Canada’s Brookfield Asset Management has agreed to invest $1.5 billion in global private credit manager Castlelake.

Toronto-based Brookfield announced in a news release Monday that the company will acquire a 51% stake in Minneapolis-based Castlelake’s fee-related earnings. Essentially, Brookfield is acquiring a majority stake in the company.

Brookfield, through its reinsurance arm, will also invest in Castlelake’s funds and strategies as part of the $1.5-billion capital deployment.

The companies said the partnership will allow them to collaborate and expand Castlelake’s differentiated asset-based investment business. Castlelake will continue to manage its business independently.

Rory O’Neill will remain as CEO and chief investment officer, while Evan Carruthers continues to chair the firm. O’Neill and Carruthers co-founded Castlelake in 2005.

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

Castlelake manages more than US$22 billion of assets on behalf of about 200 diverse institutional investors. Castlelake’s website says the company has invested US$14 billion in residential transitional real estate, homebuilder finance, income-generating real estate loans through leasing or rental arrangements, infrastructure and sub- and non-performing loans secured by real assets.

The deal is expected to close in the third quarter of 2024. Castlelake has offices in North America, Europe and Asia.