Brookfield invests $1.5bn in private credit manager Castlelake

Brookfield Asset Management is investing around $1.5bn (£1.2bn) in US private credit manager Castlelake.

Under the terms of the deal, Brookfield will acquire a 51 per cent interest in Castlelake’s fee-related earnings. The $1.5bn deal value also includes capital to be invested in Castlelake’s investment strategies by Brookfield Reinsurance.

Canada-based Brookfield Asset Management has more than $900bn of assets under management, including $300bn across a range of private and public credit strategies.

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Castlelake, which focuses on asset-based private credit including aviation and specialty finance, manages around $22bn of assets.

“We are thrilled to be partnering with Castlelake, a leading asset-based private credit business with an exceptional management team,” said Craig Noble, chief executive of Brookfield Credit.

“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 $300bn credit business over the next decade.”

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Castlelake will continue to operate its business independently, retaining its current leadership structure, including Evan Carruthers as chief executive and chief investment officer, and Rory O’Neill as executive chair.

In a joint statement, Carruthers and O’Neill said: “In Brookfield, we believe we have found a like-minded partner that values experience and specialized expertise, and takes a disciplined, yet creative approach to delivering value for investors. We are excited about this 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. Alongside the existing Executive Committee and senior leadership of Castlelake, and with the support of Brookfield’s significant credit franchise, we look forward to continuing to grow and evolve Castlelake into one of the foremost asset-based investment firms in the market.”

The deal – rumours of which emerged last month in a Financial Times report – is expected to close in the third quarter of this year.