Brookfield, Societe Generale to Launch Mammoth Private Debt Fund
Brookfield Asset Management Inc. and Societe Generale SA have announced a strategic partnership to launch a new private debt fund that will target investments in infrastructure, real estate and renewable energy sectors.
The fund, named Brookfield Societe Generale Private Debt Partners (BSG PDP), will have an initial capital of $10.70 billion, making it one of the largest private debt funds in the world. The fund will seek to provide long-term financing solutions to companies and projects that are aligned with the United Nations’ Sustainable Development Goals and the Paris Agreement on climate change.
Brookfield, a global alternative asset manager with over $600 billion in assets under management, will contribute $7.70 billion to the fund, while Societe Generale, a leading European financial services group with a strong presence in sustainable finance, will contribute $3 billion. The fund will also leverage Societe Generale’s global network and expertise in structured finance, capital markets and advisory services.
The fund will be co-managed by Brookfield’s Private Credit Group and Societe Generale’s Global Banking and Investor Solutions division. The fund will have a flexible mandate to invest across various geographies, sectors and credit profiles, with a focus on Europe, North America and Asia-Pacific.
The fund will aim to generate attractive risk-adjusted returns for its investors, while also supporting the transition to a low-carbon economy and fostering social inclusion and diversity. The fund will adhere to the highest standards of environmental, social and governance (ESG) criteria and reporting.
The launch of the fund comes at a time when private debt has emerged as a critical source of financing for companies and projects facing challenges or opportunities in the wake of the COVID-19 pandemic and the global shift to sustainability. According to Preqin, a data provider for alternative assets, private debt assets under management reached a record high of $919 billion as of June 2023, up from $848 billion at the end of 2022.
Brookfield and Societe Generale said they believe that private debt can play a vital role in bridging the financing gap for sustainable development and creating positive social and environmental impacts. They also said they expect strong demand for their fund from institutional investors who are looking for diversification, yield enhancement and ESG alignment in their portfolios.
“We are delighted to partner with Societe Generale, a leader in sustainable finance, to launch this innovative fund that will provide long-term capital to support the growth and transformation of businesses and projects that are contributing to a more sustainable future,” said Mark Carney, Vice Chair and Head of ESG and Impact Fund Investing at Brookfield.
“Private debt is a key asset class for our clients who are seeking to diversify their sources of income and enhance their returns while also aligning their investments with their ESG objectives. We are excited to join forces with Brookfield, a global leader in alternative asset management, to offer our clients access to this unique fund that will combine our complementary strengths and expertise in private debt and sustainable finance,” said Séverin Cabannes, Deputy Chief Executive Officer of Societe Generale.
