Brookfield Buys Energy Infrastructure Business

Brookfield Asset Management’s public securities group announced Tuesday that it will expand its energy infrastructure investing business by acquiring Houston investment adviser Center Coast Capital Holdings.

Center Coast Capital, which has been investing in energy infrastructure since it was created in 2007, manages $4 billion in assets, according to Brookfield’s announcement. Terms of the deal were not disclosed.

The purchase will strengthen Brookfield’s research and investment capacity at time when institutional investors are showing heightened interest in alternative assets like energy infrastructure, according to Craig Noble, chief executive officer and chief investor officer of the asset manager’s public securities group.

“There’s been more appetite from investors who are looking for alternatives,” Noble said in a phone interview. “This type of investment is a really good diversifier with stable cash flow, low correlation to the broader markets and inflation hedge components.”

Brookfield is an alternative asset manager that invests in real estate, infrastructure, private equity and renewable power. The New York-based firm has $250 billion of assets under management, including $15 billion managed by its public securities group.

According to Noble, Center Coast Capital primarily is targeting natural gas infrastructure investments, which includes pipelines and gathering systems. The asset manager invests in master limited partnerships, which are publicly traded companies that use partnerships for tax advantages. MLPs are popular in the energy industry.

“We’ve been investing in and studying the energy infrastructure space for a long time,” Noble said. “We’re excited to have this dedicated team that will be a part of our larger platform.”

The acquisition of Center Coast Capital is expected to be completed by the end of March, according to the announcement.

Noble said he sees an energy market rife with opportunity as well as increased client interest. “Valuations are attractive,” he said. “We have seen a stabilization in commodity prices.”

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Brookfield also announced Tuesday that it’s acquiring certain assets of both Liberty Street Advisors and its affiliates HRC Fund Associates and HRC Portfolio Solutions, which provide sales and marketing services for Center Coast Capital funds in the wealth management industry.

“We wanted to make sure that when we were doing the deal that we serviced all the existing clients,” Noble said.