Paul, Weiss prepares Brookfield Asset Management for its upcoming partnership involving a USD 1.5 billion investment.
Paul, Weiss announced its advisory role in the transaction on 6 May 2024, which sees the international law firm guiding global alternative asset manager Brookfield Asset Management on its strategic partnership with global alternative investment manager Castlelake LP, in which Brookfield will invest approximately USD 1.5 billion in Castlelake, including capital to be invested by Brookfield Reinsurance in the company’s investment strategies.
The team at Paul, Weiss was headed by M&A partners Cullen Sinclair and Ted Ackerman, M&A counsel Erika Detjen and private funds partners Bradley Brown and Marco Masotti. The wider team comprised private funds partners Aaron Schlaphoff and Lindsey Wiersma; private funds counsel Andrew Day, Marc Palumbo and Arik Hirschfeld; corporate counsel Nathan Mitchell; finance partner Suhan Shim; intellectual property partner Chuck Googe; tax partners Reuven Garrett and Scott Sontag and tax counsel Patrick Karsnitz; litigation partner Gregory Laufer and litigation counsel Pietro Signoracci and Steven Herzog; executive compensation partner Lawrence Witdorchic and executive compensation counsel Jake Glazeski; environmental counsel William O’Brien; and real estate partner Salvatore Gogliormella.
Castlelake specialises in asset-based investment in the real assets, private specialty finance and aviation markets, managing roughly USD 22 billion of assets for a global investor base. Brookfield is a global asset manager with over USD 900 billion of assets under management across infrastructure, renewable power and transition, real estate, private equity and credit, investing client capital with a focus on real assets and essential service businesses.
Brookfield will acquire a 51% stake in Castlelake’s fee-related earnings while Castlelake will retain its current leadership and governance structure and continue to operate independently. The partnership will enable Brookfield and Castlelake to collaborate and expand the latter’s differentiated asset-based investment business. The transaction is expected to be finalised in the third quarter of 2024.
CEO of Brookfield Credit, Craig Noble, commented: “We are thrilled to be partnering with Castlelake, a leading asset-based private credit business with an exceptional management team. There is strong demand for Castlelake’s leading private credit strategies, and tremendous growth potential in the asset class. We look forward to helping Castlelake scale their business, and the addition of their capabilities enables us to better serve our clients around the world. With growing demand from investors for diverse credit strategies, this multi-trillion market has significant tailwinds that will help drive the growth of our $300 billion credit business over the next decade.”
Investment banking firm Evercore provided financial advice to Brookfield while global investment banking, securities, and investment management firm Goldman Sachs & Co served as the primary advisor to Castlelake. Investment banking and strategic advisory firm Colchester Partners also provided advisory services to Castlelake, with global law firm Kirkland & Ellis serving as legal counsel.
Rory O’Neill and Evan Carruthers, founders of Castlelake, will retain their leadership roles, with O’Neill serving as Executive Chair and Carruthers as Chief Executive Officer and Chief Investment Officer. The pair expressed their “excitement” at the “partnership’s ability to enhance Castlelake’s value proposition, help accelerate its innovation, and scale its platform for the benefit of investors, business partners and employees”. They added: “In Brookfield, we believe we have found a like-minded partner that values experience and specialised expertise, and takes a disciplined, yet creative approach to delivering value for investors.”