Blackstone data center vehicle makes muted debut after $1.75 billion IPO
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FILE PHOTO: Signage is seen at the Blackstone Group headquarters in New York City, U.S., January 18, 2023. REUTERS/Jeenah Moon/File Photo
By Arasu Kannagi Basil
May 14 (Reuters) - Shares of Blackstone's newly minted investment vehicle opened flat in their market debut on Thursday, after the company raised $1.75 billion in its U.S. initial public offering with plans to buy data center assets.
New York-based Blackstone Digital Infrastructure Trust's stock opened at $20 per share, the same price at which it had sold 87.5 million shares in its IPO.
Artificial intelligence-linked companies have taken center stage in the U.S. IPO market this week with three billion-dollar offerings, including chipmaker Cerebras and Fervo Energy.
"The timing is crucial because the window can open and close suddenly in thematic IPO markets. Deals like Cerebras, and the huge demand around it, show that the window is wide open right now," IPOX Research Associate Lukas Muehlbauer told Reuters.
"If it trades well, BXDC may become a template for other sponsors with data center, power or AI infrastructure assets to launch similar vehicles."
The Blackstone vehicle will invest primarily in newly constructed data center assets leased to investment-grade hyperscale tenants. It has identified $25 billion in near-term opportunities in top markets such as Northern Virginia, Ohio, Phoenix, Maryland and Austin, the company said earlier.
Spending on AI infrastructure such as data centers by Big Tech firms is expected to exceed $700 billion in 2026.
"Being a new vehicle without having acquired data center assets so far, investors are primarily buying into Blackstone’s execution capability and long-standing history in the sector," Muehlbauer said.
Blackstone, the world's largest alternative asset manager, holds over $150 billion in data center assets globally, including QTS and AirTrunk.
QTS's leased megawatts have soared 14-fold since Blackstone took the company private in 2021, positioning the data center operator as the asset manager's most profitable investment to date.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Jonathan Ananda)
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