Brookfield Asset Management is preparing to smash its own fundraising record with its latest opportunistic real estate vehicle, Brookfield Strategic Real Estate Partners III, which it started marketing in the second quarter. Here are five key takeaways about the fund series:
1. Bigger than ever
PERE revealed last month that the firm has a $10 billion target for BSREP III. On the firm’s Q3 earnings call, chief financial officer Brian Lawson said: “We would expect that the funds will continue to increase in size.”
2. History of beating targets
Speaking of size, BSREP I closed on $4.4 billion in 2013, above its $3.5 billion target, while BSREP II closed on $9 billion in April 2016, above its $7 billion target.
3. Quick deployment pace
BSREP II was 80 percent deployed as of March 31, less than a year after the fund’s final close. In the firm’s Q1 earnings call, chief executive Bruce Flatt spoke about the company’s hefty real estate investment volumes: “Each quarter [to] six months, we’re putting $500 million or $1 billion to work in great opportunities, and it’s largely because of the scale and presence that we have in the US.”
4. Strong returns to date
The BSREP fund series has a 16 percent net internal rate of return target, which BSREP I is beating with an 18 percent IRR as of press time.
5. Significant skin in the game
“Brookfield is typically the largest investor in each fund,” according to meeting materials from State Universities Retirement Systems of Illinois. Brookfield made a $2 billion commitment to BSREP II, while PERE understands that the company is committing $2.5 billion to BSREP III.