Brookfield Asset Management, the Toronto and New York based-firm with $150 billion of global assets, is making a strategic push into opportunistic real estate investing in the UK and Europe.
Barry Blattman, senior managing partner responsible for Brookfield’s global opportunistic real estate programme, has located to London as the multi-asset class firm seeks out distressed investments particularly in large real estate operating companies.
“We feel that if there has ever been a time for Brookfield to establish the kind of presence that makes sense for us in the region, it would be out of this current complex situation which companies and countries are trying to work their way through,” he told the PERE Global Investor Forum at the Hotel Okura in Amsterdam yesterday.
Blattman oversees Brookfield’s real estate investment activities alongside Ric Clarke, and is global co-head of Brookfield’s recently launched Brookfield Strategic Real Estate Partners Fund (BSREP). He was also heavily involved in the creation and oversight of Brookfield Real Estate Financial Partners, Brookfield’s Private Funds Platform, and Brookfield’s $5.5 billion Real Estate Turnaround Consortium which provided an equity injection into US regional shopping mall company, General Growth Properties, after it filed for Chapter 11 bankruptcy proceedings.
Blattman said that the firm, which has $90 billion of real estate assets under management, was a household name in the US, Brazil, and Australia, as well as being well-known in the Middle East through its ties with local investors, but had yet to replicate that in the UK and Europe.
“My decision to come over to London is a reflection of that. I want to put more of a home-grown stamp on conversations taking place. We have been about finding platforms that can operate really world class significant businesses and the modern history of the company has been about investing in platforms in a very complicated distressed environment.”
He added: “We have in hindsight navigated our way through the global financial crisis. Our hope is that we will do the same in terms of what is happening in Europe and the UK. I am pretty optimistic that for management companies that have complicated ownership, limited access to capital, and capital structures that are problematic, we are a suitable partner for a company like that.”
Brookfield employs 100 people in London involved in infrastructure, fund relationships, fundraising, advisory and securities businesses as well as construction. The company also owns a stake in the Canary Wharf Group, which owns a collection of office and retail assets in London’s former Dockland's area after trying to buy the company in 2004.
Nevertheless, Blattman said: “We haven’t made our mark yet in terms of what our real estate investments should be as an investor or as a known-name as an asset manager in the region. The way we do large transactions typically is we like to come in alongside stakeholders that are optimistic but are in a challenging situation and let them sit aside us in order to realise gains over the future. There are some questions we have a hard time answering such as what if we buy something that has a long-term cash-flow that’s tied to a currency that that country may not decide to stick with, and what happens if we end up having liabilities in a currency that is different to what we going to be generating on the asset side. There are some challenges, but regardless of that, we like those challenges.”
The PERE Global Investor Forum (click here) drew 150 professionals together to hear from major figures in real estate from limited partners, consultants and gatekeepers to general partners and service providers.