Brookfield’s fifth private equity fund secures $8 bln, nears finish line


Cyrus Madon, managing partner and CEO, private equity, Brookfield Asset Management ; photo courtesy of the firm.

The private equity group of Brookfield Asset Management has so far raised nearly US$8 billion ($10.6 billion) for its fifth flagship fund.

Brookfield Capital Partners V, which held a US$6.5 billion first close last year, is expected to wrap up fundraising by the end of Q3 2019, the Toronto-based alternative asset manager said in a news release. The target was not disclosed.

Current commitments to the fund are effectively double that of Brookfield Capital Partners IV, which secured US$4 billion in 2016.

BCP V’s limited partners were not identified. Its predecessor was backed by 65 investors, primarily pension funds, sovereign wealth funds, financial corporations and other institutions.

BCP V was intended to be much bigger than prior PE offerings, PE Hub Canada reported last year. The goal is to help the PE group tap into a “global opportunity set that gets larger every year,” Managing Partner and CEO Cyrus Madon said in an interview.

The fund looks to build on BCP IV, which moved activity beyond a traditional focus on mid-market buyouts, turnarounds and other special situations in North America. BCP IV also emphasized doing more deals at bigger investment sizes.

Recent transactions suggest this increasing scope. Earlier this year, Brookfield closed its US$13.2 billion purchase of the power solutions unit of Johnson Controls International, now called Clarios, in partnership with Caisse de dépôt et placement du Québec.

Brookfield also completed its US$4.1 billion take-private acquisition of Healthscope, Australia’s second-largest private hospital operator.

The PE group’s latest deal is closer to home. This week, Brookfield agreed to buy a 57 percent controlling interest in Genworth MI Canada, a private residential mortgage insurer, from Genworth Financial. The deal reflects a purchase price of $2.4 billion (US$1.8 billion) and is expected to close in the second half.

Brookfield’s ability to take on bigger and more globally diverse deals is supported by the co-investment resources of Brookfield Business Partners, the PE group’s listed vehicle. Spun out in 2016 with a market cap of US$2 billion, BBP today oversees almost US$6 billion.

Brookfield’s PE group employs more than 100 investment pros, including Madon, who joined in 1998. Senior team members, mostly managing partners and managing directors, total 23.