Asset AllocationNovember 25, 2024

CPPIB, Pacific Asset Management Launch South Korea Data Center Joint Venture

The Canada Pension Plan Investment Board’s C$285 million commitment follows several recent data center investments.

Reported by Michael Katz

The Canada Pension Plan Investment Board has launched a joint venture with U.K.-based Pacific Asset Management to develop data centers in the Republic of Korea that are “carrier-neutral,” meaning they will allow use by multiple telecommunication carriers. The C$646.8 billion (US$472 billion) pension giant committed C$285 million to the project as an initial investment.

It is the second time the CPPIB and Pacific Asset Management—part of the Pacific Investments Group—have formed a data center-focused joint venture in South Korea. In March 2022, the tandem announced a joint venture to develop the Jukjeon Data Centre in metropolitan Seoul. At the time, the CPPIB and a Pacific Asset Management fund invested C$146.8 million in equity for project development, with the CPPIB committing C$135 million.

“The demand for data centers in Asia Pacific has been on the rise, driven by the continued need for cloud computing and the increasing global adoption of artificial intelligence,” the CPPIB’s global head of real assets and head of Europe, Max Biagosch, said in a statement. “In South Korea, businesses continue to seek high-quality digital infrastructure to support the country’s emergence as a digital technology hub.”

The CPPIB has made multiple investments in data centers since 2017, focusing mainly on the Asia-Pacific region, including investments in Australia, Hong Kong, Japan, Korea, Malaysia and Singapore. In addition to the two joint ventures with Pacific Asset Management, the pension fund signed an agreement in September with private equity firm Blackstone to acquire Australian data center operator AirTrunk Operating Pty Ltd.

The CPPIB committed A$24 billion ($16.16 billion) for a 12% stake in the company. It also committed as much as $2.4 billion in the second quarter of fiscal 2025 in a joint venture with digital infrastructure company Equinix Inc. and Singapore sovereign wealth fund GIC. The three aim to raise more than $15 billion in capital to develop data centers in the U.S.

In 2021, the CPPIB invested C$400 million in a data center joint venture with Japanese general trading and investment firm Mitsui & Co. Ltd. to create an investment platform for data center developments in Japan.