Digital Colony Has Raised $4.1 Billion for Its Second Fund

Gillian Tan (Bloomberg) -- Digital Colony, an arm of Colony Capital Inc., held a first close of more than $4.1 billion for its second fund dedicated to global communications-infrastructure investments, according to a memo sent to investors obtained by Bloomberg News.

Digital Colony, led by Colony Chief Executive Officer Marc Ganzi, is targeting $6 billion for the fund, the memo shows, confirming a Bloomberg report from May.

The second fund has formed three investment platforms, including one dubbed Edgepoint focused on acquiring Asia Pacific towers that’s helmed by the former Edotco Group Sdn Bhd. CEO Suresh Sidhu.

Investors in the latest Digital Colony vehicle include the Teacher Retirement System of Texas, Employees Retirement System of Texas, Virginia Retirement System and the Orange County Employees Retirement System, according to data compiled by Bloomberg. Wafra Inc., which invests on behalf of Kuwait, has also committed capital to the fund, following the firm’s July purchase of a minority stake in Digital Colony that included a more than $400 million pledge.

A representative for Digital Colony declined to comment.

Digital infrastructure, which includes towers, data centers and fiber networks, has become an increasing area of focus for institutional investors amid enhanced reliance on technology and upgrades to existing infrastructure. GI Partners last year raised $1.8 billion for its debut data infrastructure fund, while firms including KKR & Co. and Goldman Sachs Group Inc. have continued to make wagers in the space.

Founded by Tom Barrack, Colony Capital has spent the past 18 months pivoting to digital infrastructure from traditional real estate. As of Jan. 1, Colony relocated to Boca Raton, Florida -- the longtime headquarters of Digital Colony -- from Los Angeles.