Blue Owl's Strategic Debt Financing for Italian Data Centers: Evaluating Growth and Capital Efficiency in a High-Demand Market

The global data center industry is undergoing a seismic shift, driven by the insatiable demand for computing power from artificial intelligence (AI) and cloud services. In this evolving landscape, Blue Owl Capital's recent foray into Italian data centers through its subsidiary Stack Infrastructure Inc. has emerged as a strategic bet on Europe's most dynamic digital infrastructure market. With a proposed €600 million debt financing linked to Milan-based assets, Blue Owl is leveraging its expertise in private equity and infrastructure to capitalize on a sector poised for explosive growth. This analysis evaluates the investment's potential by examining market fundamentals, capital efficiency, and the broader implications for digital infrastructure in Europe.

Strategic Debt Financing: A Calculated Move

Blue Owl's Stack Infrastructure is exploring a commercial mortgage-backed securitization to fund its Milan data centers, a move that aligns with the firm's broader strategy to scale its digital infrastructure portfolioItaly GDC2025 | CleanBridge^[1]. The transaction, potentially finalized in Q4 2025, reflects the growing appeal of data centers as an asset class. According to a Bloomberg report, the deal underscores the sector's resilience amid macroeconomic uncertainty, as demand for AI-driven computing continues to outpace supplyItaly GDC2025 | CleanBridge^[1].

This financing strategy is not without precedent. Blue Owl's Digital Infrastructure Fund III, which recently closed at $7 billion, has already demonstrated strong investor appetite for global data center investments. The fund's focus on high-capacity projects—such as a $15 billion joint venture with Crusoe and Primary Digital Infrastructure for a 1.2 GW Texas data center—highlights the firm's ability to secure large-scale, scalable assetsBlue Owl Capital (OBDC) Earnings Call Transcript^[2]. By applying similar principles to Europe, Blue Owl is positioning itself to benefit from the continent's fragmented but rapidly consolidating data center market.

Market Fundamentals: Italy as a Digital Hub

Italy's data center market is experiencing a renaissance. In 2024, the country's IT power capacity grew by 17% year-on-year to 513 MW, with Milan emerging as a critical node for trans-European data trafficItaly GDC2025 | CleanBridge^[1]. By 2030, total capacity is projected to reach 1,390 MW, driven by investments from hyperscalers like Microsoft, Oracle, and Google, which have established cloud regions in Milan and TurinItaly GDC2025 | CleanBridge^[1].

The colocation market, a key segment of the industry, has also surged, reaching €765 million in revenue in 2024—a 17% increase from 2023Italy GDC2025 | CleanBridge^[1]. This growth is fueled by two factors: the EU's digital transformation agenda, including the “Piano Nazionale di Ripresa e Resilienza,” and the influx of private capital. For instance, Apto's €3 billion Milan data center campus, announced in 2025, underscores the scale of private-sector commitment to the regionBlue Owl Capital (OBDC) Earnings Call Transcript^[2].

Moreover, Italy's strategic location as a gateway between Western and Eastern Europe, coupled with its relatively low energy costs, makes it an attractive hub for hyperscalers seeking to optimize latency and operational efficiency. However, the market is not without challenges. Energy consumption by data centers in the EU is projected to rise to 168 TWh by 2030EU to propose data centre energy efficiency package amid rising consumption^[3], prompting regulatory scrutiny and calls for stricter energy efficiency standards. Blue Owl's focus on renewable energy integration—evident in its portfolio's emphasis on sustainable infrastructure—positions it to navigate these risksItaly GDC2025 | CleanBridge^[1].

Capital Efficiency: Leverage and Resilience

Blue Owl's capital efficiency metrics reinforce the prudence of its strategy. As of Q2 2025, the firm's net leverage ratio stood at 1.17x, within its target range of 0.9x to 1.25xBlue Owl Capital (OBDC) Earnings Call Transcript^[2]. This conservative approach, combined with a diversified loan structure across over 400 borrowers, enhances resilience against economic volatilityItaly GDC2025 | CleanBridge^[1]. The firm's Return on Equity (ROE) of 10.6% for Q2 2025 further underscores its ability to generate returns without overleveragingBlue Owl Capital (OBDC) Earnings Call Transcript^[2].

The proposed €600 million financing for Italian assets is likely to be structured with a mix of senior debt and equity, minimizing exposure to interest rate fluctuations. By securing debt at favorable terms—potentially through securitization—Blue Owl can amplify returns while maintaining a balanced capital structure. This approach mirrors the firm's success in the U.S. market, where its Texas data center joint venture leverages a 1.2 GW asset to serve both cloud and AI workloadsBlue Owl Capital (OBDC) Earnings Call Transcript^[2].

Risks and Considerations

While the outlook is optimistic, investors must remain cognizant of risks. The AI market in Italy, for instance, is forecasted to contract between 2025 and 2031Growth of the AI market in Italy from 2021 to 2031^[4], potentially dampening demand for specialized computing infrastructure. Additionally, the EU's proposed energy efficiency regulations could increase operational costs for data centersEU to propose data centre energy efficiency package amid rising consumption^[3]. Blue Owl's emphasis on renewable energy integration—such as solar and wind-powered facilities—will be critical to mitigating these headwindsItaly GDC2025 | CleanBridge^[1].

Another challenge lies in the sector's capital intensity. The €15 billion in planned data center investments across Italy between 2023 and 2025EU to propose data centre energy efficiency package amid rising consumption^[3] could lead to oversupply if demand growth slows. However, Blue Owl's focus on high-occupancy, mission-critical assets—such as those in Milan's central business district—reduces the risk of underutilizationItaly GDC2025 | CleanBridge^[1].

Conclusion: A Strategic Bet on the Future

Blue Owl's debt financing initiative in Italian data centers represents a calculated alignment with global megatrends. By tapping into Europe's fastest-growing digital infrastructure market, the firm is leveraging its capital efficiency, investor confidence, and strategic partnerships to secure a foothold in a sector projected to expand from $236 billion to $933 billion in the AI data center segment alone by 2030EU to propose data centre energy efficiency package amid rising consumption^[3]. While regulatory and market risks persist, Blue Owl's disciplined approach—evidenced by its leverage ratios, ROE, and sustainability focus—positions it to navigate these challenges and deliver robust returns.