Nik Kemp, Head of Global Real Assets, AustralianSuper

Nik Kemp, Head of Global Real Assets, AustralianSuper

The Fight for Digital Infrastructure

Competition Is Heating Up

The fight for digital infrastructure assets is heating up. Florence Chong takes a look at some of the recent deal activity in this space.

Digital infrastructure – think mobile phone towers, data centres and fibre networks – has become the hottest must-have investment sector for cash-rich super funds.

In May this year, UniSuper invested $1 billion to buy a 5 per cent stake in Vantage Towers, one of Europe’s leading mobile towers businesses. Vantage has a portfolio of more than 8,300 sites across 10 markets.

Weeks later, AustralianSuper inked a $2.5 billion deal with DigitalBridge to become a key shareholder in Vantage EMEA (Europe, Middle East, and Africa), described as one of the fastest-growing hyperscale data centre platforms across this region.

It was the first significant exposure to data centres for Australia’s largest super fund. Nik Kemp, Global Head of Real Assets at AustralianSuper, said at the time the investment was the fund’s largest infrastructure investment in Europe and would provide it with access to an attractive market that has delivered strong growth and returns in recent years.

Kemp told [i3] Insights the deal gave AustralianSuper a ‘significant minority stake’ in the Vantage EMEA platform to complement the fund’s existing digital infrastructure investments in Australia.

Vantage Towers represents an important step for the fund as it deepens its infrastructure in Europe, he says. And it is timely, he adds. Kemp sees the Vantage EMEA platform as being at an ‘exciting point in AustralianSuper’s history’, with a strong pipeline of developments in growing markets across the EMEA region.

AustralianSuper is a relative newcomer to digital infrastructure. Just three years ago, it plunged into the sector with a big splash, acquiring a 70 per cent stake in Australian Tower Network (ATN) from Singapore Telecommunications (SingTel) for $1.9 billion. SingTel needed to free capital to fund its 5G rollout and for data centres in Australia.

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Digital infrastructure is a burgeoning sector driven by growth in data consumption and usage, and, as such, competition for high quality assets will always be intense – Nik Kemp, AustralianSuper

The deal came with 2,312 mobile network towers and rooftop sites which serve the Optus network. In 2022, AustralianSuper partnered with SingTel to buy Australia’s largest independent tower network, Axicom, for $3.58 billion. The super fund’s share in the deal is 82 per cent.

ATN, since rebranded as Indara Digital Infrastructure, has folded the Axicom business into its own. It now operates more than 4,000 mobile phone towers and telecom sites around Australia.

AustralianSuper bought Axicom from Macquarie Asset Management and its co-investors – including UniSuper, a UBS-managed infrastructure fund and the Abu Dhabi Investment Authority. The Macquarie consortium had bought what was known as Crown Castle’s Australian portfolio in 2015.

From the fund’s perspective, Axicom had all the characters AustralianSuper was looking for in an infrastructure asset. Kemp points to strong synergies between Axicom and Indara.

Of future growth of the Indara network Kemp tells [i3] Insights: “The business has a clear strategy to expand its footprint and customer base. It also has a development pipeline of new contracted sites and a strategy to service other carriers wanting to expand their capacity. As a flexible capital provider, we see opportunity to realise significant value from the execution of this growth plan.”

He adds: “Digital infrastructure is a burgeoning sector driven by growth in data consumption and usage, and, as such, competition for high quality assets will always be intense.

“The scale and reach of many tower assets is difficult to replicate and they often have long-term contracted revenues which make them attractive investments. In recent years, we have been seeing more opportunities in the digital infrastructure sector coming to market.

“We will continue to seek further opportunities in the digital infrastructure sector, both domestically and globally. AustralianSuper is looking to double its infrastructure portfolio over the next five years from its current $40 billion. We believe there will be significant growth in demand for digital infrastructure, and will actively look for future opportunities.”

UniSuper clinched its 5 per cent stake in Vantage Towers in what [i3] Insights believes was a contest with another super fund.

Sandra Lee, Head of Private Markets of Unisuper, was delighted to secure the stake, describing it as a ‘high quality’ defensive infrastructure investment. The anchor tenant is Vodafone, Europe’s leading mobile phone operator.

Lee says Vantage Towers offered compelling value. It is the fund’s first direct investment in Europe, paving the way hopefully for more direct investment.

In another industry play, Australia’s Future Fund in 2021 led a consortium that includes Commonwealth Super Corporation and SunSuper (now Australian Retirement Trust) to purchase 50 per cent of Telstra’s InfraCo for A$2.8 billion.

Now renamed Amplitel, it is the largest mobile tower infrastructure provider in Australia, with an asset portfolio of more than 8,000 physical towers, mast, large pole and antenna mount structures.


In each of these major digital transactions, the field of deep-pocketed contenders, including superannuation funds and foreign pension plans, have competed fiercely, paying a hefty premium to secure what are critical infrastructure assets.

The price paid often reflects more than 25 times the business’ EBITDA (earnings before interest, tax, depreciation and amortisation).

Names that have frequently appeared in the contests include the likes of OMERS Infrastructure, which bought mobile towers and a rooftop portfolio from TPG Telecom (which runs Vodafone networks in Australia) for $950 million in May 2022.

This deal paves the way for OMERS Infrastructure, part of the Ontario Municipal Employees Retirement System, to enter the Asia-Pacific digital infrastructure market.

Canada’s Brookfield Asset Management, which invests on behalf of global institutions and pension groups, last year took over Uniti Group, Australia’s number one independent provider of fibre network, for $3.62 billion.

Across the Tasman, pension funds have also been active acquirers of digital assets. Ontario Teachers’ bought a 70 per cent stake in New Zealand’s Spark TowerCo, which operates about 1,263 sites, for NZ$900 million in 2022.

But with most available New Zealand assets now sold to long-term owners, it will become harder for those who come later to assemble meaningful portfolios.

Telecom companies generally have sought to offload their passive mobile assets, physical towers which support functioning of active assets like mobile networks, to lighten their balance sheets and to fund growth in other areas of their businesses.

In concluded deals, the telcos have signed long-term leases with the new owners. In the case of Spark, for example, the New Zealand company signed a 15-year agreement plus rights of renewal and access to existing and new towers, with an expansion program over the next 19 years.

TPG entered a 20-year contract with OMERS Infrastructure to use the tower assets, with options to extend, and is also committed to building additional towers to further expand the network over coming years.

Invariably, UniSuper, AustralianSuper and the Future Fund each see the contracted income streams over long periods as the key attraction of these increasingly difficult-to-obtain assets. This is a main thematic because of the exponential growth in demand for both telecom towers and broader digital infrastructure.

Whether it is through the migration to 5G, wider adoption of artificial intelligence, or the ongoing expansion of digitalisation in businesses like e-commerce, emerging asset owners appear assured of endless blue skies.

They are at the backbone of today’s digital economy, just as airports, ports and toll roads have been highly prized for the critical roles they play in national economies.


[i3] Insights is the official educational bulletin of the Investment Innovation Institute [i3]. It covers major trends and innovations in institutional investing, providing independent and thought-provoking content about pension funds, insurance companies and sovereign wealth funds across the globe.