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| The Daily Pitch |
| VC, PE and M&A |
| Your edge on global private capital markets |
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| Good morning. In today's Daily Pitch, we cover how the cleantech sector is keeping its allure amid a PE infrastructure surge and what Meta and Blue Owl's data center joint venture says about investor safeguards. And in case you missed it, our latest US PE Breakdown shows a dealmaking frenzy is driving the industry. |
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| Meta, Blue Owl data center JV puts investor protections in the spotlight |
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| (Josie Doan/PitchBook News) |
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By Rod James and Madeline Shi, PitchBook News
Tech giant Meta announced it is forming a joint venture with Blue Owl Capital to build one of the most expensive data centers ever.
The deal sheds light on how lenders and tech companies are protecting themselves in the face of what many believe to be an AI bubble.
The JV has committed to invest around $27 billion in the development of the Hyperion data center campus in Richland Parish, a sleepy corner of northeastern Louisiana. Blue Owl has an 80% ownership stake in the JV, with Meta accounting for the remaining 20%.
Blue Owl has put up an initial $7 billion in cash for the new entity, with Meta set to receive a $3 billion distribution upon closing. Blue Owl's contribution is part-funded by fixed-income investors, including Pimco, through a private bond offering.
The deal gives Meta the option to walk away, and for Blue Owl, the transaction includes a residual value guarantee, which means that if Meta chooses not to renew its lease, the facility will be marketed for sale. And if the resale value of the data center falls below a pre-agreed threshold, Meta is liable to make up the shortfall to investors.
"Meta wants the optionality to be able to walk away from this facility if either their strategy changes or they decide they are going to take a different approach to AI training, or God forbid this 'bubble cracks' and the world goes a different direction," said Naveen Sarma, a managing director at S&P.
An exit might not be easy. The Hyperion data center is designed specifically for AI model training, and rural Richland Parish was chosen as the location because of the immense space required for such projects.
Even with the residual value guarantee, the facility could become a stranded asset, causing a significant impact on the local economy. |
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| A message from AlixPartners |
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| Have your voice heard in AlixPartners’ 11th annual leadership survey |
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For 11 years, AlixPartners has been publishing groundbreaking research on leadership within private equity (PE) firms and their portfolio companies (portcos). Every Fall, AlixPartners collects data from people like you to highlight key trends shaping the industry, including the growing significance of leadership and talent management, and how human capital is pivotal to creating value. Particularly when disruption reigns supreme, having the right leadership team in place is critical.
From navigating disruptions like technology and geopolitics, to managing longer hold periods and complex organizational strategies, leadership effectiveness has become the top lever for driving success in PE portfolios
Be part of this year’s crucial findings to shape the outcomes on how leadership and talent can transform your PE firm’s bottom line.
Take the survey now |
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• Just out: Our Q3 valuations data for public companies in the healthcare services sector. Get our analysts' report today
• Emerging firms are capitalizing on record investor demand for secondhand fund stakes, with the cohort raising $3.8 billion this year—their biggest haul in more than 15 years. Learn more |
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| PE infrastructure funding rebounds amid wave of large-cap deals |
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By Emily Lai, Private Equity Reporter
PE investment in infrastructure has already grown by 44% this year, bolstered by a spate of large-cap deals. At the same time, more capital is flowing into cleantech assets.
A strong start to H2 has helped infrastructure deal value reach $25 billion in 2025, the second-highest annual total in the past decade, according to PitchBook data. The deal count is on pace to exceed last year's, though by a smaller margin. |
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This year's biggest deals include KKR and CPP Investments' $10 billion purchase last month of a 45% equity stake in Sempra Infrastructure Partners, a California-based developer of natural gas liquefaction export facilities.
Also, this month, Tailwater Capital made a $1.1 billion debt and equity investment in Dallas-based Producers Midstream.
Notable cleantech investments have been made this year as investors continue to pile into energy transition opportunities.
In February, Ares Management acquired Geronimo Power, a Minneapolis-based renewable electricity provider, for $1.7 billion. In January, Brookfield Asset Management and Antin Infrastructure Partners also invested $1 billion in Origis Energy, a Miami-based solar development and construction firm. |
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Smart reads that caught our eye.
• Elections in Virginia and New Jersey are bringing the politics of data center infrastructure to the forefront. As the needs of generative AI processes grow, large data centers are impacting local communities, from energy and water supplies to jobs and taxes. [Fortune]
• This company is valued at $20 billion but has no revenue. Meet Oklo, a nuclear energy startup capitalizing on the need to supply energy to massive data centers. Is the valuation of Oklo, still without even a license to operate its reactors, too ambitious? [Financial Times]
• The New York Giants are now the most valuable sports team in the world. The NFL approved several deals Wednesday, some involving PE firms, that skyrocketed the valuation of many franchises. [Bloomberg] |
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