Brookfield Asset Management’s New York-based real estate unit plans to start an opportunity-zone fund, joining the roster of financial firms in taking advantage of new U.S. tax breaks for investing in low-income communities.
The average expense ratio among the top-performers is 40 basis points higher than the average.
“We are launching a fund in the next month or two,” said Brookfield Property Partners CEO Brian Kingston.
Goldman Sachs, Starwood Capital, hedge fund EJF Capital and New York-focused RXR Realty are among firms that have begun making investments in opportunity zones or are raising money to do so.
The government incentives are meant to encourage development in areas “that are otherwise crippled,” Kingston said.
Real estate is attracting more interest from institutions including sovereign and pension funds seeking to hedge against long-term liabilities, Kingston said. Brookfield is invested in 30 countries including Brazil, Colombia and Chile, and probably won’t ever be in more than 35, in part because of a focus on strong rule of law and respect of private capital, he said.
