Aware Super takes minority stake in European fibre network platform

Aware Super has taken a minority stake in London-headquartered bandwidth and data centre connectivity leader euNetworks.

While it did not disclose the size of the stake or investment, it explained the deal was part of a €2.1 billion equity recapitalisation via a vehicle led by global infrastructure and real assets manager Stonepeak, anchored by Mercer and Aware Super.

The deal also includes direct investments from the Investment Management Corporation of Ontario (IMCO) and APG Asset Management.

euNetworks builds and invests in city and long-haul fibre networks to connect over 540 key European data centres and data hubs. It owns and operates deep fibre networks in 18 cities, as well as a highly differentiated long-haul network that spans 45,000 route kilometres across 17 countries.

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Mark Hector, head of infrastructure at Aware Super, explained the investment will assist the fund in capturing the tailwind of digitisation and the artificial intelligence (AI) boom.

He described euNetworks an attractive asset due to its unique duct and fibre footprint and the highest number of ‘On-Net’ data centres relative to European peers. 

“These differentiating characteristics have contributed to euNetworks’ historical growth and will enable it to capture the strong industry tailwinds arising out of the acceleration in AI innovation and adoption,” he said.

“The addition of euNetworks also further diversifies our digital infrastructure holdings as it sits in the nexus between our investment into Switch DC (USA) – which is a pure-play data centre – and Vocus (Australia) / 2 Degrees (NZ) – which is a pure fibre play.”

With the investment, Katya Romashkan, who joined Aware Super as portfolio manager for infrastructure in 2023, will have a seat on the board of euNetworks. 

“This opportunity aligns well with our investment thesis,” Romashkan explained.

“We can directly invest to lower overall fund costs for members, it has a strong return profile, and we are also able to actively manage our members’ interests through our role in the company’s governance.”

The investment in euNetworks marks the first infrastructure deal originated out of Aware Super’s London office, which commenced operations late last year.

At the time, the fund confirmed around $17 billion was invested in the UK and Europe, and the initial focus for the team at its new UK headquarters would be in real estate, infrastructure and private equity, with an emphasis on the energy transition sector, affordable housing, innovation, life sciences, technology, and the digital infrastructure sector.

According to Aware Super head of international and deputy CIO Damien Webb, the euNetworks investments highlights how an on-ground presence in London “has helped facilitate a new pipeline of assets” and provided “important opportunities to deepen relationships with leading like-minded investors”, such as Stonepeak. 

“The team is primed to make further investments in the coming year in infrastructure and also in property and private equity,” he said.