On September 15, Prime Minister Mark Carney hosted Canada’s first Investment Summit, which attracted nearly $500 billion in new investment commitments to Canada. Pension funds, investment houses, and the Big Six banks committed billions of dollars in new capital. Canada Pension Plan (CPP) and Brookfield Asset Management (TSX: BAM) launched the $50 billion “Maple Fund” to invest in critical infrastructure and strategic industries across Canada.
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What Is Brookfield’s new “Maple Fund?”
Retail investors cannot invest in the New Maple Fund like they can in a mutual fund. Then how will it raise capital? CPP will pour in $25 billion in capital and Brookfield another $25 billion. Brookfield, being an alternative asset manager, will raise the capital from institutions and high-net-worth individuals.
CPP already has the funds from the money it deducts from your taxable income. What it needs is attractive investment opportunities that can give regular long-term cash flow to pay pensions to aging Canadians.
Like CPP, several sovereign wealth funds, public and private pensions, insurance, and family offices/unions and corporates have huge investment capacity and have already exhausted their limits on traditional investments. Alternative asset managers like Brookfield bring their expertise in investing in energy, infrastructure, real estate, private equity, and credit. Brookfield deploys and manages capital for the long term and gives returns to its clients after deducting its fees.
Why should Canadian investors keep an eye on Brookfield’s Maple Fund?
The Maple Fund is not for individual investors for a good reason. The fund will invest in large and complex projects that need more than $5 billion in equity capital. Interestingly, among the large deals pitched at the Summit prospectus were the West Coast Oil Pipeline and the Ksi Lisims and Kino Aski LNG pipelines for which the government seeks private capital.
Now, Brookfield or CPP have not stated which projects they will invest in. However, investors should keep an eye on which projects they choose for the Maple Fund.
Oil and gas pipeline projects carry the risk of uncertainty around future demand, volatile oil and gas prices, and the economics of long-term oil infrastructure. Building oil and gas pipelines is expensive, and the toll they will have to charge to recover costs will significantly increase transportation costs. Plus, the environmental concerns and opposition from civil society could delay or cancel the projects. The Keystone XL Pipeline extension is a perfect example. The project was terminated after then-U.S. president Joe Biden revoked its cross-border permit.
Such complexities need expertise, deep pockets, patience, and risk-taking ability.
Should you buy Brookfield’s stock?
However, you can still get exposure to Maple Fund by buying shares of Brookfield Asset Management on the TSX. BAM shares started trading on the exchange in 2022 and offer an annual dividend yield of 4.4%. The stock price surged significantly between November 2023 and January 2025, but since then it has shown tepid returns due to trade war uncertainty. BAM could be a good investment if you are looking to diversify into alternative investments.
BAM’s business model is that of collecting management fees on more than $1 trillion in assets under management. The dividends could fluctuate, and capital appreciation may be cyclical. You could consider buying the stock in the current dip. However, be mindful of the projects it undertakes.
