GI Partners

GI Partners is a Menlo Park-based private equity firm founded by Rick Magnuson, with CalPERS as an early anchor investor. It specialized in buying undervalued real estate and infrastructure, which led it to the stranded data-center buildings left by the dot-com crash.

Digital Realty was not started by engineers. It was assembled by GI Partners, which from 2001 bought specialized telecom and data-center buildings from distressed owners after the dot-com bust. Traditional real estate investors avoided these windowless, heavily wired properties, but GI Partners bet that internet traffic would recover and need them. In 2004 it combined the portfolio into Digital Realty Trust and took it public on the NYSE, with Magnuson as chairman and Michael Foust as CEO. GI Partners later sold down its stake as the REIT grew into an independent public company. (Exact birth year remains publicly undisclosed).