I think on the $7 billion this year, we’ve been pretty clear that the bulk of that will be flagship. So we’ve got closings that are scheduled for the end of this month. We’ve got a big closing scheduled for March. We have rolling closings, Ric, pretty much every 30 days. And remember, we’re no longer a one product shop, right? So between co-investments, continuation vehicles, the flagship product, our credit strategy, our late stage venture growth strategy, we’ve got an ample amount of products in the market that there’s always a closing happening at some point in time. So the key to that is just updating you guys on a quarterly basis about how much we raise inside the quarter, and then ultimately how that offsets against our annual objectives.
So, so far, good start to the year. Good January, right? February’s lining up pretty good. March is lining up very strong. And everything seems to be as we have planned it. As I mentioned earlier, Ric, there’s one key word to all of this, which is just patience. Whether you got to wait two weeks for a signature, you got to wait 30 days for a fee letter, you got to wait 45 days for an investment committee to reconstitute itself, every place has a story and an issue, and we just need to be good listeners, which we are. We need to be patient, which we are, and the results will come. We have a very, very good feel for what we’re doing. And which is why we sit here today with the results that we just delivered to you and the conviction level that we have for the story this year and out in the ‘25 and ‘26 where we’ve already got new products lined up for launch later this year, that’ll be our ‘25 products.
And then if we continue to deliver on Fund I and Fund II, we can continue to grow our flagship strategy in ‘26. So everything is pretty well thought out, right? I mean, we have a very specific set of goals and objectives. And the good news about having the multi-strat setup that we have today between InfraBridge, right, the flagship product, late stage venture growth, credit, SAF, which is our core fund, and our two liquid securities and our continuation funds group, we have enough products out there that can keep growing. And don’t forget, Ric, as our portfolio companies grow, in the middle of the year, we may announce a big co-investment, right? So we may go out to all of our LPs. Let’s say, I’m not going to pick on one company, but let’s say Scala or Switch or Vantage Europe ends up outperforming, it’s not uncommon for us in the middle of the year to do an equity raise very quietly.
And then all of a sudden that pops up in the next quarter and you’re like, oh, wow, where did that come from? Well, it came from success based CapEx. And so we’ve got a rich history of doing that. And again, whether it’s a Scala or whether it’s a Highline or whether it’s a Vantage Europe or whether it’s a Vertical Bridge, all of these companies require capital. And when they’re succeeding and they’re taking outsized wallet share, it’s easy to go to LPs and pass the hat and ask for a top up on co-invest equity. So you’ll see that. Each quarter, you’ll see a co-investment strategy, bring in some new capital, perhaps you guys don’t expect it. We don’t model it, right? But as our portfolio companies grow, so does the equity table and so does the ability to form capital around our best management teams.
Ric Prentiss: It might be a little premature, but Tom, you’re in the background there on the call. It sounds like you’ve got extensive experience in the alt world. What are you seeing so far as kind of the pros and cons of DigitalBridge versus others in the alt asset manager space? And what do you think the market’s missing as far as people look at DigitalBridge?
Tom Mayrhofer: It’s probably a little premature for me to comment on that specifically, but what attracted me to DigitalBridge is that we have a focus and an area of expertise that differentiates us. And so that’s what attracted me here. I think that’s fundamentally what’s important when you think about investing capital.
Ric Prentiss: Hey, Marc, you’ve obviously been around a lot longer, we’ve known each other, gosh, 20, 25 years. What do you think are the pros and cons on what you guys now are the simpler story, and what is the market not giving you credit for yet maybe?
Marc Ganzi: Well, Ric, I think we’ve been pounding the table now for three years and I’ve been at your conferences quite a bit, being an evangelist of the asset light digital infrastructure player. And even though we’ve taken an alternative asset management skin, deep at our core, our capillaries, our heart, our brain is that of an operator. And when you’re asset light, Ric, you can go faster, right? And when you’re asset light, you can form capital quicker and you can take wallet and I love doing that. I love competing and I like to go out and I love it when our portfolio companies go win the key jump balls because we can move a little quicker and we can form a little capital. And make no mistake in AI infrastructure, you’ve got to have a big wallet if you’re going to go compete for some of this business.
So we’re out there doing that. And as you can tell from the likes of Equinix and DLR, they’re out there trying to form capital away from their public balance sheets because they have to. It’s the only way they can survive, which is why DLR did the business, did the deal with Blackstone and why Equinix did their deal with GIC. I think it’s sort of proof positive that what we’re doing is the new thinking in infrastructure, a more evolved way to invest in digital infrastructure, which is why our investor base has some crossover. You see traditional infrastructure, TMT investors in our share price. And then you see obviously folks that hold other alternative asset managers moving in to our stock in the last 90 days, because they understand what we’re doing and the fact that we are the next-gen alternative asset manager, lean, focused, flywheel, product-centric, customer-centric.
These are things that are unique and even unique, Ric, in the alternative asset management space, we’re at our first financials conference today, which will be interesting. But we’ll still attend your conference, right? Because we have a big say in what happens in your world. But we now have a voice in the world of, again, the Blackstones and Carlyles and KKRs, because, our fees, our revenue, our earnings, and most importantly, the scarcity of what we do is so unique. And I think as time goes on, you’re beginning to see us grow into what I think is an appropriate multiple for this business. We’re not industry leading yet. I think my goal is to have the highest multiple in the industry because I think what we do is more unique. I think what we do is a little bit more sticky.
I think our fee streams are a little bit longer. And as we get out on the circuit and we talk to investors in the financial services space, like we’re going to do today at one of your competitors conferences, we’re going to go make that case, that the durability of our management fees, the uniqueness of what we do, the scalability of what we do, our ability to grow AUM, FEEUM and FRE is very unique because it’s fueled by a secular tailwind that hits credit, that hits core, that hits flagship, that hits InfraBridge, that hits our liquid securities funds. All of these ideas and concepts are unique, curated, tailored, different products and perhaps what our peers are selling. And so as Tom said, being focused matters. Investors want focus. They want to be with somebody that’s an industry specialist and that understands how to invest in these secular opportunities.
You’re seeing the same thing, Ric, in renewables. Investors pile into folks that are focused, that have that industrial background, and that’s why I think you’re seeing some of the success. Now, I think the big elephant in the room about our valuation, Ric, is just carried interest, right? I remember talking to some friends of mine at Blackstone who now are the senior leadership there. Over a decade ago, when they went public, there wasn’t a great appreciation for their carried interest. And now today, I think investors expect on a quarterly basis, Blackstone to deliver carried interest and they do it and they do it really well. They’re best in class. And so we need to get into that same cadence, right, where investors can trust the carried interest delivery.
And we’ve got a big chunk of our carriers is for the public company. And right now we don’t get valued for that at all. So that’s a big opportunity. But that’s something that’s earned, Ric. We got to go earn that. And I plan to do that. Just like we spent the last four years earning your trust and earning investor trust, we will spend the next four to five years earning the trust side on the carried interest delivery for our shareholders.
Ric Prentiss: Makes sense. Thanks, everybody. Jacky, again, best wishes.
Marc Ganzi: Thanks, Ric.
Operator: Our next question is from Richard Choe with JPMorgan. Please proceed.
Richard Choe: Great. I just wanted to follow up on the $11 billion in data center CapEx. What kind of return rate should we be expecting from those investments? And I think there’s some worry that we’re kind of entering this peak data center demand environment. Can you talk a little bit about kind of the sustainability that you see? I know you went over a little bit on your pipeline, but in the past, pipelines don’t always turn out to what they should be.
Marc Ganzi: Yeah. No, Richard, as always, you’re asking the right question, right? I think we should always be concerned at the peak, not the trough. And so having — like you, having been around this sector for three decades, I mean, I’ve watched the peaks and the valleys in cell towers, I’ve watched in small cells, I’ve watched in fiber, I’ve now watched two leasing cycles in data centers. And I think, Richard, you’d probably agree with me, we’re in a third cycle now, since the inception of the industry where we’re at a peak. I actually will take the view that I think rental rates, Richard, will continue to go up. I do think it is very market specific. Given that we are a global operator, we do operate in five different continents, just to be clear.
We’ve got operations in Africa, got operations in Asia, Latin America, the US, and Europe. And so we have a pretty good purview of what’s happening out there. And certain markets, lease rates are up 10%, 11%. Certain markets, lease rates are up 25%, 30%, 40%. And Richard, it is heavily correlated to power and power availability. And so as certain markets, like for example, the flat markets or Northern Virginia or Santa Clara, or even out of Hillsboro, these are capacity constrained markets where the landlord has the advantage. And how you use that advantage is really important, and I won’t get into the strategy of pricing and what we do, it’s not appropriate. But our 5 gigawatt pipeline is super qualified in the respects that we have land, we have permits, we have will serve letters, and we’re prepared to deliver that capacity.
That 5 gigawatt number last year, just to put it in proper context, our pipeline this time last year, Richard, was 2.3 gigawatts. So our pipeline is up over 2x, right? And so we’ll lead through that pipeline as the year goes on. And again, what is also unique to our story is that we have six different data center platforms. So we’re not just myopically focused on big cloud hyperscale campuses, right? AtlasEdge is building hyperedge compute in Europe. DataBank is building hyperedge here in the US. AIMS is building hyperedge in Southeast Asia. So we have three edge compute companies that are very focused on a specific product, a certain vertical, and a certain set of customers. Take a step back. Look at what Vantage is doing and look at what Scala is doing in Brazil and in Santiago and Colombia.
There we’re delivering at scale big hyperscale campuses focused on cloud customers and cloud logos and some AI logos. Then, last but not least, private cloud, 100% renewable. Switch, very differentiated, very unique, highly secure. These are things that resonate with the customers, particularly Fortune 100 customers and big government agencies that really are focused on data sovereignty and data protection. We’ve had a fantastic first year results at Switch, and Switch is poised to deliver another big year of results. But again, that is Tier 5. It’s a very differentiated product. So again, having these six different companies where we can show up and be incredibly surgical and act local with the customer and already have the power lined up, already have the land lined up, and already have the building permits lined up, that’s advantage DigitalBridge at the end of the day.
And so when we present to you an $11.7 billion CapEx number for this year on new data center spend, that’s committed, that’s signed. So those were leases that were signed 12 months ago, 18 months ago. What we’ll do this year is we’ll work through that 5 gigawatt pipeline and hopefully we convert somewhere between one and 1.5 gigawatts of new leasing, maybe more. Our sales teams are pretty confident that this could be the first year we could surpass 2 gigawatts of leasing across all of our portfolio companies. We’ll wait and see. We’ll keep you updated on it but I think the punchline is the markets that we’re operating in, we see price elasticity but we see defensibility around what we’re doing from the power position we have, the permits we have, and the customer relationships we have.
That to me is the strategic moat at the end of the day, is being a year, 18 months ahead of our competition in terms of the land, the permits, and the power.
Richard Choe: Thank you for the color.
Marc Ganzi: Thanks, Richard.
Operator: Our next question is from Eric Luebchow with Wells Fargo. Please proceed.
Eric Luebchow: Thanks. Good morning, Marc. So maybe you could touch on kind of the buy versus build equation across your key industry verticals. It seemed like you’re more focused on building via CapEx and greenfield in 2024. Wanted to confirm if you’ve seen any kind of changes in transaction multiples across your key verticals.
Marc Ganzi: Yeah, thanks. Look, we’re not bullish nor bearish on M&A versus building. I think inevitably we skate to where we think we can achieve the best IRR. And so for right now in data centers, it’s built. Buying existing data center platforms are incredibly expensive. And the returns are incredibly tight because five or six infrastructure firms show up who claim to be in digital infrastructure and need to buy something. And so that’s not a race we play in. It’s not a place where we perform particularly well. So this is why we’ve been for years building these six platforms and building our construction pipeline and most importantly, building our partnerships with tower source providers. That’s really been the magic for us.
In that swim lane, we’re focused on greenfield. I think if you look at towers, we’ve seen tower multiples retreat a little bit, not much, but there’s been some value opportunities where we’ve dipped our toe in and we found an opportunity to do some tuck-in M&A and we do that discreetly and quietly and we don’t do it with a lot of fanfare. So we are buying towers, but we’re also building towers. We’ve got a big pipeline of towers in Europe with GD Towers with our friends at DT. Vertical Bridge has a monster pipeline of new BTS towers, but they’re also engaging in M&A. EdgePoint has a big BTS pipeline of over a couple thousand towers for customers in three different countries in Southeast Asia. And ATP and MTP and Highline are all executing down in Latin America.
So we’re very busy. I would say our global built-to-suit pipeline is somewhere between 5,000 and 7,000 towers today across all the different tower companies. That actually might be light, Truth be told. And then I think the M&A pipeline is somewhere between 15,000 and 20,000 towers when you amalgamate all the M&A acquisition work we’re doing around the globe in Asia, Latin America, Europe, and the US. Again, in the tower business, we operate in four different theaters, so we’re pretty busy. Moving on to fiber, I think this is where you’ve seen the biggest degradation in multiples. Fiber-to-the-home, there were some deals that kind of got done in the crazy days of COVID in the mid-20s. I think you’re seeing those multiples retreat down in kind of the 10 times to 14 times range.
Enterprise fiber, again, good enterprise fiber, was trading in the go-go days in the mid-20s, retreated to the high teens and I would say today is retreated even further down into the low teens and again, kind of in that 12 times to 14 times band. But it just depends on the business model, depends on the market, the management team. We saw fiber-to-the-home business in Florida trade for over 30 times to a sponsor last week, and that just kind of blew our minds. So there are outliers and certain fiber models are pricing well and certain fiber situations aren’t even pricing. It’s just a no bid. And we’ve seen a couple of different auctions where the auctions have failed because there wasn’t a bid sufficient to proceed, where the sponsor was like, look, I’m holding out because I got this marked on my book at 18, and all the bids were at 12.
So I think fiber still has a shakeout in pricing and in the M&A landscape. And we’ll continue to track that space pretty carefully. I think the small cell space is very interesting because we haven’t quite hit 5G densification. So as that growth kicks in and we move into the next phase of leasing, I think you’re going to see multiples move up in the small cell space because particularly in Generative AI where you really need to have low latency edge delivery of those applications to mobile devices, I think you do see a pickup in small cell infrastructure in ‘26 through 2030. I think that’s kind of the four year pocket we see being a lot of demand in small cell. So there haven’t been any material trades in the small cell sector in the last 12 months.
There have been a couple of businesses that have been up for sale that didn’t get the price the sponsor wanted, so they pulled it back. And those are valuable assets. And so I think time will tell, there’s a bid-ask spread between what a sponsor wants to sell a small cell infrastructure business for and versus what the market wants to pay. So I think time, growth, and interest rates will sort of reconcile that. But for the time being, we don’t have enough data to suggest that small cells are trading up or trading down. We just know that there’s a material bid-ask spread. So that’s kind of my picture on greenfield versus brownfield. In the meantime, fiber greenfield is good. Small cell greenfield is okay. You saw our growth numbers from last year.
Both those verticals are still delivering positive year-over-year growth, but clearly not delivering the kind of demand that we’ve seen across certainly data centers and towers.
Eric Luebchow: Great, thanks. And maybe you could touch on kind of M&A opportunities within the alternative asset manager space. I mean, we saw a large transaction announced earlier this year between BlackRock and GIP. And just wondering if you think there’s more consolidation opportunity to come in what your M&A pipeline may look like in terms of tuck-in and other asset management platforms?
Marc Ganzi: Good two questions. I was wondering when those were going to come. So on the first one, I mean, if you take a look at the two trades, the General Atlantic trade and the BlackRock trade, and then you look at KKR’s acquisition of Angelo Gordon, I think you do see a pattern — sorry TPG’s acquisition of Angelo Gordon, you do see a pattern of M&A activity in the sector. I don’t think that slows down. I think that’ll continue. I think that what people are recognizing is when you have a good platform, you have one accounting system, one SEC reporting, one asset management platform, one fundraising team, you do get economies. What we’ve learned is you do get economies of scale as you get bigger. And having a multi-strategy approach, whether you’re Ares, whether you’re Apollo, whether you’re Blackstone, that is the playbook.
