Brookfield plots $100bn in flagship fundraises

The firm collected $9bn for its latest private equity fund last week and expects to hold a final close for its infrastructure fund as early as year-end.

Brookfield Asset Management expects next its next fundraising round for its flagship funds to reach $100 billion.

Speaking on the firm’s third quarter earnings call on Thursday, chief executive and managing partner Bruce Flatt said the figure could be reached by including Oaktree Capital Management’s flagship distressed credit fund, special situations programme, real estate and new strategies.

Flatt added that the figure also includes co-investment capital as well as direct investments with its partners and open-ended strategies.

Brookfield held the final close last week on its latest private equity fund, Brookfield Capital Partners V, amassing $9 billion, more than double its 2015-vintage, $4 billion predecessor. About 150 investors have invested in Fund V, according to a filing with the Securities and Exchange Commission in October.

The fundraise includes a $3 billion GP commitment.

The firm also expects its flagship infrastructure fund, Brookfield Infrastructure Fund IV, to hold its final close by the end of 2019 or early in 2020, according to its Q3 2019 interim report. Infrastructure Fund IV is seeking $17 billion. Together with co-investment capital raised to date, the firm’s latest round of flagship fundraising will total approximately $50 billion.

“These funds and the co-investment capital and the pools of money that we bring beside our flagship funds are getting bigger and bigger every year, every time. The capital in the world seems to be splitting down the middle. There are small niche strategies and there’s very large strategies. We fortunately fit into the latter and we just think the scalability of the franchise just gets better and better,” Flatt said during the call.

The Toronto-based manager’s latest flagship funds across private equity, real estate and infrastructure have invested 45 percent in aggregate. It plans to return to market with its flagships in 2021/2022, it noted in the report.

On the firm’s open-ended or perpetual strategies, Flatt said he expects such strategies to “get bigger and bigger and bigger”, noting that in the low interest rate environment these are ideal fixed income alternatives.

“Our infrastructure and real estate funds should continue to grow, and they just continuously bring in capital. And as they get larger, more and more institutions are able to invest into them because some of them have size restrictions, and therefore, you need a certain size for them to be invested into it. So, they get more attractive as they get bigger.”

Revenues generated from Brookfield’s private equity operations increased by $2 billion during the quarter primarily as a result of acquisitions completed in the last 12 months. These include Johnson Controls, a Cork, Ireland-headquartered automotive battery business and Healthscope, an Australian private healthcare provider. Both were acquired in the prior quarter, Brookfield noted in the report.

Brookfield’s private equity holdings accounted for 8.2 percent or $18.3 billion of the firm’s total assets, as of end-September.