Blue Owl Closes $7B Data Center Fund

May 19, 2025

Commitments exceeded the original target of $4 billion.

Blue Owl sees a generational market opportunity in data centers, said Co-President & Global Head of Real Assets Marc Zahr. Image courtesy of Blue Owl Capital

Blue Owl Capital has closed its most recent digital infrastructure fund, Blue Owl Digital Infrastructure Fund III, with $7 billion of total capital commitments. ODI III exceeded the original target of $4 billion.

ODI III will develop, acquire, and own data centers and related real property assets. The fund will focus particularly on large-scale, build-to-suit developments, as AI and cloud-driven global digital capacity needs ramp upward.

A mix of existing and new institutional investors made commitments to ODI III. They include public and private pensions, insurance companies, sovereign wealth funds, asset managers, endowments and foundations, and family offices in the U.S., Europe, Asia-Pacific and the Middle East.

The fund is part of the company’s digital infrastructure strategy, which has raised $34 billion of capital thus far, investing in more than 90 facilities in more than 25 markets worldwide. It holds about $15 billion in assets.

In January, the firm obtained $2.3 billion from JPMorgan for a data center project in Abilene, Texas. Blue Owl is developing the project in partnership with Crusoe Energy Systems and Primary Digital Infrastructure.

Blue Owl sees a generational market opportunity in data centers and digital infrastructure, Co-President & Global Head of Real Assets Marc Zahr said in a prepared statement, adding that massive capital commitments are required to fund their development.

All together, Blue Owl has $67 billion in assets. Until recently, the private equity firm focused mostly on net-lease properties.

Data center sector booming

The current data center investment trend is no surprise. Digital infrastructure is currently the only CRE segment experiencing a genuine boom, according to a Newmark report. Not just any boom, but structural boom, driven primarily by investment in AI-related data center development.

The data center development pipeline stood at nearly 50 million square feet at the end of 2024, Newmark noted. That is essentially double the volume from five years ago.

During 2023 and 2024, roughly 24 percent of all industrial-zoned development site acquisitions were for data center development, the report also shows. Hyperscalers are driving these acquisitions by a significant margin, representing over 10 percent of all commercial development site purchases in 2024, regardless of zoning.

There are constraints—or potential constraints—on data center development, however, the number one being power, Newmark reports. Projected power demands from all existing and planned U.S. data centers will exceed the supply of power by around 50 percent, unless new sources of power come online, such as small nuclear reactors.

Blue Owl Capital