Brookfield may emerge the largest investor this year

The Canadian fund announced investments worth $2.6 bn this month

Canadian alternative-asset-manager Brookfield, with $200 billion worth of assets under management, set up its office in Mumbai 2009. Anuj Ranjan, its managing partner for India office, did not make any investment in the first three years. Over the next three years, however, he invested in assets worth $2 billion.

This year, he plans to acquire assets worth $2.6 billion. These include the $1-billion (approximately Rs 6,700-crore) acquisition of retail and real estate assets from Hiranandani Developers at Powai in Mumbai early this month followed with a non-binding bid worth Rs 11,000 crore ($1.6 billion) for acquiring tower assets of Reliance Communication. This might make Brookfield the largest alternative asset investor in India this year.

Last year, Singaporean fund Temasek emerged as the largest PE investor with investments worth $1 billion.

“There is nothing as a must do for Brookfield in terms of geography or industry as it remains truly opportunistic,” says a person familiar with Brookfield’s India investments plans. He did not wish to be identified. “Right now, India looks attractive with good macro fundamentals coupled with challenging micro situation resulting in good deal opportunities,” says the person explaining the sudden spurt in Brookfield’s India investment plans.

The earlier deals of the fund include acquisition of six roads and three power projects from Gammon Infrastructure in 2015.  

The Canadian fund with focus on infrastructure assets also announced Rs 7,000 crore joint venture with public-sector lender State Bank of India to purchase distressed assets this year. This is the largest joint venture (JV) from the fund, which in 2012 put in $20 million in Kotak Mahindra’s infrastructure fund, followed with a Rs 1,000-crore JV fund with Peninsula Land to provide loan to real estate developers.

“The spurt in investment is also because of the opportunity to buy majority control in these assets that can provide operational control,” says the person familiar with Brookfield’s plans.

This has led to not only Brookfield but other global marquee investors such as Blackstone and GIC also lapping up assets in real estate as well as in larger infrastructure space in India. This year, US-based Blackstone, the world’s largest alternative assets fund, acquired a 1-million sq. feet mall in the Seawoods area of Navi Mumbai from Larsen & Toubro for Rs 1,400 crore. Last year, Singaporean sovereign wealth fund GIC had invested about Rs 2,000 crore in DLF’s two upcoming residential projects in central Delhi.

“In the earlier years, the investments were fuelled by an increase in consumer demand,” says Madhur Singhal, partner at global management consultancy firm Bain & Co. “This year, along with the consumer demand growth in some micro-markets, there have also been opportunities in funding real estate developers who are looking to reduce the stress on their balance sheets.”

BROOKFIELD INVESTMENTS IN INDIA

• Jan ‘14: Acquired AIG Global’s real estate assets in India
   
• Jun ‘14: Bought Unitech Corporate Park
   
• Aug ‘15: Acquired six roads and three power project from Gammon Infrastructure Projects
   
• Oct ‘16: Acquired office and real estate assets from Hiranandani Developers in Mumbai for Rs 6,700 crore
   
• Oct ‘16: Inked pact for buying majority stake in R Com telecom tower company for Rs 11,000 crore

Partnerships

• 2012: Invested $20 mn in Kotak Mahindra Bank’s infrastructure fund
   
• 2013: Formed Rs 1,000 crore JV Peninsula Brookfield India Real Estate Fund
   
• 2016: SBI and Brookfield launched a JV fund, with a commitment of Rs 7,000 crore