PGIM Real Estate Raises $2B for Final Close of Global Data Center Fund

Rhea-AI Summary

PGIM Real Estate has successfully completed its first Global Data Center Fund (GDCF) fundraise, securing $2 billion in capital commitments from global investors. The fund employs a build-fill-sell strategy targeting opportunistic returns in the hyperscale data center sector.

Since its initial close in July 2023, GDCF has been developing a diversified portfolio across North America, Asia Pacific, and Europe. Led by Global Head of Data Center Investments Morgan Laughlin, the fund creates value through development joint ventures with leading data center operators while maintaining operator independence.

To date, over $450 million of equity capital has been committed to data center investments, with plans to deploy remaining capital within 18 months. The fund incorporates ESG considerations, including allocations to green-certified buildings, and was supported by a distribution partnership with a global private bank.

Positive

• Successfully raised $2 billion in capital commitments
• $450 million already committed to data center investments
• Clear deployment timeline with remaining capital to be invested within 18 months
• Geographic diversification across major global markets
• Strategic partnerships with multiple data center operators providing market access

Negative

• Significant capital yet to be deployed, creating execution risk
• Dependence on joint ventures with external operators may impact control

Insights

Asset Management Specialist

PGIM Real Estate's successful $2 billion capital raise for its Global Data Center Fund represents a strategic expansion in Prudential Financial's alternative investment capabilities. The fund's build-fill-sell approach targeting opportunistic returns positions PGIM in the higher-yielding segment of the data center market rather than competing for stabilized assets.

The $450 million already committed demonstrates execution capability, with plans to deploy the remaining capital within 18 months. This aggressive deployment timeline suggests a robust pipeline in what has become a highly competitive sector. The operator-independent strategy allows PGIM flexibility to partner with multiple data center operators rather than being tied to a single platform.

From an earnings perspective, this fund should generate meaningful fee income for Prudential through management fees and potentially performance fees if return targets are achieved. The $2 billion size makes this a material addition to PGIM Real Estate's portfolio.

The global diversification across North America, Asia Pacific, and Europe provides both market access and risk mitigation against regional economic challenges. The emphasis on the hyperscale, low-latency segment targets where demand is strongest from cloud service providers and AI applications.

This initiative aligns with broader institutional investor interest in digital infrastructure, allowing Prudential to capture capital flows into this growing asset class while diversifying beyond traditional fixed income and equity strategies.

NEWARK, N.J.--(BUSINESS WIRE)-- PGIM Real Estate has completed the fundraise for its first Global Data Center Fund (GDCF) with $2 billion of capital allocated to the strategy. PGIM Real Estate secured capital commitments for the GDCF from a range of global investors.

Morgan Laughlin, Global Head of Data Center Investments, PGIM Real Estate

The Fund has a build-fill-sell investment strategy focused on the low latency hyperscale segment of the global data center sector, targeting opportunistic investment returns. Since its first close in July 2023, the GDCF has been developing a geographically diversified portfolio of assets targeting investments across the major global data center markets of North America, Asia Pacific and Europe. The Fund is managed by a global portfolio management team led by Global Head of Data Center Investments Morgan Laughlin and PGIM Real Estate has over a decade of experience investing in the sector.

The Global Data Center Fund strategy creates value through asset-level development joint ventures with leading data center operators. Retaining an operator-independent approach allows the Fund to access attractive investment opportunities in supply constrained markets through its deep range of operator relationships. ESG considerations are factored into each investment decision with a defined asset allocation to buildings with a green building certificate.

As well as raising capital amongst institutional investors, PGIM Real Estate entered into a distribution partnership with a leading global private bank to raise assets globally for the Fund.

Morgan Laughlin commented: “Successfully reaching our $2 billion target raise is an important milestone that reflects strong investor confidence in the sector and our strategy. Data centers are at the heart of the digital framework that is playing an increasingly critical role across our economy and society. In line with the recognition of the importance of digital infrastructure in our modern lives, global investors are rapidly increasing their exposure to the sector.”

To date, over $450 million of equity capital has been committed to data center investments across PGIM Real Estate, and GDCF retains a strong pipeline of opportunities that is expected to allow it to deploy the remaining capital within the next 18 months.

PGIM Real Estate co-CEO Raimondo Amabile commented: “Congratulations to the team on reaching the final close on our Global Data Center Fund. We see a significant opportunity to develop expertise in the data center space and create a wider digital infrastructure platform. Data centers, and other associated digital infrastructure, offer a generational investment opportunity as the digital demands of our societies and economies continue to expand at an astounding pace.”

ABOUT PGIM REAL ESTATE

PGIM Real Estate is the world’s third-largest real estate investment manager, with $206 billion in gross assets under management and administration,¹ and real estate professionals located in 35 cities worldwide. Built on our belief that strong performance is fueled by dynamic expertise, our global network of on-the-ground specialists is dedicated to opportunity creation, optimization, and timely capital deployment amid shifting market conditions.

Through our full suite of real estate equity and debt solutions, we aim to achieve exceptional outcomes on behalf of investors and borrowers. Our uncompromising commitment to building lasting relationships with our clients is founded on trust, transparency, and mutual respect. We strive to integrate sustainable best practices throughout our investment, asset management, risk and talent management processes for the benefit of our clients, employees, and the communities in which we operate. PGIM Real Estate is a business of PGIM, the global asset management business of Prudential Financial, Inc. (NYSE: PRU). For more information visit pgimrealestate.com.

ABOUT PGIM

PGIM is the global asset management business of Prudential Financial, Inc. (NYSE: PRU). In 41 offices across 19 countries, our more than 1,450 investment professionals serve both retail and institutional clients around the world.

As a leading global asset manager with $1.38 trillion in assets under management,² PGIM is built on a foundation of strength, stability, and disciplined risk management. Our multi-affiliate model allows us to deliver specialized expertise across key asset classes with a focused investment approach. This gives our clients a diversified suite of investment strategies and solutions with global depth and scale across public and private asset classes, including fixed income, equities, real estate, private credit, and other alternatives. For more information visit pgim.com.

Prudential Financial, Inc. (PFI) of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom, or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. For more information please visit news.prudential.com.

¹ As of Dec. 31, 2024. Net AUM is $132 billion and AUA is $47 billion. PGIM Real Estate is the third-largest real estate investment manager (out of 72 firms surveyed) in terms of global real estate assets under management based on Pensions & Investments’ “Largest Real Estate Investment Managers” list published October 2024.

² As of Dec. 31, 2024.

For Professional Investors only. All investments involve risk, including the possible loss of capital.

PGIM is the primary asset management business of Prudential Financial, Inc. (PFI). PGIM Real Estate is PGIM’s real estate investment advisory business and operates through PGIM, Inc., a registered investment advisor.

REF ID 016634

PGIM Real Estate is the real estate investment management business of PGIM, the principal asset management business of Prudential Financial, Inc. (“PFI”), a company incorporated and with its principal place of business in the United States. PGIM is a trading name of PGIM, Inc. and its global subsidiaries. PGIM, Inc. is an investment advisor registered with the U.S. Securities and Exchange Commission (the “SEC”). Registration with the SEC does not imply a certain level of skill or training. PFI of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. Prudential, PGIM, their respective logos and the Rock symbol are service marks of PFI and its related entities, registered in many jurisdictions worldwide. In the United Kingdom, information is issued by PGIM Private Alternatives (UK) Limited with registered office: Grand Buildings, 1-3 Strand, Trafalgar Square, London, WC2N 5HR. PGIM Private Alternatives (UK) Limited is authorized and regulated by the Financial Conduct Authority (“FCA”) of the United Kingdom (Firm Reference Number 181389). These materials are issued by PGIM Private Alternatives (UK) Limited to persons who are professional clients as defined under the rules of the FCA. In the European Economic Area (“EEA”), information is issued by PGIM Luxembourg S.A. with registered office: 2, boulevard de la Foire, L1528 Luxembourg. PGIM Luxembourg S.A. is authorized and regulated by the Commission de Surveillance du Sector Financier in Luxembourg (registration number A00001218) and operating on the basis of a European passport. In certain EEA countries, this information, where permitted, may be presented by either PGIM Private Alternatives (UK) Limited or PGIM Limited in reliance of provisions, exemptions, or licenses available to either PGIM Private Alternatives (UK) Limited or PGIM Limited under temporary permission arrangements following the exit of the United Kingdom from the European Union. PGIM Limited and PGIM Private Alternatives (UK) Limited have their registered offices at: Grand Buildings, 1-3 Strand, Trafalgar Square, London WC2N 5HR. PGIM Limited is authorized and regulated by the Financial Conduct Authority (“FCA”) of the United Kingdom (Firm Reference Number: 193418). PGIM Private Alternatives (UK) Limited is authorized and regulated by the Financial Conduct Authority (“FCA”) of the United Kingdom (Firm Reference Number: 181389). These materials are issued by PGIM Luxembourg S.A., PGIM Limited or PGIM Private Alternatives (UK) Limited to persons who are professional clients as defined in the relevant local implementation of Directive 2014/65/EU (MiFID II) and/or to persons who are professional clients as defined under the rules of the FCA. PGIM operates in various jurisdictions worldwide and distributes materials and/or products to qualified professional investors through its registered affiliates including, but not limited to: PGIM Real Estate (Japan) Ltd. in Japan; PGIM (Hong Kong) Limited in Hong Kong; PGIM (Singapore) Pte. Ltd. in Singapore; PGIM (Australia) Pty Ltd in Australia; PGIM Luxembourg S.A.; and PGIM Real Estate Germany AG in Germany. For more information, please visit pgimrealestate.com.

The brand “PGIM Real Estate” encompasses both (1) a fund advisory business headquartered in Newark, New Jersey, which operates as a business unit of PGIM, Inc., an SEC-registered investment advisor organized as a New Jersey corporation (“PGIM”), under the name “PGIM Real Estate,” and (2) a commercial real estate debt origination and advisory platform which operates through a separate, affiliated legal entity known as PGIM Real Estate Finance, LLC (“PGIM REF”), a Delaware limited liability company. Several officers of PGIM REF are also associated with PGIM, Inc., and, from time to time, may provide services to PGIM Real Estate in their capacities as officers of PGIM that are separate and distinct from the services they provide as officers of PGIM REF.

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Source: Prudential Financial, Inc.

FAQ

How much capital did PGIM Real Estate raise for its Global Data Center Fund?

PGIM Real Estate raised $2 billion in capital commitments for its Global Data Center Fund (GDCF).

What is the investment strategy of PGIM's Global Data Center Fund?

The fund follows a build-fill-sell strategy focused on low latency hyperscale data centers, targeting opportunistic returns through development joint ventures with operators.

How much has PGIM's Global Data Center Fund deployed so far?

Over $450 million of equity capital has been committed to data center investments to date.

What regions does PGIM's Global Data Center Fund target for investments?

The fund targets investments across major data center markets in North America, Asia Pacific, and Europe.

When did PGIM's Global Data Center Fund have its first close?

The fund had its first close in July 2023.