Brookfield Aims to Spend $5 Billion to Shore Up Troubled Retailers
07 Mai 2020 - 06:00PM
Dow Jones News
By Miriam Gottfried
Brookfield Asset Management Inc., a major owner of malls, plans
to devote $5 billion to shoring up retailers hit by the coronavirus
pandemic, according to people familiar with the matter.
The program, which the Canadian investment giant is expected to
announce Thursday, will be aimed at taking noncontrolling stakes in
retail businesses with prepandemic revenue of $250 million or more
whose sales have plummeted as stores have been forced to close and
consumers have remained on lockdown, the people said.
Brookfield plans to finance the program using money from its
balance sheet and existing funds and investment strategies. It may
also raise additional institutional capital for the program.
Known for its contrarian investing style, Brookfield already has
placed a large wager on bricks-and-mortar retail through its
real-estate business. In August 2018, the firm closed a deal to buy
the two-thirds of real-estate investment trust GGP Inc. it didn't
already own. The transaction valued the 125-property portfolio,
mostly comprised of malls, at around $15 billion.
Brookfield is now hoping to leverage its retail expertise and
the data it collects through its malls to backstop retailers whose
businesses it believes will eventually rebound. It plans to target
companies with experienced management teams that have been
operating for at least two years, the people said. Investments
could also include retailers that have already filed for bankruptcy
protection.
The retail-investment program will be run by Ron Bloom, vice
chairman of Brookfield's private-equity group. Mr. Bloom, a former
restructuring banker at Lazard Ltd., is best known for his role
leading the U.S. government's auto task force during the financial
crisis.
Brookfield's first investment in GGP was born out of the
financial crisis after that mall owner filed for bankruptcy
protection. That bet has generated over $10 billion in profit for
Brookfield and its investors over the years, but its future had
looked uncertain even before the pandemic as the growth of
e-commerce continued to take its toll on bricks-and-mortar retail.
Some of its major tenants had filed for bankruptcy protection and
announced significant store closures before the coronavirus, and
shares of rival mall owners had suffered.
Write to Miriam Gottfried at Miriam.Gottfried@wsj.com
(END) Dow Jones Newswires
May 07, 2020 11:45 ET (15:45 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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