Brookfield Explores New Infrastructure Fund Months After Record Close

(Bloomberg) -- Brookfield Asset Management is beginning early-stage discussions about its next infrastructure product, two months after it closed a record fund that it’s deploying into transportation, telecom, and other hard assets. 

The world’s second-largest alternative asset manager has started informal talks with investors for the sixth vintage of the flagship Brookfield Infrastructure Fund, aiming to launch next year, according to people familiar with the matter who asked not to be identified because the matter is private. The timing is subject to change, one person said. 

Brookfield received $30 billion in commitments for its infrastructure strategy in a process that closed in late 2023 – $28 billion for the fund and $2 billion for related co-investment vehicles. A representative for the firm declined to comment. 

The Toronto-based manager has $154 billion of fee-paying assets across its infrastructure, renewables, and climate-transition businesses, accounting for one-third of the $457 billion in capital from which it draws fees.

Brookfield’s infrastructure unit pitches the funds as a way for investors to play major trends shaping the global economy, including the clean-energy transition, digitization and artificial intelligence. Like rival Blackstone, it has poured money into data centers to capitalize on growing interest in AI.

“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,” Chief Executive Officer Bruce Flatt told analysts on February 7, adding that meeting these challenges will require trillions of dollars in investments. 

Some investors are drawn to infrastructure funds owning businesses that generate steady, contracted revenue that rises over time. Alternative asset managers amassed close to $90 billion for infrastructure funds and spent more than $300 billion on deals in the asset class last year, according to Preqin data. 

In January, BlackRock agreed to buy Adebayo Ogunlesi’s Global Infrastructure Partners for about $12.5 billion. 

The Canadian firm’s most recent fund, Brookfield Infrastructure Fund V, is about 40% deployed across six investments, Flatt said earlier this month. Holdings include Triton International, which leases intermodal shipping containers. The fund also has a pending deal to acquire American Tower Corporation’s thousands of telecommunications sites in India.

Brookfield Asset has also tapped former Worldpay CEO Ron Kalifa to help lead a new financial infrastructure group focused on opportunities in digital infrastructure within its private equity arm.

The firm launched an infrastructure fund tailored to wealthy individuals last year, garnering $2 billion. 

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

Brookfield is the world’s largest infrastructure and renewables manager with around $300 billion of assets.