Saturday, July 20, 2024

Brookfield eyes ~$3bn for investments in financial infrastructure assets

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Brookfield Asset Management is marketing its debut pool for investments in financial infrastructure assets as part of its efforts to invest in the “backbone of the economy,” sources told Buyouts.

Brookfield has been rapidly expanding its franchise into various strategies across private and public markets, including secondaries and flexible capital opportunities like non-control equity.

The firm is targeting around $3 billion for the debut financial infrastructure fund, with a large, $500 million contribution from Brookfield’s balance sheet, one of the sources said.

Fund I is in the early days of its marketing period and it’s not clear if the fund has a cap. A Brookfield spokesperson declined to comment.

Brookfield last year hired Ron Kalifa as head of financial infrastructure investments. The strategy targets investments in digital assets and services that form “the backbone of the global financial economy.”

Financial infrastructure includes payments, software systems, financial exchanges and systems of record, cleaning or settlement or back office services, “systems we don’t often think about when you’re moving money or doing things within the financial ecosystem, but these businesses are at the heart of making that ecosystem work,” Kalifa said in a podcast recording earlier this year.

“They’re typically businesses that are asset-lite; in other words, they’re software or platforms across these sectors of payments, or capital markets, or banking and lending, or insurance,” Kalifa said. “These financial infrastructure businesses tend to share similar fundamental characteristics…to the physical infrastructure assets. Crucially, they’re stable and they’re scalable, they’re very embedded to the financial ecosystem they operate in.”

The strategy is not new to Brookfield, which has invested at least $5 billion in financial infrastructure companies. Past investments include Network International and Magnati, Brookfield said in a statement last year.

Financial infrastructure is an extension of Brookfield’s strategy of backing other types of infrastructure, including those involving physical assets.

The firm manages $850 billion of assets across renewable power and transition, infrastructure, private equity, real estate and credit.

Earlier this year, the firm named Anuj Ranjan as CEO of its $140 billion private equity business, Buyouts reported at the time.

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