Sep 14, 2021
Brookfield seeks up to US$15B for next private equity fund
Christine Poole discusses Brookfield Infrastructure Partners
Brookfield Asset Management Inc. is seeking to raise US$12 billion to US$15 billion for its third flagship private equity fund after making a string of acquisitions, according to people familiar with the matter.
The Toronto-based firm is expected to start fundraising later this month and complete it by early 2022, the people said, asking not to be identified because the matter is private.
Bruce Flatt, chief executive officer of Brookfield Assest Management Inc., speaks during a Bloomberg Television interview at the Milken Institute Global Conference in Beverly Hills, California, U.S., on Monday, April 29, 2019. The conference brings together leaders in business, government, technology, philanthropy, academia, and the media to discuss actionable and collaborative solutions to some of the most important questions of our time.
In a letter to shareholders in August, Brookfield Chief Executive Officer Bruce Flatt said he wanted to bring in US$100 billion for deals and grow each of the firm’s flagship funds to more than US$25 billion in capital over time. To achieve that, Brookfield is bolstering its investor ranks. Flatt said the firm now has 2,000 clients globally, up from 425 five years ago.
A representative for Brookfield declined to comment.
At US$15 billion, the new fund would be two-thirds larger than the US$9 billion raised for a 2019 buyout pool. A prior fund brought in US$4 billion in 2016. Those vehicles each had a net internal rate of return of about 30 per cent, the people said.
Three recent acquisitions by its private equity arm, Brookfield Business Partners, pushed it past the threshold that typically triggers the firm to start raising additional capital, or more than 75 per cent of the money allocated. Those deals included the US$5 billion acquisition of Modulaire Group, a provider of modular leasing services in Europe and the Asia-Pacific region, and the purchase of trucking-parts supplier DexKo Global Inc. for US$3.4 billion.
Brookfield’s buyout division had roughly US$77 billion in assets under management at the end of the second quarter, according to its website. That’s up from US$17.8 billion at same point five years ago. As with previous funds, Brookfield Business Partners is expected to be the largest investor in the new fund and will likely commit more than US$3 billion, the people said.
Investors continue to pour vast sums of money into the private equity industry in search of higher returns in the low interest rate environment. In July, Hellman & Friedman raised US$24.4 billion for its biggest fund to date. Soon after, Carlyle Group Inc. said it was seeking to raise the industry’s largest-ever private equity pool.