Brookfield to launch Fund IV in Q4

The Canadian firm’s CEO says market conditions should drive the vehicle to top its $14bn predecessor.

Brookfield Asset Management is preparing to launch its fourth flagship infrastructure fund, having invested the majority of its $14 billion third vehicle, executives for the Canadian fund manager told investors on Thursday.

On Brookfield’s second quarter earnings call, Ben Vaughan, senior managing partner at the Toronto-based firm’s infrastructure business, said Brookfield Infrastructure Fund III is now 75 percent invested, highlighting recent deals in the telecoms, midstream energy and residential services sectors.

“Infrastructure remains a core and growing real asset allocation across our investor base,” Vaughan said on the call. “We’re now positioned to begin fundraising for our next flagship fund, and we expect to start in the fourth quarter of this year.”

Bruce Flatt, Brookfield’s chief executive, added that the firm’s previous fundraisings, along with demand for infrastructure assets from institutional investors, means “we can have a larger fund than we have today”, he said.

A spokesperson for Brookfield declined to comment on the amount of capital Brookfield is hoping to raise, but reports suggest it could be as much as $20 billion.

The firm closed its third flagship fund in July 2016 on $14 billion, at the time the largest investment vehicle in the industry. That was soon upstaged by Global Infrastructure Partners, which closed its third fund on $15.8 billion in early 2017. GIP is mulling a new fundraising as well, which is also rumoured to be around the $20 billion mark.

Just under one year after it closed its third fund, in May 2017, Brookfield told shareholders the vehicle was 45 percent invested. That means the firm took about 15 months to deploy another 30 percent of Fund III, equivalent to $4.2 billion.

In addition to its closed-ended offering, Brookfield launched an open-ended core infrastructure fund in May. The firm said the Brookfield Super-Core Infrastructure Fund, its first open-ended vehicle, will target assets that do not generate returns as high as its more opportunistic vehicles.

Last week, Brookfield Infrastructure Partners, the firm’s publicly listed infrastructure arm, announced a C$4.3 billion ($3.31 billion; €2.86 billion) acquisition of Enercare, a company providing heating and air conditioning rental and maintenance services. In July, Brookfield agreed to pay C$4.3 billion for the full interest in North American energy company Enbridge’s Western Canadian natural gas gathering and processing assets.