The investment firm also isn’t shying away from putting some of its assets on the block. It’s seeking more than £4 billion in a sale of UK holiday resort chain Center Parcs, according to people familiar with the matter. Brookfield is also exploring the sale of a stake in an iconic office tower in the heart of Dubai’s financial district, Bloomberg News reported this month.
Brookfield has been hunting for bigger deals after bringing in around $100 billion of fresh money across its various businesses over the past 12 months. It’s been actively raising money for property, infrastructure, private equity and credit strategies in a bid to boost its fee-bearing assets under management to $1 trillion.
Large investors are becoming more selective on which private equity funds they’ll back, and buyout firms can’t count just on cheap financing or revenue growth to deliver returns any more, according to Brookfield’s Ranjan.
“You have to generate those returns and create growth through operational improvements,” he said. “As an industry as a whole, we’re back to ‘roll up your sleeves’ private equity.”
Brookfield is alternative investment royalty. It is spoken of in reverential terms among institutional investors and the group’s approach to long-life income producing assets is well respected. That has not helped performance over the last year but it has aided in securing fresh funds for investments.
The firm has been quite vocal in their ambition of reaching $1 trillion under management following the divestiture of the asset management company last year. That separated the commercial real estate heavy portion of the business from the investment arm.
Brookfield Corp has trended lower for 18 months and is attempting to build support around the $30 area.
Brookfield Asset Management has been mostly rangebound since the separation and continues to trade around the listing price.
The recent acquisitions may be an example of “buy when there is blood in the streets, even when it is your own.“ Tiger Global is actively seeking investors in its assets as liquidity dries up. Here is a section from a Pitchbook article:
In a strip transaction, buyers become LPs in a portfolio of assets, and the GP retains some future upside in the remaining portion of these companies. In contrast, when buying stakes in specific companies, usually referred to as a secondary direct transaction, a buyer is added directly to the cap table of a single company.
Tiger isn't the only investor that has been unsuccessful at selling a strip portfolio of late-stage VC assets, according to Ken Sawyer, managing director at Saints Capital, a VC firm that invests in direct stakes and portfolios.
"There are at least five portfolios with a [net asset value] of over $200 million. Many of these are brand name funds and brand name family offices." Sawyer said. "There are no bids."
Tiger's willingness to sell its assets piecemeal suggests it faces more pressure for liquidity compared to other venture firms, said one secondary investor who has been having conversations with Evercore, Tiger's adviser, about potentially buying direct stakes from the firm.
The vintage of when investments in speculative companies were made is going to be a deciding factor in how well firms are able to tolerate the higher interest rate/tighter liquidity environment. As long as it lasts, the venture sector is likely to be more difficult to make money from, even as mania around AI startups reaches a fever pitch.Back to top