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Is Brookfield Biting Off More Than it Can Chew?

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According to data from the Sovereign Wealth Fund Institute (SWFI), increasingly asset owners such as sovereign wealth funds and large pensions have augmented allocation to unlisted infrastructure. The money flows have created bubbles in the world of private infrastructure, forcing asset owners, managers and other investors to pay more for infrastructure assets. Toronto-based Brookfield Asset Management, within a nine-month span, raised the biggest private infrastructure fund in history – closing US$ 14 billion in equity commitments for Brookfield Infrastructure Fund III. The original fundraising target was US$ 10 billion. Brookfield Infrastructure Fund III, which targets core infrastructure assets on a value basis, has a four-year investment period that will last 12 years – subject to annual extensions. To be fair, US$ 4 billion of that amount is being committed by Brookfield Infrastructure Partners L.P. and Brookfield Renewable Partners L.P. However, US$ 6.2 billion was committed from 77 new investors, which include fresh backers from China, Japan and South Korea, out of 120 investors. Asian investors such as Korean pensions are eager to push capital toward single-digit generating illiquid infrastructure assets. Even so, the surging demand for investments outside the volatile world of listed equities and negative interest rates in government bonds have created substantial demand for real assets.

That limited partner money would be at substantial political risk, as Brazil is undergoing a tumultuous period of exposed corruption.

Enough Opportunity

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Qatar Central Bank Deals with MSCI

MSCI, a stock index company whose benchmarks influence investor behavior, has tremendous indirect power impacting the stock markets of smaller economies. In 1988, MSCI released its emerging markets index, a now-widely-used benchmark for many institutional investors wanting access to growth markets. China and South Korea make up the majority of the benchmark, but smaller economies such as Poland, Chile and even Qatar make up other pieces of it.

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bcIMC Buys into Bottling Business with PAI in €1.623 Billion Takeover of Refresco

Dutch soft-drink bottler Refresco Group N.V. has agreed to a buyout offer for all 81.2 million of its shares from French private equity firm PAI Partners SAS (PAI) and Canadian pension manager British Columbia Investment Management Corporation (bcIMC) in exchange for €20 in cash per ordinary share for a total consideration of €1.623 billion. Refresco’s major shareholders, which includes 3i Group, and shareholding members of its boards, who represent 26.5% of outstanding shares, have said they stand behind the deal.

Refresco’s board rejected an initial offer from PAI in April 2017 of €1.4 billion, which they felt did not adequately capture the value added by their plans to bolster its presence in North America through the acquisition of Canadian bottler Cott TB, a deal that went through in July for US$ 1.25 billion.

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Digital Insurance Distributor BGL Opts for CPPIB Money Over IPO

Canada Pension Plan Investment Board (CPPIB) is investing £675 million (US$ 895.715 million) for a 30% stake in Peterborough-based BGL Group, a digital distributor of insurance and household financial services to 8.5 million customers. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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