The energy infrastructure-focused firm has over $4 billion of assets under management
Brookfield Asset Management's Public Securities Group (PSG) announced that it has agreed to purchase Center Coast Capital Holdings, an infrastructure-focused investment firm with over US$4 billion of assets under management.
Reuters reported that the share purchase would help PSG expand its product offering to include investments in energy assets such as the tax-efficient master limited partnerships (MLPs).
Most energy firms use MLPs to house their midstream assets that shop and store oil and gas.
The takeover comes as large asset managers reignite their interest in energy investment firms which focus on MLPs.
To recall, investors became wary of the structure's long-term viability in the wake of the 2014 crude price slumps. The structure also faced problems generating higher profits due to the easing of the construction of new pipelines.
In order to prevent this, some MLPs restructured their payout ratios to help boost returns to ordinary investors.
Brookfield's PSG CEO Craig Noble told Reuters that this could be high-time to make such an investment, given the rebound in oil prices and the advantages of having more infrastructure carrying natural glass.
“We knew it would be a good strategic fit, but it’s an interesting time too in terms of where valuations are,” he said.
Brookfield PSG's acquisition of the Center Coast Capital is expected to conclude early next year. As part of this deal, the group is also subscribing to nab certain assets of New York-based Liberty Street Advisors and two of its affiliates. These are third-party marketing and servicing agents of Center Coast Capital.
For more of Wealth Professional's latest industry news, click here.
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Reuters reported that the share purchase would help PSG expand its product offering to include investments in energy assets such as the tax-efficient master limited partnerships (MLPs).
Most energy firms use MLPs to house their midstream assets that shop and store oil and gas.
The takeover comes as large asset managers reignite their interest in energy investment firms which focus on MLPs.
To recall, investors became wary of the structure's long-term viability in the wake of the 2014 crude price slumps. The structure also faced problems generating higher profits due to the easing of the construction of new pipelines.
In order to prevent this, some MLPs restructured their payout ratios to help boost returns to ordinary investors.
Brookfield's PSG CEO Craig Noble told Reuters that this could be high-time to make such an investment, given the rebound in oil prices and the advantages of having more infrastructure carrying natural glass.
“We knew it would be a good strategic fit, but it’s an interesting time too in terms of where valuations are,” he said.
Brookfield PSG's acquisition of the Center Coast Capital is expected to conclude early next year. As part of this deal, the group is also subscribing to nab certain assets of New York-based Liberty Street Advisors and two of its affiliates. These are third-party marketing and servicing agents of Center Coast Capital.
For more of Wealth Professional's latest industry news, click here.
Related stories:
Canadian asset manager may boost offer for power firm
Is Brookfield about to acquire UK energy assets?
