What Does the Acquisition Mean for Apollo’s Portfolio?
Apollo Global Management, a major player in the investment landscape, has announced its acquisition of Argo Infrastructure Partners, marking a significant expansion of its infrastructure platform. The transaction, expected to close in Q2 2025, will add approximately $6 billion in assets to Apollo’s portfolio. The deal continues a growing trend in 2024, where investment firms have been acquiring other firms within the infrastructure sector, especially those focused on mid-market opportunities.
Who Is Argo Infrastructure Partners?
Founded in 2013, Argo Infrastructure Partners is an asset manager with a strong focus on essential infrastructure in North America. Its portfolio includes power generation assets, utilities, electric transmission systems, and energy storage networks. Argo is well-regarded for its expertise in managing a variety of assets in the vital infrastructure space, and it has proven to be an essential player in the sector.
In addition to its diverse portfolio, Argo holds a majority stake in TierPoint, a prominent U.S. data center operator. TierPoint manages around 40 facilities across 18 U.S. markets. This partnership, which began in 2020 with an initial $320 million raise, has evolved significantly, with Argo increasing its investment and ultimately securing a majority share in TierPoint by 2023.
What Does Apollo Gain from the Deal?
By acquiring Argo, Apollo gains access to an experienced team and a high-quality portfolio of infrastructure assets. The acquisition aligns with Apollo’s strategy to invest in essential, long-term infrastructure assets with steady returns. Harry Seekings and Olivia Wassenaar, co-heads of Apollo’s infrastructure team, expressed their enthusiasm about integrating Argo’s team and its established track record into their platform.
Upon completion of the acquisition, Argo will join Apollo’s Sustainability & Infrastructure group, further strengthening Apollo’s position in the infrastructure investment space. This strategic move is expected to enhance Apollo’s value-add investment strategies, particularly in the mid-market sector, which is a key focus for the firm.
How Does Argo’s Acquisition Impact the Data Center Sector?
Argo’s ownership of TierPoint plays a crucial role in the deal’s implications for the data center industry. TierPoint operates in a critical space within the infrastructure ecosystem, and Argo’s decision to focus on this sector highlights the growing importance of data centers in the modern economy. As Apollo assumes control of Argo’s assets, TierPoint’s operations are likely to benefit from the larger firm’s extensive resources, helping it expand its footprint across the U.S. and beyond.
This acquisition also aligns with Apollo’s previous investments in the data center sector, including its stake in Yondr and the acquisition of Rackspace. With the rising demand for data storage, computing, and cloud solutions, the data center market is poised for continued growth, and Apollo is positioning itself to take full advantage of this trend.
What Is the Broader Trend in Infrastructure Investment?
The Apollo-Argo deal is part of a broader shift in the infrastructure investment landscape. 2024 has seen a series of similar transactions, with firms like Blue Owl, BlackRock, and General Atlantic acquiring others in the sector. This consolidation is driven by the increasing demand for infrastructure investments, particularly those in the energy, utilities, and technology sectors, as investors seek stable, long-term returns in a turbulent global economy.
Investment in infrastructure, including data centers and energy systems, remains a key focus as firms look to capitalize on technological advancements and growing market needs. The trend of investment firms acquiring other firms provides them with enhanced capabilities, deeper expertise, and more diverse asset portfolios to navigate these evolving markets.
What’s Next for Argo, Apollo, and TierPoint?
With the deal set to close in mid-2025, the integration of Argo’s team into Apollo’s infrastructure division will likely lead to enhanced synergies and growth opportunities. The addition of TierPoint to Apollo’s portfolio will be particularly noteworthy for the data center industry, as Apollo’s expansive resources could accelerate TierPoint’s growth trajectory and further solidify its position in the U.S. market.
Jason Zibarras, Argo’s founding partner, expressed optimism about the acquisition, stating that Apollo’s global reach and resources will support the continued evolution of Argo’s mission to deliver innovative infrastructure investments.
Frequently Asked Questions (FAQ)
1. What does Apollo Global Management gain from the acquisition of Argo Infrastructure Partners?
Apollo will add $6 billion in assets to its infrastructure platform, gain a team with deep expertise in asset management, and increase its presence in the data center sector, especially through its connection to TierPoint.
2. How has Argo Infrastructure Partners contributed to the data center sector?
Argo Infrastructure Partners has played a pivotal role in owning and managing TierPoint, a leading U.S. data center operator. Their investment in TierPoint has enabled growth across 40 facilities in 18 markets.
3. What is the significance of the Apollo-Argo deal for the infrastructure investment industry?
This acquisition signals a broader trend of consolidation within the infrastructure investment sector. As firms seek stable returns, larger players like Apollo are acquiring mid-market firms to bolster their portfolios and expertise in high-demand areas like energy and data centers.
4. When is the Apollo-Argo acquisition expected to close?
The deal is expected to close in the second quarter of 2025, pending all regulatory approvals and necessary procedures.
5. How will the acquisition impact TierPoint’s operations?
Under Apollo’s ownership, TierPoint is expected to benefit from enhanced resources, potentially expanding its footprint and service offerings across the U.S. The acquisition could also strengthen its position within the competitive data center industry.
