Asset management firm Brookfield has raised a combined $700 million from major South Korean institutional investors, including the Teachers’ Pension, for its upcoming $14 billion infrastructure fund, a local newspaper reported on June 20, citing unnamed investment banking sources.
The Teachers’ Pension, the Public Officials Benefit Association and four other unidentified South Korean institutions have participated in Brookfield Infrastructure Fund III that targets an annual return of about 13%, the Maeil Business Newspaper reported.
For the fund that will buy infrastructure assets in North Americas, Europe and other major regions, the Canada-based asset management firm has wrapped up the first round of fund-raising from investors around the world, raising a total of $11.8 billion. It plans to attract an additional $2 billion by the end of this month to launch the planned $14 billion infrastructure fund.
For its part, Brookfield will make a contribution of part of its own capital, equivalent to 30% of the infrastructure fund.
“Institutional investors, which are increasing alternative investments, are showing a keen interest in infrastructure investment as part of portfolio diversification,” the Korean daily quoted an unnamed investment banking source as saying.
“Considering their large scale and stable returns, (infrastructure is) worth an investment for deep-pocked investors such as pension funds and insurance companies.”
The newspaper added that Brookfield Infrastructure Fund II, which raised $7 billion in 2013, has posted an internal rate of return about 17% a year.
Other investors in Brookfield Infrastructure Fund III include New Mexico’s pension fund, Oregon Public Employees Retirement System and some sovereign wealth funds, the Korea Herald reported on June 21, without citing sources.
Separately, Brookfield had reportedly bid for a prime office building in downtown Seoul, in a deal estimated to fetch $391 million~$410 million, for which Blackstone has been chosen as the preferred bidder, according to another newspaper report earlier this month.