Apollo Sets Stage to Deploy 'Billions' Through Dallas' Stream Data Centers in Digital Infrastructure Push

New York City-based Apollo (NYSE: APO) announced that Apollo-managed funds will acquire a majority interest in Dallas-based Stream Data Centers from Stream Realty Partners, also based in Dallas.

With Apollo’s backing, Stream Data Centers (SDC) said it’s positioned to execute on a multi-gigawatt pipeline while enabling Apollo Funds and affiliates to potentially deploy “billions of dollars” into next-generation digital infrastructure.

SDC’s management team will retain a minority stake and continue leading the business.

Michael Lahoud and Paul Moser, co-managing partners of Stream Data Centers, said they’re excited to partner with Apollo “on the next phase of SDC’s growth amid robust demand for data center solutions.”

“After more than two decades of delivering exceptional data center experiences, SDC has created a building and operating model with very strong fundamentals based on collaborative, enduring customer relationships,” Lahoud and Moser said in a joint statement. “This symbiotic relationship with Apollo amplifies that existing strength, offering access to the capital required to significantly scale our developments at the rate hyperscale customers demand.”

“We look forward to working with the Apollo team to execute on our pipeline,” they added, “and we extend our sincere gratitude to SRP for providing the firm foundations that have helped SDC become the organization it is today.”

Addressing growing need for data centers across U.S.

SDC builds, leases, manages and operates hyperscale data center campuses and has delivered more than 20 campuses to date. It controls more than 4 gigawatts of long-term powered land and said it has a “robust near-term pipeline.” SDC said that with Apollo Funds’ capital and strategic support, it plans to scale platform-wide development to meet accelerating demand from hyperscale cloud and AI providers across key Tier 1 and Tier 2 U.S. markets.

“Stream Data Centers represents a landmark digital infrastructure transaction for Apollo,” Apollo Partners Joseph Jackson and Trevor Mills said in a joint statement. “With deep development expertise and a valuable long-term land fund in key growth markets, we believe SDC is uniquely positioned to serve the infrastructure needs of the world’s most sophisticated technology customers. Apollo will bring scaled capital and structuring capabilities to help drive recurring origination across our ecosystem. We look forward to partnering with SDC as a key operating platform to deliver next-gen capacity at scale.”

Apollo said its estimates show that data centers will require “several trillion dollars of global investment” over the next decade, driven by a secular global industrial renaissance, with substantial investments required in power, facilities, and semiconductor chips.

Since 2022, Apollo-managed funds have deployed roughly $38 billion into next-generation infrastructure investments, including renewable energy, digital platforms, and compute capacity. Apollo said it plans to significantly scale its investment in these areas in the coming years, both through Stream and as a capital partner to other market participants.

Details of the deal

As part of the transaction, Apollo Funds and SRP will commit new capital to Stream’s existing data center land fund to accelerate site development for 650 MW of near-term power capacity across campuses in metro Chicago, Atlanta and Dallas.

A newly formed subsidiary of the Apollo Funds will assume the role of investment manager of the land fund, the firm said.

The transaction is expected to be completed in 2025.

Goldman Sachs & Co. acted as sole financial advisor to Stream Data Centers, while Akin Gump Strauss Hauer & Feld LLP was legal counsel. Moelis & Co. acted as financial advisor to the Apollo Funds on the transaction, while Latham & Watkins LLP was legal counsel.

As of June 30, Apollo said it had roughly $840 billion of assets under management.