Brookfield sees five hotspots for massive infrastructure fund

Brookfield Asset Management sees ample investment opportunities in five key areas as it plans to pursue more and larger transactions with its $14 billion Brookfield Infrastructure Fund III, the largest infrastructure fund ever raised, according to a source.

The pool is twice the size of its predecessor, which closed in 2013 on $7 billion. Fund III beat its $10 billion target by 40 percent with investments from 120 LPs. Brookfield committed $4 billion to the fund.

Fund III also beat out the $8.25 billion Global Infrastructure Partners II, which wrapped up in 2012, for the No. 1 slot among infrastructure funds, according to data from Preqin. Global Infrastructure Partners III is in market targeting $15 billion, according to a report.

Brookfield expects to do both more deals and bigger purchases with the larger fund, with attractive prospects in the U.S. energy sector, South America, transportation infrastructure related to the mining sector, non-core renewable power assets and infrastructure assets held by construction companies, according to the source.

Continuing the overall approach in Brookfield’s previous fund, Fund III has already invested more than $3 billion including a portfolio of U.S. hydroelectric facilities, Brazilian electricity transmission projects, a Colombian power-generation company, Peruvian toll roads and a U.S. water infrastructure project developer, a statement from the firm said.

Brookfield will invest in areas where it maintains a local presence in North America, Europe, South America and the Australasia region.

The leadership of Fund III remains the same as Fund II, headed by Sam Pollock, who leads Brookfield’s infrastructure business, the source said.

Overall, Brookfield is taking aim at the need to build infrastructure in emerging markets and to replace aging roads and other assets in developed markets after long periods of under-investment.

The firm sees low commodity prices and over-leveraged balance sheets offering a compelling opportunity, the source said.

Action Item: Overview of Brookfield infrastructure:

A worker paints a scaffolding for a planned MRT station along a street at the Bundaran Hotel Indonesia area in Jakarta on May 6, 2015. Photo courtesy Reuters/Beawiharta