PGIM Closes $2B Data Center Investment Fund

New Jersey-based global investment giant PGIM Real Estate is creating a 10-figure capital fund to capitalize on the growing demand for computing capacity — demand that is only growing with the evolution of AI and other technologies.

PGIM Real Estate, the real estate investment branch of Prudential Financial, has closed a $2 billion fundraising campaign for its Global Data Center Fund, which it secured from “a range of global investors,” the firm said Wednesday. Details about the fund were first reported by Private Equity Real Estate (PERE) last May, and its closure was first reported by Bloomberg. It’s is the largest closed-end fund raised by PGIM to date, per PERE. 

“We see a significant opportunity to develop expertise in the data center space and create a wider digital infrastructure platform,” Raimondo Amabile, PGIM’s co-CEO and global chief investment officer, said in a statement. “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.”

The fund, overseen by a management team led by PGIM’s Morgan Laughlin, will focus on low-latency hyperscale data centers, which can range past 1 million square feet. More than $450 million of capital from the fund has already been committed to data center developments, per PGIM, and the firm expects to use the remaining funds for pipeline projects within the next 18 months. The firm said it also entered into a partnership with a “leading global bank” to raise assets for the fund, though did not disclose the bank’s name.

“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,” Laughlin added in a statement. 

Despite the sheer size of the fund, investing in data centers is nothing new to PGIM. The firm has been involved in the sector since 2013; in 2021, PGIM and partner Digital Realty sold a nearly 1.2 million-square-foot, U.S.-based data center portfolio to Menlo Properties for $581 million. Around this time last year, meanwhile, PGIM acquired land near Munich, Germany, to build up to 30 megawatts of data center capacity. 

It has also since entered into a $600 million joint venture with data center-focused real estate investment trust Equinix to develop and operate SV12x, a 28-megawatt hyperscale data center in Silicon Valley. The REIT last summer sold the data center to an unnamed buyer, according to its third-quarter 2024 earnings report. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.