Good morning, everyone, and welcome to DigitalBridge’s first quarter 2024 earnings conference call. Speaking on the call today from the company is Marc Ganzi, our CEO, and Tom Mayrhofer, our CFO. I'll quickly cover the safe harbor. Some of the statements that we make today regarding our business operations and financial performance may be considered forward-looking. And such statements involve a number of risks and uncertainties that could cause actual results to differ materially. All information discussed on this call is as of today, April 30th, 2024, and Digital Bridge does not intend and undertakes no duty to update it for future events or circumstances. For more information, please refer to the risk factors discussed in our most recent Form 10-K filed with the SEC for the year-ending December 31, 2023, and our Form 10-Q to be filed with the SEC for the quarter ending March 31, 2024. Great. So, it's the new year and in connection with the completion of our business transformation, we've advanced and further simplified the format of our earnings presentation. Going forward, we'll start with Marc providing a business update, highlighting key takeaways from the quarter, and covering thematics that would have historically been incorporated in our third section, executing the digital playbook. Tom will cover the financial highlights in the second section, followed by Q&A. Another advance that you'll notice is we've condensed our earnings presentation and supplemental financial report into one document. The goal here is to make it easier for investors to access a single document that captures the highlights as well as some of the important detail behind the numbers. We look forward to your feedback on this new format. I also want to highlight our second Investor Day coming in a couple of weeks on Monday, May 13th at the New York Stock Exchange. Some of you will be joining us in person, others on the webcast. Either way, we're looking forward to outlining our simplified business profile, discussing the state of private markets, digital infrastructure and AI, and how we continue scaling our highly differentiated platform. In addition to our senior management, we'll be joined by some of our operating partners as we give you color on what's happening on the ground in digital infrastructure. With that, let's get started and I'll turn the call over to Marc Ganzi, our CEO. Marc?

Thanks, Severin. Let's begin by discussing our progress on FEEUM, our key driver for revenue and earnings, which continues to show solid growth. FEEUM grew 17% year-over-year to $32.5 billion by the end of the first quarter of 2024. This growth was fueled not only by our flagship strategy DigitalBridge Partners III and related co-investments, but also by our expanding multi-strategy offerings, including contributions from credit and liquid assets this quarter. If we hadn't experienced a decrease in separately capitalized portfolios due to Vantage transitioning from our latest flagship fund, FEEUM would have actually increased by over 20% year-over-year. The deal we announced in January is similar to the Vertical Bridge deal from DigitalBridge Partners II, which resulted in short-term pressure on FEEUM but will ultimately help us maintain exposure to top growth platforms. In this instance, Vantage stands out as a leading global hyperscale data center platform, constructing large campuses at scale under the leadership of our CEO, Sureel Choksi. Together with Silver Lake, we plan to develop more than 3 gigawatts of capacity to meet the rising demand for cloud and AI infrastructure. At the same time, DigitalBridge shareholders will earn carry as we generate additional value at this platform, rather than just receiving a traditional management fee from the original investment vehicle created at Vantage. Overall, year-over-year FEEUM growth remains robust, and in the next quarter, we expect to see this metric continue to rise as we close additional capital across all strategies. In terms of new capital formation, we secured $1.1 billion in new capital commitments this quarter, reflecting a 47% increase from the prior year. To summarize, Q1 was a positive quarter, and it could have been even stronger. We held back some commitments from clients who are collaborating with us on a multi-strategy initiative that will unfold in the coming months. We're starting to engage in more holistic discussions with our partners and investors as our fund strategies expand, and we'll provide more details on this during Investor Day. We're building various products in the digital infrastructure realm to meet our clients' needs, including credit, core, liquid securities, late-stage venture growth, flagship funds, co-investment vehicles, and continuation funds. Our multi-strategy platform leverages the digital infrastructure flywheel at DigitalBridge. In Q1, we received ongoing commitments of over $600 million to DigitalBridge Partners III. Since our 4Q 23 report in February, we've also attracted commitments for our second credit strategy and had contributions from liquid and co-investments as well. The key takeaway here is multi-strategy, which will help stabilize fundraising over time. Periodic closings for our strategies occur throughout the year, and now that Q1 has concluded with a good outlook on capital formation, we feel confident about meeting or exceeding our fundraising targets for 2024 that we set last quarter. As Severin mentioned earlier, we’ve altered the presentation format, moving what used to be the third section to the front to discuss pressing issues and strategic initiatives that are guiding our business growth. Currently, data centers and AI are at the forefront not only in digital infrastructure but across the increasingly digital global economy. Today, the top concern in this sector is power. This is evident as tech CEOs, including Sam Altman and Mark Zuckerberg, publicly address the need for accessible power to meet the demands stemming from Generative AI workloads. From our perspective as owners, operators, and managers of some of the largest data center platforms globally, it's crucial to understand the challenges we're facing and how we're addressing them. I want to emphasize that the problem isn't power generation; it's about power transmission and distribution being constrained. Transmission grids face capacity challenges. If you think it's complicated to permit a new cell tower, consider the difficulty of building new transmission towers or substations. There’s significant friction in the system regarding this. Moreover, while the increasing contribution from renewables is an important development, it adds complexity to the grid, particularly concerning data centers. We typically focus on solutions rather than complaints. Our management team aims to tackle these bottlenecks presented by the grid by encouraging our portfolio companies to adopt innovative approaches to colocation, bringing power generation closer to data centers. For instance, we’re building data centers nearer to existing or new power sources, such as hydro, solar, natural gas, or wind. This strategy aligns well with AI training models, which are less sensitive to latency and can be located farther away from end-users during the training process. Conversely, we’re also exploring ways to bring power nearer to where data centers are needed, as seen with our DataBank and Switch platforms. This will become increasingly vital as we enter the AI inference stage, where deployed AI models require proximity to end-users, not just in hyperscale but also at the edge. Both approaches will be essential to meet the rising demand for new power capacity across our portfolio. We believe that solving this issue will require multiple technologies and strategies, rather than a single solution. We're deeply focused on this today, and you can expect more discussions about it as the year unfolds. A significant aspect of the power challenge lies in renewables. This has attracted considerable interest from our portfolio company customers, who have aggressive net-zero goals for their compute and connectivity operations, as well as from our institutional investors. They want to see their data center investments increasingly powered by renewable energy, not only through direct power purchase agreements but also by sourcing energy directly behind the meter at the data center. We're making substantial progress in this area, with two of our six data center portfolios already operating at 100% renewable energy—Switch in the U.S., primarily using wind and solar, and Scala in Brazil, powered by hydro. DataBank and Vantage are also making significant strides in obtaining renewable energy, as highlighted earlier. Another key factor in tackling the power challenge involves developing and operating data centers with improved efficiency, measured by power usage effectiveness (PUE). A lower PUE indicates more energy-efficient facilities, which consume less energy overall. Notably, AI plays a role in enhancing efficiency. Several of our platforms are testing new AI-powered technologies to improve operational efficiency in data centers. We are not only constructing facilities for AI but also investing in AI technologies to benefit our own infrastructure and our clients' needs. In summary, our focus on power aligns with one of the foundations of the DigitalBridge roadmap: investment. Last quarter, I noted that our portfolio companies plan to invest over $11 billion in data center capital expenditure globally in 2024 based on previous and current bookings. Just yesterday, one of our portfolio companies secured a lease for over 100 megawatts, which translates to approximately $1 billion in additional capital expenditure. Currently, we have over 2 gigawatts under construction at a cost of $10 million per megawatt, leading to over $20 billion in new capital commitment over the next few years. We've already secured the power necessary for that 2.2 gigawatts of ongoing capacity expansion. The challenge lies in our pipeline, which currently exceeds 5 gigawatts and is expanding rapidly. To convert this pipeline into bookings, we must ensure the delivery of power and power density at scale. This will be a crucial competitive advantage moving forward, and we will continue to provide updates on this topic, including additional insights during our Investor Day regarding data centers, renewable energy, and how these two subjects intersect. Now, I'll conclude our business and strategic update and hand it over to Tom to discuss the financials.

Thank you, Marc, and good afternoon, everyone. As a reminder, this earnings presentation is available within the shareholders section of our website, and this quarter, we've combined the previously separate financial report with the earnings presentation for your convenience. Starting on Page 15, our key operating and financial metrics have seen significant year-over-year growth. Fee revenues, fee-related earnings and distributable earnings have continued to demonstrate positive trends year-over-year, and we expect this growth trajectory to continue as we progress through 2024. In the first quarter, we also generated year-over-year growth in new capital formation as Marc discussed. As the year progresses, we expect momentum to build and full-year results to align with our guidance targets. Our fee earning equity under management is $32.5 billion as of March 31st, a 17% increase from the same period last year, driven by organic capital formation in the DBP series, co-investments and credit strategies. This increase was partially offset by an anticipated fee-based reduction as Vantage data centers transitioned from our prior separately capitalized vehicle structure into our latest flagship fund, DigitalBridge Partners III, or DBP III, which extends our exposure to Vantage through its next phase of growth. Moving to Page 16, the company continues to simplify its financial reporting to align with our alternative asset management peers, specifically in our presentation of fee-related earnings and distributable earnings. Beginning in the first quarter, the company introduced fee-related earnings on a company-wide basis, which now incorporates corporate expenses and is not equivalent to the metric reported prior to 2024 investment management fee-related earnings. FRE metrics discussed in this earnings presentation for prior periods have been updated to reflect company-wide fee-related earnings and are suitable for period-over-period comparison. Starting with fee revenues, the company reported $72.8 million in the first quarter, marking a 21% increase from the same period last year. As we progress through 2024, we continue to anticipate additional fee revenue growth, including catch-up fees driven by fundraising for DBP III, which had its initial close on November 1st of last year. Fee-related earnings were $19.6 million in the first quarter, up 28% year-over-year. While cash compensation was up due to the inclusion of a full quarter of the InfraBridge acquisition and continued investments in the platform, general and administrative costs were flat year-over-year, allowing us to improve operating leverage and expand FRE margins. We expect this trend to continue over the course of the year, with growth in revenue exceeding the growth in compensation and G&A expenses. Distributable earnings were $2.2 million in the first quarter, with the progress we were making at the corporate level de-levering on display with continued reduction of interest expense. The LTM figures on the right, I think, give you a good sense of the operating leverage that is starting to materialize in our operating margin, which has expanded from under 20% to just over 30% on an LTM basis. Turning to Page 17, we reported a reversal of $2.7 million in carried interest income for the first quarter. The company accrues carried interest based on quarterly changes in the fair value of our fund investments. The reversal in the first quarter stemmed mainly from net increases in fair value during the quarter, which came in below the preferred return hurdle on certain funds, resulting in a reduction on a mark-to-market basis at a small amount of accrued carried interest. Notably, carried interest compensation expense tracks these changes, and there was a commensurate reversal of a small amount of unrealized carried interest compensation. Principal investment income, which is accrued and/or realized income primarily earned on the company's GP investments in our various funds, was $2.8 million in the quarter, with $2.3 million in realized distributions from our funds. Turning to Page 18, you'll see that the company continues to maintain ample liquidity and has continued to de-lever its balance sheet, including the completion of the full exchange and redemption of its $78 million of 2025 exchangeable notes in April, reducing corporate-level debt that will result in approximately $4.5 million of annual interest savings. With that, I'll wrap up the financial results section of our presentation. It's shorter and I hope easier to follow given our simplified business profile. Before handing it over to Marc, I want to express my gratitude to everyone on the finance team and across the firm, especially Jacky Wu for welcoming me to DigitalBridge and helping my transition over the last few months. I'm really excited to be here and look forward to connecting with our shareholders at Investor Day and over the course of the rest of the year. With that, I'll turn it back to Marc for his final remarks.

Thank you, Tom. And again, thank you to Jacky Wu and our entire finance team for making your transition so seamless. Well, look, we're going to wrap it up. I want to thank everyone for their time and attention today. I think we've continued to lay out the foundations for how we're building what we believe is one of the most powerful alternative asset managers tied to some of the most exciting secular themes on the planet today. We're looking forward to welcoming all of you to our Investor Day. And with that, I'm going to turn it over to the operator for Q&A. Thank you.

Marc, I want to follow up on your comments about power, which I appreciate. You mentioned that data centers need to be located where the power is, and I've noticed a lot of activity in the Midwest. How has your perspective on markets changed, particularly regarding areas that haven't traditionally hosted data centers? That's my first question. The second part relates to locations with power but no current data centers; it seems like there's a lack of network infrastructure. You've previously discussed convergence. I'm interested in your thoughts on how a data center platform like Vantage interacts with Switch and Zayo, a fiber company, in providing a comprehensive solution for hyperscalers as we consider expanding data centers into new markets with available power. I know that's a lot, but I hope it makes sense.

You always make sense, and I think you're anticipating future trends rather than just current ones. Let me break down your question into two parts. First, I want to discuss the direction of power, and then I'll address connectivity, which is indeed crucial. The connections between data centers and the impact on AI, particularly with large language models, will become increasingly important as we shift from training to inference, which is where latency becomes a key factor. Data centers operate under two main considerations. The first is whether our customers trust us to build their data centers and lease capacity from us, and what workloads they are relying on us for. This quarter, we received contributions from all six of our major data center platforms worldwide. We have been analyzing data to understand our customers' needs, and it's clear there's a significant divide between cloud workloads and AI workloads, especially those that are sensitive to latency and location. Currently, private cloud, public cloud, edge workloads, and enterprise workloads are all evolving rapidly, just like our data centers. Some locations that are less sensitive to latency can handle large power capacities like 200, 400, or 800 megawatts, suitable for training AI models. Provided there's good fiber connectivity, these sites may have some flexibility with latency. However, as we delve into Generative AI with active workloads, similar to the cloud's trajectory, we're seeing these emerging workloads becoming significant in areas like Goodyear, Arizona, Atlanta, Georgia, Columbus, Ohio, and Reno, Nevada, which is becoming an alternative to Santa Clara. This indicates a shift in where customers are choosing to locate. DataBank recently had an excellent quarter, focusing on what we call hyper-edge workloads ranging from half a megawatt to 10 megawatts, as the cloud market increasingly moves into secondary and tertiary locations. AI seems to be following suit, but the challenge lies in how we create AI infrastructure, which is closely tied to power availability. We also face decisions concerning whether customers will let us build their workloads or if they will proceed independently. Additionally, we need to discern if the work is for cloud or AI products. Each scenario influences engineering and design standards, particularly regarding GPU and cooling requirements, and whether a Tier 5 experience is necessary, as demonstrated by Switch's impressive performance. In our ecosystem, we aren't restricted to a single path. Owning platforms like Vantage, AtlasEdge, DataBank, and Scala in Brazil allows us to see opportunities across the globe. Our challenge lies in managing power constraints, which will become increasingly pressing for the investment community. Although I've previously noted a five-year window for overcoming power shortages, it seems we now have only 18 to 24 months before encountering serious issues. We've been preparing for this power challenge for two years, focusing on our current projects that include 2.2 gigawatts of power, all supported by customer commitments. As I look ahead to another 5-plus gigawatts of opportunity, creativity will be essential. This means identifying locations for large AI data centers that may not be as latency-sensitive, co-locating with renewable energy sources, and striving for energy independence. We're committed to enhancing customer experience by ensuring low latency and robust fiber connectivity. Not just a few pairs, but hundreds of pairs with redundant pathways will be vital. This is where Zayo plays a significant role, enabling us to assure key customers that we can provide the data center, fiber, and necessary power. At InfraBridge, we're also engaging in renewable energy to create comprehensive solutions that merge our efforts across all sectors. I'm optimistic about the developments with Zayo, with substantial increases in bookings, particularly from hyperscalers. The demand for new, low-latency routes in the fiber industry will only grow, particularly for AI workloads. The current landscape requires a blend of strategies, and while it's more complicated to build data centers now than it was a few years ago, we are equipped and eager to tackle these challenges. We’ve been anticipating these changes for some time, so stay tuned for how we’ll address these needs for our customers.

I appreciate the comment around the carried interest reversal. Do you have any estimate of what distributable earnings would have been excluding that item?

The carried interest reversal is a mark to market, so that doesn't impact distributable earnings.

How do you feel about the outlook to achieve full-year FEEUM in your prior outlook of $36 billion to $38 billion from the $33 billion at year-end ‘23?

Yes, I think Tom and I remain completely convicted in the numbers. We have no changes to our guidance at all. We're seeing exactly, we feel like we are where we want to be through the first quarter. And again, want to reiterate, no change to our guidance that Tom and I reiterated in the previous quarterly call. Thanks, Jade.

Good afternoon, everybody. A couple of questions. I want to follow along with Jay's question there, too. So obviously the outlook confirmed on the capital formation, $36 billion to $38 billion for ending TUM. Help us understand the pacing. Obviously, it's still pretty tough out there. And what's kind of like the gross funding versus net funding and the pacing for those returns as well? First. I have a follow-up question.

Let me address the first question regarding capital information. It's certainly challenging out there, but typically, the first quarter is always difficult for us. Limited Partners are planning their allocation strategies for the year, and historically, not many allocations happen in the first quarter. This trend is not specific to DigitalBridge; it's a common pattern across the alternative investment space, where fundraising is generally slow in the first quarter. However, we outperformed last year and 2022, and we maintain an optimistic outlook. We are currently in the process of closing deals with multiple clients across various strategies. What I wanted to convey during our call this quarter is that our multi-strategy approach is proving effective, as people are starting to understand our offerings not only in our flagship fund and co-investments but also in core strategies, credit, liquid assets, and continuation vehicles. We're seeing more repeat activity with Limited Partners than ever before. Regarding our flagship fund, we are on track with our targets and our guidance for the third flagship fund remains the same. It's exciting that we launched Credit II sooner than expected, and that strategy is now in progress. Additionally, some of our co-investment vehicles are performing strongly this quarter as we raise capital for promising companies like Switch and Vantage, while also investing in our AI strategy. So we're legging in. Our LPs are legging in. Certainly, some of the commitments related to flagship as I inferred on the call are tied to some other investment vehicles. So we slowed them down a little bit and now we're getting them over the goal line. But again, I want to reiterate, no change to our guide. We feel really good about our ability to raise the capital. The clients are happy with what we're doing and we anticipate a strong year. Your second question, Ric, I don't think I fully appreciated it. Can you reframe it for me?

Well, just there's some return of capital involved too, right? I mean, you have the Vantage.

Yes, yes, so absolutely. You are correct. So in the first quarter, we did return some capital. We had some exits, and we created some DPI, good outcomes for investors. And at the same time, we formed capital. So part of the magic is we do return capital from time to time. And I mean the great news about Vantage is we return capital but we then put capital to work with our friends at Silver Lake. And as I intimated, we have a big co-investment vehicle that's getting ready to close there, which is exciting. And we love the fact that we retain that management team, we retain that asset, and we're deploying new capital that bears economics. So on a net basis, we actually think much like Vertical Bridge, our exposure in terms of fees will rise over time, but here's the best part. We're getting US public investors get carry now on Vantage. It now sits in our fund product. And so investors now get to participate in the success of what's happening at Vantage with Sureel and the team. And that should be a really good day for public investors. I know Ric, you like Sureel. I know every analyst on the street likes Sureel and likes what Vantage does. So, now our public shareholders get to ride sidecar with us and get to enjoy the profits of that hard work. And Sureel is absolutely doing a great job for us.

And the final question for me is obviously reaffirming the capital formation targets. Tom, you've made some changes in the way you present the financials and report. You mentioned the company-wide fee. How should we think about where you're headed on helping the street understand financial guidance and what are you looking specifically to benchmark against the peer group because obviously this change, I think, sounds like you're trying to line it up so it's much more comparable to the peer group?

Yes, I think we've tried to make it quite simple to follow. I think our financials are fairly almost self-explanatory. They drive, as Marc talked about, the fee raising, that converts directly into fee revenue and the expense side of the equation is relatively simple and straightforward as well. So, we hope we'll be able to deliver really clear, clean, and kind of results that you can follow and model and predict.

And I think you called out the margin improvement. What was that slide? Let me see, I'm there. Is there a target of where you want to get the FRE margins? And is there important size of scale that you want to try and achieve also? That's one for me as well.

Yes, I think, look, I think the scale is not kind of binary. I think it is kind of gradual. And as we continue to grow, we'll continue to achieve scale. I don't think there's a step function change. I think as we continue to grow, particularly when you have multiple products in a family. So, you get DBP III, DBP II, DBP I, that gives you a lot of scale. So I don't think we're going to set a target on FRE margins, but every new dollar of revenue that we bring in, we feel like improves the margin.

Yes, and I'll just come behind you on that, Tom. I think we are seeing, as that incremental capital dollar comes in on flagship III and incremental dollars come in on Credit II, we do see the opportunity for margin expansion. I think in the first quarter we had some new FTEs that came on. We did some hiring as we are expanding into some other strategies, which we'll certainly talk about Investor Day. But we've been really good at sort of being able to home grow our own best ideas around products. And as those products scale, we ultimately, they turn the corner and they create efficiencies and we get margin expansion, not margin compression. So I think in large, we remain very convicted about the guide. And more importantly, we remain convicted about the ability for us to improve revenues and margin as the year goes on, Ric, much similar to what happened last year.

I just wanted to follow up on Ric's questions a little bit. With the FEEUM guidance being reiterated, is the fee revenue guidance also being reiterated and how much of that is coming from catch-up fees? And then following on with that is the FRE guidance, I guess now that it's a consolidated number, not digital, I am related, is that $150 million to $165 million still a good number for the year?

Hey, Richard, how are you? First of all, thank you. One, I think I would just go yes, yes, yes, if we just want to be quick about your questions. Let me give you a little more color behind it. I think on the fundraising piece, there will be inevitably be catch-up fees, right? That always happens. There'll be catch-up fees in Q2, Q3, and Q4. And the timing of that always is a little bit tricky. So some quarters may have a little more catch-up fees than others. I don't think we're exactly going to handicap how much catch-up fees we're going to have over the 3 quarters at this point in time but suffice to say your assumption is correct. And the assumption remains accurate as we bring on that $7 billion to $8 billion of incremental capital this year. You can anticipate that all three quarters coming will have catch-up fees and flagship and certainly to a lesser extent, credit. Obviously, continuation funds and co-investments, we get the fees immediately. So we do anticipate there being some velocity in that, it'll pick up as we go throughout the year. I think the other two answers to your questions were yes and yes. We're not changing the guidance. And obviously now that everything's all rolled up in one consolidated number, hopefully it's easy for you guys to all digest, and if it isn't, we're always available to talk about it and give you any more granular information you need.

The guidance was created on a company-wide basis, so it does not change.

It's not an IM versus operating, it's all just one company now.

Great, just wanted to clarify that. And then going back to the strategy presentation earlier, do you expect to just benefit from kind of the data center growth, or can there be, I guess, incremental returns being generated from, I guess, the transmission and power solutions that you come up with? And how big could that be? And would that require, I think you've talked about in the past, kind of different maybe teams or funds or can this all be captured in the existing, I guess, with the existing infrastructure?

Yes, it's a great question. I'm going to break the answer down into three components. One, applied learnings over the last 36 months have been really happening at our portfolio companies. And so the good news about having a global footprint and having six powerful platforms is we do business literally with every power provider on the planet. So we have great insights into what's happening in Campinas and Tambore, what's happening in Kuala Lumpur, what's happening in Tokyo, what happens in places like certainly like Berlin or Cardiff or London and then of course here in the US and Canada. So it's been great to have these great management teams that have been out executing some of these renewable solutions like at Switch and Scala which are a hundred percent renewable already. It's really exciting what we've done at Scala that's all hydro, we lease transmission infrastructure, we have our own substation, we've created our own grid in Campinas. We sell power, obviously, to ourselves. We certainly could sell power to other data center operators. We don't. But that was a great learning experience for us, Richard, over the last 3 years. Really exciting what we've been able to do at Switch. Certainly, the Reno campus is a model for the future, given the amount of exposure to solar there and hydro. Our partnership with the Nevada Power and Light and a few other utility companies has taught us a few things. And the best way to really drive this stuff, Richard, is to drive it at the portfolio company level and drive those experiences with customers. And that's what we've been doing. And so having exposure to great management teams, great customers, creating great solutions has been what it does. And that stuff percolates back up to us here at the asset manager level. Now, no accident that we bought AMP Capital, no accident that we renamed it InfraBridge, and that we decided to put a team focused on renewable energy. We've done that. We have a dedicated group of folks that are working on that. And we believe there is a really big, big opportunity not only to deliver power at scale for our data centers, but even to some of our friends that are in the business. And so we're working on a bunch of ideas and solutions. Those ideas and solutions will manifest themselves quite soon. What I can tell you is we've never shied away from developing new strategies at DigitalBridge. We've gone out and hired, we think, the best team to go prosecute these ideas. We've been working on it for two years. This has been a lot of hard work. And I think what you're seeing is, again, at the portfolio company level, we're creating these ideas and creating these solutions. Is there something to do that's bigger? Of course there is, right? If you think about how much power remains on the US grid and on the European grid, we're down to less than 7 gigawatts on the US grid, we're probably down to less than 2.8 to 3 gigawatts in Europe. And as I said earlier in the call today, we think we run out of transmission infrastructure for power dedicated to data centers in 24 months. And so to go to the next place is we've got to be proactive. We've got to work hard down the portfolio company. We've got to work with other utility providers that are our friends, that we've worked with in the past, and we have to create those good outcomes. So it's a little bit of foreshadowing, but that's what we're doing. And we do think it's a huge opportunity. Given our backlog, we're executing on 2 gigawatts and our backlog is over 5 gigawatts. If we were to execute 5 gigawatts of leasing, that's $50 billion in AUM in terms of data center spend. Talk about $0.50 on the dollar in creating new renewable power, that's another $25 billion of AUM that we could produce in renewable energy if we chose to go that path. So we have a lot of alternatives. We have a big backlog. We've got great customers. We've got great CEOs. And we've got great partners in the power industry. So I would just tell you there's a lot to be done there. And we absolutely anticipate being a part of the narrative.

Great. Look forward to the Investor Day where we can go over this stuff in more detail. Thank you.

Looking forward as well. Thanks, Richard. See you up in New York.

So, Marc, maybe I just wanted to get the latest pulse on the M&A market where you're finding maybe some relative value today. It seems like data centers and kind of developed market towers are still priced pretty aggressively. So are you finding any better value in Fiber, whether it's residential or enterprise?

So yes, I would say look, the value proposition on Fiber is, you are correct, is initially starting in residential. Resi fiber has got some really interesting platforms that we think some sponsors perhaps paid too much, put too much leverage on them and so there's an opportunity to play either through our credit fund or play through our third flagship fund. I think we have got a significant amount of new pipeline of ideas. We're prosecuting over 20 new ideas in our third flagship fund. A couple of those ideas are in the fiber space where we are seeing significant value. I think the deals that were once priced in the 18 to 25 times EBITDA range are now pricing in the, call it, 10 to 14 times range and we're even seeing some interesting opportunities in other verticals of residential fiber where we think those could price down into the single digits. So I think there's value to be found, but you have to be careful, right? There's pitfalls with that. The entry price is just one part of the proposition when you're an investment committee. There's follow-on CapEx. You've got to continue to invest in these networks. And some of these businesses in the residential fiber space are under-invested because they're competing against well-capitalized cable companies or other entities. So we've looked at a lot of stuff, we've said no to a lot of stuff, we've greenlit one deal already in the fiber space. We're looking at another one in our third flagship fund, but again, there's a lot to do out there. It's not just in the fiber space, or not in the residential fiber space, but we also see opportunities certainly in the enterprise fiber space. And then most importantly, we really like the data center connectivity space. So that's really long haul, metro rings and data center connectivity or AI connectivity where we're integrating that with a data center solution and a power solution to a customer. There's a lot happening in connectivity right now. But one thing is for certain, as we said on the call today, fiber is critical. Fiber is critical to AI, fiber is critical to ultimately connecting the edge, and fiber is critical to bringing ultimately low latency, high-speed solutions to IoT networks, small cells, everything we're doing and everything we're touching does involve that connectivity in the fiber. So we don't see the vertical going away. We do see value. But I actually think some of that value will be more pronounced next year. There's close to $80 billion of LBO debt that's rolling in the next 36 months. Some of that is in the fiber space. And so we're looking forward to taking a look at some of those opportunities and being a helpful partner to companies that need capital.

I appreciate that, Marc. And just a follow-up, I know it's touched on data centers a lot, but maybe you can just give us an update on what you're seeing in terms of where kind of market rents have gone in data centers. We talked a lot about the supply-demand imbalance. Have they continued to move higher this year? And kind of where does that take unlevered returns today, just given where the cost of construction and lean times are? And I guess, is there a breaking point at which we're going to see pricing growth start to slow down, or a point at which the hyperscalers might try to bring more in-house if the industry keeps raising pricing? Thanks.

That's a dangerous question, right? Certainly, I don't love to talk about pricing on our calls, but what I would tell you is broadly speaking, we continue to believe that there is a really good opportunity to continue to work with our partners and get paid for the risks that we take. And what I mean by that is that obviously there is a big opportunity, and look, if our customers could self-perform, they would. And we never tell a customer that they can't self-perform. I'd be the last person in the world to tell any of the hyperscalers that they cannot build their own data centers and can't self-perform. I think the challenge today, if you're looking and taking a step back, is there is that constraint of power. And there is that constraint of resources, of land and building permits. And just it's a question of focus at the end of the day. What is the best use of Microsoft's time or Amazon's time or Meta's time or Google's time? We think they will self-perform some of their workloads, 30% to 40%. And we continue to believe 60% to 70% percent of the time they're going to work with folks like us that have the inventory, that have the land, that have the permits, and have the will-serve letters. So, as I said before, we're lighting up 2 gigawatts right now. So we're pretty busy. That's on top of the 1.8 gigawatts to 1.9 gigawatts we already have online today. So we think on an aggregate basis across all of our platforms, we're one of the largest, we think, the largest data center operator in the world in terms of certainly power online, square footage, number of data centers, and certainly the ability to service private cloud, public cloud and edge, which is something quite unique to the DigitalBridge platform. I would say that, without being specific or announced on pricing, we've had 2 really good years, right? The uptick from '21 to '22 is strong, rents were up over 21%, the uptick from '22 to '23, depending on which market you rent, sort of 13% to 16%. And so far through the first quarter, we are seeing that pricing power remains with the landlord. I never believe we have pricing power. And by the way, our CEOs that run our data center companies, they subscribe to my view and my logic, which is we need to work with customers. We don't want to be the price setter. We want to have partnerships. And that comes from my 31 years of doing this and building towers and building fiber and small cells and data centers, is if you take every bit of flesh out of a customer, they don't come back. And so I think we've been very careful about how we price. We're very focused on the return nature and the repeat nature of our customer relationships. What I can tell you is our leasing backlog has never been bigger across all of our data center companies. It's the largest pipeline of opportunity we've ever seen. And so we got to balance that with pricing it correctly and also making sure, as you said, we get the right returns. Construction is expensive. We got to make sure we get the right anchor build, return on invested capital on a cash-on-cash basis. And remember, most of the things that we are building are campuses. So we are looking to bring that second, third, or fourth customer into a campus setting from where we build a new facility. There's a lot going on. I think Severin said it earlier, we look forward to welcoming everyone to Investor Day. I think we'll do a little bit of a deeper dive on this and certainly dive deeper into edge and private cloud and public cloud and what's happening across those three customer sets and where we see workloads going and where we see yields going and ultimately how we see RTM and AUM growing over the next 5 to 10 years.

I was interested in maybe drilling down on towers, thinking about US and maybe LatAm and opportunities that you might see for consolidation to increase your presence in that sector. And then I've got a follow-up.

Your first question pertains to tower mergers and acquisitions. We remain very proactive in the tower sector. In Asia, Europe, North America, and Latin America, we are actively exploring M&A opportunities across all regions this quarter. The US market has stood out for us this quarter, and we are optimistic about it. While public investors may have shown some hesitance today, we believe in the strength of the tower industry. We completed an acquisition at Vertical Bridge and a tuck-in with Shentel, which has a favorable tower footprint and assets that we find promising. It has been challenging to zone new towers while managing our existing portfolio, but we are now migrating those operations onto our platform, which opens up significant opportunities for leasing. In Europe, we are looking for tuck-in acquisitions across our three platforms: FreshWave, Belgian Tower Partners, and GD Towers in partnership with Deutsche Telekom. We have been very active in seeking new opportunities but found that much of what was available this quarter was priced too high for us. For example, in Ireland, we couldn’t justify a mid-20s multiple for established towers. We are particularly cautious when sophisticated sellers like Cellnex are involved. We respect their strategies and are careful about the pricing and location of assets they are selling. Although we didn’t buy at those price points, our search continues. We have a variety of tower platforms globally and are excited about opportunities in Southeast Asia, particularly with EdgePoint. New opportunities in the Asia region are currently under review. We believe that towers will play a critical role in the delivery of Generative AI applications. As these applications transition to mobile networks and devices, we anticipate a surge in data consumption at cell sites, increasing the demand on handsets. These applications will migrate across various domains including IoT networks and mobility solutions, and the future success of Generative AI in a mobile context depends on our tower infrastructure. Looking ahead, we are optimistic about the long-term impact of these developments on the tower industry, not just in the US but also in Latin America, Europe, and Asia. While I might come across as a strong advocate for the tower sector, having spent 31 years in this industry, I truly believe we are on the cusp of another significant investment cycle in towers, driven by the inevitable growth of data demand. The evolution from 2G to 5G has consistently shown this pattern, and I wouldn’t recommend betting against the tower sector. We are enthusiastic about our upcoming investments in this area as part of our strategy.

Well, appreciate those comments. And then maybe just turning to fiber and small cells. I know you talked about it earlier on the call, but any ways in which you could see maybe augmenting the ExteNet activities and then Zayo domestically, any kind of capital opportunities, whether it's M&A or just increasing your development capital, how do you view those opportunities?

Well, look, we have three small cell operators. FreshWave in the UK continues to deliver workloads for our customers indoors and outdoors. Boingo does a great job on the Wi-Fi side and indoor networks. ExteNet, largest private provider of outdoor small cell infrastructure. And look, we're busy, right? We're building, we're taking on bookings. We are seeing momentum as obviously the overlay in 5G starts to move to densification. And we think that densification for 5G really exists kind of in ‘25, ‘26, ‘27, and ‘28. That follows a similar migration path to ultimately the 3G and what we did in LTE and LTE plus. Our customers are telling us they still need small cell infrastructure. They still need an outsourced solution. And so again, we remain long term bullish about the fact that ultimately a lot of this infrastructure needs to support Generative AI, it needs to support those workloads. Macros get a lot of it done, but ultimately the proliferation to true Generative edge AI fits down at the handset.

Thank you. Ladies and gentlemen, we have reached the end of our question-and-answer session. I will now hand back over to Marc Ganzi for closing remarks.

Well, look, thank you, everyone, for tuning in to our Q1 call. We've laid out four simple tenets for you to think about as an owner of DigitalBridge or a prospective owner of DigitalBridge. There are four things that we're focused on this year. One, we're forming capital behind our best ideas. I think we've laid that case out today what our best ideas are and that we remain convicted in our ability to form that capital and then to deploy that capital. Second, we're investing. We're investing in the best secular ideas today that exist on the planet. Generative AI, mobile infrastructure, and ultimately the ecosystem and the power that supports that are all the key tenets and the foundation of our economy today. So investing in these tailwinds and investing in these secular thematics are critical and necessary. Third, we're focused on scaling our platform. Scaling means either acquiring existing platforms like we did with A&P Capital or building out new products like we did with Core, our late-stage venture growth fund, our liquid strategies, and other alternative asset management strategies that we've been very good and skilled in terms of building those capabilities in-house. And then ultimately, we got to asset manage. We've got to continue to perform at the portfolio company level. We've laid out some anecdotal cases for that, how some of our portfolio companies are delivering for customers and are delivering the future of networks for those customers. We appreciate your support. We're looking forward to hosting all of you May 13th in New York at our Investor Day. We're going to talk about these strategies in greater detail and how we plan to change the digital economy through some of the strategies and certainly through some of the investments that we're making to forge a new digital path and new digital infrastructure of the future. It's an important moment for us. We hope you'll join us. Again, thank you for your support and interest in DigitalBridge. We look forward to seeing you soon. Have a great day.

Thank you, sir. Ladies and gentlemen, that concludes today's event. Thank you for attending. And you may now disconnect your lines.