Northern Investment Partners, a Montréal private equity firm focused on real estate technology, has partnered with M Capital Group (MCG) to invest in Canada’s wholesale data centre sector. The partnership plans to invest up to $160 million to pursue a strategy that will provide facilities for AA and AAA tenants to house their IT infrastructure. Northern Chairman Roger Karam said Canada is poised to capture an increasing share of the global data centre industry, which is currently valued at more than US$14 billion. Dubai-based MCG is a merchant banking firm.
Wholesale Data Centers are naturally migrating to Canada: A potential US$14.0 billion industry with stable recurring cash flows and solid growth rates is expanding North
MONTREAL, Jan. 24, 2017 /CNW Telbec/ – Northern Investment Partners Inc. (“Northern”), announced today that it had set up and partnered with M Capital Group – MCG, a Merchant Banking Group with offices in New York, London and Dubai, to invest up to CA$160 million (US$ 120.0 million) in equity to pursue a build, operate and acquisition strategy to take advantage of one of the world’s fastest growing real estate and technology opportunities, namely wholesale data centers. The objective is to provide facilities for AA and AAA tenants to house their IT infrastructure, with a beachhead platform in one of the most naturally promising markets in the world, Canada.
According to Roger Karam, Chairman of Northern: “Today the global data center industry is worth over US$ 14.0 billion, with Canada poised to capture an increasing share as it becomes more and more attractive to foreign and domestic customers taking advantage of the ideal market conditions the country has to offer. The North American market accounts for almost half of the global market, which is expected to rise at a CAGR of 12.1 percent between 2015 and 2018. With increased requirements for the cloud industry, it is expected to double in size within the next 5 years. Canada is considered to be one of the most competitive markets to host wholesale data centers because of its cold climates, low cost of energy, stable and protective data protection and privacy laws and stable socio-political environment. Canada has the additional advantage of a privileged relationship with the world’s greatest consumer of data center services, the United States. It’s cultural proximity and trading partnership makes it an ideal destination for US corporations. More specifically, provinces such as Quebec, have among the lowest cost of electricity in the world, along with cheap real estate and affordable construction costs, thus checking all the boxes to make it the best opportunity to build data centres.”
Christian Mouchbahani, Managing Partner at M Capital Group reflected that: “Northern is pursuing a very interesting and promising focused niche management strategy that targets an Internal Rate of Return (“IRR”) of 28%, with real estate assets that takes advantage of the high growth in the technology sector without the associated risk, while providing stable locked-in contracts and cash flows with blue chip companies upon completion of construction, with possible recapitalizations and capital events after two to three years. This is a well structured roll-up strategy that provides us and our partners in the US, Europe, Middle East and Asia from UHWI, Institutions and SWF, an attractive capital opportunity. We look forward to this long term partnership with Northern.”
Northern Investment Partners Inc., an investment management company headquartered in Montreal, Canada, is established by a team of real estate and construction veterans. The Company’s strategy is to design, operate and manage wholesale data centers, focusing initially on its home market in Montreal, Canada. The Management team has an extensive and successful track record in financing, managing and delivering large-scale construction projects such as university campuses, medical schools, hotels as well as large multiuse complexes.
M Capital Group (“MCG”) is a Merchant Banking group with offices in New York, London and Dubai. M Capital Group provides unique international expertise with local know-how mainly in Merchant Banking, Advisory and M&A, Asset Management & Funds, and alternative financing structures. MCG acts as partner of choice for creative “smart capital”, while establishing a long-term successful accelerated value added relationship.
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