Brookfield Asset Management is gearing up for even more cross-platform fundraising after securing $40 billion in fresh capital last year.
A key part of this is the alternatives giant’s real estate secondaries platform which has started raising capital, chief executive Bruce Flatt said on the firm’s latest quarterly earnings call last week. He did not mention a target.
In October, Flatt said that secondaries could grow into a $50 billion business for Brookfield as rising levels of exposure to alternatives made portfolio management increasingly important. In July, the firm hired Partners Group’s Fabian Neuenschwander and Marcus Day to assist in developing the strategy.
“We’re in the early stages of a fundraising super-cycle,” Flatt said on the call on Thursday. Brookfield is confident the upcoming round will meet an overall target of $100 billion that was set last year, he added.
Brookfield’s fourth real estate flagship offering is already in the market, Flatt said, without identifying a target. The private equity and infrastructure groups are also expected to “launch fundraising for their next vintages in the next 12 months”, Flatt said. Existing flagship vehicles for both are almost 60 percent invested or committed.
Brookfield closed its Brookfield Capital Partners V private equity fund in 2019 on $9 billion and its fourth infrastructure fund in 2020 on $20 billion, PEI data show.
Other planned launches reflect an interest in new sectors that Flatt said will be “meaningful to our long-term growth strategy”. They include a debut energy transition fund focused on investing that will help accelerate the move to a net-zero carbon economy. Brookfield is targeting more than $7.5 billion.
Flatt said the offering has begun raising capital, with Brookfield providing a $2 billion anchor commitment. The energy transition platform’s leadership includes Mark Carney, the former Bank of England and Bank of Canada governor, who joined last year to run ESG and impact investing.
“As we come out of this health and economic crisis, we expect it to be a good time for companies to reset their strategies and focus on sustainable growth,” Flatt said. Because Brookfield is “carbon zero across our entire $600 billion asset footprint” it is “well-positioned to assist others with this transition”.
Brookfield last autumn outlined its push into energy transition and secondaries, as well as reinsurance and technology, sister title Buyouts reported. Through fundraising and other initiatives, the firm believes it can achieve long-term value of up to $450 billion. Sachin Shah was appointed to the role of CIO in part to oversee this activity.
Flatt did not share details about a flagship tech offering, except to say that Brookfield has assembled a team. It is being led by Josh Raffaelli, a former Silver Lake executive.
The $40 billion raised by Brookfield last year takes in the initial $12 billion secured for partner Oaktree Capital’s 11th distressed debt vehicle. In addition, $16 billion went into other credit strategies and $4 billion into perpetual pools.
– This report was originally published on sister title Buyouts.
– Rod James contributed to this report.