North America: Brookfield launches fundraising for super-core infra fund

07 August 2018 - 12:00 am UTC


Brookfield Asset Management filed a form D for the Brookfield Super-Core Infrastructure Partners L.P. fund on Tuesday 7 August.

Inframation reported in May that Brookfield would launch the fundraise for the open-ended vehicle this year, and is expected to run in parallel to the manager’s other investment strategies, targeting investments that have a lower risk-return threshold than the New York and Toronto-listed Brookfield Infrastructure Partners and the institutional-backed Brookfield Infrastructure Fund series. 

In today’s low-return environment it has become common for infrastructure managers to take on riskier investments to meet the return expectations for their strategies. The “Super Core” strategy protects against this style drift by requiring that assets be purchased from a published Target Asset List and by aligning the performance fee to yield, incentivizing the manager to invest in mature core assets that have high cash flow stability. 

As such, these super core funds are typically expected to be relatively long in length and make investments in regulated assets, while providing a low fee structure to their investor base. Net returns are expected to be lower than normal core infrastructure funds, e.g. Macquarie’s EUR 2.5bn super-core fund is expected to generate net returns between 7-8% with a 5% cash yield.

Brookfield Super-Core Infrastructure Partners is expected to make investments in the utilities, telecommunications, renewable energy, and transportation sectors within North America, Europe, South America and Australia.

Speaking in November on a Brookfield Infrastructure Partners third quarter results call, senior managing partner and head of Brookfield Infrastructure Group Sam Pollock said that the group is “looking at super core funds.”

Pollock went on to add that “we don’t think that we’ve really maximized the number of people who can invest in a unique infrastructure story…Based on our contacts with investors in our institutional funds, the appetite for infrastructure product is massive, and we think that most of those people who aren’t the large institutions should look at us as a proxy”.