Brookfield Raises $9 Billion for Latest Real Estate Fund

  • Fundraising exceeds $7 billlion target, doubles previous fund
  • Asian investors, U.S. public pension funds drivers of growth

Brookfield Asset Management Inc. raised $9 billion for its latest real estate fund, exceeding its $7 billion target and doubling its previous fund, as Asian investors and U.S. pension funds piled in to its fundraising efforts.

Brian Kingston, chief executive officer of Brookfield Property Partners LP, said the funds are already 45 percent committed, including investments in the privatization of Associated Estates Realty Corp. that were made last year and the pending offer to take Rouse Properties Inc. private.

Brookfield has also invested some of the new fund in seven office buildings in Brazil, and will likely have it fully invested in two to three years, he said.

“Obviously, with a larger fund, it allows us to do even larger transactions than we have done in the past,” Kingston said in an interview Monday.

He said the new fund was raised over 12 months from first close to final close, faster than the roughly 16 months it took for its previous $4.4 billion real estate fund in 2013. The new property fund will continue to be focused on investments where the company can take control in large-scale, undervalued or distressed situations.

Investor Growth

The biggest growth area in the investor base, both in size of commitment and number of investors, came from Asia and the U.S. public pension funds, Kingston said. Many of the investors in the previous real estate fund committed to the new one, and in some cases increased the size of their investments, he said.

“One of our big advantages, or certainly one of the reasons people like to invest with us, is because it is a global business,” he said. 

Brookfield continues to see opportunities for investing in the U.S. and distressed situations in places like Brazil, he said. Europe is another region where the company is active although the growth outlook there isn’t as good as in the U.S., he said.

Offshore Interest

Toronto, Montreal and Vancouver are benefiting from a lower loonie, Kingston said, with offshore interest growing. That offshore interest worked to Brookfield’s advantage when it sold an office building in downtown Toronto to China’s Anbang Insurance Group Co. last October. 

“Canada and the U.S., I would put in the same category, where there is a great amount of interest from foreign offshore buyers, and I would expect to see more transactions like that,” he said.

The dramatic drop-off in oil prices is also opening some opportunities for acquisitions in places like Calgary, he said.

“Our own portfolio is very well occupied and reasonably insulated from what’s happening there,” Kingston said. “But there could potentially be some opportunity for us. These are obviously the types of markets we like to invest in.”

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