Brookfield infra funds count $3.1bn in dry powder

The dry powder built up as a result of a record fundraising year the firm marked in 2010, when Brookfield secured $18bn in third-party capital for investment from its clients, according to an annual report.

Brookfield Asset Management has $3.1 billion of dry powder in its listed and unlisted infrastructure funds, money available thanks to a record-breaking fundraising haul the firm completed in 2010.

Those are some of the highlights the Toronto-based asset manager disclosed about its infrastructure business in its 2010 annual report, published yesterday.

Brookfield’s unlisted infrastructure funds raised a total of $3.1 billion in 2010, including $2.7 billion for its “flagship” Americas Infrastructure Fund, and $440 million for a Peruvian infrastructure fund, according to the report. The funds are currently about 10 percent invested, Brookfield said.

The $3.1 billion formed part of a larger $18 billion in third-party capital Brookfield raised for investment across all its funds in 2010, including a $5.5 billion real estate consortium, a $2.6 billion investment fund for mall REIT General Growth Properties and a $330 million agricultural fund, among others.

Both the $3.1 billion infrastructure fundraise and the firm’s larger $18 billion total capital raised made 2010 a record year for Brookfield, according to spokesperson Andrew Willis. In 2009, Brookfield closed on $14 billion in third-party capital for investment, Willis said.

Brookfield’s management fees jumped 35.7 percent in 2010 thanks “principally” to the increases in third-party capital managed within the infrastructure funds, according to the report. In 2010, Brookfield earned $190 million in annualised base management fees, versus $140 million the year before.

Third-party capital includes funds raised from institutional clients for private funds, public market securities issuances, debt issuances and other vehicles through which Brookfield’s clients have committed to invest with the firm. It does not count Brookfield Asset Management’s own resources.

Brookfield Asset Management chief executive officer Bruce Flatt said in a letter that “underlying fundamentals continue to be very positive for asset management, particularly within the property and infrastructure areas”. Flatt added that Brookfield would continue to grow its asset management business.

Brookfield revealed in the report it was planning to launch a further seven funds over the next 18 months targeting a combined $4 billion. It was unclear if these would be listed or private vehicles.

Overall, the firm now has $122 billion of assets under management, of which $16 billion, or about 13 percent, are infrastructure, according to the report. That’s up from $15 billion last year, when Brookfield was already 40 percent through its eventual 100 percent acquisition of Prime Infrastructure, the former Babcock & Brown-managed infrastructure fund. A $1.1 billion deal completed in December gave it control of the remaining 60 percent of Prime it did not already own.

Brookfield Asset Management’s New York Stock Exchange-listed shares ended yesterday down .6 percent, closing on $31.36 per share.