Brookfield club fund has $3.1bn of dry powder

Brookfield Asset Management has $3.1 billion of equity remaining in its Real Estate Turnaround Consortium after investing $1.6 billion in the recapitalisation of General Growth Properties.

The Toronto-based fund manager said in its 2010 annual report that the $5.5 billion consortium had been a major backer of the GGP deal, which ultimately saw Brookfield take a 40 percent stake in the retail REIT for $4.3 billion of capital.

The turnaround consortium is comprised of just a handful of the world’s largest investors, all of which have greater discretion over deals as compared with a traditional commingled vehicle. As part of the GGP recapitalisation, the turnaround consortium invested $1.6 billion of equity, alongside a further $2.7 billion of balance sheet capital from Brookfield. The turnaround club fund now has $3.1 billion of uninvested capital, the annual report said.

In total, Brookfield has more than $8 billion of dry powder to invest in real estate, real assets and infrastructure opportunities, with a further $3.1 billion of equity remaining in the firm’s private and listed infrastructure funds. In 2010, Brookfield closed on its flagship $2.7 billion Brookfield Americas Infrastructure Fund and raised another $440 million for a fund targeting Peru.

Despite the dry powder in its turnaround consortium and infrastructure funds, Brookfield revealed in the annual report, released Monday, that it was planning to launch a further seven funds over the next 18 months eyeing a combine equity haul of $4 billion. It was unclear if these would be listed or private vehicles.

The firm added that in 2010 and during the first six weeks of 2011, it invested $7.9 billion of capital in deals, which included GGP and $1 billion of office property and development site deals in the US and UK. In April, Brookfield acquired a 50 percent joint venture in 100 Bishopsgate, a development property in the City of London, with Great Portland Estates for £43 million. In July, the firm also increased its stake in Canary Wharf Group to 22 percent from 7 percent.

Brookfield also revealed its $800 million Brazil fund, the Brookfield Retail Real Estate Partners Fund currently owned a portfolio of 12 malls comprising 3.6 million-square-feet of space but that high interest rates had offset a 17 percent increase in net operating income. That could change, though, with “a meaningful portion of the portfolio continu[ing] to be redeveloped and not contributing cash flow”, the firm said.