Brookfield plans new infrastructure fund

Brookfield Asset Management Ltd. is initiating early-stage discussions for its next infrastructure fund, a move coming just two months after closing a record fund dedicated to transportation, telecom, and other hard assets.

This development was reported by individuals familiar with the matter, who requested anonymity due to the private nature of these discussions, according to BNN Bloomberg.

The global investment firm is exploring the sixth iteration of its flagship Brookfield Infrastructure Fund, targeting a launch next year. However, this timeline is subject to change, as noted by one of the sources.

The company's recent infrastructure strategy closure in late 2023 amassed US$30bn in commitments, comprising $28bn for the fund and $2bn for related co-investment vehicles. Brookfield, however, declined to comment on this matter.

Brookfield, headquartered in Toronto, manages $154bn in fee-paying assets across its infrastructure, renewables, and climate-transition businesses. This amount represents a third of its total capital of $457bn from which it draws fees.

The company's infrastructure unit is known for pitching its funds as strategic investments in major global economic trends, including clean energy, digitization, and artificial intelligence. Mirroring strategies of firms like Blackstone Inc., Brookfield has heavily invested in data centers to capitalize on the growing interest in AI.

Bruce Flatt, CEO of Brookfield, highlighted the importance of these investments in a statement: "Stakeholders have made commitments to net zero targets and are grappling with energy, security, supply chain resiliency and meeting the exponentially growing demand for data," adding that "meeting these challenges will require trillions of dollars in investments."

Infrastructure funds are appealing to investors because of their tendency to own businesses that generate steady, contracted revenue, which can rise over time.

In the previous year, alternative asset managers raised nearly $90bn for infrastructure funds and spent over $300bn on deals in this asset class, according to Preqin data.

A significant industry move occurred in January when BlackRock Inc. agreed to purchase Adebayo Ogunlesi's Global Infrastructure Partners for about $12.5bn.

Regarding Brookfield's latest fund, Brookfield Infrastructure Fund V, Flatt revealed that it is approximately 40 percent deployed across six investments.

These include Triton International Ltd., which leases intermodal shipping containers, and a pending acquisition of American Tower Corp.’s telecommunications sites in India.

Brookfield has also appointed former Worldpay CEO Ron Kalifa to co-head a new financial infrastructure group, focusing on digital infrastructure opportunities within its private equity branch.

Last year, the firm launched an infrastructure fund aimed at wealthy individuals, securing $2bn.

Frederic Bastien, an analyst at Raymond James, shared a positive outlook on Brookfield Infrastructure: “We are bullish on Brookfield Infrastructure as we expect the easing rate environment to revive investor interest in yield and growth-oriented companies.”