Rest backs US data centre investment linked to $3bn Net Zero Fund

It’s been nearly two years since Quinbrook Infrastructure Partners, a specialist infrastructure manager, announced final close of its Net Zero Power Fund. The $3bn capital raise was Quinbrook’s largest at the time.

One of the fund’s investees is Rowan Digital Infrastructure – a data centre developer in the US. In April this year, Quinbrook and Blackstone announced that funds affiliated with the latter had acquired a significant minority stake in Rowan.

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Australian pension fund Rest has come out in support of the investment. Rest – the largest investor in Quinbrook’s $3bn Net Zero Fund – says the transaction shows that digitalisation and decarbonisation can go hand in hand.

Net Zero Power

Quinbrook’s $3bn fund brought in commitments from a range of asset owners — pension funds, insurers, sovereign wealth funds, endowments and family offices.

The fund’s thematic focus included ‘sustainable infrastructure solutions for hyperscale data centre customers’. Surging energy demand from data centres has raised questions for asset owners seeking to balance opportunity with emissions.

The IEA’s analysis suggests some 40% of additional electricity demand from data centres could be met by natural gas and coal by 2030. Renewables, the agency reckons, could potentially exceed that number.

As part of the company’s commercial offering, Rowan claims its data centre projects are designed to access renewable energy. A claim Rest cites in its support.

“We established Rowan as an early mover in gaining access to power, which is now driving global data centre development. This power focus leverages Quinbrook’s specialist expertise in power project development tailored to the needs of energy intensive customers”, says David Scaysbrook, Rowan’s chairman and a managing partner at Quinbrook.

Rest support

In a statement, Rest cited Rowan’s latest recapitalisation transaction as a ‘strong example’ of decarbonisation and digitalisation creating member value.

“We have identified decarbonisation and digitalisation as two of the major forces that will shape the global economy and society over the coming decades, while also creating valuable long-term investment returns for our more than 2 million members”, commented Rest’s head of real assets investments Andrew Bambrook.

“Blackstone’s investment in Rowan reflects the growing recognition of the opportunities created by decarbonisation and digitalisation”, he added.

Rest – with roughly $75bn under management – has adopted a net zero target by 2050 and offers a sustainable growth option to members – specifically geared towards sustainable investing.

Bambrook stresses that the Rowan investment is in the interests of members.

“We believe our members will continue to benefit over the longer-term from our ongoing stake in Rowan, as well as Quinbrook’s strong return profile overall. We expect this investment will help our members grow their super while contributing to a more sustainable future”, he explains.

Rest has previously backed the renewable energy – data centre nexus with its investments. In 2023, Rest allocated nearly $760m (A$1bn) to Quinbrook – with a focus on green data centres.

By 2030, McKinsey estimates $7tn waiting to be invested in data centre infrastructure, pointing toward a pending buildout of unprecedented scale.

Data centre electricity demand and the supply that meets it, raises questions for asset owners such as Rest. What balancing long-term portfolio-wide climate risk with the opportunity to generate returns might look like, is key amongst them.

For Rest, the intersection of decarbonisation and digitalisation is an investment opportunity the superfund is not only keeping an eye on but also tapping into.

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