Brookfield holds $21bn first close on flagship, $2.8bn for debt

The asset manager has also launched a private wealth product to invest alongside its infrastructure equity and debt funds.

Brookfield Asset Management revealed it has held first closes for its fifth flagship infrastructure fund and its third infrastructure debt fund.

Having reported total commitments to Brookfield Infrastructure Fund V at the end of Q2 at $20 billion, the Canadian firm revealed in its Q3 earnings today it held a $21 billion first close during the quarter, while it also achieved a $2.8 billion first close on Brookfield Infrastructure Debt Fund III. This year is already Brookfield’s largest fundraising year ever across all strategies

BIF V is targeting $25 billion, with no hard cap believed to be set. BIDF III is targeting $4 billion, according to documents from the New Mexico State Investment Council, which committed $150 million to the strategy. A final close for BIDF III is slated for next month, according to the documents.

Elsewhere in fundraising, a further $1 billion was added to the open-end Brookfield Super-Core Infrastructure Partners, bringing the total amount raised for the vehicle at quarter end to $8.1 billion, according to its Q3 financials. Meanwhile, at $7 billion, nearly half of the $15 billion Global Transition Fund has been committed, and in its earnings call, the group confirmed a successor vehicle is being mulled.

“This was the whole idea behind the strategy that the amount of capital needed to invest in the transition is enormous. And with a pool of capital that can effectively go where the emissions are and start to help companies achieve their decarbonisation efforts, the opportunities are vast, and some of them are very large in size,” said Bruce Flatt, chief executive of BAM. “We are seeing lots of good opportunities. And as we work through that, then yes, at some point we will move on to 2.0. Hard to say exact timing, but the pace of deployment is going well.”

Brookfield also said it has launched a private wealth product to give those investors a chance to invest alongside both its infrastructure equity and debt strategies. KKR also revealed recently it has launched a similar strategy, while Global Infrastructure Partners’ managing director Mark Levitt recently has been made responsible for GIP’s US family office coverage.

“We believe there’s a great potential for this product similar to other products we have designed for this distribution channel that are steadily scaling up,” said Bahir Manios, Brookfield’s managing partner and chief financial officer.

Infra on the charge

BAM’s infrastructure unit has invested $17.3 billion over the 12-month period ending 30 September, its earnings revealed. A further $2.9 billion has been invested in its renewable power and transition business. The infrastructure deployment exceeds that of its private equity and real estate divisions, both of which have invested a little over $13 billion in the same time period.

This marks a contrast from its Q3 2021 accounts, which showed a $4.7 billion deployment in infrastructure over the previous 12 months, amid $20.4 billion invested in real estate. Asia-Pacific has driven deployment, with the $7.4 billion invested in Asia-Pacific by BAM in infrastructure over the 12 months to end of Q3 2022 more than it has deployed in North America or Europe. This was in large part driven by its $5.3 billion investment in AusNet Services.

Deals not included in those figures, as they are yet to close, include its move to invest in Intel’s semiconductor fabrication facility in Arizona and the Transition Fund’s deal for nuclear services group Westinghouse.

On Intel, Flatt stated: “This is just one chip manufacturing facility and the trends towards de-globalization may result in similar opportunities going forward.”

Westinghouse was acquired by the Transition Fund alongside uranium provider Cameco from Brookfield Business Partners, part of BAM’s private equity division. Manios said this generated BBP approximately a 60 percent IRR and a six times multiple. BBP took over Westinghouse in 2018 following its bankruptcy in 2017.