All right. If everybody can please go ahead and take their seats. Thanks everyone for joining. Just by way of introduction, I'm Matt Niknam, Communications Infrastructure Analyst here at Deutsche Bank. We are very pleased to be joined by DigitalBridge CEO, Marc Ganzi. Marc, welcome back.
Yeah, thanks, Matt. Good to be here. I think it's like my tenth year here.
Good to be down here in February. Marc, you've been really busy the last couple of years. I can't say 2020. You've been busy the last, you know, going back to 2020 when you took over. What are you most focused on as we think about 2023? There's been a lot done. There's more to do. Maybe just to start, can you talk about some of your top priorities for the organization in 2023?
Yeah. Look, I think the macro has shifted. We talked about it last summer a lot internally as a team. The thing that I sort of push my team on and I push our, you know, 40 portfolio company CEOs on is, you know, this transition from sort of, you know, peacetime CEO to wartime CEO. Doing the things that really matter at this point in time that set us up to be strategic and play offense in this environment. I don't think a lot of people talk about this notion of how you operate in a, you know, in a momentum market and against a resistance market.
What I laid out last Friday was just a couple of clear tenets that have worked for me as being a CEO for 29 years through good times and bad times. You know, we really emphasize at this moment having a light load of leverage. I think that's one of the key things that we've mapped for investors this year. My goal to get to 2 times leverage post the deconsolidation of DataBank and Vantage . You know, having the business levered at 2 times is gonna be incredibly important for us as we go forward. Imagine I inherited a business that was levered north of 14 times, you know, two and a half years ago. We've made a lot of progress on leverage, and we wanna finish that mission this year.
We've mapped out that we're gonna pay off the converts. We're gonna get Vantage and DataBank deconsolidated, and that takes us to 2 times leverage, and that's the right place we wanna be heading into this environment. Second thing we emphasized was liquidity. Got about almost $700 million of cash and cash equivalents today. We have a couple of levers that we can pull on to continue to increase that liquidity. Obviously, the movement of DataBank and Vantage SDC frees up liquidity for us, which is important. The movement of the BrightSpire shares is important to us. These are things that we're doing to increase liquidity and ensure the protection of the balance sheet, which is really my primary objective this year. Items sort of 3 and 4 are a bit more nuanced.
You know, the third thing we talked about the other day was just making sure that we're taking care of customers and making sure that we're driving organic growth. We had a phenomenal year last year. We mapped on our call the organic growth that we were experiencing at our tower companies globally. Our data center businesses, it had to be the best year in data center leasing that we've ever seen, at least for, once again, for our ecosystem. The, the rebound in fiber that we saw in organic growth, whether it was Mundo or Zayo, or XenithIG, some of the fiber businesses that we own had a nice rebound at the back half of the second part of 2022. The last thing is just growing organically.
You know, I laid out a path for how we take our FEEM, up 70% year-over-year. That's 30% of organic growth next year. 40% of that other part of that growth comes from the M&A that we did at the end of last year, which is feeling the full impact of the Wafra transaction and then feeling the full impact of the AMP transaction. takes you from $22 billion of FEEM, plus M&A takes you to $27 billion-$28 billion of FEEM. we've talked about a guide of getting to $36 billion of FEEM plus, which is the organic fundraising that we mapped out. look, the best way to change the narrative around our share price is go out and grow organically, and that's what we're doing. We're raising capital right now.
We're going to raise capital throughout the year. If we hit our objectives and we hit all four of the things that I just mentioned, the share price will follow. We've got a very serious agenda this year, and we know this is a management team that knows what it's doing in this environment. I think shareholders will be pleased with the actions that we've taken to make sure that we grow, you know, through this turbulent environment.
Got it. Got it. You laid out a roadmap, but you also last Friday, you actually provided some targets for distributable earnings or DE, which imply about somewhere between $45 million-$105 million coming up this year, ex M&A, which could maybe be a little bit more additive.
Yep.
I guess the roadmap is to get to somewhere between $140 million-$200 million by 2025. Just wondering if you can talk about your comfort level of visibility into achieving these targets given the really highly robust growth they imply.
Well, look, I think it's part and parcel of the fact that largely LPs today are under-allocated to digital infrastructure. We go around the world, we have a conversation with, you know, about 300 global LPs, the biggest LPs in the world. The common theme that we hear is that in the real asset category, LPs are under-allocated to infrastructure, they're under-allocated to digital, and they're under-allocated to renewable energy. We happen to be in a swim lane where we walk in the door and immediately LPs, even with the denominator effect, are telling us they're under-allocated to digital infrastructure. That gives us an advantage in the discussions. Look, and we've been having these discussions with LPs about where to put capital to work in 2023.
That started in October of last year. Now we've touched close to 300 accounts. We know exactly what they're thinking. We know what size checks they're prepared to write. And we know the products they like, whether it's Credit Core or our flagship product. you know, we know what's on the mind of investors today. I spent, you know, the vast part of my last 120 days doing active listening, as I call it, with LPs. We obviously I think you heard a very confident management team last Friday. We're very confident. Around the actions we've taken for fundraising. I think this year feels very good in terms of where we've mapped it.
We have a business plan for 2024 in terms of the products that we're gonna be out, fundraising for in our investment management platform. We've also laid out a map where we're scaling our investment management platform. You know, the InfraBridge platform is a big part of our future going forward. I've been very clear about the renewable energy and what we need to do in terms of the new infrastructure we're building and how we have to get behind-the-meter and make sure we have the right renewable sources of energy. I mean, look, if there's one thing that the Switch acquisition taught us is customers want to be met in data centers that have renewable energy.
Just the leasing activity at Switch in the fourth quarter and first quarter this year just shows you that if you have that renewable energy and you're not sitting around waiting for a will-serve letter from the utility company, that's advantage you. We saw that in the results at Switch, and we're seeing that in some of the data centers that we've already pushed to renewable energy. We think InfraBridge has the opportunity to grow. We've mapped out that, you know, we brought in Jonathan Schildkraut from Oak Hill, who's just a fantastic, you know, multi-decade private equity pro, similar to how we brought in Dean and Mike for credit and how we brought in Peter and Matt for core. You know, we're not afraid to put new products into our arsenal, provided that there's adjacencies to what we're doing.
The last sleeve of what we haven't done is really digital private equity. That's kind of the next frontier for us. I think we've been pretty prescriptive the last two quarters that that's an area of growth and opportunity for us. At the end of the day, we've got InfraBridge, we're developing private equity, we've got credit and core, we've got our flagship strategy. We've got the right products that I think address the opportunity set in digital, and that's the street corner that we sit on. We sit on the corner of all things related to digital infrastructure, having that last leg of the stool, which is private equity, will be really important for us going into 2023 and 2024 and 2025 as we execute that business plan.
Just to clarify, these DE targets, do they assume any carried interest or would that be maybe incremental upside?
No. That's incremental, right? We actually delivered carried interest last year. We'll deliver some carried interest this year. There's no doubt as some of the vintages, the early vintages of DigitalBridge start minting, you'll see basically 2024 and 2025 that there'll be a material amount of carry going forward. Look, we're not asking investors to model that. Let that be the good guy. Let us go out and create great outcomes. I think we did that last year. We created three outcomes that I think investors weren't prepared for, we did a good job returning capital back to LPs at DataBank, and Wildstone and Vantage Towers Europe. Part of our job is also to sell things.
I know we've been buying a lot of things, but also part of our job is to create realizations and return capital, and that's something that we were very focused on in the back half of last year. We're also very focused on realizations this year. You know, investors should not be surprised if we sell a business or two this year.
Got it. How do you differentiate in terms of DigitalBridge broadly relative to some of your larger investment manager peers who've been increasingly targeting the communications infrastructure space?
Yeah, look, I think, you know, it's a big expanse, right? You're talking about, you know, $13 trillion of investable CapEx out there. I think they're all swimming naturally to where they see opportunity. There's over $400 billion of CapEx is gonna be spent this year. We've been on a, you know, $400 billion-$500 billion cadence for the last 5 years. If you're an investor and you're thinking about where to deploy capital that's in a, in a high growth and secure environment, naturally you're gonna navigate to digital infrastructure. You know, these were asset classes that really were not even acknowledged by KKR, Blackstone, GIP 5 years ago. Now today they're saying that this is an area of growth for them and an opportunity.
The good news is, you know, at $70 billion of AUM today, we're a very small piece of that sort of $13 trillion TAM. Look, we've never put out an aspiration to have 5% of the market, 10% of the market. I think our bias is we're operators. They're investors, we're operators. There's a big difference. We're gonna continue to build and operate great businesses, which is our, which is our DNA. One of our portfolio company CEOs is in the audience there, Alex Gellman, closing a lease, I think, on his cell phone as we speak. It's a good example. Alex's company is a great example. You know, we bought that business, and we paid a lot of money for that business.
What Alex is doing is he goes out every year and he builds that business by 8%-12% organic every year through a combination of amendments, new leases, BTS towers, and M&A. Imagine there's 26 other Alexes out there that are running multi-billion dollar businesses focused on servicing customers. The cadence that he's on is the similar cadence that a Sureel is on or a Raul is on, where they're putting to work, you know, anywhere from a half a billion to $2 billion of CapEx every year to show up for customers. I think the difference is sponsors buy companies, they put leverage on them, they make some changes at the acquisition, they try to cut some costs down, and then they go to sell the business. We don't do that. To be clear, we don't do that.
We go build businesses. That's our DNA. That's what we've been doing for 30 years. When we bought his business for multiples of billions of dollars, our job was to take Alex's business from $7 billion and grow it to $14 billion over a period of 5 years, that's the cadence that he's on. It's a different playbook per se. I mean, certainly, we don't rely on leverage loans to go build businesses. I think we laid out to the street on Friday that actually from the period of 2020 to 2021 to 2022, we took our broad portfolio of assets and we were at a 45% loan-to-value in 2022. We actually took leverage down in 2022 and 2021.
We went from 45% to 43 to 41% loan-to-value. While everyone was levering up in com infrastructure deals, we were de-leveraging. Why? Because we felt like this environment was gonna turn and was gonna turn quickly. With 78% of our debt fixed at an interest rate below 4%, we get to go play offense in 2023 and 2024. Our companies are well capitalized. We have a lot of cash, we have a lot of liquidity. This is a playbook that worked really well in 2002, and it worked really well in 2009. We're replaying that playbook, except instead of doing it with one company, which we owned, we're now doing it with, you know, 27 companies.
There's a force multiplier to scale, and that's really the benefit of owning DigitalBridge shares, is you get exposure to these 27 businesses on a global basis, all growing and all taking advantage of the macro setup.
I wanna maybe drill in a little bit into some of the targets you've laid out for the IM business. I think with the big one is you've talked about reaching nearly $50 billion in fee by 2025. I think the upper end actually eclipses $50 billion.
Yep.
That's about double where the business is today. I'm just wondering, as you think about this doubling of FEEM, can you talk about your confidence level, which we alluded to a little bit beforehand, but also just what you're seeing on the ground, just given more challenging backdrop, the conversations you're having and effectively the visibility you've got to doubling this number in 2 years?
Yeah. There's two things that you need to focus on there. One is, do you believe we can raise money? Two, do you believe we can deploy capital, right? In, in high value opportunities. Let me address the former, and then I'll get to the latter. On the ability to raise capital, as I said before, you know, pro forma today, we're at about $20 billion, you know, call it $23 billion-$28 billion of fee today, post the InfraBridge acquisition and plus a little bit of fundraising here in the first quarter, which we'll update in the next quarter. If you take the guidance that we put out earlier on Friday, we said, "Look, we're gonna raise $8 billion+ of new capital. " Where does that come from?" Once again, we're very prescriptive.
We said there's another $2 billion to raise in terms of credit and core. There's another $2 billion in co-invest, which we've already raised some of that this year. We've had a rich history of exceeding co-invest capital. In our, in our sort of what we call our core strategy, the launch of a, of a third strategy in our, in our flagship line. All of those products have left the dock. You know, they left the dock actually months ago. That was the hard work we put in last year in the fourth quarter to set us up, you know, for this $8+ billion target that we put out there. We're, we're being pretty heads up that that $36-$38 guide is kinda where we think we can be.
The question is, do we push through that this year? I don't know. There is some uncertainty around timing of when commitments come in. There's no uncertainty in my mind as to whether we get the commitments. It's just a function of the timing of whether it comes in the second quarter, third quarter, fourth quarter, and do some of those commitments flop into Q1 next year, which was why we had that sort of. We gave ourselves a little more of a cushion in terms of the guidance. I think for 2024, we feel like, again, we can go out and do the same thing. We can raise another $8 billion, and that gets us to, you know, generally speaking in the low $40 billion range.
We're back in the market in 2025 with a couple of interesting and repeat strategies, right? It's natural to assume, InfraBridge could be back with something. We could be onto our second credit fund, we could be onto our second core fund, and certainly we could be out with a new strategy. There is a cadence now of our fundraising. I think if investors are smart, they should go back and look at what we did in 2020, what we did in 2021, what we did in 2022, and what we're doing in 2023. There's now kind of four years of history of fundraising at DigitalBridge, and there is a pattern to how we raise capital.
I can only give investors that much because it's hard for us to sit here with a high degree of specificity other than I've just given you the roadmap on how we get to 50. We've got a lot of hard work to do between now and then, and we gotta continue to put capital to work, which is the second piece. Where are we putting capital to work right now? I look at putting capital to work really in sort of four distinct buckets as an asset allocator today. One, we're backing new management teams. That's always been really our calling card at DigitalBridge. We're really, we think when good management teams wanna find a place to go build a business, they come to DigitalBridge and digital infrastructure, and we're doing that.
You know, we have a couple of really good new ideas that we're working on with a couple of management teams. I like that. That's fun for us, and it's also where we create a ton of value. The second thing we're looking at is buying what we call best-in-class platforms. For example, the asset of buying GD Towers with our friends at Deutsche Telekom, that is the highest quality asset in European Towers. Sometimes we go to the right and we go buy the best asset, and that's what we did there in European Towers. There's a third area which introduces itself now on the battlefield, which is go play in this location.
Similar to what we did in 2002 and 2003 and what we did in 2008, 2009, which is really going to what we think are fundamentally good businesses with good assets that have broken balance sheets. Balance sheets are gonna break. It's just the nature of the business. Nobody thought that 7%, 8% interest rates would be the norm for some of these businesses. You do have generalist GPs that went out and paid, you know, 20, mid-20s for residential fiber and other types of assets that those capital structures just don't work anymore. We saw this play out in 2001. I mean, the CLEC space was a great example of that, right? Everybody thought if you went out and you wired up an office building, customers would just fall to the ground.
Everyone believed in residential fiber. If you just passed a home, magically you'd get a connection. It hasn't happened, and it hasn't happened at the velocity that folks at... Now, there are resi fiber businesses that are working and doing well, and there's some that just aren't performing. We're looking at those non-performing assets that actually have good physical plant, and there's dislocation here in the U.S., and there's dislocation in Europe. There'll be more dislocation. You're gonna see, for example, in older legacy colocation data centers, you're gonna see dislocation. I won't pick on any names here publicly, but I think most of the people in the room know the ones that are having challenges with their capital structure. So that's an area where I feel very comfortable.
It's a playbook I ran in 2002 and 2003, it's something that we have a lot of comfort with. We're tracking, you know, anywhere from 25 to 30 companies where we think the secondary level of the bonds are telling us something. That's usually a place where we start. I'm pretty excited about dislocation. The fourth area where we're putting capital to work is behind our best management teams. We're actually out raising more capital to support our high-growth businesses. Vertical Bridge is a great example of that. I was on the road with Alex raising capital with him last week, seeing a lot of our American U.S. pension funds, and they're excited. They wanna put more money behind the best tower company in the United States, which is Vertical Bridge.
You know, when you have good high-quality companies that are growing and are exceeding their guidance and exceeding their business plan like Alex's, it's actually easy to go raise money 'cause investors wanna be in towers, they wanna be in the U.S., and they wanna be with great management teams. It's actually really easy to go raise money with him. We're gonna continue to raise money and co-invest, and we're gonna put that money to work behind our best businesses.
Whether it's, you know, Vantage doing, you know, public cloud data centers, whether it's Switch building out the private cloud, or whether it's Alex building out 5G in the U.S., or DataBank building out edge computing here in the U.S., we have some of the best logos, we have some of the best CEOs, and so our fourth investable opportunity is look internal.
Yeah.
Invest in us.
We hit on AUM and the doubling there. I think the other big metric here is FRE. If we think about FRE, I think the target for this coming year is $120 million.
Mm-hmm.
The '25 target's $250-$300, so more than doubling FRE. Naturally, the question here for me is, can you talk about the incremental margins?
Yeah
... and the growth that the growth brings along? Is there any additional investment, the scalability in terms of incremental revenue?
There's three things happening there that I think are interesting. One, on FRE, in particular, you know, as I said on the call, we invested a lot in new strategies last year. We put a lot into SG&A, and we had a lot of products come late in the year, so the back end of those earnings look distorted. If we go on a run rate basis and we really look at what we're doing for 2023, it's not really hard to get there. Once again, using the math before, which is you go raise $8 billion, you raise it at a, at 90 bits or a 1% fee, you've got an incremental $80 million of revenue coming in. At the same time, what we told investors last week is we're taking $10 million of costs out of the business.
We're not putting more cost into the business to bring in this, you know, $80 million of new revenues. We're actually taking another $10 million of cost out. This is a year where we really think we go pretty far on FRE. The easiest thing to do on FRE is, you know, we can manage the bodies, we can manage bonuses, we can manage comp, we can manage our travel and entertainment. There's a bunch of things that we can manage, and we're doing that. We're managing the business very tightly. Jackie's done a good job there. We see that this is actually the year that we grow margins, we grow FRE, we cut cost, and we invest in places where we think we can grow. Where are we investing in terms of people?
We've invested in our sales team. We talked about that on the call. We went from seven full-time salespeople, now we've got 17 people out marketing and raising capital. That was a huge push for us to expand our team there. We talked about the entrance into private equity and the hiring of Jonathan Schildkraut. There are areas where we will invest in, there's areas where we're taking a little off, and also we're just asking the team to share in the pain a little bit. You know, comp is gonna be down a little bit year-over-year, but that's the right message. You know, we gotta go get it done, we gotta get the share price fixed, and we gotta go to work for shareholders. That's the message I sent to the troops. 98% of my employees get that.
They're in the fight with us. We gotta go out there and we gotta fight for shareholders. Those are the three ways we get there, right? We cut cost, we go raise the capital. The last nuance to that is there's an opportunity for us to raise fees a little bit. You know, we've historically, we've priced our fees in a certain zone. We haven't touched fees since the inception of the company, but certainly inflation and protecting our people and protecting the quality of our team is important. We're moving fees up a little bit this year as well. That's how you get to the, to the print, and that's how you get to beating your margins.
That latter point around higher fees, was that embedded in the guide-?
No
For everybody?
That's not in the guide.
Okay. Okay, got it. Maybe if we think about how that trickles down, one other element I just wanted to hit on is leverage, just in terms of where you sit today-
Yeah
... where you'd like to get to. I think that maybe could clear a lot of the cloudiness around where the business sits.
Look, I think, you know, if people do the work, you know, they'll find out that, you know, the debt that's related to Vantage SDC and DataBank are not pledged to the parent co, so there's no cross defaults there, so. Some investors include that in our leverage and some don't. What we did in our earnings presentation last week is Jackie included that debt into our net leverage profile, and also included in that is the convert as well. We're paying off the convert April first. We've telegraphed that to the street, so that takes $200 million of debt off our stack. What that leaves us with is about $300-plus million of securitized debt.
Ultimately, you know, on our growth profile and our EBITDA profile, we believe we can get to 2 times leverage. That's the target leverage. What's the key piece to that? The key piece to that is moving DataBank and Vantage and deconsolidating them. We've once again given a clear path for deconsolidating, you know, DataBank at the end of the second quarter, Vantage SDC by the end of this year. Hopefully, it goes faster. Both of those fundraising processes are in flight, you know, once again, they're high-quality assets and Private investors are navigating to high-quality assets in this environment. We feel really good about that guidance we've given the street.
The 2x, where does that sit relative to some of your investment manager peers?
That's in line. I think most IM businesses are typically levered at about 1x to, you know, high leverage would be, you know, somewhere in the 3x zone. Where that puts us is right in the middle of the fairway. Ultimately, as we grow earnings throughout 2023 and 2024, we actually de-lever over time. There's a path that gets us into the low 1s by next year, as we're not taking on any more incremental debt much.
I'm gonna pause just to open it up. If anybody has any questions, just raise your hand. We have somebody with a mic. Want to drill in now to some of the maybe key themes across digital infrastructure.
Sure.
I've always sort of appreciated your insights that you provide at our conferences. As we sit here today, what do you see is the top themes in the space that are maybe guiding your investment process from a cap allocation perspective?
Well, I think things that are working right now is, we tipped on the private cloud situation. This notion of CIOs moving some of their workloads off of public cloud to private cloud is something that we've seen, you know, strong evidence at Switch. Their leasing results were really pretty surprising to us. What it shows us is that there is room in an enterprise spend for both private cloud and public cloud, and I think that's ultimately where we get to hybrid cloud. We do think that that, you know, those tier 5 highly secure environments are gonna be very appealing for big enterprise users and for, and for governments. The relationship that Switch has developed with the federal government is really strong. The relationship that they've developed with certain enterprises is really strong.
What we're finding is, in our survey of those customers, that brand loyalty is growing. It's not shrinking. In the meantime, we do see that, you know, confidence is a bit rattled in public cloud, CIOs are looking for this hybrid IT stack. We're naturally navigating to that. We're looking to see if whether there's an environment for a Switch-like product in Europe, whether there's a Switch-like product in Asia. That's pretty interesting to us. We're certainly spending a lot of time, you know, thematically, you know, in and across software-defined networking.
you know, a lot of where the growth is today, if you're looking across the ecosystem is, you know, whether it's, you know, Open RAN stack or whether it's DRAN deployments, this notion where the radio access network is virtualized implies that there's a huge level of infrastructure that is software defined, where people are being rewarded with long-term contracts working either with the carriers or the OEMs or somewhere in between. Sitting in that metaphysical piece of the infrastructure is a big part of what we need to own. That's a real high priority for us over the next 3-5 years is building out the strength to make sure that we know how to invest in software-defined networking and the ecosystem that surrounds that, because that's changing radio topology forever, as you know.
As you talk to some of the wireless carriers here over the next, you know, two days, they'll tell you that a big, big part of their network infrastructure spend is now virtualized. The same thing is happening in fiber, right? We go to, you know, software-defined SD-WAN products are now dominating a big chunk of our sales in our enterprise fiber businesses. This was less than 5% of revenues today, and now you go into new bookings, and it's close to 25%-30% of new bookings. SD-WAN is on the rise. You know, network ultimately, again, back to CIOs and CTOs, what do they want, Matt? They want flexibility in their network. They want a nimble network that can go anywhere where they can dial up capacity quickly.
That software-defined piece of the ecosystem is something we're spending a lot of time on. As I said earlier, we're looking hard at the fiber-to-the-home space and just looking at residential broadband in general and how does DigitalBridge play in that sector over the next 10 years if you take a view that that industry is largely gonna be restructured or there's gonna be a new paradigm there, which I believe there will be. We've got a lot of resources on that. Obviously, we're still in our same traditional swim lanes like towers, hyperscale data centers. We're investing in the portfolio companies. Private 5G networks, we're putting a lot of attention into that. Certainly Boingo's done quite well there. That was a Fund II investment.
We're looking in other areas, you know, whether it's in Europe or Asia, where we can deploy that playbook and be a market leader in private 5G networks or using Wi-Fi 6. We've never been busier. There's a lot to do.
Yep.
We're saying no a lot right now. I think, you know, there's a lot of deal flow that's coming through investment committee and the bar has been risen. We've taken returns up. We're a lot more selective about where we're writing checks right now. We've risen that bar down at the, you know, 40 portfolio companies that we own and operate, which is, you know, the risk-adjusted rate of returns has to come up. As interest rates have risen, so have our return hurdles. What was formerly a high teens return is, you know, mid-teens return is now a high teens return. What was high teens is now low twenties. Our underwriting has gotten a lot tougher, which you would expect. You've got to be rewarded for the risk that you're taking.
Good segue into the next question. What are you seeing broadly just in terms of like M&A opportunity valuations? You know, have you seen private market valuations maybe more reflective of higher rates than the new backdrop, or are they still maybe a little more stubbornly elevated?
Well, I think this is, you know, in the good times, what I've found over the last 30 years is that all digital infrastructure comes up, right? When we have these crescendos and we ride the downslope, you begin to see differentiation in the swim lanes of digital infrastructure. Tower multiples really haven't retreated in private markets. In the U.S., it's still, you know, low 30s, and Europe, it's still high 20s, as was reflected in the Vodafone sale. We haven't seen really a return to anything resembling low 20s or high teens yet in towers. I don't think that's gonna happen. I think there's a scarcity in high quality tower assets.
What we learned in, certainly in 2009 and 2010, is that tower valuations are, you know, can hang in even in a, in a high interest rate or difficult financing environment. You know, data centers is now divided into 5 swim lanes, so you know, each of these is moving through different points of inflection. Certainly managed services is down. Those multiples are down probably 4-6 turns. Enterprise colo, I couldn't even put a bid on it right now because some of the, some of the legacy enterprise colo stuff is going through its own growing pains. We mentioned 3 businesses earlier. Then I think, you know, as you, as you migrate to edge and private cloud and public cloud, those are growing at different verticals.
I think businesses that are truly, you know, infrastructure that's focused on the edge, like a DataBank or an Equinix, those are gonna price in the mid-to high 20s. They have to. Because the uniqueness and the elasticity of that network is hard to replicate. When you own that many, you know, network access points like Equinix and DataBank does, those are indelible locations, and they're hard to repeat. We've actually seen very little contraction in the multiples on the edge side. I would say on the hyperscale side, you know, probably a degradation. You know, deals were getting done again, in the high 20s, like an AirTrunk or some of these other Or EdgeConneX. Now those deals would probably get done in the mid-to lower 20s.
Maybe there's been a couple of turns of compression there. I think in private cloud, there's so few people that do what Switch does, that there's really not a bid for that. Data centers, you have to remember, that business has grown so much, and there's so many different business models in data centers that you can't take it with one paintbrush, Matt. You just can't paint it and say, "That's what it is." I think you're seeing that with DLR and Equinix today. Those stories have diverged. In the good times, both of those stories rose, and now as we've moved into a down cycle, DLR has kind of gone left and Equinix has gone right, because I think Equinix has been able to describe their value proposition, you know, from a network access perspective, and DLR has less of that.
That's why you see a divergence. Public investors are smart. I mean, I think they're smart. They're here today, so they're smart. On the fiber side is where you see the biggest dislocation today. I think there was this euphoria in 2020 and 2021 on doing resi fiber deals. That hit a crescendo in Europe where you saw deals trade in the high 20s. You know, and then enterprise fiber, of course. Actually, what was interesting is a lot of the enterprise fiber deals didn't trade up in the high 20s. If you saw a lot of the private big fiber deals, whether it was Segra or GlobalConnect in Europe or Colt and Lumen, all those deals are getting done in a pretty tight band. They're getting done between 16 and 20 times.
Really good enterprise fiber, I think, is held in. I don't think it's 16-20. It's probably somewhere between, you know, somewhere between 14 and 18 today. Residential fiber has moved from, you could say, mid to high 20s all the way down to low teens pretty quickly. In fact, in some of these restructurings, you're going to see the equity get wiped out. Whatever the debt is, that's the bid, right? Some of these businesses will end up being worth, you know, 6-8 times. It's the Tale of Two Cities in fiber. You can't sort of, again, take it with the same paintbrush. Different resi fiber businesses are having different levels of success. You saw the print on Frontier. A good management team that's executing, not only getting the homes passed, but they're getting the connections.
I think a lot of people get lost in this metric of homes passed versus homes connected. The metric that matters is homes connected and ARPU. That's what matters at the end of the day. We'll keep an eye on that. Cable obviously got beat up pretty good as well. I think cable probably rebounds in the back half of this year. It's, the ecosystem is more complex than it's ever been, but I think we all have to agree that there's nuances to these business models. You can't just take digital infrastructure and say, "Oh, it's a high 20s multiple and all digital infrastructure is great." It's not all great. We have to be discerning. We have to understand the assets. You have to understand the contracted cash flows. You have to understand the quality of the physical plant.
There's so many attributes, as you know, that goes into defining what's good digital infrastructure and what's perhaps less good digital infrastructure.
You mentioned some of the dislocations that we're starting to see now in resi fiber and I think some maybe legacy colo. You know, are we sort of in the early innings? Do you anticipate more? You know, how should we just think about that maybe becoming a little bit more shaken out through this process?
Well, I think it's the debt maturity stack in resi fiber, we're just watching that. A lot of these debt maturities are 2024, 2025, and 2026 vintages. There's in the private markets, there's probably about 20 private fiber companies that mature in the next three years, we're looking at that. I think on the older enterprise colo side, there's not a lot of folks that, you know, we're cycling through that old enterprise colo, right? Some of those facilities are functionally obsolescent. Some of them don't have functional obsolescence but need CapEx. I think one of the challenges you see with Cyxtera is they need CapEx.
For that business to move forward and for Nelson to succeed, he's got to put capital in, he's got to invest to keep up with the likes of DataBank and Cologix and Equinix, who all have new modern facilities that are on average 10 years younger than what Cyxtera had acquired from a telco. That's the challenge there. The challenge is they're bringing that portfolio up into this decade where it was built 20 years ago. Aging infrastructure is always gonna be an issue, you know. The only sector where aging infrastructure doesn't hurt you is towers. You know, towers has an accounting life of 25 years, but I know we've owned some towers that were built in the 60s and 70s, and they're perfectly fine from a structural integrity perspective.
A data center that was built in, you know, the early 1990s is not gonna be cloud capable for today. If an engineer from Amazon walks into a data center that was built in 1994 that has 2 MW of power, and these guys want power density to 8 MW, they're gonna walk in and say, "This doesn't work for me." They won't even go to the site, right? They know they can go to somebody like Vantage who has a campus that has 60 MW, and the chance for them to locate their 8 MW and grow. It's the same thing with DataBank, like in Silicon Slope in Salt Lake City, where we're onto building our seventh data center in 1 campus. Why? We've found that that's a good place for cloud to grow.
You give the customer the chance to grow with you, they lease with you, they stay with you, and they grow with you. A lot like the tower business. We get amendments in in our cloud deployments, and that's where DataBank has really excelled, is they're building new infrastructure that's tethered to a NAP, either the primary NAP or the second NAP in a city. In Salt Lake City, we own the NAP of Salt Lake City. We own the biggest interconnection data center. We've got our own fiber connectivity that goes out to Bluffdale, where we have the seven expanded data centers and campuses. That's a strategy that's worked. It's the same thing you've heard Cyxtera say and Flexential and all these guys say they wanna do tethering.
Well, the only thing you can tether off of is a highly interconnected data center. If you don't own that interconnection, you can't even play that game.
Just in the time we have left, if we sort of put this together, I wanna make sure we sort of get this out there. How would you sort of frame the investment case for DigitalBridge shares today to potential shareholders? Maybe we can sort of weave in what you think is most misunderstood by the investment community.
Well, I think, look, it's investors that have historically invested in the down cycle of digital infrastructure have done really well. You turn back the clock to investors that had conviction in SBA and American Tower in 2002 and 2003, and they've made, you know, returns of 300% if you go back in time. Same thing in 2008 and 2009. If you bet on digital infrastructure, you bet on DLR, Equinix, again, American Tower, CCI, in the last financial crisis, you did incredibly well. What we've presented to the investment community is an asset-light way to own digital infrastructure.
It's not perhaps presented in the same, in the same gift with the same gift card and the ribbon, but what we do is primarily the same thing, except we do it on a global basis, and we're not exposed just to towers. We're not exposed just to data centers or fiber. We bring a diversified approach to investing in the sector. The overlay on top of that is we happen to do it. We sort of juice that model with other people's capital. I think that's the part that's largely misunderstood, is that we're able to go out and raise billions of dollars of capital where we get fee and carry. Imagine you're American Tower or you're Digital Realty, and you can go raise capital and get paid for that. That's how we want investors to think about us.
At the same time, we have to go out and compete for capital. We do that. We effectively go out and compete against KKR, Blackstone, Stonepeak, and Brookfield, and those are worthy adversaries. We're very focused in one very specific area, which is digital infrastructure and the digital ecosystem more broadly. That gives us an advantage. It gives us an advantage to basically on a global basis, show up for customers. We're not turning opportunity away because we can operate in Asia, we can operate in Europe, the U.S., and Latin America, and we do it very effectively with a series of companies that diversifies the investor.
Instead of being exposed to one logo and one management team, you're exposed to, at least in digital infrastructure, the 27 best CEOs in the space that are investing on a global basis. I think the one thing that's mostly misunderstood about us today is just this notion of growth and leverage profile, right? This is the year where we get our leverage profile in line with where investors are gonna be happy. We think it's in a good place today. We've done a lot of hard work for 3 years, deleveraging the business and making sure that we have adequate cash, to play offense in this environment. Ultimately, at the end of the day, putting up that growth profile that we talked about. Will we deliver 30% organic growth this year?
What is our conviction level around fundraising? Our conviction level is quite high. Our conviction level is high because we've put up good returns, we work hard for investors, and mostly we're delivering in a swim lane that few others can deliver in. I think that gives us comparative advantage. Those are the strengths we're playing to, and we anticipate having a good year. It's a tough environment, but as you've known me for a long time, I like the tough environment. I like it when things get a little messy. We're in a good place.
It's a great place to end it. Marc, thank you.
Thanks, Matt.