Canadian investment firm Brookfield Asset Management has raised $26 billion in the third quarter, boosted by fresh capital across different private debt strategies.
Private credit platforms of Oaktree Capital, which Brookfield owns a majority stake in, racked up $11 billion in the quarter, including $3.2 billion for its 12th opportunistic credit fund and $2.3 billion for the leveraged buyout lending fund for private equity sponsors which was launched in February.
“In the current environment, our LPs are realising that they can earn double-digit returns investing in credit…,” Brookfield President Connor Teskey said in an earnings call on Monday.
“As credit risk return profiles have become more attractive, we’ve seen traditional fixed-income investors increase allocations to private credit, and we’ve even attracted interest from investors that have historically focused on equity investments,” he added.
Last week, the Toronto-based asset manager announced that it had closed over $6 billion in total commitments for its third global infrastructure debt fund which targets up to 20% allocation in Asia Pacific’s mature markets.
Brookfield said in the third-quarter earnings call that it has already deployed 50% of the fund and could be in the market to launch the next vintage for the series as soon as next year, given the pace of the deployment.
“The pullback among traditional lenders is happening during a period of unprecedented capital need to build out renewable data centres and fibre infrastructure capacity,” said Teskey.
Brookfield in October held the final close of its sixth flagship private equity fund at $12 billion and in the same quarter raised an additional $3 billion in capital for its flagship infrastructure fund, which it expects to hit a hard cap of $28 billion by the end of 2023.
“2023 is shaping up to be an excellent year for capital raising, which sets the stage next year for excellent earnings and dividend growth,” said Teskey, who believes that the fundraising momentum will continue to be strong in the fourth quarter.
The firm has accumulated $61 billion in capital raised since the beginning of this year while targeting to receive $150 billion in capital commitments this year. It reported distributable earnings of $568 million in the third quarter, an 8% jump from the same period last year.
Fee-bearing capital was $440 billion at the end of the quarter, flat from the second quarter. “Over 40% of the capital we have raised year to date has been from private credit and insurance. We expect that credit and insurance will be the biggest contributors to our fee-bearing capital and fee revenue growth over the next five years,” Teskey said.
Brookfield Asset Management shares closed at $31.19 apiece on the NYSE on Monday, up 8.79% year-to-date.