’re as to we webinars digital our as materializes, in their piece

this a gigawatts center seeing X leasing lease TD where over the data is market. XX States. in first. industry-wide we’re demand side, days gigawatt within the reported That’s Cowen up of XX on Secondly, last just United over the

about and a our are bigger outsized in of that talking taking market we’re gigawatts numbers So, the really and companies portfolio wallet. and X portion participating share big

our to center data first see that comes year-over-year. look capacity signs that the portfolio So, translates pipeline, lead DigitalBridge across new when you which the XX% as into across revenues you online, where pipelines are bookings, up ecosystem,

best leasing. ever to we’ve center that, data one of years seen in XXXX just contextualize So was the

in XXXX, eclipse we only think and to pace demand. year on of we’re the terms So, accelerating this is

center our describing for how one jumped opportunity was of right-hand me XXx and are the page, XX-megawatt seeing a portfolio a alike. we’re the we’ve data that On highlighted years one out ago. of at size. large now interesting the companies two few first feedback investors side And He a that from was from inbounds our CEOs. requirement The just

company DigitalBridge response well, So the The the why what deals, providers mean first difficult at securing investor setting. proud of new specialized a diligence of and response In these simple. XXX on level. work was It’s just market. down the question XXX-megawatt what’s happening comprehend, is call AI in are I the but next in is the are this response quote CEO particularly to new type of cloud the DigitalBridge we easiest to that really campus companies amazing really DigitalBridge to of this portfolio the is win. numbers great I’m wins is one Building to with customer-focused workloads. with to capacity, that’s serving companies. who companies that That’s a

Next slide, please.

the progress as I this I we up in convicted our hitting promised. the billion inside to always, wrap let’s with process those $X.X we’re as tangible fundraising, So, SDC goals. year remain One, checklist. fully We’ve we’ve and a on hit with simplification it one recap KPI, done our review made raised DataBank and up of Vantage on the is this to on number our for CEO targets year. date, track next, and fundraising will get

we connectivity at to the world. in the Finally, needs logos level, of powerful most growing support portfolio investment-grade company continue and the the compute

driver the that AI are next-generation Gen or and picks tomorrow’s the it’s supplying whether to leaders technology. business, demand Look, underpinning secular any we’re shovels the other building our

AI like was be PCS of XX growth just ago expect XX to years driver for demand the public We Gen like next years digital ago. digital cloud and infrastructure just was

show is one the to support latest key opportunities. generational We’re it’s for those key ability the our many the That’s show opportunity customers. And and in up logos. for in just us respects, to up really of great

updating of a forward asset to final as next on on continue to to the I execute support our for digital you manager, progress. thank you your to transition So, fast-growing quarter levered infrastructure. continued look our the alternative we stage powerful in tailwinds

over it I’ll Q&A the you. to that, section. with begin hand Thank operator And the to

Operator

first from Elias Our comes with of Instructions] question TD line Cowen. the Michael [Operator

Michael Elias

for may. if I taking questions. Great. the Thanks Two

is, projects? the seeing, we’ve ask multiple that, power you as And that a So particularly markets for level? Marc, of power for recent sense At you same talk we in at you could talking us Connect data what exposure in AI time, at centers data centers were directionality the portfolio Could would seen seen given give yields the given you. CapEx Thank in of of demand consumption have growth the rerating I piece long power the arise then your opportunity. strategy the that data runway the LPs for data for have magnitude associated that (X), constraint appetite to and center with the we’re in center months, on you a shift a of company appropriate look to part to AI. you pursue about second the these about As globally. as ensure

Marc Ganzi

Look, let’s first. with the start

I question. think, that’s the probably easier

As had on we whether, and them intake opportunities data respect the it happening same our with the in had time received saw center commitment. of it’s project was Europe. obviously, Switch all co-investment DataBank, and We’ve at companies, whether in significant our to you co-investment three quarter, Vantage

So, clean data modern behind quarters those want when And ideas you those to ideas last in data saying behind. the are the are AI leases. locations and facing signing good facing winning. as be for have been are centers X the those that I’ve with you centers that power, that or clean LPs could are X imagine, that are and workloads that good Those ideas

quarter those you Switch that significant shouldn’t the and support co-investment it received continue surprise Vantage in LPs will and all DataBank to so And and ideas.

conference. I’m are proactive because the leaning Boulder talk week having next significant being are is problem. But sure trying on and in this Second, are is your it real going to at and obviously, issues. Michael, this we’ll trick, are jurisdictions constraint solve certain And certain about the be Power, jurisdictions in to and interesting

in syndrome big data ‘XXs when digital the when are jurisdictions adopting don’t saying, had some want PCS. much And NIMBY we we towers we centers, were like just the

working looking for what’s locally. a play? working is out X jurisdiction, great got nimble. Having problems each So, be dominion, This important solve what instead Mark center us, lot is overhaul our Switch centers of to certainly, to markets of of Warner, at the big in look upgrades a play market. Texas, is a the the And allows Atlanta the X happening you’ve businesses, to teams AIMS, AtlasEdge, act becoming and The and of solving as DataBank, is data the concept. next Governor, big center but the peers market, with data California, Arizona of with Valley big rally trying grid globally going A Vantage in think for one specific Goodyear, to data their some well. Silicon Virginia, having with Scala, and Texas looking us of is really conundrum management grid Power’s the with

is me, we’ve We for have to been work This what jurisdictions. doing not with to This years. XX is Michael. new

got with the You municipalities. to local work

companies. utility the with work to got You

also also got back Sometimes taking put public and what what into and in that Vantage the the explaining into front grid be those at Switch environment, we’re we’re away, local how are economies at back we’re now how to on drain which applied to out put DataBank. Switch and is how matriculating doing those be and resources to to learnings public of good, explaining not to the a means the but create to and we going

you So green got to act solutions, you locally. got to have

all just can’t be on Herndon. You in

You all can’t in County, Loudon Valley. all can’t on you in be Silicon on be

on Goodyear. totally be laser-focused can’t You

some We I’ve to when to Berlin in to there thing in Cardiff. but Offenbach saying have the got a I went for been happening this long for same Europe now to And markets example, that we are shut multiple went overloaded. was Europe. markets. mean it’s are -- down, You’ve time. is went

As of Zurich shut started moving began some Milan. down, to those workloads we to

power X you think more to portfolio. leasing the deploy kind I quarter. for really and companies be DataBank and the blowout is of CEOs, ahead ability platforms X able look of capital numbers, working being now. those I saw think is mean us right efficiently Having to our to ability across The nimble, corners the around having

to been We’re this the "Oh X This our and X to curve, we’ve years. got been a customers, ahead field wasn’t winning and X said, working little on X we cloud because years. woke building gigawatts was quarter we’ve for this of deliver the god, inventory on steadily like the of power last something for my been go we to up we’ve

the you. center of hard Michael, this forward lot a with about certainly, for our that put we’ll data place looking XXXX Boulder itself is think about and we talk businesses. in I in next manifesting to -- And now So in week talking XXXX work XXXX in

Operator

line the from comes of question with next from The Rahmani Jade KBW.

Unidentified Analyst

competitive speak you. DigitalBridge Thank digital that managers first to to of This is focused the REITs asset to you Jade. are managers question, one Jason for digital Sabshon pure-play can compared only raise broadly more that on larger [ph] as opportunity on the has looking infrastructure. that My aren’t asset generally capital third-party and

Marc Ganzi

and in. Thanks, tuning thanks for Yes. Jade,

us an in for think talking narrative really right two the in to play now. last being starting years, model, we’ve the that’s like asset-light the about advantage I for been out

gone I of of keep center billion have pace. challenges the through funding that REITs CapEx. already data some deployed fact We’ve The think year, still continued and terms future to cloud-driven in we for which being deploy CapEx of we’ve public form $X of you’ve seen data XX% private show we capital center-driven can was and shows we up and can cloud capital can that this and most customers. that other

we it the for we capital a good out in play nothing we’re opinion, This It’s Asia, at that who now it doing is really up capital, asset-light This model in go doing Brazil, Equinix, in now manifesting itself. But key what’s companies. think local, have showing meeting we’ve in laid the showed is, the Paulo, we’ve U.S. it, intelligent deployed it doing great in the ability Digital Sao the really, up playing in are to Europe, to, out And for act The digital I customers. is is really against believe in doing of place. and my most infrastructure. raised Southeast years we’ve really both again, deadlines, Ridge is ago, our DLR way global, the Jade, CapEx, customers, deployment two it scale, playbook quarter, friends

I they’re it us. other think just just limit with having success, I to asset alternative wouldn’t managers, too.

saw of about into data there’s $X I a and deploying that Blackstone’s to think, this strategy recognize Gray but Blackstone. billion big, $XXX There’s billion going to DLR. Blackstone. be room room in It’s ambition to for of allocation AI, Jonathan marketplace. moment of trillion capital all. have big other they with in expect a in you other for could partner public now, it asset companies. a be direct know, GPs fact, XX-year other record. track we’ve Jade, lot partner success, and we’ve in a right said we don’t We They we’ll can’t location. people. with I time. know Michael, And But week, $X vocal ultimately very going room Equinix big a billion with with we’re They right to it for future could digital got DigitalBridge. us. smaller They and own with We our managers. inventory, got for also was LPs. certainly, centers. room earlier We We to And partnering going plenty got other that’s And alternative There’s going like to and we’ve all. partner $X the do there’s a with that do be the as having the This spend is

in quarter I of ago that asset-light this guys a think So, working. that model proved environment, we around this I out. results couple years this out you for it’s And think the laid

Operator

Day with question Dan Riley line next comes of Securities. B. The from the

Dan Day

raised DBP funds. or any the that existing Just for relative DBP this check investors Thanks. versus detail any just all new at have fund to third existing size at the the the billion-plus around point, decreasing you’ve interest indicated investors prior detail ones, on for $X increasing around

Marc Ganzi

I though, and of well. our us, lot investors continue continue a lean with we’re details would But in re-up that’s position give broadly really rest not and existing you yet new of detail strategy. speaking, the on call, for to in next I’ll to fundraising, the assured you. first tell take this. around they final on It’s totally to the a have fundraising. you, close the One, we’ll working

have a logos whether coming flagship our into it’s core, credit, number also new fund. products, it’s it’s whether our of We whether

So, wasn’t we’re our core. was success. brought all strategies This co-invest. just It Even new It was it great group capital. a a credit. having lot because of flagship. was was quarter some in It liquid

So the headline of hitting. our this quarter. are out investors, coming products They’re really big resonating fund that’s and with all of

the acceptance XX% I’m seeing fundraising. to typically I in we are anticipate we’re a either staying guidance new that from continue in sovereign. our our It of we’re products. the do good the or asset tension. just previous work, of that acceptance on that haven’t in year. that are anywhere happy products down investors rest depends we’re us, But and renewals, really with where strong said the depends reinforcing all to check It is, no strong news depends obviously in XX%. to a really and they’re at for our again, were on allocator. on And sizes par our It seeing

feel we we Thank So, good are. where very good That’s about you. a though. question

Dan Day

one. quick other One Yes.

Just the carried interest. unrealized $XX million in

talking valuations. guys driving marking and the can hurdle of obviously, move that. are people if things private rates in in the you you cap excess detail up there Just rates, But provide what’s about out rate. any on pressure treasury There’s in

be would So, any that detail on great. where more occurred just Thanks.

Marc Ganzi

the is because kind working answer. But Jacky the our right, portfolio why let reason direct companies multiples working, It’s backfill is of the Yes, which well. Public But up. is as DCFs the private are are market me. slightly multiples the are slightly are valuations answer, cashless. down I DCFs the are up. mean I’ll way down. are leasing it’s up easiest the and

we’re at fact the reassess that XX% of growing businesses these CAGRs to on north assets. allowing marks the us So, those is

Jacky. front to Go Sorry run ahead. I apologize. you,

Jacky Wu

XXX% excess then XXX% details workload we’re data And globally, a businesses center some our Gen length increases behind to of plan. of our of original exactly. across some about bit pipelines mean, the it, some AI No, I seeing of and right? our Marc, at in the of

amazing our together. bad times. resilient times, to we’re come always bookings pipeline sector that ridiculously about good talked in tremendous all an sector infrastructure -- So sectors. And the sector and we seeing that it’s are fact across have is a And and digital just

up of some those excess funds. driving X% this our of combination of quarter in is the So factors in our X%, all valuations

Operator

The next of the with Prentiss James. Ric question comes from Raymond line

Unidentified Analyst

Brent morning. this Ric on for

question, First capital allocation.

this back of from preferred bought the a bit quarter. little you a liquidity. You’re recaps saw bringing of I got and in lot some funds

So, other there, common like we think about out should opportunities how versus versus preferred M&A?

Jacky Wu

sure. Yes,

as we We continue at ton to have just -- a we discussed. look our liquidity of

lower Our significantly single are debt every low and year. levels

got towards deploy out to we’ve there, So, a firepower ton M&A.

about bigger. We’ve at talked continue at we and new We to And get like look to get products GPs. would this. to -- continue other look

we in analysis doing build not are deploy buy to is And of M&A. to that So continue important we us. degree for there that versus cash terms is at opportunities those that going the to excess towards look

those that XX% preps upsizing benefit return will the recurring certainly the redeeming but some of just flows to -- for because of that from because common the We firepower guaranteed we’re additional the scale. then risk-free, cash generating business potential look unlocks a continue dividend is of at it’s of that and

down take return So that that Certainly, first investment order a is well can prep we GPs of that. give XX%, buy, of business then is a we which to find to XX%, liquidity and if in exit other that’s of that’s and us if uses, managers waterfall can and course, we’ll that do redemption. going not, we’ll good

Unidentified Analyst

talked info be on the the there are originally get Great. And XX%, us where color then and on even once then You, in be below on appreciate give you the DataBank. think, well? Can process about SDC? other And X% additional you on lower. possibly you the would ownership all could deconsolidation. Vantage I there sales question any I as

Marc Ganzi

Yes.

take were with are of I they and growth then year-over-year. EBITDA Let you it first the staggering this highline I the and that that in XX% yesterday. numbers. about plan think growth are by But we’re happy It’s guys XXX% DataBank. These like their And almost leasing foremost, year. beating give EBITDA. Jacky produced the It’s sort talking me of really can performance Jacky

math, through see premium more shares. our to to to once that down levels. of really we We’d you DataBank and moment want at selling active a seller significant minimums, of get walk not will we’re the at an So, Jacky our these

quarter. So on DataBank. target plan, once dividends we SDC, on performing were ahead going be that’s deconsolidate, it cash Vantage this of really well, to same EBITDA thing

very assets. with happy So we’re two those

Jacky you we’re we’ll do out to, goal can Our as give get those them with this again, dictates, two satisfied. deconsolidated then figure the time pretty what at to but on year, which doing, if is and Vantage assets, we math and you going both we’re we’re more agree, to should we I Jacky, not. I get once those deconsolidation give but I want to piece Jacky know, think color levels, the don’t SDC or stop.

Jacky Wu

continue have you That’s alongside what correct. other to guys in ownership Yes, the what economic said all one the businesses I we’ve have as -- mean, Marc. control XX% we to the different is no and that that is material our in deem we perspective a our these funds. than we businesses,

deconsolidate accounting, So the from will that’s we just a public perspective. once we these get and through work accounting But we below that percentage, public accounting work that that perspective. economic on the public a businesses consolidate ownership, require that to

doing dividends We here. tailwinds talked they’re from about will fantastically continue as huge receive AI, these Marc and well, businesses, to

cooking. businesses. love be just have won’t continue these own material headache having But our alongside our publicly now these the have love these we traded businesses of basically in businesses. vehicle. we ownership So, We We’ll public to

Operator

Choe of from The the next line JP comes question Richard Morgan. with

Richard Choe

normal near most is your an fund of it and dedicated assume your portfolio strategies of see from I I bit little the to a AI of companies. wanted coming term, outside on up follow existing for AI to need maybe you potential investments. for potentially investments a existing kind do companies? But different

Marc Ganzi

we’re Richard, now, with current pretty doing we’re happy in right the strategies. think I what

anywhere. to ventures investing us we ability customers prohibit our have it’s in to or funds from their these the AI go fund for show whether don’t ideas, And the core, ideas. think credit backing I or ability flagship up co-investments,

need think we the like capital X cloud there’ll encompassed you in to impact public and and X infrastructure. ideas, for biggest an those our ideas think again, are ideas support that can raise out But funds to edge cloud and And public we developed X see infrastructure, that. the be I don’t current dedicated construct. our road already ideas these in any to down connectivity to mandate AI to you and begin mobile off that’s private saw a that. then I see their cloud, is be other the our data much We it bandwidth now, in going ecosystem cloud, specifically and right to purview of X out to obviously of in as starts in centers in years go funds. go because attack years

our of and best again, be comfortable and that infrastructure, that going we’re So, really capital to forming capital AI the is products deploy products, support we’re able that which confident amount us depth the focus. the the to of the of really makes the ideas breadth and

Richard Choe

on, then bounces margin. a guess, And FRE around lot. volatile. I It one the It’s

a on of there’s level what And I costs where of expenses aiming in into capital at are up rate over for going and of end year the next the we -- maybe raising. Just or end terms of basis of should year by lot Kind there? margin a of kind terms run the next few corporate, in or you on guess, quarters? a

Jacky Wu

Yes.

just to segments. at conjunction So really IM kind looking Richard, with you business I’ll of corporate other in our point our and

associated XX% two allocatable add margin has to basis. this you corporate geography from there’s quarter if expenses The the little double to volatility margin because with together, accounting. a why more our profit IM, quarter-over-quarter, about increased reason just those so from is XX% really an bit that’s So and EBITDA so

not talked fees those have Marc As on about III, DBP we’re turned as we fundraising, yet.

they’re that means their coming which are in no folks sector. activity, sheets the allocating revenues certainly time there’s hard there’s but IM to So and there, working

two managers at some looking from And segments look with that’s combination really line is out perspective, you right other the those corporate in total in at if that includes of expenses. publicly profile the So there a traded which approach. pretty XX%, with investment margin

of a we it. is where rate this year. to expect that’s basis run And we be that how certainly that to I’d you on sustainable ending and margin -- kind guide is much So believe

Operator

The Wells next line Luebchow Eric the Fargo. question comes of from with

Eric Luebchow

question. to this wanted about the Vantage SDC on Great. year. talked touch I Thanks for later the process you

So, seen cap X.X% center or kind asset in few JVs range. rate we’ve X% a larger data to sales stabilized of recently the

what talk comps somewhat market? Vantage makes in what may the different like we’ve that about and looks other market could from be So, think of you seen some maybe SDC you the the today

Jacky Wu

percentage Yes, rates over a sure. that XX-plus it’s pays yields, got sets, One dividend and too, is it already. and is it’s customer occupancy fantastic

best in it’s generative. And truly good of and some terms there of the out So thirdly, customer stabilized logos set. got cash you’ve

investment-grade So in they’re best of all the logos but not probably only some world. the

So debt we’ve of in got. just a well certainly of from equity, the well capital perspective as a differentiator as three we believe of excess and markets those attractive as as that is some believe rates mentioned, what combination we attractive the both not that’s which cap you

Eric Luebchow

the great. I wanted Okay, some but touch like in up And pullback activity over that. the during been XX%, MRRs Thanks quarter. levels carrier there’s It your as to looks U.S. around tower well. second pretty your just portfolio on concern for were material then,

Thank business. any headwind longer wonder tower term think if I just structural of timing you have So, the you. you’re and it’s whether that you on seeing kind of related or kind concerns

Marc Ganzi

ahead. go Jacky Yes,

guy. tower my are You

Jacky Wu

Look, to tower portfolio that’s platform of continues it about some keep continues Sure. to towers our there. Vertical certainly out part And only in of our But is well Bridge organic the core rates outperform. not excess public and good younger company. our that it’s growth the mind, in

double-digit We’re across South in we’re global within those for a reason, of and XX% America seeing excess Asia, rate regions. growth

a at tower we sector. the in why the returns all those combination driving our are basis. rates And global That’s global. that’s on of companies portfolio growth is look why it So and we fantastic

Operator

the comes with Jon The next RBC from of question Atkin line Capital Markets.

Jon Atkin

Thanks.

of AI Gen how you’re emerging versus more some demand, the seeing wonder AI-focused Thanks. much I the On hyperscalers from traditional start-ups?

Marc Ganzi

marketplace, and traditional XX% guys, it’s in Jonathan, moment, about hyperscalers Jonathan. players app new Right the it’s now, [ph] the heavily hyperscalers guys at about and chip but

Jon Atkin

some versus AI do what versus it’s it you or based on the do know it’s the when locations was choosing? color that -- rack hyperscaler of have versus figure out? So, they’re focused, you you How applications? cloud networking social other how Is that are density,

Marc Ganzi

between the at And suffice that’s liberty do we I the those it tell working all that difference But say, teams can workloads the We’re really on. and give to you. know to unfortunately. are details, not

Sorry.

Jon Atkin

the keeping pricing of spreads, on a development the then us data and kind trends, then since call to And give lastly, and on of any last regional any centers, sense maybe seen -- quarter? yields anything And targeted you’ve change out renewal just differences?

Marc Ganzi

and limited, development by investments away yields the because at U.S., I’m give is I you a secrets. not is inventory tell does what those, would in are tell I course, tight I pricing that liberty to large, would to private to from is those the and more are you as private want But rise too, their What pretty tell companies. rents store give ever. up. don’t to continue it’s as band. would attractive And you, to Europe of than do in I yields. it’s differ Asia But

Operator

Marc this Thank call to concludes turn you. question-and-answer I’d any gentlemen, remarks. the session. Ladies for and Ganzi the back closing like to

Marc Ganzi

working We’ll And our today. us. year. back to to the We’ve continued weeks forward an everyone’s leave made, perform. look And various keep portfolio all on kept. which exciting do We’ve our investor been you. for I’ll the appreciate of in everyone to before, coming with told investors the to continue you promises interest I thank goals, hard we’ve a is and for refrain Well, to with got incredibly I quarter fundraising of an firm. our in at continue promises similar having on It’s deliver conferences. we companies you dialogue half want continued busy that participating deconsolidation deliver to I’ve for

a care. you So, Have weekend. thank all. Take great

Operator

conference. today’s concludes This

may at disconnect Thank lines You time. for your your you this participation.

DigitalBridge (DBRG) 4 Aug 232023 Q2 Earnings call transcript