Great. Welcome to Citi's 2024 Global Property CEO Conference. I'm Nick Joseph, joined by Mike Rollins with Citi Research. Please stand up with us. DigitalBridge and President and CIO Ben Jenkins. This session is for Citi clients only. If media or other individuals are on the line, please disconnect now. Disclosures are available on the webcast and at the AV desk. For those in the room or the webcast, you can go to LiveQA and enter code GPC24 to submit any questions if you do not wish to raise your hand. Ben, I'll turn it over to you to introduce the company and the team. Provide any opening remarks, tell the audience the top reasons an investor should buy your stock today, and then we'll get into Q&A. Great. Thank you. Good morning, everyone. Bright and early. Great to see you all. We are a focused alternative asset manager, DigitalBridge being the moniker for digital infrastructure, which we define as the physical layer of infrastructure that enables mobile and internet communication and analysis and transport of data. We're currently managing about $80 billion in assets, $35 billion in fee earning equity under management. We've recently deconsolidated a couple of operating assets that were previously on our balance sheet and now have a pure play alternative investment manager asset light business model. We are, in essence, an amplified play on AI. That's the big driver in our business today. Roughly 40% of our capital is deployed in data centers, and it spans the gamut from hyperscale through edge all the way to sort of micro edge with private and public cloud in between. We also have a focus on towers given our legacy and also fiber. We've also done other things, specialty assets like billboards or the ground-based satellite infrastructure. We will continue to focus on this space. We think it is the most attractive area within infrastructure and indeed within alternatives. The growth rates underlying our businesses are dramatic. I'm sure all of you have seen the results and projections for NVIDIA and other AI-focused companies. We see that continuing. The public cloud has roughly 300 GW of capacity, we think, and that took about 10 years to deploy. We think AI will reach a similar size within just 2 or 3 years. And so that's a massive investment cycle that we're still in the very early innings of. With that underlying growth, we should be able to grow our assets at a faster rate than the overall alternatives sector and then driving that to the bottom line through operating leverage. So that's really our story. It's been about focus and simplicity and really leveraging the underlying growth in our sector. We've delivered significant growth over the past three years, and we think over a cycle we can continue to outperform our sector. Thanks for that introduction to the company. Just thinking about 2024, can you review DigitalBridge's priorities for the year that were outlined on the earnings call and what may be underappreciated by the investment community regarding the opportunity for DigitalBridge to deliver during 2024? Underappreciated. Well, I think people are still trying to get their heads or arms or models around what AI really means for alternative investment managers such as ourselves. And I think the sort of in-place CapEx spend that we see already in our pipeline is so dramatic that I don't think people really appreciate that yet. We're talking about $15 billion of incremental investment before we even sign a new lease or get a new order. So on $80 billion of assets, that's a substantial growth rate that's already in place. So I think that's probably not fully appreciated yet. That's helpful. And when you think about that $15 billion, can you unpack that a little more in terms of how it may fit relative to some of the asset verticals that you're focused on within digital infrastructure? And is there a way to consider how much of that $15 billion may specifically be targeting the AI opportunity? That $15 billion I reference is just in data centers. That's one of our three main verticals. We are also seeing significant growth in fiber and towers. But the $15 billion in place is specifically for data centers. I would say there's relatively little AI in that, Michael, simply because those are orders that we booked over the past couple of years before AI really was in the plans. And so we're starting to see new orders now for AI, but some of that will take 2-3 years to deploy. We're just in the very beginning of that. I think in regards to this, on your earnings call, there was a reference, correct me if I'm wrong, I think it's about 5 gigawatts of pipeline that you're targeting over the next few years to deploy in data centers. Can you also review that in terms of the quantum of opportunity that you have capacity-wise for data centers and maybe relative to the base of what you're operating so investors could consider what the growth rate of that is looking like? That's our in-place capacity. Yeah. So we roughly manage 1.5 GW of capacity today. So when we talk about 5, that's a sort of addressable market opportunity, and it's over multiple years. So you're talking about potentially tripling or quadrupling even if we got to the full $5 billion of our current base. Again, I gave the total market growth that we see. So it's still a relatively small percentage of that, and we think it's achievable across our many platforms and across our many geographies. Let me just go into fundraising a bit. I was hoping you could review your fundraising goals for 2024 and then if you can break that down between kind of existing investors and then the amount of capital you're hoping to source from new investors? I think we've said we're targeting $7 billion of gross fee earning equity under management to raise in 2024. That'll net us somewhere between $4 billion and $5 billion when you consider existing investments that we would exit. I would say the major or roughly half of that would be in our DigitalBridge Partners series product, which would come from a combination of new investors and existing re-ups. We also are pursuing other strategies including private credit and wrapping up funding of our core or we call it Strategic Assets Fund. And then we have other products, liquid securities funds, which are in effect perpetually fundraising. I would say of the $7 billion gross, probably half of that is new investors and half of that would be re-ups. And how are those conversations going thus far? I mean, you've talked about the unique opportunities you're seeing right now. Is that kind of? We have a very high re-up rate by investor, over 90%. The check sizes vary depending on the individual circumstances of those investors. Some have ample liquidity and are eager to participate in one they perceive to be a more attractive, slightly lower valuation environment. Others with either denominator or the new term of art is numerator challenges. They may be re-upping but with smaller check sizes. So that's why we talk about expanding our pie in order to achieve the fundraising target that we've talked about. And then taking a step back, given the audience at this conference, could you remind the audience the reasons you chose to migrate from the REIT structure to a pure play alternative asset manager and how this structure can benefit real estate investors? Yeah. Well, the simple answer is we had to because we were making too much money in the asset management business that we couldn't maintain our REIT status. Now, I think it's also a strategic decision to focus on more of an asset light, more of an amplified play on AI and digital infrastructure generally. I think the sort of real estate characteristics of what we do remain though. And the way we talk about it with investors is we're able to generate, whether you want to call it value added, core plus, core plus plus, which was a term I heard recently, which I'm not sure what that means, but it's better than core minus, I think, or even private equity, right? We can generate those sort of returns but with infrastructure risk. We have long-dated contracts. We have very high credit quality counterparties. We have stable recurring cash flows, all the things that real estate investors look for. Plus, we have growth. And that's the big differentiator. And I think that makes DigitalBridge a very attractive way to play this, if you will, new real estate sector. Maybe that's a great way to segment into some of the verticals that DigitalBridge has been focused on. When you've been providing results, I think generally you've put them in four key categories. You mentioned some of them earlier: data centers, towers, fiber, and small cells. Before we go a little further into each of these areas, are there opportunities for DigitalBridge to add additional verticals, and what might they be? Sure. I mentioned a couple earlier, one of which we'd already entered, which was the digital billboard sector, which has many of the same characteristics. We played it as a landlord, owner of the panels, as they call them, and we had a very ambitious upgrade program to digitize many of them. And as everyone knows, that creates almost infinite capacity and very high returns on that capital investment. So we were able to secure a platform that leased the billboards on a long-term basis to operators like JCDecaux or Lamar or the companies that you would all know. And so that was an infrastructure or real estate-like way to play that space. It wasn't subject to the vagaries of the spot ad rates. Similarly, we've been spending time around satellites and not the so-called birds themselves but the terrestrial infrastructure. There's actually quite a lot on the ground that's required, whether it's landing stations, repeaters. As everyone knows, there's a whole new subsector of satellites, the LEO constellations, of which there are three currently in deployment. So we see an opportunity to, in effect, mutualize some of that ground-based infrastructure and offer services to all the operators, the LEOs, GEOs. That's something that we're spending time on at the moment. That's really helpful. You mentioned earlier about the $15 billion of investment. You've also talked about the interest on the earnings call to increase the amount of distributions this year. So as you're looking to potentially invest more through your portfolio companies but return more capital, how do these businesses get funded? What's the access to capital look like for that? Yeah. And this is a very important point that differentiates us perhaps from other alternative investment managers who are very tied to particular fund-raising cycles. And I pause there intentionally. Usually, firms will raise a fund invested over three or four years and go raise another one. With our platforms, which are growing so significantly organically, we have the opportunity to almost be continually fundraising in a so-called co-investment format or investing directly into those companies to fund that growth. And that's a key driver and a key element in our business model. It also is what the customer, our limited partners and investors, want because it's important to them in their model to get direct access to attractive deals. And so that's been a very crucial part in our overall value proposition to investors. It also has the sort of mutually beneficial effect of allowing us to be continually fundraising rather than having to wait specifically for the next fund cycle. And now maybe just delving into some of these areas, maybe we start given the roots that you were referring to earlier on the towers, does DigitalBridge believe in a second-half recovery for leasing activity? And how do you think about long-term growth for the tower model, whether it's in the U.S. or in some of the international markets that you're in? Look, I think the tower business has matured. There's no question about that. You see that in the public company numbers. But the importance of wireless infrastructure has never been greater. And when you look at what's happening with fixed wireless, for instance, and broadband deployment or the upgrades to 5G, the FirstNet project for public safety communications, this is a critical part of our daily lives and work. So it's not going anywhere. The wireless carriers in the U.S., for all their challenges, are still among the most profitable in the world. And they will continue to invest in their networks. And tower companies will continue to be important partners in that deployment. I think in Europe, as contrast, the profitability is not as high. The returns on capital are not as good. That's just sort of an objective statement. And therefore, growth rates tend to be lower. Returns on capital tend to be lower. There's still some infrastructure owned by operators, carriers in Europe, which eventually will need to be monetized in some way. So there could be opportunities to play that. Then if you look to Asia, their growth rates are much higher. The carriers are more profitable. We've been very successful in that market and would expect continued growth there. Latin America, where we also have presence, Mexico, Brazil, other parts of South America continue to see high rates of growth as well. So that's been an attractive market for us too. And I think overall the sector will continue to generate good returns and stable cash flows. So we're very much believers in the tower model. Just back on the U.S., any observations on leasing activity, just given this has been a big topic for investors? Look, I don't think I would comment beyond what's been publicly stated on sort of expectations for this year. It's very hard to say quarter to quarter what the leasing activity may be. But long-term, we still very much believe in the tower model. And then one question before we get back to data centers on fiber and small cells. So what's interesting is that some companies have combined fiber and small cell operations. And DigitalBridge, when describing performance, the company's chosen to separate them into distinct categories. And I'm curious, what drives that distinction for DigitalBridge? And when you look into the future, do you see fiber and small cell convergence in your portfolio, or do you think some of these other companies that have combined it are destined to separate this into different investment opportunities the way you do? Look, I think they are very much related and indeed connected activities. But they are distinct. And even within companies that look at it on a combined basis, they would talk about horizontal versus vertical real estate. And I think increasingly it won't be necessary to own or even control the entire chain. And so I think you will see more distinction or delineation in those two activities. But it continues to be the case that fiber is critical. A single small cell on its own isn't even operative, let alone valuable. But the activities for deploying fiber versus the vertical component of small cells are different. And so I think you could make an argument either way, but I think the delineation likely will be more pronounced or more important over time. Great. Maybe we shift over to data centers. Maybe just to start, if you can frame what you see as the multi-year demand opportunity for that segment? Look, I mean, I've sort of thrown out some numbers that we think this will be as big as the public cloud. And you guys have all seen the results or projections for NVIDIA. And the amount of capacity required to just house all of the chips that they plan to sell doesn't exist today. And then if you want to think about the power required, that doesn't exist either. So this is a multi-year, likely multi-decade cycle to build, operate, maintain the data center infrastructure for AI. And that is today just the so-called generative part, the large language models. When we get to inference, you'll have much more data-intensive, power-intensive applications at the edge of networks, which, by the way, will need to be nearly ubiquitous with zero latency. So that brings demand for fiber, small cells, wireless infrastructure. This will be the big initiative, the big wave of the next decade and beyond. We're very excited. We're very humbled by the opportunity and the challenge. This is going to be a massive driver of investment for the next 10, 20 years. What portion of your bookings is tied to GenAI workloads within the portfolio? And then how do you think about the mix between large language models and inference? Yeah. Well, as I said, it's still predominantly cloud. I don't necessarily want to put a percentage on it, but it's the preponderance still of cloud or what you could think of as existing workloads versus the new generative AI. We haven't seen any specific inference workloads yet. I think it's too early for that, but it's coming. I think you talked about multi-decade opportunity there. But if you think about the expansion of bookings and investments, at least over the last 12-18 months, is there some risk that the large amount of capacity needs to be digested before more active workloads and demand comes? I think the challenge of securing land and power will act as a regulator or governor on the capacity expansion. And so I don't think it's likely to get ahead or too far ahead of demand. We have another question here from our audience. I just want to invite everyone, especially around the table, if you do want to directly ask a question, you could push the button on your microphone and we'll get to you as soon as we can. One question came in. For all this quantum of investment that the portfolio companies are making, what's the development yields on that on average? I don't think we would comment on the specific development yields. Suffice it to say that we have raised our internal hurdle rates in the last couple of years, both in response to interest rates but also to risk premia and, frankly, the scarcity of capital and expertise to develop these data centers. It's sufficiently attractive that we can raise those hurdle rates and still be, in essence, fully booked for the next several years. Is it helpful for investors to think about the totality of DigitalBridge in terms of the investment capacity in new companies or new opportunities based on where you exited 2023, so the excess financial capacity to either invest in new companies or new opportunities or the same companies but new opportunities for them? Yes, I think it is useful. And that's why we reference the $15 billion of sort of backlog or in-place development for the coming year. I think beyond that, we have ample firepower in our various funds. We have the ability to raise incremental capital at specific companies. And we have access to debt capital and the internally generated cash flow as well. So these are very much sort of compounding vehicles. I was wondering if you could expand on why you're not disclosing the yields on development. It's quite unusual for a public company. Many of your peers do disclose it, whether it's hyperscale or colocation, at least on the data center side. Yeah. I'd rather have that conversation with the customers, all due respect. When you look at the financial performance at the DigitalBridge level, can you share how investors should think about DigitalBridge delivering returns to shareholders? Well, I think fundamentally through growing our assets and our earnings. We have a small dividend, but this is fundamentally a growth story. We would expect, as I said, over a cycle to grow at a faster rate than the alternative universe. With the operating leverage inherent in this business, that should give us a further amplitude on earnings growth. On the recent earnings call, carried interest was referred to as the elephant in the room. How would you frame that issue for investors? What is the solution that DigitalBridge expects to present? Well, the best way is by delivering it. And I think the comment was in reference to sort of embedded value in that carried interest that we would expect to realize over time. And obviously, we would love for investors to have visibility and predictability around that. And as we grow and mature, I think there will be more regular realizations and distributions in that regard. But it is, in fairness, up to us to deliver it. As you look at. As you look at the direction of. Got that out of the way. As you look at the direction of investments, is there some trends that you would raise to all of us today in terms of is there a specific set of geographies that you're looking to increase concentration to, products or any other types of categorization that's kind of helpful just to think about the portfolio? Geographically, I would mention Asia again. We've been moving there in our second fund. We'll have 15%-20% of the capital deployed in the region. I'd say our third DigitalBridge Partners Fund would have a similar, maybe a slightly higher amount. Product-wise, I'm very bullish on private credit. I think there's a huge opportunity in our space there. I think eventually more of a private equity growth equity type strategy would kind of complete the product suite. And I think we have the capability and the insight to deliver on that. So that's something that's a little further out on the drawing board but is another big opportunity for us. One more question before we get to our rapid fires. Can you review the capital allocation priorities for DigitalBridge? How should investors just think about the DigitalBridge M&A opportunities and what the company wants to achieve with that? Yeah. So I mentioned we have a nominal dividend. We've said that we would opportunistically look to buy back some of the preferred stock. We do consider M&A opportunities. We completed an acquisition last year of the former AMP Capital Infrastructure Equity business. So we do believe that's an arrow in our quiver as well. We would be opportunistic there, either sort of product capability or potentially a different distribution capability that would be additive. So those are things that we continue to evaluate and, meanwhile, very focused on organic growth and the earnings from that. We'll do a slightly different style of the rapid fires, just given the breadth of the portfolio that you have. When you think about same-store growth for the categories of digital infrastructure that you have exposure to, can you just give us a sense, looking into 2025 for the sector, not for your portfolio companies specifically, can you give us a flavor of what those growth rates should look like, whether it's on a same-store revenue or on an NOI gross profit basis? Sure. I would quickly say towers globally 5%-10%. We have companies in Asia and Latin America growing much faster. Fiber probably similarly. Again, depends whether you're talking about dark fiber, enterprise, or consumer. And then data centers is everywhere from 15%-40%, depending on the segment, but sort of skewed to the higher end there. When you look at each of these categories, do you expect to see more consolidation or more companies emerge within the categories? It's an interesting question. I think in wireless, it's hard for there to be much more consolidation. And so I think with AI, you're likely to see new companies emerge from that, new customers. So I think net-net, it's probably expanding a little bit. Great. And then lastly, when you look at real estate decisions - and it may vary depending on the subsector - what's the best approach: buy, sell, build, redevelop, or just repurchase your own stock? Well, we look at all of that. That's a very important element. In our business model, is that we can do development. Unlike many other alternative managers, we have the capability and the platforms to do that. So when M&A multiples are high, we build. When they come down, we look to buy. Ben, thank you very much.