Brookfield Asset Management’s real estate business has been the driving force of its private fundraising activity during the past year, the company reported in its latest earnings results.
The asset class represented nearly 78 percent of the $4.9 billion in capital raised for private funds across all asset classes during the third quarter. This included $2.7 billion in co-investment capital related to the take-private of mall real estate investment trust GGP and $1.1 billion for its latest flagship real estate fund, Brookfield Strategic Real Estate Partners III. During the quarter, Brookfield also raised $200 million for its real estate perpetual core fund.
Meanwhile, real estate accounted for $13.2 billion of the $15.7 billion raised across all asset classes over the last 12 months, according to the firm’s third-quarter earnings report.
The flurry of fundraising activity was largely driven by Brookfield’s third opportunistic real estate fund, BSREP III. The fund reported inflows of $8.5 billion during the last 12 months, bringing the 2017-vintage fund’s total equity haul to $12 billion. The firm has already surpassed the $10 billion target for BSREP III and expects to raise additional capital during the rest of 2018, according to its earnings report.
Brookfield’s BSREP III will be the firm’s largest real estate fund ever when it closes. Its predecessor, BSREP II, closed on $9 billion in April 2016, PERE previously reported. Fund II, which launched in 2014, beat its original $7 billion target. The debut fund of the series brought in $4.4 billion in 2013, exceeding its $3.5 billion target.
The BSREP series was on track to meet its return target as of September 30, according to Brookfield’s third quarter financial results. The series is tracking a 22 percent gross actual internal rate of return, surpassing the 20 percent target.
During the last 12 months, Brookfield deployed $2.1 billion from its private real estate funds and $16 billion through its listed partnerships for real estate investments, according to the quarterly financial report. During the same period in 2017, Brookfield deployed $2.07 billion and $1.36 billion for real estate investments through its private funds and listed partnerships, respectively.
Notable real estate outflows over the 12 months ending September 30, 2018 included $14.5 billion to privatize GGP, $2.3 billion to purchase commercial and hospitality properties globally and $600 million to buy European housing portfolios. The firm also committed $3.4 billion toward the purchase of a US REIT portfolio during this time.
Brookfield’s total assets under management grew to $332 billion in the third quarter from the $269 billion reported during the same period in 2017, according to its earnings report. In real estate, the firm’s AUM grew to $171 billion from $152 billion over the same timeframe.