Fund size, quality focus, and risk-first underwriting

Welcome back to the Alt Goes Mainstream podcast.

Today’s episode unpacks how to build a private equity firm within one of the largest and most unique investment platforms in private markets.

We sat down in Brookfield Asset Management’s Brookfield Place office in downtown NY with David Nowak, the President of Brookfield’s Private Equity Group. 

David and I dove into a conversation about the private equity industry, Brookfield’s approach to private equity, and how the firm’s culture and DNA shapes how they work with portfolio companies and LPs.

David has overall responsibility for the Private Equity Group’s North American business. He also serves as Chief Executive Officer of Brookfield Private Equity Fund. He joined Brookfield in 2011. He holds a MBA degree from Duke University, where he graduated as a Fuqua Scholar, and a Bachelor of Laws degree from the University of Western Ontario.

David and I had a fascinating conversation about private equity and the Brookfield platform. We covered:

• How Brookfield’s owner-operator alignment informs how they approach private equity investing and their partnerships with portfolio companies.
• How the industry has gone from “roll your dice private equity to roll up your sleeves private equity.”
• Why and how the firm has a “blue collar work ethic.”
• The firm’s flat structure and a culture of collective effort, humility, and “earning your seat.”
• Why Brookfield’s private equity business focuses on complex carve outs.
• Why it’s important for investors to “think like an operator.”
• How the firm approaches value creation and the importance of understanding value creation levers even before making an investment.
• How Brookfield’s broader platform provides the private equity business with insights and subject matter expertise.
• The story behind Brookfield’s Westinghouse investment.
• What it means to look for “unloved businesses.”
• Why private equity is an apprenticeship business and how AI might impact the next generation of private equity leaders.

Thanks David for sharing your expertise, wisdom, and passion for private equity and company and culture-building.

Show Notes
00:00 Cold Open

00:51 A Message from our Sponsor, Ultimus

01:48 Welcome to Alt Goes Mainstream and David Nowak

03:30 Brookfield Culture is We Not I

04:48 Leadership Succession and Humility

06:22 Earn Your Seat Mindset

06:30 Owner Operator Alignment

08:23 Maax Bath Case Study

09:34 Roll Up Your Sleeves Private Equity

11:31 Operators on the Team

12:06 Secondments Train Investors

12:53 Underwriting with Reality Checks

13:58 Platform Advantage and Insights

16:46 How Collaboration Actually Works

18:56 Long Term Patient Capital

21:07 Value Creation Playbook

24:38 Contrarian Deals and Valuation Nuance

27:41 Underwriting Operating Change

27:55 Fixable vs Hard Problems

29:16 Winning Management Buy In

30:00 Early Wins and Focus

30:25 Humility on the Ground

31:06 Listening in Founder Talks

32:09 Stretching Young Leaders

33:23 Flat Structure Decision Table

34:24 Scaling Without Losing Culture

35:06 Open Space and Mobility

35:50 Cross Office Deal Teams

37:20 Fund Size and Return Pressure

38:23 Shift to Quality Businesses

39:25 Good Business or Cheap

40:13 Risk First Capital Protection

41:50 Graphite Electrode Auction Win

43:45 Diligence - Then Move Fast

48:14 Curiosity Apprenticeship and AI

A Word from Our Sponsor, Ultimus

This episode of Alt Goes Mainstream is brought to you by Ultimus, the full-service fund administrator and transfer agent powering asset managers in private and public markets. As alts go mainstream, you need real expertise to handle complex fund structures, connect with key distribution partners, and handle sophisticated compliance, reporting, and transparency demands.

That’s Ultimus: high-tech, high-touch solutions for over 450 clients and 2,500 funds with $775B in assets under administration. Backed by an expert team of over 1,200 employees, they place client service at the core of their business, helping you navigate complexity during your fund structuring or launch and then supporting you through every stage of growth. Whether you’re already in the market or thinking about entering private wealth, you can trust their team’s deep expertise in retail alternatives to help you reach your goals.

Learn more at ultimusfundsolutions.com or email info@ultimusfundsolutions.com.

We thank Ultimus for their support of alts going mainstream.

Editing and post-production work for this episode was provided by The Podcast Consultant.