FRANKFURT-The California-based private equity firm GI Partners has sold the last European asset from its debut Fund 1, a data center in Frankfurt, and said the sale completes a realization of over $1 billion in cash proceeds on an initial equity investment of $280 million, giving a 3.7x multiple to invested capital and a 60% gross internal return of investment.
The data center was sold for $28 million to Equinix Holding, a Dutch-registered subsidiary of the NASDAQ-listed Equinix group. Acquired in June 2004, it comprises around 29,000 square meters in total and 9,000 square meters of raised floor space. Fund 1 at its peak held 25 technology buildings, of which 21 were later contributed to the formation of Digital Realty Trust, now a NYSE-listed REIT with an enterprise value of some $6 billion.
Other GI Partners Fund I properties sold include Sunset Gower Studios, located in Hollywood, CA, and Yates Group, a pub operator with locations throughout the UK. GI is currently investing out of its recently-raised GI Partners Fund III, which has secured $2bn of capital commitments from leading institutional private equity and real estate investors.
“The return we have delivered to date from our Fund I is well in excess of the market average and demonstrates the success of our investment strategy,” commented GI’s Executive MD Rick Magnuson. “As we embark on Fund III we are well positioned to leverage the success we’ve achieved from both our Fund I and Fund II investments.” Fund III has already invested 20% of the committed capital and has a strong pipeline of opportunities, he added.