Peppertree Capital Management, a private equity firm headquartered in a suburb of Cleveland, Ohio, disclosed that it has raised $1.2bn+ through its Fund IX to invest in towers, fiber, small cells, and distributed antenna systems (DAS). Previously, the firm’s earlier fund vintage, Peppertree Capital Fund VIII, raised $927m in 2019.
Limited Partners (LPs) – Peppertree Capital Fund IX
Peppertree Capital has secured notable Limited Partners (LPs) for its ninth fund (Fund IX). Below we highlight three significant equity commitments, totaling $165m or ~14% of total commitments, to Peppertree Capital Fund IX:
University of Michigan
In October 2021, the Regents of the University of Michigan made a commitment of up to $75m to Peppertree Capital Fund IX.
Arlington County Employees’ Retirement System (ACERS)
In October 2021, the Arlington County Employees’ Retirement System (ACERS) made a commitment of $15m to Peppertree Capital Fund IX. Notably, ACERS’ commitment is a re-up with Peppertree, as the LP previously committed $15m to the firm’s prior vintage, Peppertree Capital Fund VIII.
San Francisco Employees’ Retirement System (SFERS)
In October 2021, the San Francisco Employees’ Retirement System (SFERS) made a commitment of up to $75m to Peppertree Capital Fund IX. Of this total commitment, $65m closed on November 5, 2021. Additionally, SFERS’ commitment is another re-up, as the LP previously committed $75m to the firm’s prior vintage, Fund VIII.
Peppertree Capital Management – Digital Infrastructure
Peppertree Capital invests primarily in digital infrastructure, including the sub-sectors of towers, fiber, small cells, and distributed antenna systems (DAS).
Overall, Peppertree has made 110+ investments in digital infrastructure companies in 12 countries. For example, Peppertree Capital’s digital infrastructure investments include:
- Blue Sky Towers: in February 2021, Peppertree Capital increased its funding commitment to Blue Sky Towers from $120m to $320m. Notably, Peppertree has committed both equity and debt financing to Blue Sky
- Everest Infrastructure Partners ANZ: in March 2021, Peppertree Capital invested $50m for Everest to acquire and develop wireless infrastructure in Australia and New Zealand
- Octagon Towers: in October 2019, Peppertree Capital acquired 1.0k towers from AT&T for $680m via a sale-and-leaseback transaction
- TowerCo: in January 2019, Peppertree Capital committed $300m of equity capital to fund future growth of the company
As highlighted above, Peppertree Capital has consistently invested in both the acquisition and construction of cellular towers. However, the firm also has a desire to increase its exposure to fiber infrastructure, particularly for the purposes of backhaul.
In May 2021, Peppertree Capital hired Arnoud Krijt as a Managing Director to expand its investments in the fiber sub-sector of digital infrastructure. Krijt was formerly the Senior Vice President, Corporate Development, of Uniti Group, leading the company’s acquisition of fiber networks.
One of Peppertree Capital’s investment themes is the roll-out of 5G, which fiber networks play a critical role in enabling. Specifically, dark fiber will be deployed to connect to towers and small cells in order to backhaul data traffic – which will be ever increasing in a 5G environment.
As a firm, Peppertree Capital has experience investing in dark fiber from its previous holdings in Lightower, which owned or had rights to 32k route miles of fiber in the United States, at the time of its sale to Crown Castle, in November 2017.
Peppertree Capital Management is led by its co-Presidents, Ryan Lepene and Howard Mandel.