• If fund reaches $12B it will be among biggest ever raised
  • Initial fundraising close said to take place in weeks

Brookfield Asset Management Inc. is close to raising $10 billion for its new global infrastructure fund within weeks, according to a person with knowledge of the fundraising. 

The first close for the fund, which would be among the biggest private equity-style infrastructure vehicles ever raised, comes as investors allocate more to the asset class amid low fixed-income yields.

A spokesman for Brookfield declined to comment on the fundraising.

“There is an enormous change going on in the institutional client world, driven by the fact that interest rates have come down dramatically over the last number of years, and they need to earn yield within their funds,” Bruce Flatt, Brookfield’s chief executive, said on its Feb. 12 earnings call. He said most institutions still don’t have enough allocated to real estate and infrastructure, as compared to other investments.

Brookfield expects to hit the self-imposed $12 billion cap for Brookfield Infrastructure Fund III LP by its final close, according to Mark Williams, a managing director of private assets advisory firm Cliffwater LLC. He made the comments at the Public Employees Retirement Association of New Mexico’s Feb. 25 investments committee meeting, according to meeting minutes.

Investor Commitments

New Mexico’s pension fund plans to commit $75 million to Brookfield’s new fund, according to the meeting minutes. Some sovereign wealth funds are planning to commit $500 million apiece to the pool, Williams said at the meeting.

Other investors in the fund include Oregon Public Employees Retirement System and Maine Public Employees Retirement System, according to data compiled by Bloomberg.

If the cap for the new fund is reached, it would be 71 percent bigger than its predecessor, which the Toronto-based asset manager raised in 2013 with $7 billion in commitments. The second fund has an 18.4 percent net internal rate of return and a 1.2 times multiple of invested capital, according to Sept. 30 figures from the Teachers Retirement System of New York. 

That performance puts the fund in the top quartile compared to its peers, according to data compiled by Bloomberg.

A record 179 unlisted infrastructure funds were in the market seeking investors at the start of the year, as compared to 155 at the start of 2015, according to Preqin. They are trying to gather $120 billion, up 24 percent on the 2015 figure, the data provider reported.

Global Infrastructure Partners is trying to raise as much as $15 billion for its third flagship fund, which would be the biggest fund of its kind ever raised. It recently gathered commitments of $7.7 billion.

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