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Brookfield’s Bruce Flatt: ‘We’re in the early stages of a fundraising super-cycle’

Brookfield’s fundraising plans include a debut energy transition offering with a target of more than $7.5bn. The firm is committing $2bn.

After securing $40 billion in fresh capital in 2020, Brookfield Asset Management is gearing up for even more cross-platform fundraising in the months ahead.

In a year-end financial results webcast this week, CEO Bruce Flatt spoke of continued “strong momentum” on the fundraising front in 2021 and beyond. “We’re in the early stages of a fundraising super-cycle,” he said. Brookfield is confident, he added, the upcoming round will meet an overall target of $100 billion that was set last year.

The Toronto alternative-asset manager’s plans encompass longstanding strategies, such as infrastructure, private equity and real estate, as well as new areas where Brookfield is looking to build a presence.

Brookfield’s fourth real estate flagship offering is already in the market, Flatt said. He did not identify a target. Fund IV’s predecessor was completed two years ago at $15 billion.

The PE and infrastructure groups are also expected to “launch fundraising for their next vintages in the next 12 months,” Flatt said. This owes to the fact that existing flagship vehicles for both are almost 60 percent invested or committed. Brookfield closed a fifth PE fund in 2019 at $9 billion and a fourth infrastructure fund in 2020 at $20 billion.

Other planned launches reflect an interest in four spaces that Flatt said will be “meaningful to our long-term growth strategy.” They include a debut energy transition fund focused on investing that will help accelerate the move to a net-zero carbon economy. Brookfield is targeting more than $7.5 billion.

Flatt said the offering has begun raising capital, with Brookfield providing a $2 billion anchor commitment. The energy transition platform’s leadership includes Mark Carney, the former Bank of England and Bank of Canada governor, who was recently hired to run ESG and impact investing.

“As we come out of this health and economic crisis, we expect it to be a good time for companies to reset their strategies and focus on sustainable growth,” Flatt said. Because Brookfield is “carbon zero across our entire $600 billion asset footprint,” he added, it is “well-positioned to assist others with this transition.”

Brookfield is also doing deals, and bringing in initial capital, for an inaugural real estate secondaries platform, Flatt said. He did not mention a target. Secondaries Investor last year reported the hire of Partners Group‘s Fabian Neuenschwander and Marcus Day to assist in developing the firm’s strategy.

Brookfield last fall outlined its push into energy transition and secondaries, as well as reinsurance and technology, Buyouts reported. Through fundraising and other initiatives, the firm believes it can achieve long-term value of up to $450 billion. Sachin Shah was appointed to the new role of CIO in part to oversee this activity.

Flatt did not share details about a flagship tech offering, except to say that Brookfield has assembled a team. It is being led by Josh Raffaelli, a former Silver Lake executive.

The $40 billion raised by Brookfield last year takes in the initial $12 billion secured for partner Oaktree Capital’s eleventh distressed debt vehicle. In addition, $16 billion went into other credit strategies, and $4 billion into perpetual pools. A further $2.3 billion was collected in the final close of a second infrastructure debt fund.