Blackmore Capital Blended Australian Equities Portfolio
We have included a new position in the portfolio – Macquarie Technology Group (MAQ).
Our initiation of the position in the portfolio came after MAQ’s announcement of A$100mn equity raising to fund the acquisition of the underlying property (A$190m) of its existing Macquarie Park data centre. (MAQ historically entered into sale & leaseback agreements for the land and building shells). This acquisition represents the sovereign ownership of data centre assets for Macquarie and would provide greater control over its Date Centre growth strategy while retaining capital management flexibility for the future.
MAQ exhibits a high-quality business model with over 90% recurring revenue and strategically positions itself to leverage the ongoing megatrend of AI development and cloud computing, expanding its presence in cloud services and data centres.
Having ownership of the underlying property also makes MAQ more comparable to other peers such as NEXTDC which owns all of the underlying property to its DC portfolio in Australia.
We are of the view that MAQ is a high-quality growth company particularly post this acquisition that’s strategic suitable for company’s growth and valuation. The company is also benefitting from AI trend with AI’s growth and the associated rapid rise in compute power is accelerating while cyber-security demand is set to rise in lock-step with the AI and cloud growth.