Challenge
A publicly traded alternative asset manager focused on digital infrastructure investments engaged Marshall &-Stevens to provide a fairness opinion in connection with a GP-led fund-to-fund transfer of a data center-development asset. The transaction involved a data center project anchored by a hyperscale tenant and required-evaluation across affiliated funds with differing investor interests. The analysis included multiple structuring-scenarios, including contingent earnout provisions tied to future leasing and stabilization milestones. The-engagement was further complicated by evolving market dynamics, including power availability constraints,-regional pricing variability, and a compressed timeline with multiple stakeholders.
Approach
Marshall & Stevens served as an independent valuation consultant and fairness opinion provider, performing a-comprehensive valuation analysis of the data center development project. The team evaluated project-level-forecasts, construction timelines, and contractual arrangements with the hyperscale tenant to assess key value-drivers and risks. Multiple valuation methodologies were applied, including discounted cash flow analyses under-various development scenarios and benchmarking against comparable data center transactions. Sensitivity analyses-were performed on critical assumptions such as lease-up timing, power costs, and exit capitalization rates, with-particular attention to the structure and impact of contingent consideration. Marshall & Stevens coordinated-closely with management and legal advisors to ensure alignment on assumptions and support a well-informed and-defensible fairness conclusion.
Outcome/Solution
Marshall & Stevens delivered an independent fairness opinion, providing the client with confidence that the-consideration was fair from a financial point of view. The analysis helped clarify key risks and value drivers,-particularly related to development uncertainty and earnout structures. The engagement supported fiduciary-responsibilities, aligned investor interests across funds, and facilitated timely execution of a complex transaction. Marshall & Stevens presented its analysis of the transaction to the approving board to assist their ultimate-determination of whether or not to proceed with the transaction.
