Discussions on Brookfield's massive fund aim to boost Canadian investments but face lukewarm reception
Brookfield Asset Management Ltd. has informally proposed the idea of launching a fund worth up to $50bn, according to sources reported by The Globe and Mail.
The fund aims to raise money from major Canadian pension funds and the federal government to invest in Canadian assets. The proposal has received limited interest, with three sources stating it is unlikely to gain momentum.
In recent weeks, Brookfield held preliminary discussions with some of Canada’s largest pension funds, with the intention of raising over $35bn from these funds.
The Toronto-based asset manager also sought a $10bn contribution from the federal government and planned to contribute as much as $4bn of its own capital, one source confirmed.
The pension funds have shown little interest in the proposal, partly due to concerns over the limited availability of large-scale investable assets in Canada that fit their risk profile.
Another concern involves Mark Carney, Brookfield’s head of transition investing, who was recently appointed to lead an economic task force advising Prime Minister Justin Trudeau. This raised the potential for conflicts of interest, according to sources.
Despite Brookfield's overtures, the proposal has not progressed beyond early discussions, and the government has not requested Brookfield to initiate such a fund. A senior government official confirmed that no such request had been made.
The discussions align with ongoing debates about whether Canada’s largest pension funds, which collectively manage more than $2tn in assets, invest enough in domestic markets.
Earlier this year, Ottawa appointed former Bank of Canada governor Stephen Poloz to lead a federal working group aimed at encouraging pension funds to invest more domestically. On average, Canadian pension funds invest about 25 percent of their assets in Canada, though this figure varies by fund.
It remains unclear whether Brookfield’s proposal was linked to Poloz’s initiative. Poloz declined to comment on the discussions but confirmed his work continues with meetings and conversations with government officials.
Brookfield manages over US$1tn in assets, with significant investments in infrastructure, real estate, renewable energy, credit, and insurance. A $50bn fund would be a significant undertaking for Brookfield, though the asset manager recently raised US$30bn for its fifth infrastructure fund.
If successful, this fund would require a substantial commitment from Canada’s pension funds and Ottawa, which recently allocated $15bn to launch the Canada Growth Fund, managed by PSP Investments.
