Data Centers
and Fiber⁵

Data Centers are an important part of the digital infrastructure ecosystem given the exponential growth of data. The world continues to migrate to fiber-based networks, delivering data speeds faster than ever before, which is critical for supporting connectivity between cell sites and data centers and between data centers and interconnection points across the country and globally.

Palistar believes that current macro industry trends provide strong tailwinds for data center assets including:

• Social distancing and remote work have highlighted the necessity for embracing digital transformation at every enterprise level
• The emergence of intelligent connectivity, such as 5G, Internet of Things and Artificial Intelligence, will drive explosive growth in both edge and core connectivity and compute requirements
• Strong demand across the data center stack driven by hybrid multi cloud including hyperscale compute, retail connectivity and services

Fiber is used for long-haul traffic (i.e., between cities or regions), in-metro / urban areas (to connect buildings), undersea (to connect countries and continents) and, ultimately, to the individual home or premise.

As with other components of the digital infrastructure ecosystem, we believe that there are some key tailwinds to the fiber sector such as:

• Higher broadband speed and lower latency applications which require all components of connectivity amongst wireless towers, data centers, buildings and homes to ideally be transported via fiber
• While much of the current U.S. fiber total addressable market is enterprise and fiber-to-the-home connectivity, a substantial portion of the growth is now driven by connected amongst macro towers (mobile backhaul) and data center (within and between facilities)
• The global fiber network is also experiencing both a refurbishment phase to upgrade fiber networks from the last few decades as well as new builds to connect areas that remain unconnected and tower and data center connectivity
• In the U.S., governmental broadband initiatives at federal, state and local levels to reduce the digital divide are providing an incremental catalyst to invest in fiber plant in rural and underprivileged inner city and suburban areas. We are seeing similar initiatives in other countries around the world as well.

Leveraging our deep experience and relationships in the industry, we seek to create joint ventures and partnerships with successful data center and fiber platforms which are paving the way for increased global connectivity.

⁵ The information above is presented for illustrative purposes only to provide examples of the types of investments targeted by Palistar. There is no guarantee that Palistar will be able to make investments with all or any such characteristics.