Large private market investors are playing a key role in helping Europe become more independent from the US in digital infrastructure. The British asset management giant L&G (formerly Legal & General Investment Management) plans to increase its investments in this field from 400 million to 4 billion euros over the coming years. This was announced by Matteo Colombo, Managing Director for Digital Infrastructure Investing at L&G Asset Management, in an interview with Börsen-Zeitung.

L&G is a subsidiary of the listed insurance giant Legal & General and, with 1.3 trillion euros in assets under management, one of the largest asset managers for institutional investors. The British firm invests around 68 billion euros in private markets alone. „Away from the stock market, we invest in real estate, private credit, and venture capital – entirely using our own balance sheet“, says Colombo. „In digital infrastructure, we focus on data centres, cell towers, and fibre optics.“

L&G’s data centre portfolio includes both assets and business partnerships with operator platforms – among them Kao Data, a specialised developer of high-performance data centres with seven facilities in the UK. Construction recently began on a new 40-megawatt data centre in Manchester at a cost of 350 million pounds – the largest facility in Northern England. L&G also received planning approval for a 750 million pounds investment in a hyperscale data centre in the London borough of Newham, in partnership with Goldacre and SineQN.

„Across Europe, there is a gradual trend toward localising data storage“, Colombo observes. This is also driving L&G’s investments, and the company plans to invest in Germany as well. AI innovations such as those from DeepSeek are further accelerating planning. Recently, private equity firm Tikehau acquired Frankfurt-based data centre planning firm TTSP HWP – the French firm’s first deal in Germany. And BlackRock has acquired a majority stake in Frankfurt-based Mainova data centre subsidiary WebHouse.

In Germany, the spread of fibre-optic networks remains relatively low compared to other European countries, due to continued reliance on copper-based technologies. „Although the number of households connected to fibre has increased, actual usage is still lower than in countries like Spain and France. In Spain, the shutdown of most copper networks is scheduled to be completed by 2025“, notes Colombo. Fibre-optic cables are preferred in digital infrastructure due to their higher speed, bandwidth, and energy efficiency compared to copper – and because they are less prone to electromagnetic interference.

„Replacing old copper networks with modern fibre-optic cables can be a key driver in the development of digital infrastructure and services – not only for data centres but also for the digitalisation of society as a whole“, believes Colombo. Germany’s Federal Network Agency is pushing for a voluntary, large-scale migration from copper to fibre household connections by the early 2030s, and has called on market participants to provide input on the transition.