L&G has announced the first close of its new L&G Digital Infrastructure Fund (“LDIF” or “the fund”), raising around €600 million in commitments and related co-investments. A second close is anticipated later in the year, a major milestone in the firm’s Asset Management strategy to increase its position in private markets.
The digital infrastructure fund is intended to invest capital in key assets underpinning the digital economy. Its areas of focus are data centers, fiber networks, wireless broadband and cloud services, with selective international allocation expected, mainly in the United States. This move is indicative of the pace supporting L&G’s ambition to expand its private markets platform to £85 billion by 2028, increasing institutional opportunities for investment.
As L&G puts it, LDIF shows how the company uses its sector expertise, client relationships and capital power to incubate strategies that are in line with long-term macroeconomic requirements. The fund aims to solve the €2.5 trillion financing gap expected by 2030 to fund digital infrastructure. With a target of 15% gross IRR, it aims to invest in world-class businesses and assets. These would enable digital transformation, enhance connectivity and deliver resilient economic benefits.
Structured as an Article 82 Luxembourg-domiciled structure, the fund has attracted a global range of institutional capital. Investors have come from local government pension schemes, specialist infrastructure funds and global asset managers, with L&G also committing capital from its balance sheet.
The launch follows the earlier fundraising success of the L&G NTR Clean Power (Europe) Fund, which closed with more than €600 million to support renewable energy projects. Together, these funds underscore L&G’s ability to develop institutional-grade investment strategies across both digital transformation and the energy transition, two areas reshaping global markets.
Eric Adler, CEO of L&G Asset Management, commented “Infrastructure is rapidly becoming a cornerstone of global private markets, with digital infrastructure leading the charge. The successful first close of our Digital Infrastructure Fund highlights continued momentum behind our strategy to expand our private markets capabilities and reflects growing institutional appetite for essential, yield-generating assets. It is also a further step toward fulfilling our ambition to be a leading global investor, innovating to solve complex challenges for our clients using the power of L&G.”
As one of the earlier movers in digital infrastructure, L&G has built a specialist team averaging 15 years of industry experience. In 2019, it made a strategic investment in Kao Data, a UK-based developer and operator of advanced data centers, which has expanded to seven facilities across four locations. Another flagship project is the £750 million hyperscale data center development in Newham, London. This site is expected to generate £88 million in local gross value added, create over a thousand jobs across its construction and operations phases, and provide potential heat recovery for thousands of nearby homes.