(Bloomberg) -- Brookfield Asset Management Inc. beat the fundraising target for its first infrastructure debt fund as Canada's largest alternative-asset manager looks to capitalize on the retreat of traditional banks from leveraged finance.
Brookfield Infrastructure Debt Fund raised $885 million, above its $700 million target, over about 18 months from institutional investors in North America and Asia, Hadley Peer Marshall, a senior vice president in Brookfield's infrastructure group, said by phone from New York. This comes after Brookfield raised a target-topping $14 billion for its third infrastructure fund in July 2016.
The 10-year, closed-end debt fund targets high single-digit percentage returns investing in mezzanine capital, such as secured bonds and loans at the subordinated or holding-company level, Marshall said. Brookfield is building on its knowledge of mezzanine lending to real estate to exploit opportunities resulting from post-financial crisis regulations that restrict banks' ability to lend, she said.
Beating Junk
“This helps further our relationship with strategic infrastructure players and provides our investors access to infrastructure debt, which is something they didn't have access to,” she said. “You can earn a return that the high-yield market, as an example, is not able to deliver right now.”
Toronto-based Brookfield, which has about $72 billion of infrastructure assets under management, will target its areas of expertise -- transportation, renewables, energy and utilities -- to pursue opportunities with a focus on North America, as well as an eye on South America, Australia and Europe, Marshall said. A typical deal size would be a minimum of $50 million.
The debt fund has already been active in three deals, Marshall said, including a 135 million euro ($160 million) holding-company secured loan to Oaktree Capital Group LLC's Eolia Renovables de Inversiones SCR SA, a Madrid-based operator of wind- and solar-energy assets.
Brookfield has deployed about $10 billion across its lending strategies since 2003, including more than $500 million in infrastructure debt in the past two years, Marshall said.
“We have incredibly strong asset knowledge and operating capabilities that we use to help us not only source opportunities but to underwrite those opportunities,” she said.
To contact the reporter on this story: Allison McNeely in Toronto at amcneely@bloomberg.net.
To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Kenneth Pringle, Dan Wilchins
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