Brookfield’s Asia chief mulls One Belt, One Road
Formed 118 years ago, Brookfield Asset Management has $250 billion in assets under management globally, across infrastructure, real estate and private equity.
In July the Canadian firm finished raising a new $14 billion global infrastructure fund, with large amounts of capital sourced from Asian institutional investors.
Bill Powell has been the chief executive of Brookfield’s Asia-Pacific operations for three years, having worked at the company since 2002.
Q The Donald Trump administration is talking about investing $1 trillion into infrastructure, and China is spearheading the 'One Belt, One Road' strategy. Are these offering opportunities?
A In terms of One Belt, One Road, a lot will be greenfield projects into smaller and rapidly expanding emerging markets, which are not typically assets we do. We do some greenfield investments, and the type we like to do is organic growth out of existing assets.
That said, we are looking at One Belt One Road and are looking at how to participate. It may be that there is a financing angle that we can participate in, in that regard.
For the US, the infrastructure plan of the Trump administration is still largely unknown, although it’s been largely talked about. If it involves the recycling of assets and capital into new assets, we’d definitely want to be a participant into new assets as they are shown into the markets.
That’s similar to Australia, where the states were selling less risky assets in order to invest into riskier infrastructure projects.
Q You raised a new $14 billion infrastructure fund in July last year. What opportunities do you see for the asset class in general?
A So far we’ve invested over 30% of capital of the fund you referenced. We are long-term value investors and we utilise large-scale capital and our global presence to target assets with sustainable and growing cash flows, which can benefit from our operational expertise.
We look at those assets in markets that, for whatever reason, are capital-constrained. There are always sectors, regions or countries that for whatever reason – whether it be political, economic, or company-specific – have a scarcity of value, and that’s where we look to employ our assets.
For example, we are in the process of investing over $1 billion into gas and electricity utility sectors in Brazil and we’re also looking into telecom towers into India.
Q What would it take to get you to invest more into greenfield projects?
A We are comfortable with greenfield projects that involve organic growth from existing projects, as long as this is in markets that we have a specific presence in. That means we have to have operational investment people on the ground, and have a long-term history of operating in the sector.
If you look at One Belt, One Road, of course the government is looking to bring in private capital into projects. But these are markets where we have no existing presence and so we don’t target them. We are interested and following it. But to be honest we have not figured out how to deal with it yet.
Q Do you see the uncertainty in the markets this year offering you long-term opportunities?
A We have a presence and office in Mexico and if trade policies from Trump administration makes it so that capital is a little scarce then we can step in.