Brookfield Asset Management raises record amount for Real Estate Opportunity Fund

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The current turmoil in the stock and real estate markets creates good investment opportunities for Brookfield Asset Management. Chief Executive Bruce Flatt recently said in a letter to Brookfield shareholders that the company has made “great investments at very good valuations,” including $3 billion in real estate assets at deep discounts and to unprecedented cash returns.

Brookfield Asset Management has raised $14.5 billion for its latest real estate opportunity fund, the Brookfield Strategic Real Estate Partners IV fund. They expect the fund to close before the end of September and they have a target of over $17 billion in equity. Brookfield said it would be the biggest real estate fund ever raised. Meanwhile, Blackstone also recently raised a $20 billion opportunity fund.

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Flatt spoke about the company’s transactions in the UK to illustrate why the company is confident in its ability to continue to deliver good property returns. For example, Brookfield built, developed and acquired student accommodation properties in the UK over seven years, creating the third largest portfolio in the country. They recently sold the business for £3.3bn worth to GIC after investing £700m of equity in the portfolio. Brookfield expects to generate cash from the £1.8 billion investment, which will result in a gain of 2.7 times its investment and an internal rate of return of 25%.

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