Singapore-headquartered private equity real estate firm SC Capital Partners is looking to build a $2 billion data center platform as part of its plan to grow its investment business.
PERE can reveal that the firm aims to raise $1 billion of equity in the next three to four years for the platform, SC Zeus Data Centers, which is expected to have a total portfolio size of around $2 billion including leverage. The $1 billion in equity can include the firm’s balance sheet capital, capital from SC Capital’s funds and fresh capital from its existing investors. SC Capital’s funds will have the first look at deals being sourced by the platform.
With a target of acquiring at least four assets, the platform has been seeded with an investment in Seoul, where it will develop a hyperscale data center at an expected total cost of around $500 million.
Suchad Chiaranussati, chairman and founder of SC Capital, said in a release that the firm has been following the Asia-Pacific data center market closely and has seen “surging interest in the sector.” It is understood that the firm made its first investment into the sector last year with a project in Guangzhou, China. Backed by the firm’s flagship private equity real estate fund Real Estate Capital Asia Partners V and capital from its existing investors, the project is expected to be in operation in August this year.
Following the acquisition of its first investment, the firm started to look at forming a dedicated team to focus on the strategy last year. “Last year was a formation year. This year is when we put it into action. Next year will be expansion,” said Chiaranussati. Led by Joe Gooi, former managing director at private equity real estate firm Rockworth Capital Partners, SC Zeus Data Centers currently has a team of eight members.
Apart from data centers, the firm is also seeking to expand outside of real estate investment. PERE understands that SC Capital is in the process of launching an ESG investment platform where it will invest in biogas, solar farms, bioenergy and other sustainability-related opportunities. “It is not real estate. But as a real estate player, we need to be a lot more active as a user and participant of sustainable alternatives,” explained Chiaranussati.
Meanwhile, the firm’s flagship opportunistic fund RECAP V is also understood to have been fully deployed and SC Capital is currently in the process of recycling the fund’s capital to further boost returns. It is understood that the fund has achieved over 20 percent gross IRR with fund-level leverage of below 50 percent, according to an SC spokesperson. PERE reported in 2019 that the firm’s RECAP V was closed below its $1 billion target due to performance-related issues in its previous funds. Fund V ended up closing at $650 million with $200 million in co-investment capital.