All right. If everybody can please go ahead and take their seats, we're gonna go ahead and get started with our next session. For those of you who don't know me, I'm Matt Niknam. I cover cloud infrastructure here at Deutsche Bank. We are very pleased to welcome back DigitalBridge CEO Marc Ganzi to our conference. Marc, this is one of my favorite sessions to host. Appreciate you coming.
Yeah. Thank you. I think this is my 10th year here in my capacity. So it's always, always fun to be back among friends. And as a DB alumni, this has always circled on my calendar.
Love it. Great to have you. So why don't we go ahead and get started? You've obviously been very busy since you took the helm at DigitalBridge. Maybe we can start by recapping some of the bigger milestones in 2023 and what you're most focused on in terms of top priorities for the business in 2024.
Well, I think first and foremost, it's nice to be here in this position, Matt, versus where we were a year ago, which was, you know, still a business in transition marked by above-market leverage and, perhaps some confusion around the direction of travel of where we were going. I think 12 months later, and now sort of five years into the journey as a public vehicle, DigitalBridge, I think that confusion is now out of the story. I think investors now understand, most importantly, where we're going, in terms of as a business in this asset-light digital infrastructure model. I think investors have to wake up today and realize you have a choice in investing in digital infrastructure. And that can be asset-heavy, where you have a balance sheet and you have assets that are depreciating.
Particularly in today's environment, where you look at depreciating assets like data centers and fiber, those balance sheets are often at times complicated and can be hard to really pick apart. And I think for us as a REIT, we were looking at that. But most importantly, Matt, we were looking around the corner, where I don't think our peers were looking around the corner. And when I say looking around corners, you have to really be cognizant of how much CapEx is required to build public cloud and to build AI workloads and to work with hyperscalers on a on not a just in the U.S., but really understanding that digital is the great equalizer and that ultimately the challenges that hyperscalers face are global challenges. These are not regional challenges.
And so when we're sitting trying to help customers, the big hyperscale customers, you can't just show up for them in Northern Virginia and in Northern California. You have to go and show up for them in Johannesburg. You have to show up for them in Malaysia. You have to show up for them in difficult parts in Asia where there's no more power. And so our business is really predicated on showing up for customers, showing up at scale, and being able to deliver. And make no mistake, what delivery is today. Delivery is the ability to raise a lot of capital and show up in force and scale on a localized basis. And so where does that take us today?
It takes us to where DigitalBridge is today, an $80+ billion global asset-light digital infrastructure owner and operator with a scale and a reach that cannot be matched by any public digital infrastructure REIT that'll come present at your conference. No offense to my friends at American Tower, Equinix, but what we're doing, they cannot do. There's an acceptance by our public peers that the asset-light model is working because they're going out now and raising capital, with sovereign wealth funds and other forms of capital, which is something we were doing five, six years ago. So we're ahead of the curve. We're in a very good place, reflecting on 2023 and my priorities. You know, I did make deleveraging a big priority. We deconsolidated both DataBank and Vantage off our balance sheet. We're targeting net leverage sub-5x now.
We're growing our core earnings, which is now FRE instead of AFFO. But we're growing that at a cadence of 25%+. And again, benchmarking ourselves against our public peers, we are producing results that are superior from a growth rate perspective because we're no longer burdened by a big balance sheet. And if you're gonna play digital infrastructure at scale on a global basis, you better be prepared to be asset-light. We announced guidance on CapEx in our last quarterly call, $15 billion+ of CapEx committed to shovel-ready projects that are in flight right now. So what is shovel-ready? It means we have land. We have permits. And guess what? We have a 10-, 15-, 20-year lease with an investment-grade counterparty. Those are the things that we're doing at DigitalBridge now.
To commit to that $15 billion of Greenfield CapEx, again, is something that requires a lot of planning, unfortunately for me, a lot of travel in terms of seeing LPs, and making sure that we have great relationships with our banks, our lenders, and making sure that we're out in the ABS and CMBS market. We were very active at ABS West, a couple weeks ago, launching a couple of different securitizations. And look, last year we formed $26 billion in capital. I don't know another digital REIT in the world that formed $26 billion of capital. That was $10 billion of equity, $16 billion of debt. And we'll go and do the same thing, again this year in terms of our ability to form capital, on the equity side and on the debt side.
So it puts us in a really unique position, having finished the cleanup and having finished the transition. I think investors woke up in, you know, the early part of this year and said, "Okay. How am I gonna play digital infrastructure? How do I play artificial intelligence infrastructure in a smart way?" And I think investors are waking up to the fact that DigitalBridge is that story. So a lot of eyes on us now, now that we're a cleaned-up story. And so this becomes a year where, for the first time in my position of five years of being in a public CEO position, where I get to play offense, which is something I'm really comfortable with. I mean, we spent the last four years playing defense and cleaning up.
And now I get to go out and do the things that I really like to do, which is work with customers, go do deals, raise capital, and not worry about being a story in transition. So it's an exciting place. To have a clean sheet for this year and deliver a clean set of guidance is a good place for us to be.
It's a great segue, maybe, into the next question. You've got larger alts peers that have recently bulked up in the digital infrastructure space, either through additional investments or M&A. We often hear the line imitation's the greatest form of flattery. But, you know, can you talk a little bit about how you differentiate now, DigitalBridge, relative to this alts peer group and some of the relative competitive advantages unique to your business?
Well, again, I think what's unique about our business is we own and operate, on a global basis close to 50 different platforms, 28 specific digital infrastructure platforms. So as a global organization, with management teams that are regionally focused, we can be a bit more surgical. I think just in terms of our total assets under management, we're on a factor of 3x-4x bigger than our peer set in digital, not in total AUM. Certainly we pay attention to the likes of Blackstone and Brookfield and KKR. They're great organizations, many of them run by friends of mine who I have deep respect for. But I think we play the game a bit differently. I think we don't wake up every day and think, first as an alternative asset manager.
I think we wake up and we think of ourselves first and foremost as operators. Why? Well, the form we're taking is an alternative asset manager. But the daily cadence of what we do is very operational intensive. And so that's where we because of our operating DNA and my background and a lot of my partner's backgrounds, I think we're always waking up with a myopic focus on how do we solve customer problems. And I think that's the business we have to be in. We have to wake up and think about how we're solving issues around, you know, how do we bring more fiber? How do we ultimately provide power to our data centers? How do we ultimately get through zoning challenges? Every day, this business is marked by a series of control variables and non-control variables. The non-control variables are regulations.
Some of these issues we're experiencing are power, zoning, land use rights. And by the way, that hasn't changed in 30 years. When I got in the business in 1994, those were the same challenges we faced back then. The good news is we've evolved as an industry. We've gotten better at it. As I mentioned, you know, the stuff that we're building this year, we already entitled last year. So being out in front of that stuff and predicting, you know, where we need to be for customers is super important. I think the differentiation piece for us is our relationship with customers. I think, you know, when we sit with a customer, it is an incredibly strategic relationship we have with a Verizon or an AT&T or a Deutsche Telekom or a Microsoft or an Amazon. And why is it a different relationship?
Because I've been building and owning and operating that infrastructure for 30 years. So the opportunity set that we get to see is really based on a 30-year track record of being a trusted partner where my infrastructure has stayed up better than five nines. And at the end of the day, the at-bats we get and the opportunities we get are predicated on the fact that our infrastructure has to stay operational. And you have to be a trusted set of hands. You can have the biggest wallet in the world, Matt. You know this. And if you show up in the front door of a mobile operator or a hyperscaler and they don't know you and know you in the sense of being an operator, that's somebody they can trust, they're gonna spend a couple of years vetting you before they give you a big at-bat.
So there is an advantage we have. I always am, you know, I wake up every day worried that there is someone chasing us and, certainly flattered. But we know we have to be better every day. And so I accept that challenge. And I know that the likes of Brookfield and Blackstone and KKR are coming for us. And that's fine. I mean, it's not the worst thing in the world to have incredibly responsible, well-capitalized competitors. I think that is something I'm prepared to live with. So the ultimate advantage for us is being out ahead, making good decisions around site selection, again, thinking about power, how do we create alternative sources of power to our infrastructure, and come up with the best value proposition.
And most importantly, when we say we're gonna build something and we say that ultimately our customer can move their server in or our customer can install their 5G antennas, that we deliver that date with certainty. Because the one thing that I think a lot of these new kids on the block don't understand is if you don't deliver a facility on time at a specific date, you will go into a penalty box. And I've been in that penalty box before, many times. And so the understanding of the mission-critical nature of the infrastructure and the fact that we have to deliver is entirely seminal to our success. So I think we always wake up every day a little, focused on that.
You referenced sort of deconsolidation of the opco assets and largely simplifying the business. What's next for the company in terms of maybe more closely aligning yourself to your alts peer group and maybe introducing a newer investor base who may be less familiar with the story?
Well, look, we finally got to start down that journey. This is the first quarter where we've attended financial services conferences. So that was a new theater, a new venue for us to have a dialogue, you know, so the first couple of conferences we attended, we were doing not one-on-ones. We were doing, like, eight-on-ones, 10-on-ones. So I think people are really curious in the financial services space to learn about DigitalBridge and learn about asset-light digital infrastructure. The direction of travel favors what we're doing because of the size of the wallet. The investable wallet is growing. If you look at what's happening in alts today and you look at, you know, allocations on a global basis and if you're out talking to big sovereign wealth funds and big allocators, look, they're trimming their allocations in real estate. They're trimming in PE.
But they're growing in infrastructure. Specifically, they're growing in renewable energy. They're growing in digital. Those are the two hottest areas, two investable, the hottest areas of investable ideas. They're also growing in private credit. So what have we done in turn? We're now moving on to our second credit strategy. It proved to be really successful for us, what we did in our credit strategy last year. Our pipeline has doubled in terms of new loan ideas and new lending ideas to great digital infrastructure companies. You look at the CoreWeave loan that we did. Very creative. Structure was really good. And we helped CoreWeave solve a problem. And again, it comes back to this whole DNA of the firm, Matt, which is we're problem solvers.
Our approach to credit was, "Let's go solve a problem." That strategy has worked really well. We're growing our assets under management as we provide unique credit solutions to businesses that are between $25 million of EBITDA and $200 million of EBITDA. I'm excited about what's happening in credit. We think that's a swim lane that we can go faster in. We can grow. We talked about in our last call about maybe an opportunity for us to get into private equity. We hired Jonathan Frazelle from Oak Hill. Great track record in cable and telecom and private equity. We're thinking about ways that we can deploy capital in businesses that perhaps have a little more operational complexity. That opens up a whole nother swim lane of opportunity.
And then we're in the midst of, you know, our third flagship strategy, which is going incredibly well. Investors are excited to partner with us, you know, in core infrastructure, core digital infrastructure. And that's a huge investable, thematic for us. So direction of travel favors us. We've got a TAM that's growing sort of $500 million-$700 million a year in terms of total wallet size of digital infrastructure. We think that wallet is close to $15 trillion today, going to $20 trillion by the end of this decade. And we're not done building public cloud. We're just starting to build AI infrastructure. And so the passage of travel for us looks pretty clear. In a global economy that's confusing and has some side currents and some side winds, one thing is consistent. On a global basis, everyone needs digital infrastructure.
So we feel like we're in the right place. We have the right team. We have the right product set. We're able to form capital. We're a trusted set of hands to customers. And, we're getting it out there and getting it done. I think that's the key.
On the fundraising front, I mean, you obviously have been busy not only transforming DigitalBridge but also fundraising in a very, very difficult 2023. So I think you had laid out on the last call, roughly $7 billion in incremental gross FEEUM for 2024.
Yes.
W, can you talk a little bit about the latest you're seeing on the fundraising front from a visibility perspective year to date? Has there been any sort of inflection or improvements versus a very difficult 2023 for the broader industry?
I think, look, the environment will continue to be difficult for fundraising. I think that's largely predicated on the fact that a lot of big allocators are looking to get DPI or get money back from LP from GPs like ourselves. So we had a very successful 2023 in terms of returning capital. Last 18 months, we returned over $4.6 billion in DPI back to investors. We had a successful recapitalization of one of our continuation vehicles called Vantage, North America. So big closing last week, working in concert with some investors to recapitalize that. So last week, we returned more capital back to investors. So happy investors. That's important. And we have a schedule of other exits that we have planned for this year. And I've been very very clear with our private LPs when I meet with them.
The first thing we talk about is, "What are we returning to you?" because our responsibility as a GP is if you give me capital, I have one primary responsibility. First, invest it responsibly. And then, two, I have to return the capital back to LPs. We've been very focused on that, perhaps a little more focused than our peers. So it should, you know, maybe it comes as a surprise. Maybe it doesn't. But as we get new commitments to our new products, it is a function of ultimately our successful track record of returning capital to investors. And if you look back through the last two years, whether it was Wildstone, Vantage Towers, DataBank, Beanfield, now with Vantage, we have a series of tombstones now that are fantastic returns where we're returning capital back to investors above the benchmark that we set for them.
The best way to get new commitments is honor your old commitments. And so that's what we've been focused on is first and foremost DPI. I think, the way the calendar has set up is most organizations are now in their final stages of capital deployment, planning.
Mm-hmm.
So a lot of the meetings that we've been having with big LPs and sovereign wealth funds and insurance companies is they're just now coming out of their planning season. And now they're finally allocating. So we had some good success in January. We had more good success in February. We're lining up for a very strong March. We're anticipating to be on plan for our first quarter. Nothing would suggest that we are off our cadence that we've put out to the street. My hope is that we will exceed our guidance in terms of fundraising this year. The setup looks good. I think if we keep returning capital, allocators will head in our direction.
You talked about, on the last call, I think, 250+ LPs, and that's up from about 100, I believe, in 2021. Well, can you talk a little bit about where you're targeting and where you're seeing incremental success?
Well, I think that success is, one, geographic-based and then, two, size-based. So let's start with geography. What is working for us right now is Asia. Asia's been an incredible opportunity for us. I was in Asia last week. And I'm really surprised at how underallocated Japanese and Korean and Australian investors are to digital infrastructure. So we really, as the global leader, those LPs are pretty excited to see us. So had a really busy schedule in Tokyo last week, a lot of people wanting to put capital to work in our sector. And in general, Asia is pretty underallocated. I would say the GCC continues to be a good region for us in terms of, you know, there's a lot of capital inflows, not a lot of outflows in the Gulf. And so allocators in the Gulf region are underallocated to digital.
There is a strong emphasis in economies like Kuwait and the UAE and Qatar and, of course, Saudi Arabia. They do see the digital future. And digital's a big part of the mandate of what those countries wanna do. And so again, as the market leader, they always like to be with the leader. They don't wanna be with the number two or the number three. So we've been able to be very successful there. And then I'm excited about what we've been able to do here in the U.S. It's public record that, you know, Maryland came into our fund. State of New York came into our current strategy. So we are making a lot of progress with U.S. pensions. U.S. pensions are coming back around again. Last year was a year where I think they sort of pulled back.
I think we're starting to see the U.S. pension system loosen up. So there's some green shoots that are happening there that make us pretty excited. And Europe has been a tough pocket. That's historically been a very good market for us in terms of fundraising. But we definitely feel like Europe has, you know, some more challenges ahead of itself. And so we are winning check sizes in Europe. But, those accounts that we're winning are mostly renewals. And they're smaller checks. So we're seeing check sizes down anywhere from 10%-30% in Europe. Check sizes in the U.S. anywhere down from 10%-20%. Check sizes in the Gulf sort of holding, maybe some of them even moving up. And then check sizes in Asia, certainly new checks and bigger checks. So it's a, it's a global enterprise, right?
We've got 30+ fundraisers in Asia, the GCC, Europe, and here in North America. We actually just closed some capital recently down in Latin America. So there's pensions in LatAm that wanna get exposed to us. So running a global business has been really helpful for us. I think this is the first time we feel like we have a global fundraising machine, and we can self-perform. We're not reliant on consultants or outside folks. So the confidence we have in our numbers for 2024 is really embedded in the fact that we have a big team and that the second dimension of that is just seeing more investors, Matt. So, you know, historically, if there was a, you know, $800 million allocator or a $10 billion allocator, that really didn't hit our radar.
So going for smaller pensions, going for family offices. And then I think we've spent a lot of time in the fourth quarter and in the first quarter this year of strategic planning thinking about how we penetrate private wealth. So that's a segment you hear a lot. You hear Blackstone talk about their private wealth channel. You hear Ares talk about the acquisition they made in Denver in terms of their ability to attract private capital. We have to do a better job of accessing those swim lanes 'cause there's billions of dollars of capital that we can go chase in the private wealth channels. So we have a number of strategic conversations happening there about people that we trust and that we could partner with. And that could be significant upside to our 2024 plan if we ultimately develop those channels.
Okay. Okay. Maybe let's pivot a little bit towards cloud infrastructure, digital infrastructure, just for the benefit of the audience. And this is, in fact, a media interview.
I think that's what we're here for.
Telco conference. Open-ended question, maybe just to start. What do you see right now as, maybe some of the bigger themes within digital infrastructure today that guide your team's investment process from a capital allocation perspective?
Well, I think that the biggest tailwind is certainly AI and, you know, obviously AI infrastructure. We think that is a, you know, a decade-long build. I think we've been pretty prescriptive about that. We're sort of in the first inning of a nine-inning baseball game, maybe bottom of the first heading to the top of the second. Last year, in terms of leasing, it was, you know, probably about 30% of our leasing from data centers was on AI-related workloads. We think that gains us here. We think that transitions probably to 40%-50% in terms of new lease applications. Remember, we've got an edge computing business. We've got a private cloud business. So owning the entire ecosystem in data centers, we're not just beholden to one sort of trend or technology. We've seen that in Switch.
Switch has had a tremendous last 14 months. What Rob and Tom have been able to do is incredible. And so we do see that that is a monster tailwind. But at the same time, we also know, as we've been saying, you and I have been talking about this for the last two years, we recognize that power is a limiting factor. And ultimately, the existing transmission infrastructure in the U.S. and Europe is inadequate to fuel all of the AI growth that's coming. I think, our next-door neighbor in Reno to our data center, the SUPERNAP, is a guy named Elon. He recently proclaimed that the U.S. would run out of transmission infrastructure by 2025. I'm not quite where he is. Now, he's a little smarter than me. He had the engineering degree at Penn and I had the Wharton degree.
But Elon is smart. He knows what he's talking about. Even if there's, you know, some partial truth in what he says, I generally think he's one of the smarter guys in our sector. There is a problem. The problem isn't that the U.S. and Europe cannot create enough generation capabilities. We can generate power. But ultimately, it's our ability to transmit power, interconnect that power, and then bring it into a high-density environment like a data center. Now we have regulators waking up to this. I'm sure you read the Washington Post article last week about this intersection between regulators and the transmission infrastructure, reaching a critical fail point. My number was a couple years ago. Two years ago, I said, "In 2028, we run out of power." It could be sooner. It could be 2027.
Ultimately, we started working on this two years ago internally. We have a team that's been focused on how do we create energy independence for data centers. To understand that, you have to understand that you don't achieve full energy independence. That doesn't exist because solar and wind have peak and off-peak hours. So we can go generate, you know, 10, 20 GW of solar or wind. But if we can't build our own transmission infrastructure where we control the transmission, bring it back to our own microgrid, and then ultimately interconnect to the existing grid because remember, at nighttime, we've gotta go back to the grid to pull power into the data center when we lose daylight, right? Battery storage is typically somewhere between 3-5 hours in terms of total storage.
So I can build as much fuel cell technology as I want. But I do have a limitation on how much power I can store. We do think that we can get our data centers 60%-70% energy independent. Now, the trick to this game is, as we're generating excess power in daylight conditions and in high-wind conditions, we have to be selling that power back to the grid. So again, I come back to the problem isn't, "Matt, can I build a solar farm? Can I build a wind farm?" We can do that. And we have the right partners to do that. And we have partners that are doing that for us already at Switch. We've learned a lot at Switch about renewable power. The real question is, are we prepared to own our own transmission infrastructure? And are we prepared to build our own microgrid?
Are we prepared to enter into our own interconnection agreements with the likes of Pacific Gas & Electric, Silicon Valley Power, Nevada Power & Light, Exelon, you name it, Central Michigan Power, really critical for Grand Rapids for us and one of our big data centers, the Southern Company down in Georgia in terms of what we're doing with Switch and DataBank and Vantage in that market? And so what you'll see from us this year is we'll begin to open the curtain for you, public investors, in terms of what we're building, how we're building it, how we're thinking about energy independence, how do we create those solutions with customers.
Yeah.
Like, that to me is the next level thinking because if I can do this, I'm not only solving a problem for DigitalBridge. I'm not only solving the problem for our portfolio companies. But what I'm really doing is getting back to the core of what we do best, which is the customer solution business. Our ability to generate energy independent, holistic solutions for our hyperscale customers is where we're going. And if we can do that, again, this is looking around corners. This is the next paradigm shift in digital infrastructure. I think a lot of people know how to buy land. I think a lot of people can build a powered shell. And I think people can get building permits.
What will really differentiate ourselves is our ability to have energy independence across our portfolio, which is now 198 data centers, over 3 GW of in-power place today, and a pipeline of 5 GW. We are, if you add up all of the companies we own and all the data centers we own, we're the largest operator of data centers in the world today. If we're gonna maintain that market position, energy independence remains my number one concern. That's what we've been doing the last two years at DigitalBridge, is working on that solution. So more to come. Spoiler alert, I guess, or not spoiler alert. But you can expect us to deliver some really unique solutions on the power opportunity this year.
Right.
It is the number one issue that confronts us. It's the number one issue that confronts the sector.
We'll wait till May. I sense maybe there may be more to come at the analysts' day coming.
Everyone should come to our investor day. It's gonna be super exciting. Severin's gonna be delighted to host all of you in New York, on May 13th. So hopefully, folks will show up for that.
Looking forward to it. What about on valuations? I mean, what if we think broadly around opportunities, within digital infrastructure, valuations across key asset classes and geographies, I think there was talk maybe a year or two ago, around higher interest rates maybe tightening some of the gap between public and private. We haven't really seen that, doesn't feel like, play out. What are you seeing broadly across the different swim lanes?
What is interesting is that the interest rate environment has created this little sort of microcosm of the have and the have-nots. And so the haves have been towers and have been hyperscale data centers. The have-nots have been enterprise data centers, residential fiber, and other parts of the fiber ecosystem that are fractured. So that's interesting, right, because in a rising tide, all the boats lifted. And as you know, as the tide has gone out, I think certain elements of the ecosystem have been disadvantaged against other parts of the ecosystem. And I think a lot of that just has to do with fundamental cash flow, right? At the end of the day, what makes fiber less attractive than a tower? Well, a tower, as you know, Matt, requires no CapEx.
And so once you get a fixed asset in place and that asset generates cash flows, there's stability in those cash flows. Irrespective of interest rates, you have stability. Now, the public stocks have been hit hard. Private valuations have largely hung in. Maybe you've seen a two- to three-turn discount in private market multiples. But we haven't seen that discount, you know, on a global basis. And in fact, I'd offered you recent M&A trades like Towerlink in Poland, Phoenix Towers in Ireland, certainly the acquisition I think what we did with Shentel kind of in the mid-20s was better than paying 30+, with Vertical Bridge. So but still, what you see is private market multiples are hanging in because there's capital. And there's a scarcity of these high-quality assets.
I think that's what you saw last week in Ireland at 23x-24 x for Cellnex, a good trade for Cellnex at a full valuation. I think the flip side of that coin is fiber. I think as we begin to see restructurings like we saw in 2001, you know, what we've always learned about fiber is when you add that extra layer of skilled capital, you get in trouble. Like, what got the CLECs in trouble in 2001 and 2002? It was high-yield debt. That's what destroyed CLECs. It wasn't that they were a bad business model. Yes, the growth fell off a cliff. But the existing cash flow should have been able to sustain the first lien. So capital structure has a lot to do with the failings in the fiber space.
We own fiber assets in the U.K., in Chile, here in the U.S., and we've been very cautious about layering extra layers of leverage on top. I know some in the room would argue our Zayo Secureds would indicate an extra layer of leverage. But at the end of the day, you know, we have sufficient liquidity and a sufficient ramp there to navigate through that capital structure. There have been a number of recapitalizations already in Europe. There's been some bankruptcies. There will probably be some bankruptcies here in the U.S. And we've seen multiples in the fiber space trade as high as mid-20s. And now we're seeing fiber multiples trade all the way down back into the 11-12x zone. So there's been probably a six to 10-turn correction in fiber. There's actually been a zero correction in hyperscale data centers.
Actually, hyperscale data centers have gone the other way. Prices have gone up. And then I think when you look at private cloud and you look at edge computing, particularly Equinix's share price and DataBank's valuation, there's a scarcity in edge assets. There's a scarcity in interconnection. And with hyper-edge coming, we're seeing more cloud workloads pushed to those tier two and tier three markets. You've seen it in Equinix's numbers. And you're seeing it with what DataBank's doing. We actually think that edge will move up in value because there's such a scarcity in hyper-edge compute. So it is a tricky environment to navigate, Matt, because interest rates have made it challenging to sort of figure out who the winners and losers are. But at the end of the day, it's leverage. It's leverage. It's cash flow. And it's the ability to service your debt.
By the way, same issues we saw in 2001, same issues we saw in 2008, same issues we saw in the early 1990s. This business always has a way of repeating itself. Capital structure is usually where you begin to see a change in valuations pretty quickly.
I'd be remiss if I didn't talk about DigitalBridge's balance sheet only because you've made so much progress over the last several years. So maybe for the benefit of the audience and some maybe less familiar, with the DigitalBridge balance sheet position, can you talk about where you sit today from a company perspective and how you think about uses of excess cash?
Well, I think we've always outlined that there are four possibilities for where we could put cash to work. We sit in a pretty good position today. Total liquidity available to us is circa around $500 million of cash and cash equivalent. So, we've gone through great lengths to when we took over the balance sheet, I don't even think there was a debt to EBITDA ratio. We always laughed, Jacky and I, laughed about that, like, someone said it was 17x. And Jacky and I couldn't even compute the debt at Colony when we took over that thing. Today, we sit effectively just above 5x leverage. You know, our target leverage is we'd like to be somewhere between 3.5x and 4x. We think that's a nice leverage level for an alternative asset manager.
And by the way, very commensurate with our peer group if you look across our peer set. Certainly, we could take more leverage. I don't believe in this environment. I wanna take more leverage. I'm still thinking through how to delever our balance sheet. Now, we only have $300 million of securitized debt. That's the only leverage we have on a corporate basis. We do have about $800 million of preferred equity, which we count as debt, although that is permanent capital at 7%, really relatively a cheap cost of capital today. But what we do is from time to time, we opportunistically pick off at that. And I think as interest rates moderate, and that's the word I'd like to use, is moderate, we will retest the securitization marketplace either late this year or early next year.
We had a very successful securitization of our fee streams, of our funds. What's unique about DigitalBridge is our funds are typically 10-, 11-, 12-, and 13-year funds. And so when you look at a five-year ARD date, you have really good, good visibility in our cash flows. And so our ability to securitize our funds, which are infrastructure funds. And if you're thinking about the credit look-through from an ABS perspective, where does that revenue come from? Well, it comes from Sovereign Wealth Fund A, Sovereign Wealth Fund B, Public Pension C, Insurance Company Z. And so most of the people that we do business with are investment-grade. So our management fees are coming from investment-grade counterparties. So when we got the agencies comfortable with that and we did that securitization, we do think that's a market we can hit again.
And by the way, since we issued that last securitization two years ago, we've gone on to double our FRE and FEEUM. We've added a bunch of new investment-grade logos. We've added new products. And so the depth of our cash flows are strong. Our DSCR ratio against that securitization is super strong. And so we can tap that existing securitization, tap that trust, expand it a little bit. And if I can bring that cost of capital down, you know, sub 5%, I can start picking off at my preferreds again. And I can really go through this allocation strategy where instead of paying 7%, I'd certainly like to pay 4% or 5%. And I'd rather have, you know, again, no covenants, no cash sweeps. And certainly, we like the ABS market in terms of the long-term capital structure for DigitalBridge.
So we have more work to do. We've made a lot of progress. But ultimately, as we think through capital allocation, we're gonna pay down debt. We're gonna repurchase our own shares. When windows open and we see good value in our shares, we certainly wanna eat what we cook. So, we have purchased shares before. We can certainly go out and buy our own stock. We do look at M&A. We were incredibly direct in our last call about the ability for us to go out and be an acquirer of other businesses. The AMP acquisition was very successful for us. We fully integrated AMP six months ahead of schedule. We pulled close to $7 million-$8 million of cost synergies out of that acquisition. We renamed it InfraBridge. And now that business is going incredibly well.
So we are looking at other adjacencies in the GP space. I have known to, as a CEO, those my bankers, I think, are in the room back there somewhere. They know I like to buy stuff. So hopefully, Deutsche Bank will help us go look and go shop. But we are out there looking. And we do think there's an opportunity to play in the M&A space. The last thing I would say in terms of capital allocation, that's important, is we're not afraid to stand up new products. That's really important. So we stood up our credit fund. We stood up our late-stage growth fund. We stood up our liquids liquid security strategies. We've been able to demonstrate that we can go hire great people. We can back them.
Much like you hear Jonathan Gray talk about the best way to grow AUM is to grow it from within, we share his philosophy. So we've been able to create new products, stand them up, go out and fundraise for them, create deal flow. And honestly, that's the best return on invested capital. If you can organically grow new products and you can nurture talent and go out and raise money and create FRE and FEEUM from those vehicles, it is a lot better than M&A. So we're thinking very carefully about capital allocation. And I think one thing that we've been good with the street is we've always been transparent. We've always said what's in favor, what's not in favor in terms of how we allocate that cash.
But, I think we sit here today as a clean story and a lot of different options available to us and how we deploy the cash.
Got it. I think any issues with time. It's a great place to end it, Marc. Thank you very much.
Thank you.