Arch Capital Management has joined the data centre rush with its announcement on Wednesday of Digital Halo, a venture aimed at building a regional digital infrastructure portfolio starting with a $500 million investment in the Philippines.
The Manulife-backed fund manager has teamed with former senior executives from Keppel Corporation’s data centre business to form Digital Halo, which it says will invest, develop and operate digital infrastructure assets across Southeast and North Asia.
“We intend to offer innovative and sustainable solutions to hyperscale and enterprise customers to meet substantial untapped demand in emerging markets and to overcome capacity constraints in mature markets, leveraging on Arch Capital in-country execution capability,” Digital Halo co-founder Kai Goh told Mingtiandi.
Hong Kong-based Arch, which took on Manulife Investment Management as a minority shareholder just over one year ago, is announcing its entry into the digital infrastructure segment following earlier such ventures by regional rivals such as PAG, which launched Flow Digital Infrastructure in mid-2021, and SC Capital Partners, which announced its Zeux Data Centres venture in February of last year.
70MW in Eastern Manila
Based in Singapore, Digital Halo is led by Goh as chief investment officer and chief operating officer, together with his co-founder Charles Cosgrove, who serves as executive chairman of the company, alongside his role as president of Arch Capital.
The company’s first project is a 70MW data centre campus in Rizal, east of Manila, that will be partially operational by the end of the year and is targetted at hyperscale and enterprise clients.
Digital Halo’s first ever project is taking shape on a 3.75 hectare (9.3-acre) plot in Cainta, a town in Rizal province near the eastern edge of Metro Manila. To be developed in stages based on customer demand, the 6 megawatt first phase of the project is being developed in an existing industrial building that will be renovated to host server racks, and is scheduled to go online near the end of this year.
Goh said the company is also “in active discussions with potential local partners” for the project. He estimated the Cainta campus will entail at least $500 million in total investments funded by its Asian Partners IV opportunistic strategy and affiliated investment vehicles.
Digital Halo aims to develop a portfolio of built-to-suit and colocation data centres serving hyperscale and enterprise customers across Manila, Bangkok, Japan, Singapore and Taipei, with the goal of harnessing renewable energy to drive high efficiency facilities.
“I see a bright and compelling future for Digital Halo’s highly focused strategy on key regional markets and customers. We are in the right place at the right time,” Cosgrove said in the statement.
Aside from data centres, Digital Halo will also invest in fibre networks, cell towers and renewable power sources.
Keppel Veterans On Board
The digital infrastructure platform is led by Cosgrove, who brings with him over three decades of experience in telecommunications, real assets and infrastructure from having held senior roles at Singapore Telecom and Ayala Corp, which is the Philippines’ oldest conglomerate.
The Stanford University graduate played a crucial role in forming the original plan for Arch Capital in 2005 while he was heading Ayala’s offshore investment business. Co-founded by Ayala and Richard Yue, a former head of Investment at AIG Global Real Estate in 2006, the Hong Kong-based investment firm now has over $5.6 billion of assets under management focused on core and opportunistic strategies in APAC.
Goh joined Cosgrove in establishing Digital Halo shortly after his 12-year stint at the Singaporean conglomerate Keppel Group, where he was portfolio manager for the group’s $1 billion Alpha Data Centre fund before heading mergers and acquisitions as well as strategic initiatives for Keppel Data Centres.
He brings with him Tan Lee Kheng, who previously led the engineering and project management teams at Keppel Data Centres and has now been appointed chief technology officer of Digital Halo.
In February 2022, Arch Capital welcomed Canada’s Manulife Investment Management as a minority shareholder as the two formed a long-term partnership to expand their presence in the region. Ayala became an indirect stakeholder in Arch Capital following the sale of its half-stake 10 years ago to Ayala-backed asset manager The Rohatyn Group, who later on exited all its shareholdings four years ago.
Manulife Expands Footprint
For Manulife Investment Management, the new platform gives it access to an Asian opportunity to develop and acquire properties in one of the fastest growing segments in real assets.
“Digital Halo further extends Manulife IM’s private markets buildout in Asia leveraging on the strong strategic partnership with Arch Capital,” added Myron Zhu, Manulife’s private markets head for Asia.
He added that, “The Digital Halo launch underscores our strong commitment to Asia and provides the foothold for our investments into the digital infrastructure sector in Asia (ex-China), taking our trademark approach in combining local investment expertise with global institutionalised standards and enhancing our offerings to investors.”