Brookfield Asset Management and Castlelake, an alternatives asset manager specializing in asset-based private credit including aviation and specialty finance, entered into an agreement whereby Brookfield will acquire a 51% stake in Castlelake’s fee-related earnings. The amount of capital to be invested will be approximately $1.5 billion, including capital to be invested in Castlelake’s investment strategies by Brookfield Reinsurance. The partnership will allow Castlelake and Brookfield to collaborate and expand Castlelake’s differentiated asset-based investment business.
“We are thrilled to be partnering with Castlelake, a leading asset-based private credit business with an exceptional management team. There is strong demand for Castlelake’s leading private credit strategies and tremendous growth potential in the asset class,” Craig Noble, CEO of Brookfield Credit, said. “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 $300 billion credit business over the next decade.”
“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,” Rory O’Neill and Evan Carruthers, co-founders of Castlelake, said in a joint statement. “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.”
Castlelake will continue to operate its business independently, retaining its current governance and leadership structure, including Carruthers as CEO and chief investment officer, and O’Neill as executive chair. It will retain majority ownership of its performance-related earnings. The transaction is expected to close in the third quarter of 2024.
Evercore acted as financial advisor to Brookfield and Paul, Weiss, Rifkind, Wharton & Garrison acted as Brookfield’s lead legal counsel. Goldman Sachs acted as lead advisor to Castlelake, and Colchester Partners also acted as advisor. Kirkland & Ellis acted as legal counsel to Castlelake.
