The money raised so far includes a US$500-million commitment Brookfield made to the fund. The fund is expected to have its final close later this year, which could push its total assets past the US$2-billion mark.Andrew Lahodynskyj/The Canadian Press
Brookfield Asset Management Ltd. BAM-T is pressing ahead with its expansion in the Middle East, raising money for a regional private equity fund and investing in energy infrastructure despite the threats to trade and security from the Iran war.
Brookfield announced Monday that it has raised about US$2-billion for the first close of Brookfield Middle East Partners, or BMEP, a fund conceived in 2024 that aims to invest half its capital in Saudi Arabia and the rest across countries such as the United Arab Emirates, Qatar, Oman, Kuwait and Bahrain.
Saudi Arabia’s Public Investment Fund, or PIF, a sovereign wealth fund that manages US$910-billion, is the anchor investor in BMEP. Brookfield has also raised money from other regional and global investors that were not identified in Monday’s announcement.
The money raised so far includes a US$500-million commitment Brookfield made to the fund. The fund is expected to have its final close later this year, which could push its total assets past the US$2-billion mark.
The war in Iran, which quickly drew in other countries across the region as Iran attacked key infrastructure such as Qatar’s Ras Laffan liquefied natural gas complex with rockets and drones, was expected to make investing in the region more fraught the longer it dragged on.
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Investment leaders from Gulf countries have acknowledged that the crisis has disrupted some normal-course business, but they have also expressed hope that the conflict will prove to be a short-lived setback.
So far, Brookfield hasn’t broken stride on its plan to increase its investments in the Middle East and expand its regional partnerships. Fundraising and joint investments in the region are a key part of a five-year plan to double the size of its private equity portfolio, which currently manages US$160-billion, compared with US$130-billion two years ago.
Brookfield is one of the largest foreign investors in the Middle East, managing a US$16-billion portfolio of private equity, real estate and infrastructure assets in the region. The company, which manages more than US$1-trillion worldwide, opened an office in Dubai in 2015 and more recently added one in Riyadh.
The fund raised with PIF and other anchor investors reflects “the global confidence and strong demand for private equity opportunities in Saudi Arabia and the region,” Brookfield Corp. chief executive officer Bruce Flatt said in a statement.
Connor Teskey, the CEO of Brookfield’s asset management business, said after the start of the Iran war in February that the conflict will not diminish the company’s appetite to do business in the region, which he expects will play a larger role in global finance over the long term.
PIF deputy governor and head of Middle East and North Africa investments Yazeed Al-Humied said in a statement that, “Our partnership with Brookfield is designed to help anchor international private equity into Saudi Arabia and the region,” and to speed up the flow of deals.
Canada’s government has also courted deeper trade and investment ties with Saudi Arabia. Prime Minister Mark Carney visited the Kingdom in July and met with Crown Prince and Prime Minister Mohammed bin Salman, mending relations that became strained under the previous Liberal government, which severed some ties after the 2018 murder of journalist Jamal Khashoggi.
Opinion: Canada should deepen its ties with Saudi Arabia
On Saturday, Brookfield also announced it joined a consortium with Blackstone Inc. and KKR & Co. Inc. that is buying a minority stake in a joint venture with Kuwait Oil Company, or KOC, a subsidiary of the state-owned Kuwait Petroleum Corp., or KPC.
Kuwait Oil Company has signed a US$16-billion lease and lease-back agreement with the investor consortium. The contract covers all 13 of the company’s pipelines, and the investors will earn fees based on pipeline volumes, while KOC owns and controls the network.
The upfront proceeds to KOC from the deal will be US$7.85-billion, making the transaction the largest foreign direct investment in Kuwait’s history. Brookfield’s share of the consortium investment was not disclosed.
The deal “reflects confidence in Kuwait’s resilience, the quality of KPC’s assets and our long-term vision for the country’s energy sector,” KPC deputy chairman and CEO Shaikh Nawaf Saud Al-Sabah said in a statement.