What are Digital Realty’s Plans for $3.25bn Hyperscale Fund?

Digital Realty has confirmed the final close of its first US hyperscale data centre fund, securing US$3.25bn in equity commitments from global institutional investors. The fund focuses on the ownership and development of hyperscale data centres across Tier I markets, placing data centre capacity expansion at the centre of its strategy.

The company is targeting major US metros including Northern Virginia, Santa Clara, Dallas, Atlanta, Charlotte and New York – locations that serve as core hubs for cloud computing and enterprise workloads. 

Digital Realty will retain a 20% stake in the fund’s portfolio and acts as manager, overseeing operations, leasing, development and financing. This structure keeps control of performance and customer delivery while aligning investor interests with long-term infrastructure growth.

Scaling hyperscale infrastructure capacity

The fund supports PlatformDIGITAL, Digital Realty’s global data centre platform, which operates across more than 55 metros on six continents. The platform integrates colocation – shared data centre space – with connectivity services that allow businesses to link systems and exchange data efficiently.

By introducing private capital into its funding model, Digital Realty expands its ability to deliver hyperscale capacity while managing balance sheet exposure. The approach reflects growing demand for data centre infrastructure as cloud adoption and AI workloads increase power, space and connectivity requirements.

The Strategic Private Capital platform, which sits behind the fund, enables Digital Realty to scale development while maintaining operational control. Investors including public pensions, sovereign wealth funds, insurance firms and asset managers provide capital, allowing the company to expand without relying solely on traditional financing routes.

Building out investment and leadership

To support this expansion, Digital Realty has added two senior figures to its Strategic Private Capital team.

Michael Yang joins as Managing Director, Fund Management, bringing experience from CBRE Investment Banking, where he led private capital advisory. His background also includes roles at Goldman Sachs Asset Management, NEPC, GID and AEW Capital Management, covering both general and limited partner positions.

Bradley Petersen joins as Managing Director, Private Capital Fund Raising. He arrives from Jamestown LP, where he led capital raising, and previously holds roles in investor relations and business development at Garrison Investment Group and Aetos Capital Real Estate.

These appointments strengthen the company’s ability to manage investor relationships and deploy capital into hyperscale data centre developments, particularly as demand grows across core US regions.

Investor demand and market outlook

Digital Realty positions the fund as part of a broader capital allocation strategy designed to support long-term infrastructure growth while meeting customer requirements.

“We are pleased to announce the final close of our inaugural US hyperscale data centre fund, alongside the addition of two highly experienced senior executives to our Strategic Private Capital team,” says Greg Wright, Chief Investment Officer at Digital Realty. 

“We remain focused on sourcing and delivering hyperscale data centre capacity to support our customers’ accelerating requirements, and private capital is playing an increasingly important role in how we prudently and efficiently scale PlatformDIGITAL. 

“Strengthening our private capital capabilities enhances our customer focus, expands our ability to fund growth, and positions Digital Realty for durable long-term value creation.”

Matt Mercier, Chief Financial Officer at Digital Realty, links the fund to wider technology trends shaping infrastructure demand.

“Demand for hyperscale data centre capacity remains exceptionally strong, driven by secular tailwinds in digital transformation, cloud and AI,” says Matt. “The US remains the world’s cornerstone market for advanced technology companies, and we are proud to support their growth through our inaugural Fund. 

“We are excited to partner with our new investors and welcome Michael and Brad to the team, as we enter the next phase of hyperscale infrastructure expansion.”

Eastdil Secured and PJT Park Hill Group act as placement agents for the fund, while Kirkland & Ellis provides legal counsel, supporting the structure and execution of the capital raise.