Brookfield Business Partners: A Strategic Deep Dive into Private Equity Returns and Unit Trust Strategy

Brookfield Business Partners (BBU) has long been a cornerstone of Brookfield Asset Management's private equity strategy, leveraging its expertise in industrials and essential business services to generate robust returns. As the flagship listed vehicle overseeing over $900 billion in assets under management, BBU's performance in 2024 and early 2025 offers critical insights into its ability to navigate macroeconomic headwinds while maintaining a disciplined capital allocation approach.

Financial Performance: Resilience Amid Challenges

Despite a net loss of $109 million ($0.50 per unit) in 2024, driven by one-time non-cash expenses in healthcare and construction operations, according to its 2024 year-end results, BBU demonstrated operational resilience. Adjusted EBITDA rose to $2,565 million, up from $2,491 million in 2023, fueled by tax benefits and improved performance in the advanced energy storage segment, the release noted. The Industrials segment led the charge, contributing $1,247 million in Adjusted EBITDA, underscoring its role as a cash-generative engine, the release added.

However, the Business Services segment faced headwinds, including a cyber incident at its dealer software division and reduced healthcare services performance, resulting in a decline to $832 million in Adjusted EBITDA, per the same release. Meanwhile, the Infrastructure Services segment saw a $247 million drop to $606 million, partly due to the divestiture of the nuclear technology services operation, the release reported.

Private Equity Returns: A 30% IRR and Strategic Capital Recycling

BBU's private equity strategy has consistently delivered market-leading returns. According to a Fool Canada article, the firm has achieved a three times multiple on invested capital and an internal rate of return (IRR) of 30%. This performance is exemplified by recent transactions, such as the $1.7 billion acquisition of Chemelex, a leader in electric heat-tracing systems, and the $1.3 billion purchase of Antylia Scientific, a chemical safety solutions provider, as detailed in the year-end release.

A pivotal 2025 move involved the sale of partial interests in DexKo, CDK Global, and BrandSafway to a new evergreen private equity fund managed by Brookfield. This transaction generated $690 million in proceeds, with units issued at an 8.6% discount to net asset value (NAV), redeemable within 18 months, the year-end release disclosed. The strategic rationale was to accelerate capital returns, reinvest in high-growth opportunities, and reduce leverage, the release explained.

Unit Trust Strategy: Liquidity, Buybacks, and Growth

BBU's 2025 unit trust strategy has prioritized liquidity management and shareholder returns. By the end of Q2 2025, the company had repurchased 2.2 million units and shares, totaling nearly 6 million since the year's start, while securing $4 billion in debt refinancings to strengthen its balance sheet, the report noted. Corporate liquidity surged to $2.9 billion, with an additional $7 billion in operational liquidity, providing flexibility for strategic acquisitions, the release added.

The privatization of First National Financial Corporation for $2.7 billion and the acquisition of Antylia Scientific for $160 million further illustrate BBU's focus on high-quality, cash-generative businesses, according to the year-end report. These moves align with its long-term objective of acquiring undervalued assets, driving operational improvements, and creating shareholder value, as the Fool Canada article suggested.

Outlook: Navigating Uncertainty with Discipline

While macroeconomic volatility persists, BBU's strategic initiatives position it to capitalize on market dislocations. The new evergreen private equity fund, seeded by the sale of DexKo and other assets, offers a scalable platform for future growth, the company's release stated. Additionally, the firm's strong liquidity position and disciplined buyback program-repurchasing units at a 15% discount to NAV in Q2 2025-signal confidence in its intrinsic value.

Conclusion

Brookfield Business Partners' 2024-2025 performance underscores its ability to balance operational execution with strategic agility. With a 30% IRR in private equity, a robust unit trust strategy, and a focus on capital recycling, BBU remains a compelling investment for those seeking exposure to Brookfield's industrial and business services expertise. As the firm continues to refine its portfolio and return capital to shareholders, its disciplined approach positions it to outperform in both stable and turbulent markets.