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Brookfield targets $5bn for debut special investments fund, nabs initial $2.4bn

Brookfield’s special investments strategy, much like Blackstone's tactical opportunities, was set up to invest in assets and businesses that fall outside the scope of the firm’s flagship funds.

Brookfield Asset Management secured $2.4 billion in the first close of an inaugural special investments fund unveiled last year, sources told Buyouts.

The fundraising brings Brookfield Special Investments Fund nearly halfway toward a $5 billion target, the sources said. The offering is expected to wrap up by the end of the year.

Brookfield’s special investments strategy, led by managing partner David Levenson, was set up to invest in assets and businesses that typically fall outside the scope of the firm’s flagship vehicles. As such, the mandate is quite broad in nature, spanning the risk-reward spectrum.

It is “a tailored program,’” Brookfield said in a Q2 2019 financial report, with “the flexibility to invest in a wide range of global opportunities.”

In this respect, Brookfield’s strategy sounds much like Blackstone’s $32 billion tactical opportunities, established in 2011 and headed by David Blitzer. Blackstone is looking to raise $4 billion for a fourth tactical opportunities offering, Reuters reported in March.

Brookfield’s strategy aims to leverage opportunities linked with the firm’s core platforms, including infrastructure, private equity and real estate, and be complementary to them, the sources said.

Unlike other Brookfield platforms, the special investments strategy will make non-control equity and equity-like investments. This is intended to appeal to companies preferring a flexible capital solution that does not significantly dilute ownership, the sources said.

Brookfield’s new strategy appears to have found a promising deal environment during the health crisis. One of its earliest deals, closed in mid-2020, was a $260 million investment in Superior Plus, an energy distribution and specialty chemicals business.

Superior Plus this year sold its chemicals unit to Birch Hill Equity Partners for C$725 million ($590 million). It also agreed to acquire Freeman Gas and Electric for $170 million.

Levenson, a member of Brookfield’s private equity group, joined the firm in 2004. He was previously a CIO in the infrastructure group, focused on transportation investments. Prior to 2004, he was an associate with Willis Stein & Partners, according to his LinkedIn profile.

Another team member is Angelo Rufino, a managing partner and head of special investments in North America. Before joining Brookfield in 2014, he worked at Brigade Capital Management. Rufino spearheaded the Superior Plus deal.

Brookfield CEO Bruce Flatt in February said the firm is “in the early stages of a fundraising super-cycle.”

The upcoming round is expected to meet a $100 billion target adopted last year. It will include an array of new flagship funds as well as first-time initiatives in areas like energy transition, secondaries and technology.

Brookfield declined to provide a comment on this story.

(This story was updated to correct the name and launch date of Brookfield Special Investments Fund.)