Wednesday 28 September 2016

Brookfield's new fund easily beats $7bn target level

Scott Deveau

Published 21/04/2016 | 02:30

Brookfield Asset Management chief executive Bruce Flatt
Brookfield Asset Management chief executive Bruce Flatt

Brookfield Asset Management, the alternative asset manager led by Bruce Flatt, raised $9bn (€7.9bn)for its latest real estate fund, exceeding its $7bn target and doubling its previous fund, as Asian investors and US pension funds piled in to its fundraising efforts.

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Brian Kingston, chief executive of Brookfield Property Partners, said the funds are already 45pc committed, including investments in the privatization of Associated Estates Realty that were made last year and the pending offer to take Rouse Properties private.

Brookfield has also invested some of the new fund in seven office buildings in Brazil, and will likely have it fully invested in two to three years, he said.

"Obviously, with a larger fund, it allows us to do even larger transactions than we have done in the past," Kingston said in an interview.

He said the new fund was raised over 12 months from first close to final close, faster than the roughly 16 months it took for its previous $4.4bn real estate fund in 2013. The new property fund will continue to be focused on investments where the company can take control in large-scale, undervalued or distressed situations.

The biggest growth area in the investor base, both in size of commitment and number of investors, came from Asia and the US public pension funds, Kingston said. Many of the investors in the previous real estate fund committed to the new one, and in some cases increased the size of their investments, he said.

"One of our big advantages, or one of the reasons people like to invest with us, is because it is a global business," he said.

Brookfield continues to see opportunities for investing in the US and distressed situations in places like Brazil, he said. Europe is another region where the company is active although the growth outlook there isn't as good as in the US, he said.

Toronto, Montreal and Vancouver are benefiting from a lower [Canadian dollar], he said (Bloomberg)

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