Key Takeaways
- • Fidelity Investments Canada has entered into an agreement with Brookfield Asset Management to offer Canadian investors access to private real estate investments, traditionally available only to institutional investors, through newly formed Fidelity Private Investment Pools.
- • Brookfield will serve as investment manager and portfolio operator for a newly created portfolio of high-quality Canadian real estate assets on behalf of Fidelity, combining active management with long-term private real estate benefits.
- • The arrangement expands Fidelity's alternative investment suite and broadens its overall investment capabilities, following regulatory amendments filed earlier in the week to permit certain Fidelity Private Investment Program strategies to invest in private real estate.
- • Private real estate exposure is positioned to deliver diversification, inflation protection, and capital appreciation potential with lower correlation to traditional stocks and bonds, supporting Fidelity's strategy to enhance return potential for Canadian investors.
- • The partnership represents Fidelity's continued evolution since its 1987 Canadian founding, leveraging external expertise and global resources to introduce innovative, actively managed strategies that address changing client needs.
Summary
Fidelity Investments Canada ULC announced on July 12, 2023, that it has entered into an agreement with Brookfield Asset Management whereby Brookfield will invest in and manage a newly formed portfolio of high-quality Canadian real estate assets on behalf of Fidelity. The arrangement marks a significant expansion of Fidelity's alternative investment offerings, enabling the firm to democratize access to private real estate investments typically restricted to institutional investors.
Under the agreement, Fidelity plans to allocate this managed portfolio across a number of Fidelity Private Investment Pools while actively exploring additional deployment opportunities. The partnership was enabled by regulatory amendments filed earlier in the week that permit certain strategies under the Fidelity Private Investment Program to invest in private real estate assets. Andrew Wells, President and Head of Fidelity Canada, characterized the move as consistent with Fidelity's historical approach of "harnessing our global resources and augmenting these with external expertise where it makes sense to bring innovative, actively managed strategies for clients."
The strategic rationale centers on private real estate's capacity to provide portfolio diversification, inflation protection, and capital appreciation potential with returns less correlated to traditional equities and fixed income. Brookfield's active management, combined with private real estate's long-term structural benefits, positions the portfolio to enhance overall portfolio construction for investors seeking reduced correlation to public markets.
This agreement aligns with Fidelity's broader expansion of alternative investment solutions in Canada over recent years. The partnership enables the firm to continue building out its alternative investment suite and broadening overall investment capabilities while maintaining alignment with its client-centric product development philosophy established since its Canadian inception in 1987.
Under the agreement, Fidelity plans to allocate this managed portfolio across a number of Fidelity Private Investment Pools while actively exploring additional deployment opportunities. The partnership was enabled by regulatory amendments filed earlier in the week that permit certain strategies under the Fidelity Private Investment Program to invest in private real estate assets. Andrew Wells, President and Head of Fidelity Canada, characterized the move as consistent with Fidelity's historical approach of "harnessing our global resources and augmenting these with external expertise where it makes sense to bring innovative, actively managed strategies for clients."
The strategic rationale centers on private real estate's capacity to provide portfolio diversification, inflation protection, and capital appreciation potential with returns less correlated to traditional equities and fixed income. Brookfield's active management, combined with private real estate's long-term structural benefits, positions the portfolio to enhance overall portfolio construction for investors seeking reduced correlation to public markets.
This agreement aligns with Fidelity's broader expansion of alternative investment solutions in Canada over recent years. The partnership enables the firm to continue building out its alternative investment suite and broadening overall investment capabilities while maintaining alignment with its client-centric product development philosophy established since its Canadian inception in 1987.
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