• New evergreen vehicle will invest directly in companies alongside flagship funds
• Strategy targets upper mid-market industrials, services companies presenting operational improvement opportunities
• Exit flexibility helps Brookfield return USD 10bn to investors in last two years

President Donald Trump’s executive order to broaden Americans’ access to alternative investments through their 401(K) accounts has all the makings of an industry-wide paradigm shift.

While implementation is expected to be gradual, for private markets managers, the order will help open broader access to an estimated USD 12tn capital pool. Brookfield Asset Management president Connor Tesky predicted on the firm’s 2Q25 earnings call that even a modest reallocation could result in “hundreds of billions to trillions of net new flows into alternatives” over time. The global investment firm, which launched its wealth distribution platform, Brookfield Oaktree Wealth Solutions, in 2020, is growing its teams catering to private wealth and DC channels in anticipation of the opportunity to come.

After rolling out semi-liquid, evergreen strategies across credit, real estate and infrastructure in the last five years, the wealth solutions unit’s latest foray is in private equity, where Brookfield is currently raising its first evergreen vehicle. A first close is expected before year-end. The New York-headquartered firm believes its decades-long track record in private equity helps it stand out.

“What we’re doing with the evergreen strategy is exactly the same as we’ve done in our closed-end private equity business for 25 plus years, and we’re offering that through a different channel to a sophisticated purchaser group,” David Nowak, president of Brookfield’s private equity group, told Mergermarket.

The fund is being offered to qualified purchasers as opposed to accredited investors. Various structures were considered, but this route was chosen in part because the former are seen as more likely to expand their allocation to private equity or other alternatives. Brookfield could, in the future, look to expand elements of its private equity platform to accredited investors, if demand grows.

Geographically, the firm is casting a wide net with the evergreen fundraising. As yet, it is too early to say whether the new vehicle will be more heavily weighted to a specific region, though the US market has the largest number of high-net-worth individuals, according to Nowak. “The US, Middle East and Asia are deep markets where private equity evergreen offerings are in demand,” he said. “We believe our story and approach to generating returns will resonate with investors in these markets.”

Fueling the machine

The private equity evergreen fund has been designed to provide access for individual investors to the entirety of Brookfield’s private equity platform. Filed with the US Securities and Exchange Commission (SEC) as a 34 Act Private Fund, it will invest directly in companies alongside Brookfield’s closed-end vehicles, funding both buyout control investments, as well as structured non-control investments.

It will add further fuel to a private equity strategy that to date has amassed USD 150bn in assets under management (AUM). Brookfield is currently investing its Fund VI, which closed on USD 12bn in 2023 and is to date around 60% deployed. It is preparing to launch Fund VII by the end of the year, according to company executives on the most recent earnings call.

Nowak has worked at Brookfield for 15 years, in both Toronto and New York. Among the highlights of the firm’s private equity strategy, he highlights a repeatable playbook that is heavily centered on operational improvements, with a predilection for carve-out opportunities. “We’re not financial engineers,” he said. “We look for great businesses presenting operational improvement opportunities that we understand, and we don’t overpay for them. That model has a rinse and repeat element to it.”

Sector-wise, the focus is on industrial and industrial services companies, as well as financial services. Brookfield typically invests in companies with over USD 100m of EBITDA, and writes equity checks from USD 300m to north of USD 1bn for control transactions. Nowak views the upper middle market as a “fertile hunting ground” for Brookfield’s strategy, despite intensifying competition. In this area of the market, it finds opportunities to roll out its operational improvement-focused playbook on large industrial services companies.

A case in point was Brookfield Cold Storage, a Fund III investment, acquired from Millard Refrigerated Services in 2013, and subsequently exited in 2019. At the time of Brookfield’s acquisition, the Canadian logistics business was underperforming, with nearly a third of its contracts unprofitable. Much of its revenue came from a single customer in Buffalo, New York, which was paying less than other clients. There was internal resistance to cutting this anchor client, but after engaging directly, the two sides agreed to a repricing agreement. The change stemmed the bleeding and helped the cold storage business achieve profitability, driving a 13x return when Brookfield sold it to Americold in 2019.

Generally, Brookfield looks for opportunities where it sees itself as a “logical owner” of a business, characterized by the ability to leverage the firm’s industry experience, while post-deal, it is able to draw on cross-firm expertise – and a collaborative culture – to help run the businesses it acquires. This thinking motivated Brookfield’s acquisition in February 2025 of Chemelex, with the firm’s background operating hundreds of data centers, power plants and industrial sites globally underpinning its conviction in the manufacturer of electric heat trace systems used to regulate temperature in a variety of facilities.

“We took all of those pieces of information, which informed our diligence to convince ourselves this was a great enduring business that had a reason to continue,” said Nowak.

Minority deals are also on the agenda. Here, Brookfield will often opt for loan or debt-like instruments, such as preferred equity, with the size of its investments ranging from USD 100m to over USD 1bn on the high end. These transactions are done through Brookfield’s flexible capital solutions strategy. In a recent example, it made a minority investment in Spring Education, an owner and operator of private schools, earlier this year.

Exit flexibility

Year-to-date, Brookfield’s private equity group has made five investments. As well as Chemelex and Spring Education, it acquired Antylia Scientific from GTCR in May for approximately USD 1.34bn, alongside co-investor CDPQ. It also invested in Barclays’ payments business, and, alongside Birch Hill, agreed to a USD 2.1bn deal to take Canadian mortgage business First National Financial Corporation private.

This comes despite challenging overall market conditions, with Nowak acknowledging complications over tariffs. Meanwhile, a persistent valuation mismatch has weighed on wider deal activity, though there is reason for optimism. “What’s happened is, in many cases, the value expectations are still unrealistic,” said Nowak of services deals. “For some of the stuff that you see on the market, some people have a turn or two turn multiple expectation outside the buyers’ expectations, but this gap is narrowing.”

In this environment, flexibility is key. Brookfield’s private equity strategy has returned USD 10bn to investors in the last two years, according to its most recent earnings call. To get there, it has used a variety of monetization options. These included a USD 4.5bn dividend recapitalization for Clarios, a US lead-acid automotive battery supplier, which was among the largest such transactions executed, according to a report by Debtwire.

Taking this route left Brookfield with full control of the business, but it also spoke to the flexibility of its approach. Clarios had initially been prepped for an initial public offering. It filed an S-1 form with the SEC in July 2021, before postponing the offering later that year, and refiling for the IPO in June 2022. Ultimately, in a challenging public market at that time, the listing was not pursued, and Brookfield opted to focus on earnings growth. Clarios generated about USD 1.5bn in EBITDA when it was acquired in 2019, which had grown to around USD 2.1bn by the time of the dividend recap five years later, according to Nowak.

Brookfield’s most recent private equity exit was the sale of Greenergy Fuels – a 2017 investment – last year to Singapore-based strategic Trafigura Group. The road to an exit was a winding one, after the initial plan to sell the whole business to a large strategic was complicated when market conditions deteriorated following the outbreak of war between Russia and Ukraine in 2022.

Instead, Brookfield pivoted to a more incremental approach, selling the business in parts. In July 2023, the retail arm of Greenergy was sold to Global Fuels. Almost one year later, Trafigura purchased Greenergy’s European business, and then two months later acquired its Canadian supply operations. After taking this “sum of its parts” approach, Brookfield generated a 2x return on its initial investment in Greenergy.

This flexibility demonstrates Brookfield’s readiness to take the most viable path to achieve its goals for investors, according to Nowak. “They are a bit of an unconventional way to get there, but in all of these exits, we always say whatever the highest and best outcome is, we’ll pursue it,” he said.