Cordiant Digital Infrastructure, the UK’s first digital infrastructure investment trust, has raised £370 million in an initial public offering (IPO) against an initial target of £300 million.
The trust, under the tickers ‘CORD’ and ‘CSRD’, will start trading tomorrow on the main market of the London Stock Exchange.
Cordiant Digital issued 370 million shares at a price of 100p per share for the placing, as well as 46.2 million shares at no value under a subscription offer, on the basis on one subscription share for every eight ordinary shares subscribed for.
Another digital infrastructure investment trust, Digital 9 Infrastructure, is hoping to raise £400 million from investors in a London IPO.
INVESTING IN THE ‘PLUMBING OF THE INTERNET’
Cordiant Digital, which is targeting a 9% total return a year on net assets, will invest across the UK, Europe and North America in what it calls the core infrastructure of the digital economy, or ‘the plumbing of the internet’, comprised mostly of data centres, mobile towers and fiberoptic networks.
Its initial dividend target is 1p per ordinary share, rising to 2-3p in the second year and hitting at least 4p in the fifth year. It will have a management fee of 1% a year of market cap up to £500 million, falling to 0.9% a year between £500 million and £1 billion, and then 0.8% a year thereafter.
The fund’s manager, specialist infrastructure and real assets investor Cordiant Capital, plans to capitalise on the ‘surging growth in data consumption and traffic’. It said consumption trends and traffic patterns, as well as the adoption of 5G technology, will provide ‘an economic tailwind’ that could last for over a decade.
It will focus on the ‘middle market, where platforms can be acquired at attractive entry prices and the size of the platform grown through capital expenditure and bolt-on acquisitions’, and it has already identified a pipeline of €1.5 billion, including US data centres, Scandinavian fiberoptic networks and European mobile towers.
The trust’s chair, Shonaid Jemmett-Page, said the coronavirus pandemic has emphasized the need for ‘substantial investment’ in digital infrastructure.
She said, ‘The increasing digitisation across societies has the potential to have a transformative impact on the global climate and societal challenges that we face.’
