Brookfield Asset Management's Secondaries Stumble: A Missed Opportunity in a Booming Market?

The private equity secondaries market has surged to unprecedented heights in 2025, with transaction volume reaching $102 billion in the first half of the year—a 41% year-over-year increase. This growth has positioned secondaries as a critical component of the alternative assets ecosystem, allowing investors to buy stakes in existing private equity funds or portfolios at a discount. Yet, Brookfield Asset Management, a firm long celebrated for its foresight in alternative investments, has found itself on the sidelines of this opportunity. Despite CEO Bruce Flatt's early 2020 prediction of the market's potential, Brookfield's secondaries strategy remains underdeveloped, raising questions about its strategic misalignment and what this means for investors seeking exposure to this high-growth sector.

Strategic Missteps: Integration Over Independence

Brookfield's approach to secondaries has been marked by cautious, incremental moves rather than bold, dedicated initiatives. In 2023, the firm acquired DWS Group's private equity secondaries team and a $550 million fund, aiming to continue DWS's strategy of financing portfolio companies of other buyout shops and backing continuation funds. However, instead of scaling this effort into a standalone business, Brookfield merged the DWS unit with its existing Brookfield Special Investments strategy, which provides both equity and debt financing. This integration diluted the focus on secondaries, effectively subsuming the team's expertise under a broader, less targeted mandate.

A key sticking point emerged from Brookfield's preference for larger deals—$500 million or more—compared to DWS's historical focus on smaller transactions averaging $50 million. This mismatch in strategy led to operational friction, ultimately favoring integration over independent growth. By contrast, competitors like Apollo Global Management and TPG Inc. have raised billions for dedicated secondaries funds, leveraging their institutional expertise to dominate the space. Apollo's $5.4 billion secondhand private equity fund in May 2025 and TPG's $1.8 billion secondaries fund in 2024 highlight the scale Brookfield has yet to achieve.

Fundraising Challenges and Underperformance

Brookfield's secondaries fundraising efforts have also lagged behind its ambitions. The firm's debut real estate secondaries fund closed at $1.3 billion, below its $2–$3 billion target, despite the broader real estate solutions group raising over $3.3 billion across secondaries funds, separately managed accounts, and co-investments. Similarly, its infrastructure secondaries strategy was restructured into a $1 billion fund, but this pales in comparison to the billions raised by peers. In 2025, Brookfield allocated only $300 million to its secondaries business under private equity, a fraction of the capital deployed by competitors.

This underperformance reflects a broader strategic shift toward other high-growth areas, such as insurance and credit. Brookfield's insurance business drove a 30% jump in distributable earnings in 2025, while its real estate and credit platforms saw record fundraising. However, this pivot has come at the expense of secondaries, a sector that now accounts for a smaller portion of the firm's alternative asset portfolio.

Implications for Investors

For investors seeking exposure to the private equity secondaries market, Brookfield's current positioning raises concerns. The firm's fragmented approach and lack of a dedicated secondaries fund suggest it is unlikely to become a dominant player in this space. Competitors with robust secondaries strategies—such as Apollo, TPG, and Warburg Pincus—are better positioned to capitalize on the sector's growth.

Investors should consider alternative avenues for secondaries exposure. Direct investments in firms with established secondaries platforms, such as Apollo or TPG, or co-investments in specialized secondaries funds, may offer superior returns. Additionally, investors aligned with Brookfield's broader strategy could focus on its insurance and credit businesses, which have driven significant earnings growth in 2025.

A Missed Opportunity or a Strategic Reassessment?

Brookfield's secondaries stumble underscores the challenges of balancing innovation with operational execution. While the firm's early recognition of the sector's potential was prescient, its inability to scale a dedicated strategy has left it trailing behind peers. For now, the private equity secondaries market remains a high-growth opportunity, but Brookfield's current approach suggests it will not lead the charge.

Investors should remain cautious. If Brookfield fails to realign its secondaries strategy with the sector's trajectory, its market share in this space will likely remain marginal. However, the firm's strengths in insurance and credit—combined with its disciplined approach to alternative assets—could still provide value for investors seeking diversified exposure to Brookfield's broader ecosystem.

In the end, the secondaries boom is not a niche trend but a structural shift in private markets. For Brookfield to fully capitalize on it, a strategic reset may be necessary—one that prioritizes independent secondaries growth over integration and aligns with the sector's scale and pace. Until then, the firm's secondaries business risks becoming a footnote in its otherwise ambitious investment story.