Brookfield closes second infrastructure fund at US$7 billion
Brookfield Asset Management Inc., announced yesterday that it held the final close on Brookfield Infrastructure Fund II with equity commitments totaling US$7 billion, creating a global fund that will invest in infrastructure, with a focus on transportation, renewable power, utilities, and energy assets in North and South America, Europe and Australasia.
Commitments to the fund exceeded the original US$5 billion fundraising target, reflecting strong investor demand. Investors in the fund include a diverse group of institutional investors, including sovereign wealth funds, insurers, and public and private pension plans. The fund has over 60 investors, half of which are first time investors in a Brookfield fund. Brookfield committed US$2.8 billion to the fund, aligning its interests with those of its investors.
Sam Pollock, Senior Managing Partner and Chief Executive Officer of Brookfield's Infrastructure Group said:
"We are pleased to launch this fund at a time when we see strong opportunities to invest in high quality core infrastructure assets on an attractive risk-adjusted return basis. We believe real assets such as infrastructure are an important and growing component of institutional portfolios, and we see significant potential for investments in all the regions where we operate."
The fund will own and operate long-life infrastructure assets that generate stable cash flows, require relatively minimal capital expenditures and, by virtue of high barriers to entry and other characteristics, tend to appreciate in value over time. Brookfield's capital commitment to the fund is expected to be funded through Brookfield Infrastructure Partners LP and Brookfield Renewable Energy Partners LP.
Brookfield Infrastructure Fund II held a first close in July on about $6.2 billion, according to a filing with the US Securities and Exchange Commission.
The fun will make 15 to 25 portfolio investments, using $200 million to $500 million per deal. The main target is the U.S. but the fund will also invest in Europe, South America and the Australasia region.
Regarding sectors, renewable power and transportation are the main focus, other target sectors including utilities and energy will also be of interest.
The fund follows on the US$2.7 billion Brookfield Americas Infrastructure Fund LP, which closed in 2010.