"The worst is over" says Brookfield as it prepares for spending spree

George Sell George Sell Uploaded 17 August 2020

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Canada: Brookfield Asset Management raised a record US$23 billion during the second quarter and expects to accelerate the pace of investments after the disruption caused by Covid-19.

The Toronto-based asset manager, which owns edyn Group, said it has US$77 billion in cash, securities and other available capital, including uncalled capital commitments from clients. That figure includes $12 billion raised in its latest distressed debt fund by its Oaktree Capital Management unit.

When that fund is closed, it is likely to be the largest ever raised for distressed debt investing, according to Brookfield CEO Bruce Flatt.

“While we do not expect full recovery of the global economy until well into 2021, we believe the worst is over, and our own businesses are slowly recovering,” said Flatt. “We have been keeping our powder dry, waiting for opportunities we believe will come.”

“We are being patient with our capital, but we expect the pace of investment to increase over the next 12 months as opportunities present themselves,” he added.

Flatt said he does not believe the Covid-19 outbreak will permanently impact urbanisation trends. He said video conferencing and internet connections have allowed people to work from home during the crisis but won't replace face-to-face interaction: “The same arguments about distanced working were made when the automobile became ubiquitous, the telephone allowed transcontinental conversations, and the internet enabled online communication. None of these has changed the fact that people favour being in cities and in offices,” Flatt said. “In fact, quite the opposite has always been true in past. These communication tools historically enhanced great cities and offices rather than supplanting them. We think this will play out the same way this time as well.”

 

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