REPE Fund Profile Series - Part Two: Brookfield Asset Management

As part of our new post series, we will continue to take an in-depth look at the top 50 real estate private equity (REPE) firms in order of their prominence. Each REPE fund profile will briefly summarize each fund’s history, as well as getting into the details of the funds themselves. Our series will also outline a few of each firm’s key real estate equity investment in recent years. By the end of each post, you should have a solid starting point to aid your preparations for your upcoming real estate private equity interviews.

Following on from Part One of the series which focused on the Blackstone Group, the second part of this series will examine Brookfield Asset Management in more detail.

Key Facts About Brookfield Asset Management

Founded by William Mackenzie and Frederick Stark Pearson in 1899, Brookfield Asset Management Inc. was originally set up in Brazil as a utility management company called the Brazilian Traction, Light and Power Company. The company was later renamed as the Brascan Corporation, until the name was changed to Brookfield in 2005. 

Today, Brookfield is one of the largest alternative asset management firms in the world, with its headquarters located in Toronto, Canada. The firm boasts an impressive global team of over 150,000 employees dotted across 30 countries, including offices in major global hubs such as Dubai, London, New York, and Mumbai. At the time of writing this post, Brookfield’s real estate business unit is supported by a 24,400-strong team of employees.

As of Q2 2021, Brookfield has over $625B worth of total assets under management, with $219B (about 35%) of this figure allocated to the firm’s real estate division. To put that figure into perspective: Brookfield's real estate portfolio currently consists of over 500M square feet of commercial space—that’s almost the landmass of Bermuda.

With that being said, the firm traditionally maintains a low public profile—it may be one of the largest REPE firms you’ve never heard of!

Brookfield’s Main Areas of Concentration

Looking at the business as a whole, Brookfield has six primary business lines that operate across international markets. As well as its real estate division, the firm also invests in infrastructure, renewable power, private equity, credit (via Oaktree), and reinsurance solutions.

Within the firm’s real estate business, the main areas of focus are office properties, retail developments, multifamily units, and hospitality and leisure properties, in addition to niche investments in other sectors such as student housing and logistics.

One key component of the firm’s investment strategy lies in its focus on looking for the “hidden gem” deals where there are few competitors. Specifically, these opportunities would have less competition either due to the sheer size of the acquisition or because of limited research available regarding the opportunity’s long-term value.

Brookfield’s Signature Deals

As we mentioned in the first post in this series, to really understand how and why a real estate private equity firm invests in the way it does, it's important to examine the fund’s track record, looking at both challenges and successes. 

To kick things off for your research, here are some of Brookfield’s signature deals for you to become familiar with:

• GGP, Inc.: In 2010, Brookfield led the restructuring and recreditization process of GGP, until finally acquiring the company and all of its retail assets for $15B in 2018. Very shortly afterwards, the firm sold three of those retail properties to TH Real Estate in a deal worth $714M, and the remaining properties to CBRE in a joint venture deal for an undisclosed amount.
• Center Parcs: In 2015, Brookfield acquired Center Parcs, a UK holiday village company, for GBP £2.4B from Blackstone (as we mentioned in Part One of this series).
• Rouse Properties, Inc.: In 2016, Brookfield acquired Rouse Properties, Inc. (a spin-off company of the aforementioned GGP) for $2.8B.
• Forest City Realty Trust, Inc.: In 2018, Brookfield acquired Forest City Realty Trust in a deal worth $11.4B.
• Oaktree Capital Management: In 2019, Brookfield acquired 62% of Oaktree Capital for $4.8B to increase the firm’s credit portfolio. In July 2021, it was announced that the firm will launch a new private REIT (to be called Brookfield Real Estate Income Trust Inc.) after taking over the existing Oaktree REIT portfolio worth $478M. 

Anything else of Interest or Special Importance?

Despite the firm’s low-key manner of operating away from the limelight, Brookfield has not quite managed to escape controversy.

Most recently, Brookfield’s leasing deal with Kushner Properties at 666 Fifth Avenue—later 660 Fifth Avenue—in 2018 sparked a political investigation due to the resulting implied link between the Qatar Investment Authority (the nation’s sovereign wealth fund, also a Brookfield investor) and the then-President’s son-in-law and political adviser, Jared Kushner. The investigation centered on the idea that the deal may have had an influence on U.S. foreign policy.

Over to you...

We hope this Brookfield REPE fund profile was useful for helping you broaden your industry knowledge in preparation for your upcoming real estate private equity interview. So now that you’re up to speed, do you have your interview strategy in place, both technically and behaviorally? Without the right strategy to sell yourself at the interview stage, you’re risking your dream job. 

Let us help you set yourself up for interview success: check out everything that Leveraged Breakdowns has to offer.

 

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About the Author: 

Melody Sadé Abeni is a London-based writer who specialises in commercial real estate content. As a generalist member of the Leveraged Breakdowns team, she crafts detailed posts geared towards those curious about the real estate private equity life. 

In her former professional life, Melody supported senior corporate executives as a global mobility consultant and did her time in both management consulting and specialist asset management firms.