Kao Data investor Legal and General (L&G) has closed a €600 million ($706m) fund that will invest in digital infrastructure projects in Europe and the UK.

The closure of the L&G Digital Infrastructure Fund (LDIF) is “a key milestone in L&G’s asset management strategy to expand its private markets proposition,” the company said. A second close is expected later this year to boost funds.

LDIF “aims to invest in high-quality, productive and fast-growing businesses and assets that advance digital transformation, enhance connectivity and deliver long-term economic benefits,” L&G said. It will invest primarily in Europe and the UK with a “smaller, selective global allocation,” expected to be focused mainly on the US.

Bill Hughes, head of private markets, asset management at L&G, said: “Infrastructure is a key tenet of our expanding Private Markets platform and a global, generational investment opportunity.

“As early investors in digital infrastructure, we’ve built strategic partnerships and deployed capital into assets that are essential to economic resilience and long-term productivity. This first close adds to the strong momentum across our infrastructure offering, as we continue to back the businesses and assets that will drive the energy transition and digital economy, whilst seeking to deliver long-term value for investors.”

L&G has been investing in digital infrastructure since 2018, and was an early backer of UK-based data center developer Kao Data, first funding the company in 2019, then upping its stake in the business in 2023.

It is also an investor in a £750 million ($1.02bn) hyperscale data center planned for Newham, East London, which was granted planning permission in October last year.

To help manage and grow the fund, L&G has appointed Jack Colbourne as a non-executive director on LDIF’s investment committee. He was previously a partner and investment committee chair at Arcus Infrastructure Partners. The company has also hired Achal Arora as managing director for digital infrastructure investments. He joins from Macquarie Asset Management, where he was managing director in the European digital infrastructure team.

Matteo Colombo, head of digital infrastructure investments and asset management at L&G, said: “The launch of our digital infrastructure fund marks a significant next step in our commitment to invest in the infrastructure that underpins the digital economy. From AI and cloud computing, to data sovereignty and connectivity, the demand for robust digital infrastructure is accelerating across Europe.

“We’re leveraging our deep sector expertise, further enhanced with the recruitment of Jack and Achal, and strategic partnerships to identify and scale investments that offer strong long-term value for investors while supporting innovation, inclusion, and economic resilience.”