Brookfield collects $6.5bn in first close for largest PE fund

Brookfield Capital Partners V is seeking at least twice the target of its 2015-vintage predecessor.

Brookfield Asset Management has held a first close on its largest ever private equity fund.

The Toronto-headquartered firm has raised $6.5 billion for Brookfield Capital Partners V, according to a statement announcing its third quarter earnings on Thursday. The close occurred in October.

The fund’s target is at least $7 billion, according to a presentation from the firm’s 26 September investor day.

“This round of flagship funds will raise circa $50 billion of equity capital, therefore enabling us to acquire approximately $125 billion of assets,” chief executive Bruce Flatt said on an earnings call accompanying the results. The firm also raised $12 billion for its latest opportunistic real estate fund during the period.

Brookfield V’s target is at least double that of its 2015-vintage predecessor, which raised $4 billion against a $3.5 billion target. The firm’s 2010-vintage Fund III closed on its $1 billion target, according to PEI data.

A spokeswoman for Brookfield declined to comment on the target size of Brookfield V.

Minnesota State Board of Investment has committed $250 million to Brookfield V, according to PEI data.

Brookfield made $1.1 billion in funds from operations during the quarter. Fee-related earnings grew 72 percent year-on-year to $320 million from the firm’s private funds and higher performance fee income.

The firm has $2.6 billion in unrealised carried interest – $85 million of which was generated in the third quarter, chief financial officer Brian Lawson said on the call.

“Half of that unrealised carried balance relates to funds and assets that should be monetised over the next few years and that would allow us to recognise the associated carry in [funds from operations] as potential for clawback diminishes,” Lawson said.

Brookfield deployed $25 billion into new investments during the quarter across all its strategies, and total assets under management exceed $330 billion.

Asked on the call how environmental, governance and social issues were affecting fundraising and investments, Lawson said investors were focusing on gender diversification.

“We’ve always wanted to make sure we’re drawing from the broadest base to ensure that we have the best talent,” he said. “We think we’re in pretty good shape in that regard. Roughly 45 percent of the employee base is women, but it’s still something we are very focused on.”

The firm’s net earnings were $941 million during the quarter – a 5 percent decrease year-on-year.

North American private equity funds raised $110.1 billion in the first three quarters of this year, according to PEI‘s latest fundraising report. At least $177.9 billion was raised in the region last year.