Bruce Flatt was clear with his prediction: the secondary market for

private equity

, real estate and infrastructure was ready to take off, and it could become a US$50 billion business for his

Brookfield Asset Management.

Five years after the Brookfield chief executive’s forecast, the boom has come and Brookfield has largely missed out. It’s been on the sidelines as rivals rush to raise funds to buy chunks of portfolio companies from other buyout shops or offer their investors a way out.

The firm had planned to debut a dedicated fund that would invest in companies owned by other private equity firms, according to people familiar with the matter. But that strategy never got off the ground — and Brookfield has no immediate plans to raise a dedicated private equity secondaries fund, the people said.

The investment manager, which oversees more than US$1 trillion, had decided to break into private equity secondaries by taking over a business from

Deutsche Bank AG

’s asset management unit in 2023, acquiring DWS Group’s seven-person private equity secondaries team and its US$550 million fund.

At the time, Brookfield aimed to continue DWS’s strategy of financing portfolio companies of other buyout shops as well as backing some continuation funds raised by other alternative asset managers, the people said, asking not to be identified discussing private details.

Instead of raising a separate pool of capital to back secondary deals for private equity, the firm made some of these types of investments on its own balance sheet, the people said.

Brookfield ultimately merged the DWS unit with another strategy rather than scaling it up on its own, said the people, who asked not to be identified because the details are private.

Since the Federal Reserve ended a long stint of ultra-low interest rates in 2022, deals have slowed, choking off distributions to fund investors. Cash-hungry institutions such as

pension plans

and endowments have been turning to the secondary market to offload their stakes, sometimes at a steep discount. Meanwhile, fund managers are prolonging their ownership of some portfolio companies by transferring them from older funds to continuation vehicles.

Transaction volume for secondaries hit US$102 billion for the first half of 2025, a 41 per cent jump year-over-year and the highest on record for any six-month period, according to an

Evercore Inc.

report.

In 2020, Brookfield’s chief executive correctly predicted the swift growth of secondaries while speaking at a firm investor day. While the asset manager has largely missed out on that expansion, Flatt also cited insurance as a key avenue for growth — and profit for that unit has soared since then. In the first quarter, insurance profit drove a 30 per cent jump in distributable earnings for the parent firm,

Brookfield Corp.

Investors have taken note, with the firm’s U.S.-listed shares up about 42 per cent over the past 12 months as of market close Tuesday.

Brookfield said in an emailed statement that it still sees significant opportunities in the secondary market for private equity, real estate, infrastructure and other assets. “We continue to actively invest in private equity secondaries,” the firm said.

Its peers, meanwhile, have raised billions of dollars from investors for their own secondary strategies. In May,

Apollo Global Management Inc.

raised about US$5.4 billion for its secondhand private equity fund, which also offers structured capital. Last year, TPG Inc. collected around US$1.8 billion for a secondaries fund.

Firms such as Warburg Pincus, Leonard Green & Partners, New Mountain Capital and Golub Capital are all in the process of setting up secondary businesses and raising investor capital that will back such transactions led by other private equity firms.

Sticking point

When gearing up for its own secondaries business, Brookfield aspired to strike deals worth US$500 million or more. That became a sticking point with the DWS team, whose transactions were typically one-tenth that size.

The old DWS business, renamed Brookfield Sponsored Solutions, was later merged with Brookfield Special Investments, which backs firms with both equity and debt, depending on their needs.

In addition to private equity, Brookfield has fallen short of its goals for other types of secondary strategies.

Brookfield’s debut real estate secondary fund spent longer than it planned on fundraising and closed at US$1.3 billion, below its target of between US$2 billion and US$3 billion, according to a person familiar with the matter. In total, Brookfield’s real estate solutions group has raised more than US$3.3 billion for secondaries across a mix of funds, separately managed accounts and co-investments, the people said.

Brookfield also refashioned its infrastructure secondaries strategy into a US$1 billion fund that makes both structured and equity bets.

Bloomberg.com