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PGIM Real Estate, the property investment arm of Prudential Financial, has successfully closed a $2 billion global data center fund, marking its largest closed-end fund to date. With $450 million already deployed, the firm plans to invest the remaining capital over the next 18 months to develop, lease, and sell high-demand digital infrastructure.

The move underscores the accelerating importance of data centers in the global economy as AI, cloud computing, and digital connectivity continue to surge. “Data centers are at the heart of the digital framework,” said Morgan Laughlin, PGIM’s Global Head of Data Center Investments, noting a significant uptick in global investor interest in the sector.

PGIM, an active data center investor since 2013, secured commitments from institutional investors and partnered with a private bank to raise additional capital internationally. The fund will prioritize investments that align with ESG principles, an increasingly critical consideration as data centers face scrutiny for their intensive energy consumption.

Despite strong market momentum, developers face mounting challenges including high capital costs, infrastructure constraints, and energy demands. PGIM’s fund positions the firm to capitalize on this rapidly growing yet complex sector, backed by $206 billion in total gross assets under management.

Original article posted on April 2, 2025