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Audience

Investing in the physical networks that enable our digital society

10/09/2019

Equinix owns and operates data centres around the world and is a beneficiary of the structural demand for data globally. The proliferation of data in today’s modern society is driven by the development of technology, including e-commerce, cloud-based applications, connected devices and the internet of things (IoT), but this insatiable appetite can only be met by the support of highly connected physical infrastructure assets such as data centres.

Data centres perform a critical function in the digital economy. They provide an indirect way of accessing the high growth potential of companies such as Amazon.com, Microsoft and Google whose business models are reliant on data centres for their long-term growth and success.

Location is key for the customer and provides a barrier to entry. Security, reliable power supply and functionality are also mission critical. For example, the payments company Visa experienced a network failure in June 2018, resulting in millions of transactions being declined, the issue being attributed to a glitch at one of its data centres.

Equinix has a global reach with more than 200 data centres spread across 24 countries and benefits from a business model with high recurring revenues. The company is classified as a real estate investment trust (REIT) and as such can be susceptible to short-term negative sentiment when interest-rate sensitives are out of favour, but our investment case is based on the structural growth in the industry which is reflected in the strong growth in profits and dividends that the company has delivered over time.

Past performance is not a guide to future performance.

The value of the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested.


The value of the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested.
This website is for Investment Professionals only. Not for onward distribution to any other type of client. No other persons should rely on the information contained on this website. Content should therefore be shared responsibly with other investment professionals.