Argo Infrastructure Partners, following Apollo Global Management LLC's (APO.US) acquisition agreement earlier this year, is ramping up investments in the data center sector. The infrastructure investment firm announced it will increase its stake in data center operator TierPoint. Argo already holds a majority stake in TierPoint and stated it will now own the vast majority of the company. This deal strengthens Apollo's presence in the data center industry.
The alternative asset manager's pending acquisition of Argo positions Apollo to gain a foothold in AI infrastructure. In August, Apollo also agreed to acquire a majority stake in Stream Data Centers. TierPoint, which has received investments from Argo since 2020, operates data center facilities and leases colocation space to clients, including AI service provider Groq Inc. and the state of Maryland.
As spending on cloud computing capacity and chips for AI training surges, data center assets have become highly sought-after. Since 2023, TierPoint has issued approximately $2 billion in investment-grade asset-backed securities, including $240 million tied to its acquisition of Tek Park, a Pennsylvania-based data center site where it previously leased facilities.
Investment-grade ratings enable insurers to invest without setting aside significant cash reserves for regulatory compliance. The rise of rated data center financing notes has drawn annuity providers—tasked with safeguarding social safety nets—into the AI sector. Apollo owns Athene, an annuity provider that deploys its substantial cash reserves into various credit instruments.
Founded in 2013, Argo primarily invests in digital infrastructure, renewable energy, transportation, and other sectors.
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