(Bloomberg) -- The New Zealand fund manager that was an early champion of investing in renewable energy has picked its next major investing opportunity.

Cloud-based technology and software services are the infrastructure of the digital era, with resilient earnings that will attract aggressive long-term capital, Morrison & Co. Chief Investment Officer Will Smales said in an interview Wednesday in Sydney.

“If you think about Microsoft Azure or Amazon Web Services, you can’t buy them because they’re huge and public, but those cloud computing platforms are infrastructure in the sense they’re supporting the modern world,” Smales said. 

“If you look at the stack of priorities for a business, some parts of the software system that keep the lights on are as important as their power or water,” he said.

The firm, which today manages NZ$25 billion ($16 billion) on behalf of clients including sovereign wealth funds, pension funds and endowments, already has plenty of assets on the more tangible side of digital infrastructure.

A Morrison-led group acquired US provider FiberLight earlier this month, marking the firm’s first North American bet on fiber infrastructure. The purchase, valuing the firm at about $1 billion including debt, adds to a A$3.6 billion ($2.5 billion) deal agreed in April for Australian fiber cabling firm Uniti Group Ltd. It will also manage a A$2.8 billion stake in the phone towers arm of Telstra Corp., Australia’s biggest telecommunications company, acquired in June by an investor group.

First mover

Morrison’s track record lends credibility to its bold software bet. The fund’s first wind turbine investment was more than three decades ago, Smales observed. It established itself in New Zealand with Infratil Ltd., an infrastructure conglomerate focused on renewables that Morrison took public in 1994 and continues to manage. Infratil’s overall annual return after tax is 18.7%, according to its website.

“One thing about Morrison is that we’ve been prepared to invest time and money early into sectors,” Smales says. The firm was one of the first investors into data centers in Australia, and is pushing into the health-care sector with a focus on medical imaging, he added.

Infratil acquired diagnostic imaging clinic operator QScan Group Holdings Pty in 2020 for A$290 million and Pacific Radiology Group Ltd. last year for as much as NZ$350 million.

Last year Morrison opened an office in New York, where Smales is based, adding to its London office started in 2018. Each have a staff of 15 today, and the firm wants its trans-Atlantic portfolio to account for almost half its total holdings within three years, up from less than a fifth today. 

“We’ve built our capability quite clearly in our backyard,” Smales said. “New Zealand can export something other than milk powder and the All Blacks.”

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