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Company Voice: NextStream, Latin America

NextStream is a group of data centres across Latin America, purchased by Actis from Asterion in March 2023. NextStream consists of 11 data centres, covering six countries in Latin America and the US. Using these strategic assets as a base, NextStream has adopted a startup mindset and is aiming to address significant growth opportunities in Latin America.

What is the appeal of operating data centres in Latin America?

Latin America has an enormous digital infrastructure deficit, with approximately 15x less data centre capacity than the US on a pro rata basis, making it an attractive market to grow. We now have 11 data centres in six countries, with a unique footprint and strategic presence. We have facilities in the US (Miami), Mexico, Peru, Chile, Argentina and Brazil. These are the main markets in the region.

What is the growth opportunity for NextStream in Latin America?

We have identified several growth levers. First, increasing occupancy in existing data centres, requiring minimal additional capital. Second, we can expand capacity in each data centre. Third, we plan to construct new facilities on land we already own, exemplified by the ongoing construction of a 1.5 megawatt capacity data centre in Chile. And finally, we’ll explore Built to Suit projects that do not bring speculative risk. All this is driven by the One Actis model, which is about collaboration and synergy between teams and leveraging expertise, especially in sourcing renewable energy for data centres.

How does NextStream plan to navigate the evolving landscape of data centres, especially with emerging technologies?

The dynamic nature of the sector, with evolving demand and construction methods, presents challenges and opportunities. Here we learn from the experience of the Actis network, especially in South Korea and China, where they have been building state-of-the-art data centres for almost a decade. This gives us a critical advantage.

Additionally, with the momentum behind AI, collaboration with North America and Europe will become essential. Having AI on our radar is crucial for the next three years, again presenting significant opportunity for more growth.

Beyond capital what are the key benefits Actis brings to NextStream?

Actis has considerable experience acquiring assets and building platforms which is instrumental in shaping NextStream’s trajectory. The collaboration involves not only operating existing assets but also establishing a new company and leadership team, back-office structure and commercial teams. Actis has also strengthened our relationships with clients and negotiations with suppliers, boosting our existing capabilities.

Actis’ experience in data centres, particularly in Asia creates opportunities for synergies, knowledge creation and value generation. By leveraging expertise across the business, particularly in energy, and collaborating across different geographies, we are able to glean valuable insights.  In Brazil, we are working with Serena, another Actis portfolio company, to help meet our energy needs.

NextStream aims to play a pivotal role in modernising Latin America’s infrastructure by creating a unique data centre platform. With the support of Actis, we plan to differentiate ourselves in the market, offering long-term value through strategic growth and efficiency. Our focus on digitalisation and collaboration, with key players in the region, positions NextStream as a significant contributor to Latin America’s digital transformation journey.

From Actis’ perspective, the data centre market not only aligns with our experience in digital infrastructure, spurred by the escalating demand for digitalisation and cloud services, but also exemplifies our capacity as builders and operators in this dynamic sector. With over $1.5bn committed to digital infrastructure, Actis is strategically positioned to leverage our extensive experience and operational expertise to construct and manage robust platforms like NextStream. The data centre operation, characterised by its long-term contracts, seamlessly integrates into the broader Actis infrastructure investment model, promising stability and sustained growth.

Moreover, considering the significant energy consumption inherent to data centres, Actis’ active involvement in the renewable energy sector presents an opportunity to forge meaningful synergies. We are committed to driving sustainable infrastructure by enhancing energy efficiencies through metrics such as power usage effectiveness “PUE” and augmenting the utilisation of renewable energy sources to power our data centres. This sustainable approach underpins our focus on not just expanding our digital infrastructure footprint but doing so responsibly, in line with our commitment to building a more sustainable and efficient digital future.