The private equity industry rebounded quickly from pandemic-related market disruption amid record levels of dry powder, historically low interest rates and valuation disparities between public and private markets.
Here, Anuj Ranjan, head of Europe and Asia Pacific private equity, discusses what distinguishes Brookfield’s approach to private equity investing and where the team is finding opportunities.
Q: What sets Brookfield's private equity business apart?
A: Our private equity business benefits from Brookfield's global presence, owner-operator heritage, and local knowledge and expertise. Our approximately 1,000 investment professionals and 150,000 operating professionals across the globe enable us to closely follow local markets and access proprietary deal flow.
Our investment strategy centers on acquiring high-quality businesses for value, which we can enhance through operational improvements. We often approach the market in a contrarian way, acquiring businesses that could be considered complicated or multifaceted. We then employ our global operating capabilities to enhance the cash flows of those businesses. As a result of our approach, Brookfield's Private Equity group has a 20-year track record of consistently generating strong investment performance.
Q: How has the private equity business held up during the pandemic?
A: We held up quite well. We quickly responded to the lockdowns, taking a hands-on approach to support management teams through the downturn. For the most part, our businesses provide essential products and services, a key tenet of our strategy. As a result, they showed great resilience. We also leveraged our nimble investment approach to act quickly and decisively on certain public market opportunities. When markets declined dramatically in the second quarter of 2020, we invested a significant amount of capital in businesses we had been watching for some time, as a precursor to potential public-to-private transactions in the future. While the markets recovered too quickly to pursue those transactions, we generated significant proceeds through our public exposure. This was only possible because our deep knowledge of these businesses allowed us to act quickly and with conviction.
We also put quite a bit of capital to work in private transactions. The pandemic and related lockdowns have affected businesses differently across regions, so we moved our resources and capital to where we identified the best opportunities. Today, we are back to doing what we do best: surfacing value opportunities in an otherwise frothy environment. Using their local contacts, our teams around the world continue to identify opportunities in corporate carve-outs, sponsor exits, partnerships and, in some sectors, public-to-private transactions.