Brookfield Asset Management had its “best fundraising period ever” in the three months to June amid the global economic shutdown caused by the covid-19 pandemic.
The Toronto-based manager raised $23 billion of capital across strategies in the second quarter, according to its Q2 2020 letter to shareholders and earnings materials. Nearly half of that figure, or $12 billion of initial commitments, was raised for its latest distressed debt fund, which is said to be targeting $15 billion.
Speaking on the firm’s second quarter earnings call on Thursday, chief executive and managing partner Bruce Flatt said: “We were able to accelerate fundraising for our flagship distressed fund and to raise more capital for a more fixed income-like perpetual fund. A record level of fundraising means we now have $77 billion of capital available to deploy into investments and we expect the pace of investments to increase over the next 12 months as opportunities present themselves.”
Brookfield’s cash and capital available for investment is “substantially greater today than it was six months ago and at any other time in our history”, according to the letter.
Flatt also noted on the call that the increased level of government debt as result of the economic shutdown will have long-term effects, “the most important of which is many countries around the world will have to offload spending onto the private sector and sell assets”.
Brookfield’s latest flagship funds across private equity, real estate and infrastructure have invested or committed approximately 50 percent in aggregate as of end-June. It plans to return to market with follow-up funds in 2021, according to a statement.
Flatt had said on the firm’s third quarter 2019 earnings call that the next round of flagship fundraisings, slated for 2021 to 2022, could reach $100 billion.
Brookfield’s private equity portfolio generated $32 million in revenues in the three months to June 2020, a slight increase from the $30 million as of end-June 2019. The firm is investing Brookfield Capital Partners V, which held a final close on $9 billion in November last year.
In its PE portfolio, Flatt said some businesses’ sales were down more than 50 percent with the shutdowns in April and May. He added that virtually all operations are now seeing increased activity, with some approaching comparable results to the equivalent period last year.
Brookfield had recently created a special investments programme, which makes non-control equity and equity-linked investments in companies that require capital for debt repayment or growth. It seeded the programme with a $1 billion commitment from its own balance sheet, according to a statement. Flatt said the firm’s intention is for the fund to reach the size of its other funds.
Brookfield manages approximately $550 billion of assets across real estate, infrastructure, renewable power, private equity and credit.