Underwriting AI demand and avoiding overbuild

Welcome back to the Alt Goes Mainstream podcast.

Today’s episode brings infrastructure investing to life — literally.

We sat down in and walked through one of Stonepeak’s data center assets with Managing Director and CEO of SP+ INFRA, Cyrus Gentry.

Cyrus has played an integral role in Stonepeak’s rapid ascent as a firm and the growth of its wealth solutions business, Stonepeak+, joining early in the firm’s history and helping the firm grow to approximately $80B in AUM.

Cyrus brings a private equity perspective to infrastructure investing. Prior to Stonepeak, he held investing roles at BC Partners and Advent International. He also serves as one of the Church Commissioners for the Church of England, who hold responsibility for managing the Church’s £11.1B permanent endowment fund.

Cyrus and I had a fascinating and thought-provoking discussion about infrastructure investing and why and how it can fit within a wealth client’s portfolio. We covered:

• How Cyrus’ background in private equity investing has transferred over to investing in infrastructure.
• The opportunity and risks of data center investing.
• The risk of overbuilding in data centers.
• Why location matters for data centers.
• What makes interconnection data centers attractive data center assets.
• How Cyrus and Stonepeak have built their wealth solutions business and how they’ve endeavored to be different in how they’ve built out the business.
• How Stonepeak’s wealth business is a reflection of the firm’s DNA.

Thanks Cyrus for coming on the show to share your expertise, wisdom, and passion for infrastructure investing and working with the wealth channel.

Show Notes
00:00 Introduction and Sponsor Message

01:57 Welcome to the Alt Goes Mainstream Podcast

02:04 Introducing Cyrus Gentry and Stonepeak

00:00 Introduction and Sponsor Message

03:25 Cyrus's Journey from Private Equity to Infrastructure

04:56 Understanding Infrastructure Investing

06:10 The Importance of Moats in Infrastructure

06:57 Differences Between Private Equity and Infrastructure

07:38 Stonepeak's Growth and Strategy

09:06 Specialization in Infrastructure Investment

09:54 Balancing Long-Term Horizons with Industry Changes

11:15 The Role of Data Centers in Modern Life

14:43 Investment Perspectives on Connectivity

15:55 Challenges in Infrastructure Investing

17:10 Executing Value Creation Plans

19:06 Structured Capital in Infrastructure Deals

21:17 Trends and Scale in Infrastructure Investment

22:43 Patience and Discipline in Investment

23:34 Global Expansion and Strategy Diversification

24:09 Collaborative Approach with Corporates

24:42 Capital and Problem Solving

25:02 Building Stonepeak Wealth Solutions

25:30 Infrastructure Asset Class Benefits

25:47 Strategic Planning and Vision

26:05 Creation of Stonepeak-Plus

26:15 Early Discussions on Wealth Business

27:32 Team Dynamics and Entrepreneurial DNA

27:59 Understanding the Wealth Market

28:56 Educating Investors on Infrastructure

29:50 Allocating Infrastructure in Portfolios

30:07 Global Perspectives on Infrastructure

32:18 Learning from Institutional Investors

33:19 Common Questions from Wealth Channel

34:02 Mega Trends and Investment Strategies

34:46 Core, Core Plus, and Value Add Assets

36:12 AI and Data Centers

40:20 Power and Energy in Data Centers

42:34 Local and Global Investment Strategies

44:12 Geopolitical Risks and Infrastructure

46:36 Lessons Learned and Future Outlook

Editing and post-production work for this episode was provided by The Podcast Consultant.

A word from AGM podcast sponsor, Ultimus Fund Solutions

This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency.

To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products.

Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at gharris@ultimusfundsolutions.com.

We thank Ultimus for their support of alts going mainstream.