Toronto-based Brookfield Asset Management has surpassed Global Infrastructure Partners (GIP) to close the largest infrastructure fund ever raised at $14 billion. The milestone comes less than a year after the launch of Brookfield Infrastructure Fund III (BIF III), which easily breezed past its initial $10 billion target to hold a final close on its revised hard-cap.
Prior to BIF III, GIP’s $8.25 billion Global Infrastructure Partners II, closed in 2012, was the largest infrastructure vehicle ever raised. The New York-based manager is also currently raising its third fund, for which it has collected at least $10.8 billion. The fund has a $12.5 billion target and a $15 billion hard-cap.
In a separate interview with Infrastructure Investor, Brookfield Infrastructure chief executive Sam Pollock argues the firm’s latest fundraise hints at more to come for the asset class: “This has been a trend that has been developing and we can see more growth ahead – I don’t think this is by any means the apex.”
Like its predecessor, which closed in 2013 on $7 billion, BIF III will invest in the transportation, energy and renewables sectors in OECD countries. It will target investments ranging from $400 million to $1 billion in size and will have a four-year investment period and a 12-year term, subject to two one-year extension options.
More than 120 institutional investors committed to the fund, Brookfield said in a statement. According to Infrastructure Investor Research & Analytics, investors in the fund include the New Mexico State Investment Council, the Texas Municipal Retirement System and the Teacher Retirement System of Texas. Some of the largest investments came from the Oregon Public Employees’ Retirement System and the New York State Common Retirement Fund, which committed $400 million and $300 million respectively.
Brookfield has committed $4 billion of its own capital, through listed vehicles Brookfield Infrastructure Partners and Brookfield Renewable Energy Partners. The Canadian fund manager smashed through its original $10 billion target last April when it held a first close on $11.8 billion, just $200 million shy of its original hard-cap, which it then revised upwards to $14 billion.
According to the statement, BIF III has committed to invest over $3 billion in assets including a portfolio of US hydroelectric facilities, a portfolio of Brazilian electricity transmission projects, a Colombian power generation company and a US water infrastructure project developer.
The firm is currently in exclusive negotiations with Brazil’s state-backed Petrobras to buy its natural gas transmission assets in a deal that could be worth up to $5 billion in equity.
Last month, Brookfield agreed to buy a 57 percent stake in a 115km Peruvian toll road that comprises three main routes to and from the capital, from Odebrecht, a developer embroiled in Brazil’s far-reaching corruption scandal. The deal involves a 30-year concession, which expires in 2043, operating and maintaining the Panamericana Norte, Panamericana Sur and Ramiro Prialé routes. Financial details were not disclosed.
The Canadian fund manager is also in discussions to acquire Asciano, one of the largest rail and port logistics companies in Australia. It has teamed up with GIP for this deal.