Brookfield Asset Management has had great success fundraising for its open-ended vehicles across asset classes, executives said on the firm’s fourth-quarter earnings call Thursday.
Brian Lawson, the firm's chief financial officer, said he only wishes the firm had launched such vehicles sooner.
Toronto-based Brookfield started fundraising for its core-plus strategy, Brookfield Premier Real Estate Partners, in the spring, PERE previously reported. The firm held a close on $1 billion during the fourth quarter and has invested 50 percent of the vehicle’s capital in a seed portfolio of eight office and multifamily assets across the US, according to its earnings report. Brookfield is also raising open-ended funds in infrastructure and power.
“We should’ve had these funds many years ago,” Lawson said on the earnings call. “That was probably a mistake of ours. Having said that, I think we can catch up quickly.” He noted that open-ended funds are seeing increasing demand as fixed-income investors seek yield in a low-interest rate environment.
The firm is also marketing its latest opportunistic vehicle, Brookfield Strategic Real Estate Partners III, with an undisclosed target.
Brookfield closed the predecessor vehicle, BSREP II, in April on $9 billion. The firm has invested about 75 percent of the vehicle’s capital as of December 31, having already committed about 45 percent at the time of its closing in April.
“The history has been [that] the successor funds have been larger than the previous funds and we wouldn’t expect it to be different in this regard,” Lawson said.
Brookfield is targeting a 16 percent net internal rate of return for BSREP II and a 9-11 percent net IRR for BPREP, PERE previously reported.
The firm finished 2016 with $240 billion in total assets under management, up from $225 billion at the end of 2015.