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)

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