Why One Fund Has Amassed a $64 Million Bet on This Volatile Digital Infrastructure Stock
Key Points
Boston-based Portolan Capital Management purchased nearly 2.4 million shares of DigitalBridge Group in the third quarter.
The position value increased by $32 million from the previous period.
As of September 30, Portolan reported holding nearly 5.5 million DBRG shares valued at about $64 million.
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Boston-based Portolan Capital Management reported a buy of nearly 2.4 million shares of DigitalBridge Group (NYSE:DBRG), contributing to an increase in its stake of about $32.1 million, according to a November 13 SEC filing.
What Happened
According to a filing with the Securities and Exchange Commission dated November 13, Portolan Capital Management increased its position in DigitalBridge Group by nearly 2.4 million shares during the third quarter. The fund’s stake grew to about 5.5 million shares with a market value of $63.98 million as of September 30.
What Else to Know
Portolan Capital Management's purchase brings the DigitalBridge stake to 3.5% of reported U.S. equity AUM.
Top five holdings after the filing:
- NYSE:MOD: $85.6 million (4.6% of AUM)
- NASDAQ:TTMI: $68.5 million (3.7% of AUM)
- NYSE:ELF: $64.6 million (3.5% of AUM)
- NYSE:DBRG: $64 million (3.5% of AUM)
- NYSE:CLS: $62 million (3.4% of AUM)
As of Friday, DBRG shares were priced at $13.19, up about 18% over the past year and slightly outperforming the S&P 500's 16.5% gain in the same period.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $86.1 million |
| Net Income (TTM) | $12.8 million |
| Dividend Yield | 0.3% |
| Price (as of Friday) | $13.19 |
Company Snapshot
- DigitalBridge offers investments and operational expertise across digital infrastructure assets, including cell towers, data centers, fiber, small cells, edge infrastructure, and related real estate.
- The company operates as an infrastructure investment firm specializing in investing and operating businesses across the digital ecosystem, including cell towers, data centers, fiber, small cells, edge infrastructure, digital infrastructure, and real estate.
- It's headquartered in Boca Raton, Florida, with additional offices in major U.S. and international cities.
DigitalBridge Group, Inc. is an investor and operator in the digital infrastructure sector, specializing in businesses such as cell towers, data centers, fiber, small cells, edge infrastructure, and digital real estate. The company specializes in operating and investing in digital infrastructure and real estate businesses, including cell towers, data centers, fiber, small cells, and edge infrastructure.
Foolish Take
This position sits alongside a mix of industrial, consumer, and electronics names, and that seems to signal this digital infrastructure play is being treated as a structural growth sleeve rather than a speculative bet. At just 3.5% of reported assets, the sizing looks to be a sign of conviction without concentration risk, a notable contrast to funds that lean far more heavily into single themes.
That measured approach lines up with DigitalBridge’s fundamentals. In the third quarter, the company generated $94 million in fee revenue, up 22% year over year, while fee-related earnings climbed 43% to $37.3 million. Fee-earning equity under management reached $40.7 billion, rising 19% year over year, driven by organic fundraising and co-invest activity. Management also confirmed it exceeded its full-year fee-earning equity target a quarter early, underscoring operating momentum despite market swings.
For patient investors, it’s important to know that this isn’t necessarily a bet on a smooth ride, but it is a bet that digital infrastructure platforms with recurring fees, global scale, and exposure to AI-driven demand can compound value over time, even when the stock itself remains volatile along the way.
Glossary
Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
Stake: The ownership interest or share a fund or investor holds in a company.
Reportable assets: Assets that an investment manager must disclose in regulatory filings, typically above a certain threshold.
Position: The amount of a particular security or asset held by an investor or fund.
Dividend yield: A financial ratio showing how much a company pays in dividends each year relative to its share price.
Digital infrastructure: Physical assets supporting digital communications, such as data centers, cell towers, fiber networks, and related real estate.
Edge infrastructure: Computing resources and facilities located close to end-users to reduce latency and improve digital service delivery.
Small cells: Low-powered cellular radio access nodes that improve mobile network coverage and capacity in specific areas.
Filing: An official document submitted to a regulatory authority, often containing financial or ownership information.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Celestica, Modine Manufacturing, and e.l.f. Beauty. The Motley Fool has a disclosure policy.
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