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Alternatives

Brookfield Raises $12B for Private Equity Program

Brookfield Capital Partners VI is the largest private equity fund in the firm’s history.

By Michael Katz



Canadian investment giant Brookfield Asset Management closed its Brookfield Capital Partners VI flagship global private equity program, raising $12 billion in what the firm termed its largest private equity fund.

“Our global deal pipeline remains robust during this current period of market dislocation, which is creating significant large-scale opportunities that suit our operationally intensive investment approach,” Anuj Ranjan, president of Brookfield’s private equity group, said in a release.

In addition to Brookfield’s $3.5 billion commitment to the fund, the fund’s partners include institutional investors such as public and private pension funds, sovereign wealth funds, financial institutions, endowments and foundations, and family offices.

So far, the fund has committed approximately $4 billion to acquire six “market-leading businesses.”

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Last month, Brookfield and French bank Société Générale announced a strategic partnership to originate and distribute high-quality private credit investments through a private investment grade debt fund. The initial fund will launch with 2.5 billion euros ($2.1 billion) in seed funding at its inception and is targeting a total of 10 billion euros over the next four years. 

According to Brookfield, the seed fund will focus on two strategies: one concentrated on real assets credit within the power, renewables, data, midstream and transportation sectors, and the other on fund finance.

According to a survey from investment data firm Preqin, more capital is expected to flow into private equity in the next 12 months despite a generally pessimistic outlook for returns over the short term. 

The survey found that more than one-third of respondents plan to allocate more capital to private equity in the next 12 months, with 84% of those investors expecting to do so before the end of the year. According to Preqin, this is despite more than half of investors believing private equity to be currently overvalued and one-quarter expecting performance to be worse in the year ahead than the previous 12 months.

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Global Pension Funds Fall Short of Private Equity Targets in Q1

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Home > News > Risk > A Miasma of Uncertainty Grips Investors
Risk

A Miasma of Uncertainty Grips Investors

Washington dysfunction, fear of the Fed and a host of other anxieties haunt the markets.

By Larry Light

A leadership vacuum in the House of Representatives. Another pending federal government shutdown next month (maybe). New anxieties about the economy. High oil prices. An autoworkers strike. All these factors and others have stoked investor uncertainty.

That is reflected in the stock market, which since August has been on a downward trend. The S&P 500 has lost 6% over the past two months, squelching the rally sparked earlier in the year by artificial intelligence advances and general optimism about tech stocks.

“Right now, we’re at maximum uncertainty,” declared Brad McMillan, the CIO of Commonwealth Financial Network, in a statement.

To Jamie Cox, a managing partner in Harris Financial Group, in a written commentary, “Investors are sick and tired of being jerked around with out-of-control spending, the inability to govern, and the constant dragging of markets to the edge of economic calamity with shutdowns and debt ceiling nonsense.”

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The strong U.S. jobs report out Friday morning—the U.S. labor market added 336,000 jobs in September, nearly double economists’ consensus 170,000—fueled concern that the Federal Reserve will continue to raise interest rates. The result, former Treasury Secretary Lawrence Summers told Bloomberg TV, boosts the odds that the nation’s economy eventually will suffer a “hard landing.”

To be sure, after diving as the jobs report came out, stocks reversed course, and the S&P 500 ended the day up 1.2%, as sentiment grew that the strong employment growth might be at its zenith.

Still, lots of trouble looms, especially in Washington. The House speaker’s job is vacant following the ouster of Representative Kevin McCarthy, R-California. With no one in charge of the lower chamber, questions swirl whether Congress can prevent a government closure after November 17, the expiration date for a stopgap measure extending authority for federal funding.

Meanwhile, partisan differences remain wide, as the electorate braces for a nasty likely rematch next year between President Joe Biden and his GOP predecessor, Donald Trump.

Add in the Fed’s commitment to further tighten interest rates (one more is expected), dipping consumer confidence, the inverted yield curve and more oil price boosts. While off their September high point, crude prices are 24% above last March’s nadir.

This comes as a sell-off continues in the Treasury bond market, with the benchmark 10-year note’s yield hitting almost 4.8%, its highest level since 2007. More bad news comes from Detroit, where the United Autoworkers are striking against two automakers.

In the words of Mohamed El-Erian, Allianz’s chief economic adviser, on Bloomberg TV, “Something is likely to break.”

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