Other recent IPOs in the crypto space signal growing momentum in the market. Crypto-focused firms such as Galaxy Digital alongside eToro, which operates a crypto-trading platform, have also gone public.

In June, the US Senate passed the GENIUS Act, a landmark federal bill that establishes a regulatory framework for dollar-backed stablecoins.

According to S&P Global Market Intelligence, crypto‑currency IPO volume peaked in 2021 with 11 offerings valued at $596 million. So far this year, five crypto IPOs have raised just over $2.1 billion.

“There’s a growing appetite among investors. IPOs provide a more regulated and traditional avenue for investment compared to direct crypto investments,” says Francois Chadwick, KPMG’s Private Enterprise Global and National Lead Partner of the Emerging Giants practice.

There have also been major crypto IPOs from non‑US firms. Singapore’s crypto solutions provider Antalpha Platform Holding launched a US‑based offering in April.

“The interest in crypto IPOs is not limited to the US, across the globe similar developments are taking place,” Chadwick says. “Countries like Switzerland and the United Kingdom are home to crypto-friendly regulations and have seen companies pursuing public listings. Japan and South Korea, both of which have robust crypto markets and supportive regulatory environments, see interest in blockchain and crypto IPOs.”

Chadwick noted that while it may seem counterintuitive for crypto companies to raise fiat capital via IPOs, there are several compelling reasons: “IPOs provide significant capital that crypto companies can use to expand operations, develop new technologies, and enter new markets.”

Going public also involves extensive regulatory scrutiny, allowing crypto companies to demonstrate their adherence to financial regulations, which can be reassuring to investors.

In the US, tech giants like Google and Meta lead the change, scaling back large campuses and embracing flexible, remote-friendly work models. Salesforce sold its iconic San Francisco headquarters in 2023, shifting its focus to regional hubs. Financial firms in New York, including JPMorgan Chase and Goldman Sachs, are redesigning offices to prioritize collaboration over individual desks.

Across Europe, companies such as Siemens, SAP, and Nestlé are adopting networks of smaller offices or dual headquarters in cities like London and Munich to support regional flexibility Similarly, UK banks have invested in flexible office solutions to meet evolving employee expectations.

In Asia, Samsung is decentralizing its Seoul headquarters, creating innovation hubs closer to employees, while Alibaba is experimenting with remote-first teams. Japanese firms like Toyota and Sony are balancing their traditional office culture with hybrid practices.

This decentralization is reshaping urban real estate markets worldwide. Major finance centers such as New York and London are seeing declining demand for large office spaces, with vacancy rates rising. Meanwhile, secondary cities, including Austin and Singapore, are attracting companies seeking lower costs and a higher quality of life.

Ultimately, the corporate headquarters will become a flexible network shaped by evolving work cultures and technology. Companies are investing heavily in collaboration tools and virtual meeting platforms to maintain productivity across dispersed teams. As this shift continues, businesses and urban planners must adapt, setting the stage for a reimagined future of work and city life.

The new model’s success will hinge on how well firms balance flexibility with connectivity. Embracing digital tools alone isn’t enough; companies must foster a strong culture that keeps remote and in-office employees engaged and aligned. Those companies that navigate this hybrid future effectively will redefine productivity, innovation, and employee satisfaction in the years to come.

“This partnership ensures that U.S. Steel will retain its iconic name and headquarters in Pittsburgh, Pennsylvania, and that it will continue to be mined, melted, and made in America for generations to come,” Nippon and US Steel declared in a statement.

For the acquirer, the deal is expensive and ambitious. It paid an enormous premium for a US company on a long-term downward trajectory; earlier this year, USX stock was trading at $30 a share. But Nippon Steel also promised to invest $11 billion in refurbishing and upgrading U.S. Steel facilities by 2028, including building a new mini-mill—moves it said will create 100,000 new jobs—and import some of its own innovative technologies to its new US operations.

Should all go as the two companies are hoping it does, the deal could be a “game changer” for both, says Tiago Vespoli, senior research analyst at Wood Mackenzie. It simultaneously makes Nippon Steel a more robust competitor globally, he argues, while giving U.S. Steel a solid chance to regain its competitive strength, including against Cleveland Cliffs, the big rival that earlier offered to buy it.

“Nippon Steel is a large, extremely experienced, very well-capitalized operator globally,” notes Kyle Lundin, principal consultant, Metals & Mining at Wood Mackenzie, and it brings to the table its expertise in more energy-efficient methods of steelmaking, including direct reduced iron (DRI) and electric arc furnace (EAF) processes. U.S. Steel offers its Big River Steel facility in Osceola, Arkansas, which produces high-quality electrical steel, suggesting that the two companies complement each other in ways that could make them both more sophisticated producers.

Nippon Steel has very publicly been on a hunt for growth for several years, given that its home market is not growing, and the purchase of U.S. Steel establishes a major presence for it in one of the three largest steel markets in the world by demand—with freedom from worry over Washington’s tariff policy. It’s also a “truly transcontinental deal,” Lundin observes, since U.S. Steel owns one of the largest integrated steel facilities in Central Europe, in Košice, Slovakia. As a global producer, the deal doesn’t make Nippon Steel a lot bigger—it remains the world’s fourth largest—but the company emerges as a more formidable global competitor, especially against the industry giant, ArcelorMittal.

That said, the future for the two companies—and even some details of the deal itself—remain to be seen. “Between the actual structure of the deal, and then just some strategic considerations, there’s quite a lot that’s been filled in around the edges, but still a lot of unknowns as well,” Lundin notes.

Full details about the US government’s much-discussed golden share, which is contained in a national security agreement that President Trump signed days earlier, are still being drip-fed. Reportedly the government will have veto power (“consent rights”) over such matters as closing or idling factories and the transfer of jobs or production outside the US—but no actual financial stake in the company. And the June 18 announcement still referred to the new ownership, puzzlingly, as a “partnership,” despite the fact that the Japanese acquirer now owns all of U.S. Steel’s shares.

The union that represents a large majority of U.S. Steel employees, the United Steelworkers, is taking a wait-and-see stance after having fiercely opposed the deal, but its collective bargaining agreement with the company expires in September 2026. That gives the new management—which reportedly will not include current CEO David Burritt—little more than a year to demonstrate that it can keep its promises of new investment and new jobs.

Perhaps the biggest question mark has to do with the significance of the golden share, as opposed to the details. Depending on the attitude of the administration in power in Washington, the unusual arrangement could be “non-consequential,” Lundin observes, “or it could entirely change the trajectory of how U.S. Steel operates at specific decision points that are crucial to its growth or survival in the future.” Nippon Steel has, in effect, made a multi-billion-dollar bet that “their internal decision-making will be in alignment with whatever the US government thinks at some undetermined point down the line.”

Will the new owner’s strategic plans change? If so, how accommodating will a future administration decide to be? The next chapter in U.S. Steel’s 124-year saga has now begun.

A clear indicator of this shift is the growth in insurers’ investment in alternative capital. Aon Securities calculates that global alternative capital lept from $24 billion in 2010 to $115 billion in 2024: a clear sign of the industry’s pivot toward broader capital strategies. The cost of damage from systemic threats such as ransomware is forecast by Cybersecurity Ventures to exceed $275 billion a year by 2031. Reflecting the impact of climate change, global inflation-adjusted insured losses from natural catastrophes grew almost 6% a year between 1994 and 2023, according to Swiss Re.

Across the entire property and casualty (P&C) space, carriers are wrestling with the need to protect profitability and capital in the light of spiraling claims costs while keeping their product affordable. This is especially true in personal lines, says Sean O’Neill, head of Bain & Company’s global insurance practice.

“Commercial P&C carriers have benefited from a hard market [a period when premiums increase, coverage terms are restricted, and capacity for most types of insurance decreases] the past few years,” he notes, “and are now increasingly focused on managing through earnings volatility as the market softens. In life insurance, the issue is often more one of accessibility: how to increase relevance and make it easier for non-affluent customers to understand and buy the product.”

Carriers are increasingly turning to insurance-linked securities (ILS), including collateralized reinsurance and sidecars, to improve risk-adjusted returns and increase capacity.

“There will be more cyberrelated losses as the economy becomes increasingly connected.”

Sean O’Neill, Head of Global Insurance, Bain & Company

These concerns are also visible in headline capital figures. According to Aon, global reinsurer capital reached a record $715 billion in 2024, driven by strong retained earnings and an expanding catastrophe bond market that saw outstanding bond limits grow to nearly $50 billion as of first-quarter 2025.

“Reinsurance capital continues to grow and keep pace with increasing demand,” observes George Attard, CEO, Reinsurance Solutions, Asia Pacific at Aon. “Heading into the mid-year renewals, we expect over $7.5 billion of additional US property catastrophe limit demand, mostly due to a healthier Florida market and the depopulation of the state windstorm insurer Citizens. We also anticipate some additional reinsurance purchasing from US national carriers looking to mitigate further major net losses during 2025.”

Available capital does not eliminate risk or uncertainty, however. Attard highlights the continuing impact of geopolitical and macroeconomic volatility on exposure modeling, inflation assumptions, and investment returns. Further, catastrophe losses during the remainder of 2025, including the Atlantic hurricane season, may yet impact future market conditions beyond the US.

Aon’s April 2025 Reinsurance Market Dynamics Report anticipates that this year is likely to record the highest firstquarter losses from natural catastrophes in over a decade. At between $11 billion and $17 billion, ceded losses from the Los Angeles wildfires have absorbed 25% to 33% of major reinsurers’ annual catastrophe allowances, which could affect how some come to the market at mid-year.

“June and July are key renewal dates for insurers in the US, Australia, and New Zealand, which along with Japan, are among the world’s largest markets for property catastrophe reinsurance,” the Aon report notes. Despite early-year losses, the broker expects broadly stable renewal dynamics, driven by continued capital inflows and unfulfilled reinsurer appetite.

Much of this capital flow is occurring through structured and alternative mechanisms. Growth in sidecar capital has contributed to broader buoyancy in the ILS market, with strong investor returns matched by persistent demand from originating insurers amid inflationary pressure and changing views of risk. Sidecars, however, are expected to post negative first quarter returns due to the Los Angeles wildfires.

The Asia Pacific region represents a particular opportunity for capital innovation. With low insurance penetration and material catastrophe exposure, the region is attracting increasing policy support and capital interest. Aon’s April renewals report notes that Hong Kong and mainland China are actively promoting the catastrophe bond market and more sophisticated regional sponsors are exploring sidecar structures to access third-party capital. In 2021, Aon structured and placed a $30 million catastrophe bond for China Re, the first to be issued from a Hong Kong-based special-purpose insurer.

In parallel, facultative reinsurance—coverage purchased by a primary insurer to cover a single risk or block of risks—has grown markedly. Recent renewals in Asia-Pacific and elsewhere have seen oversubscription and improved pricing as both new entrants and incumbents expand their appetite. The market is experiencing active competition from London and Singapore, Aon suggests, alongside growing capacity from managing general agents, consortiums, and facilities. Aon’s own Marlin APAC facultative facility, launched recently, offers up to $15 million per risk and is targeted at property and renewable energy exposures in the region.

Parametric policies also continue to receive attention, although the size of the market remains limited.

“Despite its long history, parametric insurance has yet to reach any significant scale in the industry,” Bain’s O’Neill explains, adding that climate change and associated perils may boost demand and that AI could be a powerful catalyst.

“This construct has the simplicity of getting payments paid faster through a dramatically simplified claims process,” he says.

“AI has the potential to reduce basis risk, or the difference between the actual loss and the stipulated value rate in the parametric construct. The more data that can be ingested and managed by AI, combined with the declining cost and increased power of computing, the more the potential to increase the fidelity of the models that underlie a parametric policy.”

Cyber has similar loss-pattern challenges to those caused by climate, according to O’Neill: “There will be more cyber-related losses as the economy becomes increasingly connected; some will be small, some large, and the range of possibilities is endless.”

The industry’s pool of capital is growing alongside an even steeper escalation in underlying risks. Climate volatility, cyber threats, geopolitical instability, and inflationary uncertainty are all expanding in scale and complexity, and despite growing capital availability, fundamental challenges persist; chief among them, price-to-risk misalignment.

In some regions, particularly those exposed to flood or wildfire risk, O’Neill notes, homeowners are exiting the insurance system altogether, threatening to create “insurance deserts” with broader economic consequences including risk to mortgage-backed securities.

In certain flood- or fire-prone regions, and for specific perils like terrorism and cyber, greater collaboration between public entities and insurers may be needed in the future, he argues.

“Given the affordability and accessibility challenges across many jurisdictions, the increasing size of the protection gap, which is approaching $2 trillion, and the increasing role the insurance industry needs to play in prevention, greater collaboration between insurers and public entities will be required,” O’Neill explains. “Participants walk a fine line to get the right balance in publicprivate partnerships and matching price to risk, without increasing moral hazard into risk-taking by businesses or consumers.”

There are other fine lines to walk in the current environment, with geopolitical uncertainty a key risk vector. President Donald Trump’s trade and policy stance, for instance, may continue to significantly influence global risk transfer dynamics. To navigate these pressures, some insurers are pursuing mergers and acquisitions as a means of reshaping their capital and risk portfolios.

Says O’Neill, “As insurers contemplate the need for a broader range of scenarios given market uncertainty, we are seeing aggressive M&A moves to re-shape their portfolios, such as Japanese life [insurer] acquisitions in the US, increased tie-ups and scale building in asset management in the US and Europe, and greater activity by private equity-backed consolidators: especially in distribution and insurtech.”

According to the Trump administration, the reason for the decision was to save federal money, “one penny at a time.” In 2024, the US Mint reported that the pro- duction of every single penny cost the government 3.7 cents, almost four times its face value. All in all, to make

3.2 billion pennies last year, the federal government lost

$85.3 million. It estimates it can save $56 million a year just in production costs.

The penny will remain legal tender and will continue to be widely accepted across the country as long as people continue using cash. Last year, YouGov reported that cash remains “the most commonly used form of payment,” with 67% of Americans favoring it. But Capital One consumer statistics projects that about half of the US population will use no cash at all in 2025.

The one-cent coin is made of copper-plated zinc but was originally all copper. It has been in circulation since the US Mint was created in 1792. Lately, however, and despite the 114 billion currently in circulation, the Treasury says that pennies are “severely underutilized” and easily lost, thrown away, or abandoned in jars in people’s homes.

Officials expect that businesses will start rounding up to the nearest nickel—worth five cents—and gradually elimi- nate cents in cash transactions. But the transition may not be as uncomplicated as that.

“People using cash in stores are still entitled to their change,” notes Jay Zagorsky, senior lecturer in markets, pub- lic policy, and law at Boston University’s Questrom School of Business. “The problem with the decision to stop minting the penny is that it impacts only the supply of pennies, not the demand. This issue needs to be solved with an official national policy. The US Congress needs to pass a law in this regard.” The US is not the first country to abolish its smallest- denomination coins. The EU and Canada have been winding down their pennies for over a decade, while New Zealand and Australia stopped production more than 30 years ago, in 1990 and 1992, respectively.

The US saw record loan issuance in January and February, at $69.9 billion and $57.7 billion, respectively, according to PitchBook LCD. Following the Trump Administration’s tariff announcements, volume fell to $35 billion and took an even steeper drop to $19.7 billion in April.

Speculative debt issuance in the U.K. and elsewhere in Europe typically pales compared to the US market, but in April it plummeted as well, according to PitchBook, to $300 million from $2.5 billion in the U.K., and to $6.5 billion from $16.1 billion among other European borrowers.

In May and through the first half of June, however, volume across these regions staged a recovery, as demand from lenders increased, providing corporate borrowers with the opportunity to issue debt at more attractive rates.

Marina Lukatsky, global head of research, credit, and US private equity at PitchBook, said that pricing on new-issue loans in the US dropped from SOFR plus 375 bps in April to SOFR plus 365 bps in May, and while the current level is approximately 10 bps wider than in the first quarter, it’s tighter than most of 2024.

“As a result, borrowers approaching the market will find attractive spreads, especially high-quality companies from sectors isolated from tariff turbulence,” Lukatsky said.

Further underscoring the shift in market dynamics toward borrowers, she said, repricing existing debt re-emerged after the recent slump.

“LCD tracked $13 billion of these deals so far in June, more than March through May combined,” Lutatsky said.

The current window to approach the market, however, may not be fully open for all borrowers. Sean Griffin, CEO and executive director at the LSTA, pointed out that most companies seeking to refinance or reprice debt in US dollars have done so already, and loan maturities don’t pick up significantly until 2028. Consequently, lenders will look twice at borrowers approaching the market today.

“If a company has a pending maturity and it hasn’t done anything about it until now, lenders may suspect there’s an issue with the credit, indicating pricing on the wider-end,” Griffin said.

Lutatsky said the loan markets in the U.K. and other European countries saw similar drops and rebounds to the US in terms of loan issuance. They have also seen a jump in loans trading above par—increasing more than 40% by the end of May—that indicates repricing activity is resuming. She noted repricing deals for Ion Marks, Valeo Foods, and Eir Telecom that launched June 16.

“In terms of M&A activity to support volume levels, there does seem to be slightly more optimism in Europe, and there is some loan issuance supporting deals to be syndicated in the next few months,” Lutatsky said, pointing to Advent’s bid for French insurance broker Kereis, and Ardian’s investment in Diot-Siaci, a reinsurance brokerage and consulting group. “Year-over-year loan volume supporting M&A activity, she said, has more than doubled in 2025—$13.3 billion through June 13, compared to $6.1 billion in 2024 over the same time period.”

“This place is in my blood,” Filosa says in a LinkedIn post celebrating his new role. Now 51 and an alumnus of Politecnico Di Milano, he launched his career at Fiat as a quality control supervisor in Spain. A mentee of legendary Fiat CEO Sergio Marchionne, he built an international career in Brazil, Argentina, and the US.

When Stellantis, the Italian, French, and American behemoth, was created in 2021, Filosa became South American COO. Two years later, he took the helm of the Jeep brand in Detroit. More recently, he added two crowns, COO of the Americas and worldwide chief quality officer at the parent company, which has a portfolio of 16 well-known brands that includes Peugeot, Citroen, Chrysler, Dodge, Alfa Romeo, and Maserati.

His appointment underscores the growing influence of the Italian shareholders within the company. When Stellantis was created, it had two heads: John Elkann, who became board chair, scion of the founding Italian Agnelli family; and Tavares as CEO, representing the French Peugeot family’s interest. With Filosa’s promotion, with the blessing of the French directors.

“We unanimously welcome Antonio’s appointment,” vice chair Robert Peugeot said.

The new chief faces a formidable list of challenges: tariff uncertainties, market-share losses, an electric vehicle transition, and economic instability. Auto sales declined through 2023 and 2024 as the company kept prices high. For the first quarter of this year, Stellantis suffered a 14% decrease in revenue.

Dealers in the US, who openly criticized the previous CEO’s strategy, nevertheless are celebrating the arrival of a new boss who likes to quote his mentor, Marchionne: “Mediocrity is not worth the trip.” Filosa adds on LinkedIn, “Let’s win this one together.”

The main objectives for the IPO are to expand the fleet and network, including the lucrative Hajj and Umrah religious travel market, and to become fully digitalized while escalating its cargo operations.

In 2024, Flynas posted mounting revenues with proceeds increasing by 19% to $2.01 billion (about SAR7.6 billion). The airline appeared to be on a sound financial trajectory.

The IPO follows $96 billion worth of orders from Qatar Airways to Boeing for up to 210 jets, including 130 long-range 787 Dreamliners, brokered by President Donald Trump on his recent visit to Doha.

Flynas is the first airline to be listed on the Tadāwul Saudi stock exchange, and the first Gulf airline public offering since Air Arabia’s IPO in 2007.

“Enhanced financial capabilities from the IPO could allow SAUDI ARABIA From Riyadh To The Runway: Flynas IPO Is Taking Off Flynas to enter new markets more aggressively and improve its service offerings, potentially increasing its market share and establishing new hubs in the MENA, Europe, and Asia regions,” says Francois Chadwick, KPMG’s Private Enterprise Global and National Lead Partner of the Emerging Giants practice.

“This could drive down prices benefiting consumers, but may put pressure on other low-cost carriers to innovate and find efficiencies.”

Rouven Bergmann: The balance of managing long term and short term is always the biggest struggle for the CFO. You have to create the capacity to invest in the long term, but you also have to manage performance quarter to quarter. Certainly, 2024 was a difficult year, because of volatility in the end markets. There was a lot of geopolitical instability in the world and in Europe. Think back to the European elections and the uncertainty in France. This really has been a headwind in terms of decision cycles.

The timing of decision-making is becoming a bit less predictable for our customers. It’s not that they’re deciding against us or for the competition—that’s not the case. We are winning market share from the competition. But managing the cycle of transactions and deals has become really something that’s more difficult to predict.

To give you an example, we signed a strategic agreement with Volkswagen in December of last year; the first discussion started two years ago.

GF: What’s the impact of the new US tariff policy?

Bergmann: Clearly, 2025, with the situation that the US administration has started with tariffs, is creating a lot of uncertainty for our customers. Now they need to invest and adapt to the new world. I’m not worried about our future, but for sure, there could be short-term volatility and noise.

GF: There is a sort of academic debate over how the role of the CFO has changed: becoming more an ally and business partner of the CEO and less an accountant. What do you think?

Bergmann: I have been in this role for 10 years at different companies. For me, I don’t think it has changed. I think there are three types of CFOs. There is more of an accountant, who comes from the audit function, which I think is more about compliance and implementing standards but has less business interaction. Then there is the CFO who comes from an investment bank, who is more about capital and markets and investor communication. And then there is the operational CFO, who is deeply connected to the company’s value creation cycle. I think today you need to find the right mix of the three.

GF: What do you suggest to someone who is young and wants to become a corporate CFO?

Bergmann: Gain as much experience as you can with a company, in and out of finance. The CFO role is much more than finance; you have to understand the finance function, but also understand how the business works.

For example, when I was already at a very senior level at a software company, I left finance and worked as COO of product development. It was a role that was a combination of operational planning and financial planning. I had to find the right resource allocation mix, maintaining and optimizing what exists, while freeing up enough capacity to develop new products.

At the same point in time, we all know that there are constraints to resources. You cannot hire as many people as you want, so you really have to find productivity, move people around, and create that flexibility in your workforce. The company where I did that was one of the largest software companies in the world. There were 20,000 engineers in software development. So, I really learned the operational part of the company, and now I can combine that with finance.

AI’s insatiable appetite for computing power, coupled with the current demand/supply conditions for cloud-based AI workflows/use cases, has supercharged the pace of investment and development of data centers. A data center is a facility housing cloud computing and storage resources that enable the delivery of software applications, the training of AI, and any number of additional processing and production applications.

Currently, the US is leading the AI power race, having built the largest number of data centers in the world. Statista reports that as of March, the US was home to 5,426 facilities, followed by Germany with 529, the UK with 523, and China with 449. By 2030, these numbers are expected to increase by about 30-40%. Globally, investment in data centers is forecast to reach $7 trillion.

How does the investment needed to build a data center break down?

“If someone owns a land parcel where data-center development is feasible, then the value of that land is significantly higher than it would be absent that demand,” says Tim McGuire, senior director of Project Finance at Rowan Digital Infrastructure, a developer and builder of data centers in the US. “For example, we see land in core markets like Northern Virginia exceed $2.5 million an acre, and to fit a hyperscaler development—Amazon Web Services, Google, Microsoft—we’re typically buying a hundred acres plus.”

Energy and water are both crucial cost components, and energy has been the gating issue in most geographies, McGuire adds.

“Data centers are very energy intensive,” he notes, “and even if the energy infrastructure is there to power them, building an interconnection can take months if not years. The cost of building those interconnections can be high. We’re therefore seeing more and more utilities—particularly utilities where the data center boom has really put strain on them—require some form of security for them to undertake the interconnection work.”

Well-capitalized developers that can afford to meet those requirements, have the advantage he says.

The dynamics related to power availability are different for data centers, observes Gordon Bell, principal at EY-Parthenon Digital Infrastructure. “Europe is particularly challenged with respect to power availability, given some of the local regulatory hurdles around expanding the power infrastructure,” he says. “The same thing is also true in North America, whereas in Asia it is relatively fast to build out that infrastructure.”

Graphic processing units (GPUs) are essential for all things AI, and some countries face further restrictions to data center development depending on how many GPUs they can import at any one time, Bell adds.

“Countries like Canada, Japan, Australia, and many in Europe don’t have restrictions on GPU imports,” he says, “which has created another catalyst for growth in the market in those regions.”

Also, different countries will offer specific incentives around the development of data centers. Some Middle Eastern countries, including the United Arab Emirates, are aggressively incentivizing data center development within their borders, he adds.

Because building a data center is extremely capital intensive, backers are typically global companies like Blackstone, notes Claus Hertel, managing director at Rabobank, an active lender in the space and developer of its own green data center in the Netherlands. A lot of investors and lenders have relationships with these big firms and have assembled large project finance teams that are active in renewables, clean tech, and digital infrastructure.

“At the basic level, you have project financing, which incorporates construction, financing, and term financing,” Hertel says. “Once the data center is complete, you have a certain amount of time—typically a three- to four-year period—where the sponsor can decide how to access permanent capital or permanent financing. That could be in the form of asset-backed securities, commercial mortgage-backed securities, or a private placement to long-term investors. So there are different pockets of capital, short-term or longer term.”

Like many of its peers, Rowan Digital Infrastructure is sponsored by a private equity firm, Tim McGuire says.

“Typically, a private equity investor will front some of the pre-development costs, which could include acquiring the land parcel and doing some of the horizontal development,” he notes. “Rowan doesn’t put debt financing in place for projects until we have a signed lease, because at that point, we’re able to obtain very attractive terms. The hyperscaler customers are large, well-capitalized, profitable public companies with high investment-grade credit ratings. After signing a long-term lease with them, it opens low-cost debt capital that provides 80% to 85% of the capital needed to build the project.”

“The context for all of this is that the industry has grown tremendously over the last couple of years, and it’s expected to accelerate going forward,” says Gordon Bell. “That just requires more and more capital—more capital than a lot of the existing owners of these assets originally underwrote. They’re looking for ways to raise new capital as well as recycle capital.”

One of the possible solutions that is starting to percolate in the market, he says, is the introduction of dedicated funds that hold a portfolio of stabilized assets.

“That would then provide some diversification of risk and allow various investors looking to get exposure into the space to invest in a fund that holds a portfolio of assets across different markets and different customer,” he says.

“Typically, the stabilized asset deals that we’ve seen are for individual facilities or a handful of individual facilities,” he adds. “Those facilities provide exposure to very specific markets and within each of those facilities there’s oftentimes only a single customer. So, you’re placing a concentrated bet on a single customer and a single market. The private equity deals that have been made thus far have been more one off in nature, a handful of assets, or single assets. It’s not been anything that can programmatically scale globally, which is really what the industry eventually needs—a fund that would hold all these stabilized assets. Investors looking to get exposure into stabilized assets would then just be able to invest into this fund.”

Whatever the mechanism that gets it done, McGuire sees continued strong demand for data center development going forward, driven by continued investment from hyperscalers. AI will be a catalyst, but so will demand for cloud services.

“There’s a lot of support for the data center business for the foreseeable future,” he predicts.