Brookfield Closes $2.7B Americas Infrastructure Asset Fund

By Barbra Murray, Contributing Editor

As it turns out, Brookfield Asset Management underestimated investors’ interest in infrastructure . The Toronto-based property and infrastructure asset manager has just closed Brookfield Americas Infrastructure Fund L.P. with $2.7 billion in commitments–a far cry from the company’s original $1.5 billion target for the fund, which will seek high-quality infrastructure assets across North and South America.

The fund attracted a broad range of investor types, including sovereign wealth funds and public and private pension plans based in North America, Europe, Asia and the Middle East. Brookfield, obviously keen on the investment vehicle, contributed $660 million, accounting for approximately one-fourth of the fund’s total capital commitments. The company, which currently has $15 billion in infrastructure assets under management, is charged with overseeing the fund.

“Infrastructure has a very attractive valuation that is reflective of the overall change in the markets over the last few years, primarily reflecting the financial crisis, and then in the U.S., the stimulus package,” senior vice president Andrew Willis told CPE. “There is an overall need for governments to build at a time when budgets are stretched.”

Brookfield Americas Infrastructure Fund will focus 70 percent of its investment activities on North America, leaving the remaining 30 percent for acquisitions in South America. “In South America, there is more of a need to build right now,” he said. “A lot of the economies we are focusing on are growing extremely rapidly; we are targeting Brazil, Chile, Columbia and Peru.” With an eye on the transportation, utilities, energy and renewable power markets, the fund will build up a portfolio of high-quality, long-life assets that generate stable cash flows and necessitate modest upkeep and expenditures. And while the fund will cast a wide geographic net in its search, locations with high barriers to entry will be a top priority to ensure long-run value appreciation. The fund has been actively investing for the past 12 months and to date has made $300 million in acquisitions, the specifics of which Brookfield is not currently disclosing.

“Terms for infrastructure assets are extremely attractive right now,” Willis said, “and there are lots of opportunities to acquire projects.”