Brookfield eyes advisers for La Trobe Financial

Four or five banks pitched for the role in selling the $3bn business.

Brookfield is expected to formally pick an adviser this week to weigh options for its alternative asset manager La Trobe Financial.

All eyes are on JPMorgan, which sources say is in the box seat to win the mandate, though now some believe that Swiss bank UBS could succeed.

They were among four or five banks to pitch for the role in selling the $3bn business.

DataRoom understands that a number of major global funds have toyed with the idea of an investment in the business, but one deterrent is that part of the La Trobe business has credit funds for retail investors.

These typically come with higher regulatory risk and reputation risk, should anything go wrong with the business.

The call times for the retail funds can be a concern.

But Brookfield sources say the retail funds are liquid and enhanced by committed bank facilities, it has never had a delay on redemptions and its risk profile is well managed. They say demand from retail investors is strong in Australia, which has a wealthy ageing population.

Borrowing short and lending long was one of the factors that led to the undoing of Silicon Valley Bank in 2023. The bank, which was designed to meet the needs of the technology industry, suffered from a run on its deposits as interest rates rose.

Brookfield bought La Trobe from Blackstone for $1.7bn in 2022.

Recently, La Trobe Financial has undertaken a couple of non-deal roadshows to educate potential investors about the business.

While some consider La Trobe Financial to be a non-bank lender, it describes itself as an alternative asset manager.

Unlike traditional non-bank lenders, over 65 per cent of the business’s assets are funded through its asset management arm, which earns a fixed management fee. The company compares itself to companies like Qualitas, MA Financial and Pinnacle.

It has more than $20bn of assets under management.