PERE Forum: Brookfield to return to traditional fund model

Brookfield Asset Management CEO Bruce Flatt told delegates at the PERE Forum: Europe in London that the Toronto-based company would likely follow up its $5.5bn investment club with a return to traditional fundraising.

Despite managing to corral $5.5 billion of capital from some of the world’s largest institutional investors, Brookfield Asset Management is likely to return to more traditional methods of fundraising in the future.

Bruce Flatt

Bruce Flatt, senior managing partner and chief executive officer at the Toronto-based alternative asset management firm, said Brookfield’s investment club, the Brookfield Real Estate Turnaround Consortium, was a product of last year’s dire fundraising environment and was designed to capitalise on particular current deals, such as its expected investment in bankrupt US REIT General Growth Properties.

He told delegates at the PERE Forum: Europe today that in 2008 “it was impossible to raise a large fund to deploy into opportunities like GGP, which is what we were targeting”.

With many investors “retrenching and worrying about issues they had in their [existing] funds”, Brookfield decided to “try something different and raise the fund that we did which was a select fund for opportunities”.

Flatt added the opportunities earmarked for the club deal would also “never fit a [traditional fund]”. Brookfield expects to invest $3 billion of the $5.5 billion turnaround consortium to recapitalise the debt of the retail REIT GGP.

On GGP, Flatt said he hoped the deal would be completed by September. Brookfield has already been granted “court status” to bring GGP out of bankruptcy, Flatt said, but he insisted the investment was not a done deal.

“We haven’t won yet,” he told delegates. “People can still make offers for the company. It’s highly unlikely that will occur, but it is possible.”