Key Takeaways
- • Brookfield CEO Bruce Flatt predicted five years ago that the private equity secondaries market could become a $50 billion business; that boom has materialized, but Brookfield has largely missed out as competitors aggressively raise dedicated secondaries funds.
- • Brookfield has adopted a cautious, incremental approach to secondaries rather than launching bold, dedicated initiatives, leaving the firm sidelined while rivals capitalize on the market expansion.
- • The firm currently has no immediate plans to raise a dedicated private equity secondaries fund, according to sources familiar with the matter.
- • New CEO Connor Teskey has signaled a "very opportunistic" approach to secondaries expansion, with the firm viewing acquisitions and targeted moves as its strategy rather than standalone fund launches.
- • The secondaries market, which involves buying portfolio company stakes from other buyout shops or providing investor exit mechanisms, has become a major growth opportunity that Brookfield's leadership anticipated but failed to execute upon.
Summary
Brookfield Asset Management faces a significant strategic miss in one of private equity's fastest-growing segments. Five years ago, then-CEO Bruce Flatt made a prescient prediction that the secondary market for private equity, real estate, and infrastructure was poised for explosive growth and could become a $50 billion business for the firm. That expansion has indeed occurred, yet Brookfield has largely remained on the sidelines while competitors aggressively mobilized to capitalize on the opportunity.
The secondaries market—which involves purchasing portfolio company stakes from other private equity sponsors or offering existing investors liquidity events—has emerged as a critical growth driver across the alternative asset management industry. Flatt's forecast proved accurate in timing and scale, but Brookfield's execution has lagged considerably. The firm's approach has been marked by cautious, incremental moves rather than the bold, dedicated fund-raising initiatives that rivals have pursued to dominate this expanding sector.
Current leadership under CEO Connor Teskey has indicated that Brookfield will pursue a "very opportunistic" strategy toward secondaries, focusing on acquisitions and targeted transactions rather than launching standalone secondaries funds. This measured posture stands in contrast to the aggressive fund-raising campaigns by competitors seeking to capture market share in what has become a material revenue driver for asset managers. Brookfield has signaled no immediate plans to raise a dedicated private equity secondaries fund, suggesting the firm may have ceded first-mover advantage to more decisive competitors.
The strategic implications are substantial for an asset manager of Brookfield's scale and $1 trillion-plus in assets under management. While Teskey's leadership team may eventually pursue secondaries through acquisition or opportunistic deployment, the delay in establishing a dedicated platform has cost Brookfield valuable years of fundraising, deal flow, and fee generation during a period of unprecedented secondaries market expansion. This represents a rare instance where prescient top-level strategic insight failed to translate into competitive market execution.
The secondaries market—which involves purchasing portfolio company stakes from other private equity sponsors or offering existing investors liquidity events—has emerged as a critical growth driver across the alternative asset management industry. Flatt's forecast proved accurate in timing and scale, but Brookfield's execution has lagged considerably. The firm's approach has been marked by cautious, incremental moves rather than the bold, dedicated fund-raising initiatives that rivals have pursued to dominate this expanding sector.
Current leadership under CEO Connor Teskey has indicated that Brookfield will pursue a "very opportunistic" strategy toward secondaries, focusing on acquisitions and targeted transactions rather than launching standalone secondaries funds. This measured posture stands in contrast to the aggressive fund-raising campaigns by competitors seeking to capture market share in what has become a material revenue driver for asset managers. Brookfield has signaled no immediate plans to raise a dedicated private equity secondaries fund, suggesting the firm may have ceded first-mover advantage to more decisive competitors.
The strategic implications are substantial for an asset manager of Brookfield's scale and $1 trillion-plus in assets under management. While Teskey's leadership team may eventually pursue secondaries through acquisition or opportunistic deployment, the delay in establishing a dedicated platform has cost Brookfield valuable years of fundraising, deal flow, and fee generation during a period of unprecedented secondaries market expansion. This represents a rare instance where prescient top-level strategic insight failed to translate into competitive market execution.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.