Brookfield Asset Management views Beijing as the only gap in its presence in Asia Pacific, a region where the Canadian real asset giant expects its deal volume to steadily rise.
“When we look at the cities we want to be in, we are everywhere except for potentially Beijing,” said Bill Powell, Asia-Pacific chief executive at Brookfield, in a recent interview with AsianInvestor. The firm has an office in Shanghai but is considering opening an office in the Chinese capital, he noted. “Then we feel our expansion into the region will be complete.”
With $18 billion of investments in Asia Pacific of a global total of $250 billion under management, there is clear potential for Brookfield to grow in the region. That is particularly true outside Australia, which is home to the biggest proportion of its regional assets.
And Brookfield has clearly signalled its intent; in the past four years it has opened offices in Singapore, Hong Kong, Shanghai, Seoul and Tokyo.
What’s more, there has been steady growth in demand for private market investments in recent years, though there are concerns over the high valuations of such assets.
Questions have also been raised about how effectively some private-market managers can deploy the huge amount of capital they have raised in the past couple of years, given fierce competition for the best deals.
The $14 billion mega infrastructure fund that Brookfield closed last July is a case in point.
Nonetheless, the firm has already invested more than 30% the fund, one-third of which was raised from investors in Asia Pacific, said Powell. He noted there had been “tremendous growth of investment appetite” from the region for Brookfield’s infrastructure, real estate and private equity funds.
One attraction for clients is the firm’s alignment of interest with them, noted Powell. Brookfield typically accounts for 30% of each of its funds’ capital, he said, a much greater proportion than most other fund managers commit.
Asked which Asian countries the fund favoured as investment destinations, Powell said it was targeting India, China, Korea and Japan for further deals. They are very different countries, he noted, but they all have large and growing economies.
Turning specifically to China and India, he pointed to their huge populations that are increasingly moving to middle income. “The power of that economically provides a really good backdrop for us to invest in real assets, be they infrastructure, real estate or private equity,” said Powell.
Brookfield is also assessing China's One Belt, One Road infrastructure project to see where opportunities might present themselves.