Digitalbridge Group, Inc. · NYSE:DBRG
Digitalbridge — Investor Presentation (November 2023)
38 slides from Digitalbridge's investor presentation, Nov 8, 2023
Slide 1: DigitalBridge Corporate Overview
1 DIGITALBRIDGE CORPORATE OVERVIEW N o v e m b e r 8 , 2 0 2 3
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
2 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation may contain forward-looking statements within the meaning of the federal securities laws, including statements relating to (i) our strategy, outlook and growth prospects, (ii) our operational and financial targets, (iii) t
Slide 3: Important Note Regarding Non-GAAP Financial Measures
3 IMPORTANT NOTE REGARDING NON-GAAP FINANCIAL MEASURES This presentation includes certain “non-GAAP” supplemental measures that are not defined by generally accepted accounting principles, or GAAP, including certain of the financial metrics defined below, of which the calculations may differ from me
Slide 4: Table of Contents
4 TABLE OF CONTENTS A Platform Built to Capitalize on Opportunities Across Digital Infrastructure STRATEGY & PROFILE OVERVIEW SE CT IO N 1 FINANCIALS SE CT IO N 2 APPENDIX SE CT IO N 3 Simple, High-Growth Roadmap Digital Infrastructure Experts Powerful Secular Tailwinds INVESTMENT THESIS An Alternat
Slide 5: DigitalBridge is a leading global alternative asset manager
5 DigitalBridge is a leading global alternative asset manager dedicated to investing in digital infrastructure. As an Infrastructure Partner to the Digital Economy, we manage capital on behalf of institutional investors across five key verticals: data centers, cell towers, fiber networks, small cell
Slide 6: A Leading Global Digital Infrastructure Asset Manager
6 $75B Assets Under Management1 30+ Digital Portfolio Companies2 100+ Digital Infrastructure Professionals3 25+ Years of Experience A LEADING GLOBAL DIGITAL INFRASTRUCTURE ASSET MANAGER (1) AUM as of September 30, 2023, and inclusive of portfolio companies in which DigitalBridge Group, Inc. (the “Co
Slide 7: Why Digital Infrastructure?
7 WHY DIGITAL INFRASTRUCTURE? Attractive sector characteristics position Digital Infrastructure as a growing asset class benefiting from secular tailwinds D i g i t a l I n f r a s t r u c t u r e
Slide 8: Overview: Strategy & Profile
8 1 OVERVIEW STRATEGY & PROFILE
Slide 9: Our Platform: An Alternative Asset Manager Dedicated to Digital
9 Business Building / Growth PhaseMature, Stabilized, Yield-Focused DIGITAL INFRASTRUCTURE EQUITY ‘Value-Add’ Digital Infrastructure Equity Investing on a Global Basis CORE PLUS Long-duration, stabilized assets VENTURES Software Powering Next-Gen Networks LIQUID Public Market Investing Built to Capi
Slide 10: DBRG Roadmap – Finalizing Our Pure-Play Profile as We Scale
10 DBRG ROADMAP – FINALIZING OUR PURE-PLAY PROFILE AS WE SCALE THE PLATFORM SIMPLIFY - FINALIZE PURE PLAY ALT ASSET MANAGER PROFILE MANAGEMENT TEAM - SUCCESSFULLY ROTATED OVER $80+ BILLION OF MANAGED ASSETS AS PART OF TRANSITION TO DIGITAL IN 3 YEARS (AHEAD OF SCHEDULE) DBRG IS COMMITTED TO FINALIZI
Slide 11: An Alternative Way to Invest in Digital Infrastructure
11 AN ALTERNATIVE WAY TO INVEST IN DIGITAL INFRASTRUCTURE Leading management team with operating DNA driving strong revenue and earnings growth powered by expected rapid AUM trajectory EXPECTED FINANCIAL IMPACT: Powerful absolute and relative growth with revenue targeted to grow >20% and cash flow m
Slide 12: Investment Management Profile
12 2019 2020 2021 2022 3Q23 InfraBridge Co-invest $18.3B $12.8B $6.8B $29.9B IM F EE U M (A S R EP O R TE D ) INVESTMENT MANAGEMENT PROFILE Long-term contracted fee streams provide predictable revenue and earnings that we expect to grow over time Balanced, diversified portfolios built with the flexi
Slide 13: Investment Solutions Across the Digital Infra Ecosystem
13 INVESTMENT SOLUTIONS ACROSS THE DIGITAL INFRA ECOSYSTEM DBP I DBP Series Permanent Capital Vehicles formed during original ‘Digital Bridge holdco’ period. These are separately capitalized vehicles where DBRG exclusively earns management fees over some or all of the holding period. Co-Invest Credi
Slide 14: Overview: Investment Thesis
14 OVERVIEW INVESTMENT THESIS1
Slide 15: The DBRG Investment Case
15 THE DBRG INVESTMENT CASE The Demand – More, Better, Faster connectivity and compute is driving significant global digital infrastructure investment and DBRG is well positioned with exposure to powerful thematics including AI, Cloud, 5G, and IoT. The Supply – We believe DBRG’s investment managemen
Slide 16: The Demand: More, Better, Faster Connectivity & Compute
16 Data Centers Will Need Far More Power Source: AvidThink TE R AW AT T- H O U R S 20402038203620342032203020282026 0 500 1,000 1,500 8.15% CAGR 25% CAGR MORE COMPUTE AND PIPES REQUIRED Digital Infra Ensures Secure, Scalable, and Reliable Compute Power PRE-AI GROWTH: GLOBAL DIGITAL INFRA CAPEX INVES
Slide 17: How Does DigitalBridge Meet the Demand?
17 HOW DOES DIGITALBRIDGE MEET THE DEMAND? 5G - MOBILE CAPEX $1T worldwide (2021-2026) ARTIFICIAL INTELLIGENCE Experiencing its “iPhone moment” Resource-hungry AI workloads drive growing demand for digital infrastructure CLOUD ~$1.3T on global data center Capex INTERNET OF THINGS (IoT) >50 billion c
Slide 18: The Supply: DigitalBridge Is a Partner of Choice
18 THE SUPPLY: DIGITALBRIDGE IS A PARTNER OF CHOICE ALTERNATIVES CONTINUE TO EXHIBIT STEADY GROWTH… ...WE ARE GROWING FASTER AND TAKING SHARE Global Alternatives AUM Source: Preqin Institutional investors projected to continue to raise allocations to alternatives 11% CAGR Wallet Share Only 0.43% $7.
Slide 19: The Digital Infrastructure Specialists
19 THE DIGITAL INFRASTRUCTURE SPECIALISTS The DigitalBridge team has a 25+ year track record of successfully building businesses in the digital infrastructure sector. Our specialization creates durable competitive advantages that generate alpha for our portfolio companies and investors OPERATIONAL E
Slide 20: Power of the Platform – Follow the Logos
20 DigitalBridge forges deeper relationships with customers through a structural ‘at-bats’ advantage that leads to proprietary deals and the ability to offer ‘converged solutions’ vs. digital infrastructure components DigitalBridge’s flexible capital allocation strategy is built to “follow the logos
Slide 21: Simple High-Growth Roadmap
21 SIMPLE HIGH-GROWTH ROADMAP $100B+ AUM $52B AUM 30%+ FEEUM CAGR*$22B FEEUM $49B+ FEEUM 2025E INVESTMENT MANAGEMENT AUM FEEUM Value creation at DBRG over the next 3 years expected to be driven by strong capital formation from new and existing flagship fund offerings Note: There can be no assurance
Slide 22: An Attractive Business Model
22 AN ATTRACTIVE BUSINESS MODEL Digital Asset Rankings Highly Scalable 3 Compare the economics of buying $1 Billion of digital infrastructure in the traditional vs. investment management model (50% Equity ($500M) at 20x EBITDA or 5% Cap Rate) ILLUSTRATIVE TRADITIONAL MODEL VS. ILLUSTRATIVE INVESTMEN
Slide 23: Financials
DIGITALBRIDGE 2? FINANCIALS
Slide 24: Investment Management Financial Profile
24 $69 $120 $181 $330 $480 $33 $73 $97 $205 $300 2020 2021 2022 2023E Base Case 2025E Base Case INVESTMENT MGMT FINANCIAL PROFILE Actual/Mid Point Estimate* 2020 2021 2022 2023 Base Case 2025 Base Case Annualized Fee Revenue $69M $120M $181M $310M $455M Annualized FRE $33M $73M $97M $185M $275M Annu
Slide 25: Guidance – 2023 & 2025
25 2023E 2025E Base Case W/M&A or Deployment1 Base Case Run Rate Investment Mgmt Fee Revenue $290 - 330M $315 - 400M $430 - 480M Run Rate Investment Mgmt FRE (earnings) $165 - 205M $180 - 250M $250 - 300M Ending FEEUM (Implied) $33 - 36B $35 - 41B $47 - 51B Operating Revenue (DBRG Share)1 $90 - 100M
Slide 26: Positive Recurring Earnings With More to Come
26 ($28) $66 $108 $210 $265 ($118) ($20) $37 $140 $200 $130 $205 $60 $140 POSITIVE RECURRING EARNINGS WITH MORE TO COME Our completed business rotation has driven positive recurring earnings and now allows incremental fundraising to drive bottom-line growth 2020 2021 2022 2023E 2025E Growth into 202
Slide 27: Strategic Capital Allocation Priorities
27 STRATEGIC CAPITAL ALLOCATION PRIORITIES As DBRG executes on a near/medium term focus on capital structure optimization, we expect additional free cash flow will become available to invest and compound capital alongside LPs in our fund vehicles 1. COMPOUND CAPITAL ALONGSIDE LPS 2. ACCRETIVE DIGITA
Slide 28: Liquidity and Leverage
28 $378M $368M LIQUIDITY AND LEVERAGE DigitalBridge maintains a strong liquidity position, $530M as of September 2023, and is on track to achieve its targeted corporate leverage levels following the targeted deconsolidation of its Operating segment and anticipated conversion of its ‘25 Notes. Corpor
Slide 29: Balance Sheet Profile
29 BALANCE SHEET PROFILE Assets Equity Investments (At Share) GP Affiliated Investment in DBP Series $303 GP Affiliated Investments - Other & Warehoused Investments (Credit, Core, Infrabridge, Liquid, Ventures) 321 GP Affiliated Investment in DataBank 434 Equity Investments Total (at share) $1,058 O
Slide 30: Evolution to an Earnings-Driven Valuation Framework
30 4 3 EVOLUTION TO AN EARNINGS-DRIVEN VALUATION FRAMEWORK DigitalBridge has transitioned from a valuation framework based on net asset value to a framework based primarily on earnings-driven value. Three of the four principal components of value at DBRG today are earnings driven. FEE RELATED EARNIN
Slide 31: DataBank and Vantage SDC Overview
31 Overview Premier edge/colocation data center platform with nationwide US footprint Portfolio 70 data centers / 26 domestic edge markets served Profile Nationwide footprint with continued growth driven by enterprise customer demand as data gravitates to the Edge DBRG Growth Strategy New Build + M&
Slide 32: Appendix
DIGITALBRIDGE APPENDIX
Slide 33: Portfolio Companies and Investment Structure
33 INVESTMENT MANAGEMENT OPERATING(5) DBH Legacy Cos. DBP Series and Core(1) Co-Invest Capital DBRG Balance Sheet Mgmt. Fees Mgmt. Fees & Carried Interest Mgmt. Fees & Carried Interest Investment Earnings MEXICO TOWER PARTNERS 2013 ~2,400 active sites, ~3,200 total sites(2) Tower EXTENET SYSTEMS 201
Slide 34: Simplification: Fund Performance Reporting
34 SIMPLIFICATION FUND PERFORMANCE REPORTING As DigitalBridge finalizes its transition to a pure-play alternative asset manager, we continue to align our reporting with our peers. This quarter we are introducing fund performance metrics into our 10K/Q financial reporting framework. (1) Listed herein
Slide 35: Non-GAAP Reconciliations
35 NON-GAAP RECONCILIATIONS 3Q23 2Q23 1Q23 4Q22 3Q22 2Q22 1Q22 4Q21 Net income (loss) attributable to common stockholders $ 261,828 $ (22,411) $ (212,473) $ (19,356) $ (63,273) $ (37,321) $ (262,316) $ (20,686) Net income (loss) attributable to noncontrolling common interests in Operating Company 19
Slide 36: Non-GAAP Reconciliations
36 NON-GAAP RECONCILIATIONS ($ in thousands) 3Q23 2Q23 1Q23 4Q22 3Q22 2Q22 1Q22 4Q21 IM net income (loss) $100,014 $ 35,177 $ (2,804) $ 81,167 $ 46,065 $ 67,995 $ (9,143) $ 28,194 Adjustments: Interest expense (income) 2,128 2,268 2,411 2,200 2,906 2,771 2,500 2,499 Investment expense, net of reimbu
Slide 37: Definitions
37 DEFINITIONS Assets Under Management (“AUM”) AUM represents the total capital for which we provide investment management services. AUM is generally composed of (a) third-party capital managed by the Company and its affiliates, including capital that is not yet fee earning, or not subject to fees a
Slide 38: DigitalBridge
| 1 att act | DIGITALBRIDGE
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