Brookfield closes debut Global Transition fund on $15bn

‘Now is the time’, declares Mark Carney, Brookfield’s transition head, as the vehicle becomes the largest private fund of its kind in history.

Brookfield Asset Management has announced the final close of its first-ever fund wholly dedicated towards supporting the global economy in achieving net zero. The vehicle – Brookfield Global Transition Fund – which was launched in February 2021, has now made history as the largest ever private fund of its kind.

Capital from institutional investors in and alongside the fund, as well as money reserved for the private wealth channel, comprise the $15 billion raised. More than 100 investors worldwide contributed, Brookfield said in a statement, ranging from public and private pension plans, sovereign wealth funds, insurance companies, endowments and foundations, financial institutions, and family offices. Brookfield remains the largest investor in the fund, having committed at least $2 billion.

Another large investor in the vehicle was the New York State Common Retirement Fund, which committed $750 million. The vehicle is targeting net returns of 10 percent, according to documents from the New Jersey State Investment Council, which allocated $300 million, in addition to a further $300 million to a co-investment sidecar.

The final fund size was double what Brookfield originally said it would be targeting when it launched it. A $12 billion hard-cap was subsequently set when Brookfield announced a $7 billion initial closing in July 2021, with capital coming from Canada’s Ontario Teachers’ Pension Plan, PSP Investments, Investment Management Corporation of Ontario and Singapore’s state-backed investor Temasek.

The $15 billion closing figure has been anticipated for several months, with Bruce Flatt, chief executive of Brookfield Asset Management stating in December that he intended for the group to reach the figure in March. The vehicle “was raised faster and is larger than expected”, he told shareholders in February.

The fund will invest in the “transformation of carbon-intensive industries”, as well as clean energy projects. To date, $2.5 billion has already been deployed towards three projects, Brookfield stated. First, Brookfield acquired the German-American solar power and battery developer Sunovis, which boasts a development pipeline capacity of about 25GW. The firm also invested in Entropy, a carbon capture and storage developer, and in a development partnership with UK battery storage provider Cambridge Power. A tie-up with UK utility SSE has also been formed to target Dutch offshore wind.

However, Brookfield has been unsuccessful in Australia, where it launched a takeover attempt of AGL Energy with an initial A$8 billion ($5.77 billion; €5.07 billion) bid in February. It said it intended to invest a further A$10 billion in the business to accelerate the closure of its coal-fired power stations. AGL said the “unsolicited proposal materially undervalues the company”.

Mark Carney, Brookfield’s vice chair and head of transition investing, said in a statement: “Now is the time for comprehensive, determined action. [The Brookfield Global Transition Fund] provides significant scale of capital with catalytic long-term investment the world needs to help put our planet on a sustainable net-zero pathway.”

While the vehicle has formally closed, it is still possible to subscribe to the fund through Brookfield’s Oaktree Wealth Solutions channel, the firm’s branch for wealth management of individual investors.