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Leveraged Breakdowns

Top Real Estate Private Equity Firms, Part Two: Brookfield

This series covers the top real estate private equity firms. Each post briefly describes the subject fund’s size, history, and key real estate equity investments and concludes with questions to help develop your investing mindset by critically reviewing the firm’s key transactions. For a real estate private equity beginner, these posts will broaden your industry knowledge. Part One of the series focused on Blackstone.

Part Two: Brookfield

Brookfield is a Toronto, Canada based global alternative asset manager with over $350B in AUM according to their website. The firm has four primary business lines: real estate, infrastructure, renewable power, and private equity. The real estate side of the business totals $191B in AUM, or nearly 55% of AUM, and includes 450M square feet of commercial space.

The firm has historically maintained a very low public profile. It may be one of the largest REPE firms you’ve never heard of. Broofield’s roots stretch back over 100 years and began with utility investments in Brazil. Under the leadership of Bruce Flatt, CEO since 2002, the company seeks opportunities where competitors are few, either due to the sheer size of the acquisition or the long-term value isn’t obvious.

Brookfield’s Most Notable Real Estate Equity Investments

  • GGP: Brookfield Property Partners, LP completes acquisition of GGP, Inc. (more here)
  • Forest City Realty Trust: Brookfield Closes $11.4B Forest City Acquisition (more here)
  • Oaktree Capital Management: Brookfield to buy most of Oaktree to build juggernaut to rival Blackstone (more here)
  • Rouse Properties, Inc.: Brookfield Completes Acquisition of Rouse Properties, Inc. (more here)

Think Like an Investor – Why Did These Deals Make Sense?

Real estate private equity firms must think objectively when choosing between investment alternatives. Pick a deal from the list above, or any other notable Brookfield real estate equity investment, and answer the following questions. You will need to research the deals in greater detail on your own to answer these questions.

For the questions tagged as [Past], presume you are in charge of Brookfield at the time of investment. Ignore any knowledge of future events. For those marked [Present], feel free to support your response with current information.

  1. [Past] Why is now the best time to invest in this company? Why not earlier, why not wait?
  2. [Past] What macroeconomic risks, unsystematic to our own investment, could threaten our return?
  3. [Past] What microeconomic risks, systematic to our own investment, can we carefully manage to de-risk our return?
  4. [Present] Why did Brookfield choose their particular exit strategy? Was it the most logical exit for this investment?
  5. [Present] What was the original investment thesis? Did it evolve between close and exit? If so, how?
  6. [Present] What is the investment thesis of the firm that later acquired the investment from Brookfield? How does it compare with Brookfield’s original investment thesis?

Share Your Investment Analysis With Our Community!

Share your responses to each point in our Deal Talk forums, where current professionals and real estate private equity beginners meet to critically discuss all notable transactions past, present, and future. Our team is more than happy to engage with your posts and share our collective decades of insight on your responses.

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