Alternative Investment

Brookfield Oaktree Ramps Up RIA Outreach Efforts

Brookfield Oaktree Wealth Solutions, a partnership of two institutional alternative investment providers, recently doubled its team dedicated to bringing its alts products to the registered investment advisor channel, with plans to triple the team by 2023.

The growth represents “a big bet” the firm is placing on wealth management firms and the RIA channel, in particular, said David Levi, head of the wealth solutions initiative and CEO of Brookfield’s Public Securities Group.

“Historically, both Brookfield and Oaktree have marketed those strategies to institutions and very, very, very selectively to individual investors,” he said. “The mandate of Brookfield Oaktree Wealth Solutions is to bring the institutional caliber investment services from Brookfield and Oaktree to investors globally through financial intermediaries.”

In 2019, Brookfield acquired a 62% stake in Oaktree Capital Management. The two then teamed up in April 2021 to create Brookfield Oaktree Wealth Solutions with the goal of bringing alternatives to retail financial advisors. Brookfield specializes in real estate, renewable power, infrastructure and private equity, while Oaktree has a focus on credit, private equity, real assets and listed equities.

The recent hiring effort is a direct response to the RIA segment’s “meaningful” growth in the U.S., Levi said, noting that a separate sales effort is focused on wirehouses and independent broker/dealers.

“We have decided that now is the appropriate time to make a really concerted effort in offering individual investors access to alternatives,” Levi said. He cites three reasons: increased investor interest in uncorrelated investment opportunities, the higher yields offered by many alternatives and the proliferation of innovative products with lower investment thresholds.

“Our goal is to be a trusted advisor to the RIA community,” he explained. “We believe we’re uniquely positioned to help them increase their allocations to alternatives.”

Brookfield Oaktree has developed a tiered strategy, customized to different levels of wealth, that Levi believes could be especially valuable to RIAs with a wide range of clients.

Using real estate as an example, Levi identified similar investments an advisor would be able to offer different clients. An “opportunistic” product is available only to sophisticated, qualified (usually institutional) investors, he said, and a core real estate fund described as “very income oriented” is good for accredited investors at the high end of the high-net-worth cohort.

A third option would be a Brookfield Oaktree real estate mutual fund more suited to a much broader category of investor. “These are strategies that combine some private investments with some public investments and are wrapped in structures that are much more accessible for financial intermediaries and individual investors,” said Levi.

“All three of those strategies have the same philosophy, the same mindset,” he said. “It’s all Brookfield, one of the largest owners of real estate in the world. Basically, what we’ve done is we’ve really packaged the capabilities from our institutional investment engine into strategies that are appropriate for wealth.”

“The key is not the tiers,” said Amit Dogra, CEO and president of tru Independence, an RIA platform based in Portland, Ore. A proponent of the democratization of alternative investing, Dogra supports the model nonetheless. “It is the quality and cost of the product and, most importantly, the execution of the tiered product line,” he said. “Brookfield and Oaktree are quality names in the alts space, so I am sure the offering will be solid.”

“Most advisors are skeptical about the cost and the hedge alts actually give to traditional portfolios,” he added, “so being able to clearly articulate how they plan to solve for that will be critical to their success in getting advisor adoption.”

“I would prefer to invest in their public equities if given the choice,” said Kris Maksimovich, president of Global Wealth Advisors, a $600 million RIA in Lewisville, Texas. “Fully liquid, I can exit on my terms. Clearer financials. And I can see the daily price movements. . . I like seeing what the market is willing to pay for shares or trying to sell them at—support and resistance. 

“They also may have options available which can allow for additional ways to protect capital, use leverage or generate income on top of the stock ownership,” he added.

The Brookfield Oaktree RIA sales and solutions team is led by 32-year industry veteran Steve DiMaio, who joined Brookfield Oaktree Wealth Solutions in February of this year after 18 years with DWS Investments. Recent new hires include professionals who have worked for Barclays, Goldman Sachs and BNY Mellon.

 

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