Brookfield to Invest $1.5B in Castlelake

Brookfield Asset Management will invest around $1.5 billion in Minneapolis-based private credit manager Castlelake, acquiring a 51% interest in its fee-related earnings.

The deal includes capital to be invested in Castlelake’s investment strategies by Brookfield Reinsurance.

“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,” said Craig Noble, CEO of Brookfield Credit.

Founded in 2005 by Rory O’Neill and Evan Carruthers, Castlelake is an alternatives asset manager specializing in asset-based private credit including aviation and specialty finance. The firm provides funding to several large airlines, including United Airlines and Turkish Airlines.

The firm has deployed $39 billion across approximately 1,300 transactions globally. The firm manages roughly $22 billion in assets.

Castlelake will continue to operate its business independently, retaining its current governance and leadership structure, including Carruthers as CEO and CIO, 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.

The latest deal is part of a larger trend in which several large private equity and asset managers, including TPG, BlackRock, T Rowe Price, and CVC Capital Partners, have acquired credit managers to diversify their assets.

Evercore acted as financial advisor to Brookfield and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as Brookfield’s lead legal counsel. Goldman Sachs & Co. LLC acted as lead advisor to Castlelake, and Colchester Partners also acted as advisor. Kirkland & Ellis LLP acted as legal counsel to Castlelake.