Brookfield will focus on taking Japanese companies global when it launches its private equity operation in the country, according to Aditya Joshi, the firm’s head of PE for Asia Pacific and Middle East.

“We won’t do Japan for Japan, there are too many other players doing it, too much competition. Our edge will be taking a Japanese company and making it pan-regional or global,” he said.

Brookfield opened a Tokyo office in 2015, initially as a client relations base. The firm has since built a Japan real estate business and is expanding in areas like infrastructure and private wealth. Earlier this year, Luke Edwards, who leads Brookfield’s energy group in Australia and New Zealand, was appointed head of Japan.

Joshi expects to establish a private equity presence in Tokyo “at some point this year,” and is in the process of recruiting team members.

Brookfield has USD 166bn of assets under management in private equity globally. Asia Pacific and the Middle East accounts for about USD 15bn, but that is up from USD 1bn when Joshi joined the firm eight years ago, having previously worked on India deals for Blackstone and Apax Partners.

Coverage is limited to two sectors – industrials and business services – and geographies where the firm has PE investment professionals on the ground. At present, there are teams in Mumbai, Sydney, Hong Kong, and Dubai. While deals in certain markets have a domestic nexus, cross-border expansion is a consistent theme. Joshi pointed to Trimco and Everise as examples.

Brookfield bought Trimco, a Hong Kong-headquartered supplier of garment labels and supply chain traceability solutions to global customers, from Affinity Equity Partners for USD 850m in 2022. Since then, the company has completed four bolt-on acquisitions that have helped strengthen its presence in North America.

Everise, a business process outsourcing company that generates almost all its revenue from US health insurers, is more of an organic growth story. Brookfield, which bought the company from Everstone Group for USD 450m in 2020, has expanded a largely India-centric delivery footprint across Asia and Latin America. Warburg Pincus bought a stake in 2023 at a USD 1bn valuation.

“We are looking at an industrials business in India at the moment, and 80% of its sales are in the US and Europe. Can we take them into Canada? That’s why they want to work with us,” Joshi added. “And now we are looking at how we bring our global playbooks into Japan.”

Numerous global investors are looking to expand or establish PE teams in Japan, with Warburg Pincus, Advent International, and TPG Capital among the recent entrants or re-entrants. While deal flow has proliferated in recent years, there are concerns about rising competition – and valuations – in the large-cap space.

Joshi observed that Brookfield has shown an ability to be disciplined in Asia. For three or four years, the firm held back from India investments in response to heady valuation multiples. Recently, it decided to reengage, but before that an LP asked Joshi if he was suffering from FOMO – fear of missing out.

“I said we were THOMO – thoughtfully missing out. The LP wrote that down,” Joshi recalled, adding that until six to eight months ago he thought the India market was too hot.

“After the war [in Iran started], I met the LP again in Singapore and I reminded him that India is now looking more constructive. It used to be that any company could go IPO and not need our money. Now the IPO window has narrowed, so there are more opportunities for us. Our pipeline is busy now.”