Real Assets in the Digital Age: Towers, Cables, and Fibre

The traditional real asset categories — infrastructure, real estate, natural resources — have long been valued for their inflation protection, contracted cash flows, and low correlation to public markets. Digital infrastructure shares all of these characteristics, but adds a demand driver that conventional real assets lack: the exponential growth of data consumption, accelerated by AI. The result is an asset class that combines the defensive characteristics of infrastructure with the growth profile of technology — a combination that is increasingly difficult to find elsewhere in the alternatives landscape.

Cell towers are the most mature expression of this thesis. The tower-as-infrastructure model — long-term leases with inflation escalators, multiple tenants sharing a single structure, high barriers to new supply — has generated exceptional returns for investors over the past two decades. The AI era is extending this model in two directions: upward, as 5G densification requires more towers and more equipment per tower; and outward, as edge computing requires compute infrastructure co-located with connectivity assets. The tower companies that are best positioned are those that have recognised this evolution and are investing accordingly.

Subsea cables are the less-discussed but equally important layer. The internet runs on a network of approximately 500 subsea cable systems, carrying over 95% of international data traffic. AI is driving a step-change in the demand for international bandwidth — the training of large models requires massive data transfers across continents, and the inference of those models requires low-latency connections between compute clusters and end users. The hyperscalers have responded by building their own private cable systems, but the market for carrier-neutral cable infrastructure remains large and underserved by institutional capital.

Fibre networks — the terrestrial complement to subsea cables — are experiencing a similar dynamic. The buildout of fibre-to-the-premises networks, driven by both consumer broadband demand and enterprise connectivity requirements, is creating a generation of real asset opportunities with long-duration contracted revenue and genuine scarcity value. At Lensbridge, we see digital real assets as one of the most compelling areas of the alternatives landscape — and one where our sector expertise gives us a meaningful edge in identifying and underwriting opportunities.