US alternative investment manager Stonepeak Partners is expanding its business across Asia Pacific to tap into demand for infrastructure fuelled by urbanisation, growth of global supply chains, and the artificial intelligence boom.
The New York-based firm, which manages around US$88 billion of assets, has invested over $10 billion in a wide array of infrastructure projects since entering the region in 2019.
Stonepeak develops dedicated investment platforms, offers structured, solutions-oriented capital to investors, and constructs portfolios designed for resilience against foreign exchange and sovereign risks.
“Our experience in platform building and asset creation, and dedicated teams on the ground allow us to address the continued need for critical infrastructure in Asia Pacific,” Hajir Naghdy, Stonepeak’s senior managing director and head of Asia and the Middle East, says in an interview with Asia Asset Management.
He observes that investors are drawn to what infrastructure investments can provide in their portfolios — long-duration, contracted and, often, inflation-linked cashflows that can withstand economic cycles.
“In a world of higher rates, inflation, and more volatility, there is strong demand for resilient infrastructure cashflows,” he says.
Key sectors
Stonepeak has identified four infrastructure sectors with significant unmet demand in Asia Pacific: digital, social, transport, and logistics.
Demand for digital infrastructure, for instance, is driven by cloud adoption and AI, while ageing populations are pushing a need for social infrastructure such as healthcare and aged care.
According to Naghdy, data centre demand in Asia Pacific is growing at an annual rate in the mid-teens, nearly double the pace in the US.
“We’re exploring opportunities in this space to secure power-ready land in Asia Pacific’s data centre markets and de-risk it,” he says. “We invest in data centres across all Asia Pacific key markets, having committed over $3 billion in equity,” including a $1.3 billion preferred equity investment last year in Princeton Digital Group, a Singapore-based data centre developer.
Australian investment firm Macquarie Asset Management has forecast digital infrastructure in Asia Pacific to grow at a compound annual rate of 15.87% to reach nearly $84 billion by 2031.
Local presence
Stonepeak also sees significant opportunities in the cooling industry. Last year, it formed a joint venture, Lestari Cooling Energy, with Malaysian engineering services company KJTS Group, with local pension fund Kumpulan Wang Persaraan joining as a strategic investor.
“Opportunities are being driven by rising foreign investment and construction activity, particularly in the fast-growing high-tech data centre, semiconductor, and pharmaceutical industries, all of which require substantial cooling capacity,” Naghdy says.
He says Stonepeak takes a disciplined approach to investing and pays close attention to downside protection. “Combined with our on-the-ground presence across the region, this enables close collaboration between us and our investors.”
Stonepeak has offices in seven key markets in Asia Pacific, including Hong Kong, Seoul, and Singapore.
According to Naghdy, a local presence is paramount for the firm because of the diverse cultures, economies and regulatory environment in the region. “We continue to see extraordinary tailwinds driving capital investment in Asia. Each of our focus markets has its own thesis.”
