Brookfield Asset Management (NYSE: BN) struck a partnership with Castlelake LP to get a majority share of the private debt firm’s fee-related earnings, another move in the Canadian investing giant’s effort to grow its credit business.
Brookfield Asset will invest about $1.5 billion, including money that the firm’s reinsurance arm will place in Castlelake’s strategies, Bloomberg News reported. Castlelake will still operate independently and retains majority ownership of its earnings tied to performance. Toronto-based Brookfield Asset recently formed a credit arm to drive growth alongside its traditional real estate and infrastructure funds. It’s looking to manage more credit assets for insurers, including its own, and has turned to partnerships in many instances.
The Castlelake deal “helps to deploy some of its significant cash ($2.7 billion) on its balance sheet and we think there could be an opportunity to take a greater stake in Castlelake over time,” RBC Capital Markets (NYSE: RY) analyst Geoffrey Kwan said, according to Bloomberg.