Brookfield Asset Management is approaching the announced $3 billion mark for its latest real estate debt vehicle, a sum that would more than double the final amount raised for predecessor fund.
The Toronto-based firm has raised $2.43 billion for Brookfield Real Estate Finance Fund V, which will invest in real estate mezzanine loans, according to a regulatory document filed on Monday with the US Securities and Exchange Commission. Last month on the firm’s first-quarter earnings call, Brookfield chief executive officer Bruce Flatt (pictured) said the firm is wrapping up the vehicle’s fundraise.
A spokeswoman for the firm could not be reached for comment.
Fund IV, the in-market vehicle’s predecessor, raised $1.38 billion, according to PDI data, smashing the $850 million goal Brookfield had set. According to May 2014 documents from the New Mexico State Investment Council, Fund IV’s target allocation by sector is 40 percent for both office properties and retail, multifamily and industrial, 10 percent hospitality and 10 percent other property types. The vehicles made investments namely within larger metropolitan areas in the US.
The vehicle targeted a 60-80 percent loan-to value tranche ratio. Fund IV originated whole loans and sold or syndicated the senior debt to other investors; originated subordinated debt alongside a senior lender; originated mezzanine loans or preferred shares that was junior to any already outstanding senior debt; backed recapitalisations; and snapped up newly originated subordinated debt, according to the presentation.
Brookfield was also expected to have launched its latest global property investment vehicle, Brookfield Strategic Real Estate Partners III, earlier this month. The firm set a $10 billion goal after BSREP II raked in $9 billion, as Private Debt Investor sister publication PERE exclusively reported last month.
The asset manager has espoused a particularly bullish view for retail properties, even as once-household names like Sports Authority have shuttered and other notable retailers, like children’s clothing company Gymboree, recently sought bankruptcy protection.
“It is safe to say that we do not believe that the retail real estate market is going away,” Flatt wrote in his first-quarter letter to shareholders, “and the numbers prove it. Retail sales in the US are over $4 trillion, of which internet sales (excluding drugs) approaches 8 percent of the total.”