Brookfield Asset Management and Castlelake L.P., an alternatives asset manager specializing in asset-based private credit, including aviation and specialty finance, announced that they have entered into an agreement in which Brookfield will buy a 51% stake in Castlelake’s fee-related earnings business. Brookfield will invest about $1.5 billion, including capital to be invested in Castlelake’s investment strategies by Brookfield Reinsurance. This partnership will enable Castlelake and Brookfield to collaborate and expand Castlelake’s differentiated asset-based investment business.
Castlelake was launched in 2005 by Rory O’Neill and Evan Carruthers and is one of the longest-tenured investment firms focused on asset-based investments. Its experience entails over 18 years of execution and $39 billion of capital deployment across about 1,300 transactions globally. The firm manages approximately $22 billion of assets for more than 200 diverse institutional investors.
Castlelake will continue operating its business independently, retaining its current governance and leadership structure, including Carruthers as CEO and CIO and O’Neill as Executive Chair. It will also retain majority ownership of its performance-related earnings. The deal is expected to close in the third quarter of 2024.
Evercore acted as Brookfield’s financial advisor, and Paul, Weiss, Rifkind, Wharton & Garrison acted as Brookfield’s lead legal counsel. Goldman Sachs acted as Castlelake’s lead advisor, and Colchester Partners also acted as advisor. Kirkland & Ellis acted as legal counsel to Castlelake.
KEY QUOTES:
“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. 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.”
- Craig Noble, CEO of Brookfield Credit
“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. 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.”
- Carruthers and O’Neill
