Brookfield looking to build $21-billion war chest for buying spree
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Brookfield Asset Management Inc., Canada’s largest alternative-asset manager, plans to start raising an additional $10 billion in funds this year after a $15 billion spending spree over the past 12 months, the company’s chief executive officer said in a letter to shareholders.
“We are entering an investment phase which will offer us a number of great opportunities,” CEO Bruce Flatt, 49, said in the letter, adding that the focus will be “acquiring assets in out-of-favour markets, or assets which have been burdened with too much financial leverage.”
Earlier this year, Toronto-based Brookfield began raising money for private funds targeting over $11 billion, bringing the total the company seeks to raise in 2015 and early 2016 to $21 billion. A new area of opportunity is buying holdings discarded by companies under pressure from shareholders to focus on their core businesses, he said.
During the first quarter, Brookfield committed $3 billion in new investments, including oil and gas businesses in Australia, wind facilities in Portugal and U.S. multifamily apartments.
Brookfield has fully invested or committed to invest the capital in the flagship property and private-equity funds, the company said in a statement. Its flagship infrastructure fund is now 70 percent invested.
PROFIT RISES
Assets under management were $207 billion US at the end of the first quarter, the company said. Brookfield reported a 36 percent increase in first-quarter net income to $1.4 billion, or $1.09 a share, compared with a year earlier. Funds from operations for shareholders rose 14 percent to $557 million, or 82 cents a share, the company said.
Brookfield is seeking investments in Australia, Brazil, Canada, Asia and Europe, and to a lesser degree in the U.S., Flatt said.
The biggest opportunities are in oil, he said, with some “very significant” energy infrastructure and private-equity possibilities, he said.
Flatt said capital in Brazil is “even more constrained than it was in the U.S. in 2009,” creating buying opportunities. The firm’s infrastructure arm said this week it seeks to deploy $2 billion in the South American country in the next 6 to 18 months.
BRAZIL OPPORTUNITIES
Asset prices in Brazil have dropped amid projections Latin America’s largest economy will suffer its worst contraction in a quarter century this year as the government struggles to shore up finances and tame inflation to avert a credit-rating downgrade. Fallout from Petroleo Brasileiro SA’s corporate- corruption scandal also has trapped suppliers of the company, known as Petrobras, in a credit squeeze.
“This will result in large-scale, high-quality opportunities,” Flatt said. “Given our scale and platform in Brazil, we are one of the few capable of capitalizing.”
Flatt said adding to its cash supply will give Brookfield the flexibility to take advantage of opportunities. “We will be able to put these funds to work very productively,” he said.
“We are entering an investment phase which will offer us a number of great opportunities,” CEO Bruce Flatt, 49, said in the letter, adding that the focus will be “acquiring assets in out-of-favour markets, or assets which have been burdened with too much financial leverage.”
Earlier this year, Toronto-based Brookfield began raising money for private funds targeting over $11 billion, bringing the total the company seeks to raise in 2015 and early 2016 to $21 billion. A new area of opportunity is buying holdings discarded by companies under pressure from shareholders to focus on their core businesses, he said.
During the first quarter, Brookfield committed $3 billion in new investments, including oil and gas businesses in Australia, wind facilities in Portugal and U.S. multifamily apartments.
Brookfield has fully invested or committed to invest the capital in the flagship property and private-equity funds, the company said in a statement. Its flagship infrastructure fund is now 70 percent invested.
PROFIT RISES
Assets under management were $207 billion US at the end of the first quarter, the company said. Brookfield reported a 36 percent increase in first-quarter net income to $1.4 billion, or $1.09 a share, compared with a year earlier. Funds from operations for shareholders rose 14 percent to $557 million, or 82 cents a share, the company said.
Brookfield is seeking investments in Australia, Brazil, Canada, Asia and Europe, and to a lesser degree in the U.S., Flatt said.
The biggest opportunities are in oil, he said, with some “very significant” energy infrastructure and private-equity possibilities, he said.
Flatt said capital in Brazil is “even more constrained than it was in the U.S. in 2009,” creating buying opportunities. The firm’s infrastructure arm said this week it seeks to deploy $2 billion in the South American country in the next 6 to 18 months.
BRAZIL OPPORTUNITIES
Asset prices in Brazil have dropped amid projections Latin America’s largest economy will suffer its worst contraction in a quarter century this year as the government struggles to shore up finances and tame inflation to avert a credit-rating downgrade. Fallout from Petroleo Brasileiro SA’s corporate- corruption scandal also has trapped suppliers of the company, known as Petrobras, in a credit squeeze.
“This will result in large-scale, high-quality opportunities,” Flatt said. “Given our scale and platform in Brazil, we are one of the few capable of capitalizing.”
Flatt said adding to its cash supply will give Brookfield the flexibility to take advantage of opportunities. “We will be able to put these funds to work very productively,” he said.
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