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ANUJ RANJAN Head of Europe and Asia-Pacifi c , and CEO of South Asia and Middle East, Brookfi eld

FORBESINDIA.COM THE / VOLUME 13 ISSUE 14 JULY 2, 2021 BROOKFIELD HOW THE CANADIAN INVESTMENT MANAGEMENT FIRM DEPLOYED $11.5 BILLION WAY IN INDIA IN A PANDEMIC YEAR

www.forbesindia.com he fi rst time Anuj Ranjan set foot in India was on November 23, 2008. While he is Indian by origin, Ranjan was Tborn and raised in Canada, and was here from Toronto to build Canadian investment manager Brookfi eld Asset Management’s (BAM) India business. On landing in Mumbai, he went straight to the Trident (Oberoi) at Nariman Point and checked in. Three days later, the hotel was the target of a terrorist attack, till date Mumbai’s worst nightmare. Ranjan received harried calls from his offi ces in New York and Toronto asking him if he wanted to go back, but Ranjan decided against it. “It was, in a way, a sort of homage to where we had landed, this is where we had these events, it didn’t scare us off from investing in the country. And on the back of that, of course, we grew to be what we are 22 today, $20 billion invested in India,” REAL ESTATE SPECIAL COVER STOR Y says Ranjan, managing partner at the fi rm, who launched and headed Brookfi eld’s India operations. Last October, he was elevated as the global head of business development, head of Europe and Asia-Pacifi c private equity, and CEO of South Slow and Asia and the Middle East for BAM. While Ranjan now spends his time between the Dubai and London offi ces, he can’t stop gushing about the fact that of the nearly $20 billion the Steady: fi rm has invested in India since it set up an offi ce in the country ciallyoffi in 2009 with three employees (including The Brookfi eld Way him), it has deployed over half of it (nearly $11.5 billion) amid the raging How the investment management fi rm pandemic in 2020. Brookfi eld is an NYSE- and Toronto-listed fi rm and focussed on building operational capability has deployed approximately $600 in India for fi ve years, cut its fi rst deal in 2014, billion in AUM across real estate, and in a pandemic year managed to deploy infrastructure, renewable power, private equity, and credit. $11.5 billion in the country “You know, we did not make a single major investment in India till BY POOJA SARKAR 2014. Of course, we started working on things but our fi rst big idea came in 2012 and by 2014 we closed that

FORBES INDIA • JULY 2, 2021 Asia and Middle East, Brookfi East, Middle and Asia ofSouth CEO and Equity, Private Asia-Pacifi and ofEurope Head Anuj Ranjan REAL ESTATE.” INVESTMENT IN FIRST OUR DEAL, THE WE CLOSED 2012 BY AND 2014 IN CAME IDEA FIRSTBIG OUR 2014. TILL INDIA INVESTMENT IN MAJOR A SINGLE MAKE DIDN’T “WE JULY 2,2021

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(Left to right) Nawal Saini, Dev Santani, Ankur Gupta, Aditya Joshi and Arpit Agarwal of deal which was our fi rst investment some stock in that company as part of Brookfi eld at largely in the real estate space,” Ranjan training. It is meant to be an exercise their offi ce in minority deals Powai, Mumbai reminisces of one of the most complex to get the best out of the youngsters in greenfi eld deals in Indian real estate over a long in the company to demonstrate if developments. Zoom call from his London offi ce. their ideas are actually workable and And that did not make sense to us. It On June 12, 2014, Brookfi eld it also gives them access to the senior wasn’t the kind of thing we wanted announced that it would acquire management. And sometimes, some of to do. We also didn’t want to come Unitech Corporate Parks Plc (UCP), these ideas turn into real transactions. in and do completely greenfi eld a London Stock Exchange-listed UCP was one of those ‘best ideas’. development until we had built out India-focussed real estate investment Between 2006 and 2011, a real operating capability, which fi rm, for around (£205.9 million) or investments in Indian real estate came much later,” Ranjan explains. `2,034 crore. What is interesting is were essentially in large greenfi eld What Ranjan wanted was a how they zeroed in on this asset. developments, especially residential. pie of the burgeoning offi ce space Brookfi eld runs a global The global fi nancial crisis took a little in India—he believed there was programme called the Best Ideas sheen away from a lot of foreign funds signifi cant opportunity for the rent Program. Every month, nearly 1,200 (impacted back home, many folded yield to grow over the years. But investment professionals globally log in India) but domestic capital kept the problem was they didn’t want in to this call and critique the best pouring in into residential projects. to do a minority transaction. They idea. And if the idea is approved, “Watching the kinds of transactions started looking at platforms, larger

NEHA MITHBAWKAR FOR FORBES INDIA FORBES FOR NEHA MITHBAWKAR that person is given a budget to buy that were happening, they were companies, ready properties but

FORBES INDIA • JULY 2, 2021 BROOKFIELD

Brookfi eld Business Business group Head (AUM) Year Assets Value 2020 Indostar $295 mln for 57% Private Equity Aditya Joshi $1.5 bln 2020 Everise $360 mln 2018 KMC roads portfolio $0.7 bln Infrastructure Arpit Agrawal $10.5 bln 2019 East West Pipeline $1.9 bln 2020 Jio towers $7.6 bln 2017 Terraform platform $187 mln Renewables Nawal Saini $580 mln 2019 Axis Assets $231.13 mln 2020 Renewable-focussed loan book from Piramal $198.21 mln 2014-15 UCP $800 mln 2017-18 Hiranandani Powai Portfolio $1 bln 2019 The Leela Palaces, Hotels & Resorts $650 mln Real Estate Ankur Gupta $7 bln 2020 RMZ portfolio & CoWrks $2 bln 2021 Brookfi eld India Reit $1.5 bln In Pipeline Renaissance ARC - - Incor $ 100 mln Brookfi eld Special Dev Santani $ 240 mln Investments (BSI) - - Total Environment $ 130 mln

SOURCE Compiled from publicly available data there weren’t many in India back Ranjan recalls, “We did our best was only in 2019 that Gupta returned then that were large in size and idea on UCP and showed it to the to India and started working in the scale. Meanwhile, in 2011, its global group globally. The group challenged Mumbai offi ce located at the Bandra 25 peer Blackstone Group swooped in it, we debated it. And in the end we Kurla Complex (BKC). Gupta is the and closed its fi rst and the country’s said, ‘You know this stock does seem head of real estate and a managing largest commercial asset deal after like great value. So why don’t we buy partner at the fi rm. But at that time, fl agging off its real estate arm in some stock’.” And from buying some the UCP deal literally had people 2007. For an undisclosed amount, stock, they saw an opportunity. “After spread across four continents it went on to acquire a substantial we became a small shareholder, we trying to put the deal together. stake in the Bengaluru-headquartered felt this could be something more “We were able to put together Manyata Business Park from meaningful. Let’s see if we can a transaction that spanned four Embassy Property Developments; it become a larger shareholder. And continents. It was a UK-AIM listed continues to hold on to the asset. then, let’s see if there’s an opportunity entity where while the assets were in The time for commercial had to privatise the whole business.” India, the structure of the company arrived. In the middle of all this was But the problem was the was held in Mauritius and then there Delhi-based realtor Unitech, in its complicated structure of UCP. The was the holding company. And a lot heydays of 2008 the second-largest holding company for UCP was of the transaction work was being realty company in India by market Candor Investments Ltd, which was done in the New York offi ce. And capitalisation, that had even managed incorporated in Isle of Man. UCP that’s the power of the fi rm that it to bag Lehman Brothers’ last India had formed a 60:40 joint venture really comes together when it comes cheque of `740 crore. But times had with Unitech. Forty percent of the to executing our ideas,” says Gupta. turned rough and its Alternative asset was held by Unitech and it “The thing I’m most proud of and Investment Market (AIM)-listed had fi nancing against it as well. of that opportunity was the fact that fi rm, where its commercial offi ce So Brookfi eld had to work with over the two years from the fi rst properties were housed, was the banks in India and Unitech share we bought until we did 100 becoming an easy target for a sale to put the whole deal in place. percent acquisition, we never lost our process to pay off its lenders. UCP, In 2012, Ankur Gupta was part conviction. We were actually patient at that point, was developing a mix of this summer project sitting in the and it took us that long to convince of six special economic zones and Brookfi eld New York offi ce. Over all the stakeholders,” adds Ranjan. IT parks across Noida, Greater time, he became the head of the real Brookfi eld went on to hire an entire Noida, Kolkata and other regions. estate vertical for India deals but it operating team and, over the years, it

JULY 2, 2021 • FORBES INDIA REAL ESTATE SPECIAL COVER STOR Y

has built all the under-construction “WE WERE ABLE over 99 percent of rental collections. projects of the portfolio, fi nally this He expects an estimated distribution year listing the assets as part of its TO PUT TOGETHER yield of over 8 percent in both FY22 real estate investment trust (REIT) A TRANSACTION and FY23 as per current prices. While on the Indian bourses. It had ended THAT SPANNED leasing deferrals may increase leading up with nearly 8 million sq ft of into this fi nancial year, Chattopadhyay operating assets where some tenants FOUR CONTINENTS. expects demand to be back by were unhappy with the uncertainty THAT’S THE POWER second half of this fi nancial year. around the asset, and another 3-4 million sq ft under construction where OF THE FIRM.” nlike other global private work had essentially stopped due to equity peers who either buy contractor and budget restrictions. Ankur Gupta out ready assets or undertake head of real estate and U To be able to put it all together and joint ventures with developers, managing partner, Brookfi eld put the machine back in motion had in Brookfi eld’s fi rst India deal, it been one of the biggest projects and actually got its hands dirty building challenges the fi rm had undertaken. some of its assets ground up. Later, “When you’re standing on a as developers looked for capital to half-built construction site, where of the pandemic, the gains at India’s consolidate their operations, the contractors have left and the listed REITs have tapered as questions investment fi rm managed to acquire developer has thrown in the towel, around demand for commercial space some key assets like a few of builder it takes a lot of skill to revive those have once again picked momentum. Hiranandani’s assets in Powai. As projects. I’m very grateful to the However, while declaring its March Gupta narrates, “If there was one operating teams, [for the fact] that quarter results for this year, BAM said project that caught our imagination, it we have senior leaders who took it has managed to recover 99 percent was Hiranandani Gardens in Powai.” on the mantle,” says Gupta. From 8 rents from its tenants. Collectively BAM paid nearly $1 billion in 2016. 26 million sq ft of projects then, UCP too, Indian REITs saw strong rental What had them excited was now has 16 million sq ft under its belt. collections of over 99 percent in that Hiranandani had 25,000 The fi rm also has a 400-person 2021, which means tenants have condominiums, street retail walking team that does nothing but run continued to pay for their leases. tracks, jogging tracks, amenities, its offi ce presence in the country. “India went from a very high and an offi ce business portfolio of 16 In February, Brookfi eld listed interest rate market to a lower buildings that housed some of the Brookfi eld India Real Estate Trust, interest rate market. We’ve been biggest tenant profi les in the world India’s only institutionally managed able to see an entire journey and like Credit Suisse, Nomura, Fidelity, public commercial (REIT) and our investors are happy with Apollo Global. “What appealed most the fi rm’s second listing globally the outcome,” adds Ranjan. to us in this portfolio was the location of its REIT programme. Even as work from home (WFH) it has in Mumbai, the ecosystem of The `3,800 crore public issuance of and hybrid models of work are being live and play and our ability to add its real estate portfolio, too, narrates touted as the way forward, it is value in that ecosystem,” says Gupta. the story of how the investment fi rm perhaps the best time for Brookfi eld “They came late to India like has diff ered from its global peers in to build a stronger commercial other Canadian funds but they had a how they operate their business in portfolio for the long term—in a special mandate of deploying capital India. India currently has three listed world beyond Covid-19 and when in the entire gamut of real estate REITs, two of which are led by Indian offi ces start buzzing again. and infrastructure and they have developers backed by Blackstone. According to Adhidev demonstrated their commitment But this is India’s fi rst institutional Chattopadhyay, vice president at in India. Their commitment to REIT run by the fi rm. Which means ICICI Securities, who has a buy on the India is enormous and they have BAM owns and operates these stock, even though overall portfolio deployed huge dollars,” says Deepak properties and is not dependent on occupancy levels have declined by 4-6 Parekh, chairman at HDFC Ltd, also any developers for the projects. percent for the three Indian REITs pointing out that their board visited On February 16, 2021, Brookfi eld (collectively), owing to WFH and India just before the pandemic. off ered its shares for `275 per share. the second wave aff ecting the leasing He adds that Ranjan and Gupta The issue was oversubscribed 7.94 decisions, and the sector faces near- have their ears to the ground and times. On June 7, the shares closed at term weakness, BREIT has delivered they have diff erentiated themselves `258.19 apiece. Since the second wave a resilient FY21 performance with by undertaking development and

FORBES INDIA • JULY 2, 2021 BROOKFIELD

construction of projects, and now foreign investors to acquire large in New York, this was in the summer the Canadian investment fi rm is assets but Brookfi eld seems to of 2018, when the conversation betting on the rental housing sector. have the knack. And while the restarted…,” remembers Gupta “Overall, they have understood how fi rm has been planning its road about meeting Kampani, who heads to invest in India and know all the ahead, it believes Indian markets JM’s distressed asset business. major players in the country,” he says. are at a stage where the overall While Gupta and Ranjan had The fi rm’s global real estate market will exponentially grow. met various people over the course business, one of the oldest practices, While a major amount of capital of 2015, 2016 and 2017 including is slightly in excess of $200 billion has been deployed in commercial real the Nair family which owned the and consists of grade-A offi ces, malls, estate, another deal that took a long asset, in the summer of 2018, Gupta hotels. It is now busy replicating time to fructify was the acquisition could visibly see that JM was now the same model in India. It has of distressed luxury property Hotel representing the banks and they deployed nearly $7 billion in the Leelaventures Ltd. The fi rst time were getting close to a resolution. country as part of its real estate BAM got interested in Leela was in While several options were business, of which $6 billion has 2015 when the company was looking suggested that included buying a been committed towards commercial to do its debt restructuring to meet few properties to putting capital in offi ce assets, which include high- its fi nancial obligations. But the deal the company, Gupta’s conviction quality mixed use projects and offi ce didn’t go anywhere. While the fi rm was that Leela Hotels needed a parks spanning more than 45 million has closed in on quite a few distressed wholesome solution. JM ARC, State square feet. It has also acquired deals in the last few years, this was one Bank of India and HDFC Ltd were the distressed asset the 2,600 keys- of the initial ones that intrigued them. the largest lenders to the company. Hotel Leela from JM Financial “I still remember a meeting I had Fast forward to 2019. Gupta Asset Reconstruction Company. with Vishal Kampani when he was was in India due to his relocation Gupta explains, “It’s not just and the lenders met them, wanting the scale that matters. It’s a way of a commitment from Brookfi eld. running our business that sets us up In October 2019, Brookfi eld 27 for growth in future. Otherwise, we acquired Hotel Leelaventure could have done one deal and made Ltd for `3,950 crore. Meanwhile, money or not, but the processes that ITC Ltd, a minority shareholder have been set up are here to stay at Leela, had fi led a case against and have created a business that the sale and, in September 2019, should last for a very long time.” Securities and Appellate Tribunal Last year, as the country was going (SAT) had dismissed the case. through the fi rst wave of the pandemic “Over the last two years, we and everyone went remote when it have infused signifi cant capital to came to work, Gupta and his team make sure the properties have the silently stitched together one of the that could sustain largest commercial deals ever done in the business. We’ve put together the country. It acquired Bangalore- a professional management team. based RMZ Corp’s 12.8 million sq ft “THEIR COMMITMENT We are creating effi ciencies in commercial portfolio for $2 billion. TO INDIA IS the business to realise a luxury From start to end, the team completed ENORMOUS. THEY brand company that is at the core the RMZ deal in a little over three of the business,” explains Gupta months. What helped their case was HAVE DEPLOYED on how they are turning around that they knew the developer well. HUGE DOLLARS, the asset since the acquisition. As Gupta explains, “…to be able to AND THEY HAVE Despite the pandemic, BAM do diligence on 41 buildings, one of opened a new Leela Palace property the largest portfolios in India, and to UNDERSTOOD HOW in Jaipur recently, the fi rst hotel to do that in a very short timeline, legal TO INVEST IN INDIA.” be opened under the Leela fl ag in diligence, architectural diligence, nine years. It is opening two more physical diligence, etc. I would say Deepak Parekh hotels in the coming quarters in that really proves how far along we chairman, HDFC Ltd Gandhinagar and Bengaluru. are in our capability in India.” In the four years that it was chasing In India, it has been tough for the Leelaventure deal, it also signed a

JULY 2, 2021 • FORBES INDIA REAL ESTATE SPECIAL COVER STOR Y

$1 billion (`7,000 crore) joint venture deals but in 2019, it went all out and number of vehicles on the road. with state lender SBI to jointly acquire acquired Reliance Group’s East West The fi rst transaction BAM did distressed assets in July 2016. The Gas Pipeline business for $1.9 billion. after Agrawal joined the fi rm was an JV failed to take off . It has recently If that wasn’t enough, in August acquisition of two road assets from announced the launch of an asset 2020, BAM, through Brookfi eld Hyderabad-based KMC Constructions reconstruction fi rm in partnership Infrastructure Partners LP, acquired in September 2017. Agrawal explains with lender HDFC Ltd to acquire 100 percent stake in the telecom the rationale behind the deal. “These stressed real estate asset situations. tower (Reliance-Jio Towers) business assets are fundamentally solid, but As part of the structure, 80 percent of Reliance Industries. Brookfi eld suff ered from a mismatch in the of the capital will be committed from and its institutional partners have capital structure. So, what we did Brookfi eld and the remaining will invested $7.6 billion in the asset. was, we acquired the asset which come from the bank. It is awaiting “Infrastructure for us is like was in fi nancial distress, and then RBI clearance and once in place, it creating a pool of long-term stable we deleveraged it. We completed expects to do large deals in this space. cash fl ow assets, that are generally the construction and now the “With the ARC, we can actually resilient to economic cycles, and payments are regularised, and the mobilise a lot of capital in that are vital to the functioning of the assets are performing really well.” strategy. The real estate sector needs economy,” says Arpit Agrawal, But the mega deals in BAM’s India that kind of capital,” says Gupta as managing director, infrastructure, portfolio have been its two back-to- he explains that it is too early to who joined the fi rm four years ago. back deals with Reliance Industries. comment on the deal size. Globally, And, Agrawal says, when The relationship between billionaire BAM is in the market right now it comes to due diligence, like Mukesh Ambani’s team and Anuj raising its fourth fund in its global in the road portfolio, the team Ranjan’s team started off on a non- series of real estate funds, which is physically goes and counts the deal basis. But what really triggered targeted to raise almost $18 billion. the gas pipeline deal was the fact that While BAM has been an active Brookfi eld had recently acquired a gas 28 investor in real estate in India since pipeline system in Brazil, and Ranjan’s its early days, apart from its Reit this team was talking about the Brazil asset year where it used the proceeds to with them, their operational ability reduce the asset’s indebtedness, it to be able to manage these kind of is yet to exit any of its transactions. complex assets, what their learnings But Ranjan isn’t worried, he says, had been. On the other hand, it turned “We are a long-term investor and out Reliance was also looking to sell India is still a market we are growing its gas pipeline. It only took the team in. We are very pleased with the three weeks to go from discussions performance of our investments.” to the term sheet stage—they started the process of due diligence and ne of the overarching the transaction came into being. themes for Brookfi eld has Agrawal explains, “For this asset, O been to acquire and operate we were able to leverage off teams assets on a large scale, projects “BROOKFIELD IS A in Houston, Calgary, and in Sydney, that are operationally intensive. GLOBAL ENTERPRISE and they all sort of came together to While it started its journey in India undertake diligence and see this deal with investments in real estate and THAT BRINGS IN to completion. For example, there small infrastructure bets, Brookfi eld ITS BEST PRACTICES is a person in Calgary, who is our has deployed nearly $10.5 billion TO PLAY FOR upstream expert, who did work on all under its infrastructure asset class in of these new gas fi elds so he went into the last three years. In August 2015, MAKING AN the details of each of those plans and Gammon Infrastructure Projects had IMPACT IN INDIA.” gave us a view on how much gas will entered into an agreement with BIF fl ow through that pipe. The person India Holdings (Brookfi eld) to sell Mukesh Ambani in Houston is an expert in energy six road and three power projects for chairman and managing director, investments, and he had worked on about `563 crore to the investment Reliance Industries Limited the Brazilian pipeline, and he gave fi rm. After that acquisition, Brookfi eld inputs on what to look for when you’re took a back seat when it came to infra doing technical diligence.” While

FORBES INDIA • JULY 2, 2021 BROOKFIELD teams around the world pitched in to BROOKFIELD’S RENEWABLES VERTICAL IS help, the team in Mumbai was usually in Reliance’s Maker Chambers offi ce TAKING SHAPE SLOWLY BUT STEADILY. IN conducting fi nancial due diligence. 2020, IT MADE DEALS WORTH $200 MILLION While these deals were pure play infrastructure deals, its acquisition of the telecom towers in a mega $7.6 billion deal follows the more generic the business lines around them. The wanted the basic building blocks of theme that Brookfi eld is betting on— other vertical that is taking shape the team to be in place. After we did growth of the country. It is trying to slowly but steadily for Brookfi eld in that, we acquired a 200 MW wind identify assets that can fundamentally India is its renewables business. In portfolio in May 2019, which is a very benefi t from the macro growth and 2020 alone, Nawal Saini, managing interesting transaction. The way we for Agrawal and his team the answer director at the fi rm who oversees diff erentiated ourselves is that we lies in the Indian telecom story and the renewables business, has led said we will not only buy this asset, the digital wave the country is riding. deals worth $200 million where it we’d also get into a JV agreement While 4G in India has been around acquired the renewable-focussed through which we will do greenfi eld for less than fi ve years, the country loan book from Piramal Enterprises development with the partner going has more than twice the subscribers Ltd. Though Brookfi eld did not forward. This JV today has 1.7 GW as the US, which has had 4G for disclose the deal details, last year, of high quality renewable assets in the last 10 years. The team plans to it also acquired Emami Power Ltd, construction and development phase.” expand the telecom portfolio, which which has solar units in Karnataka, Hence, the 200 MW ended currently consists of 137,000 towers, Gujarat, Tamil Nadu and Uttarakhand, up providing BAM a developing to 275,000 towers across the country. and which plans to expand to other portfolio of over 2 GW. “We had built that comfort over states. It currently has a capacity the gas pipeline transaction with of around 50 megawatts (MW). hile building assets is one Reliance. The way we operate is, we’re Currently, the fi rm has a 2.7 part of the story, in the 29 extremely open and transparent with gigawatt (GW) capacity, including W middle of last year, when each other. Broadly, this deal would fi t an operating portfolio of wind and the Piramals were looking to sell their in three themes—the clean corporate solar assets of nearly 557 MW and renewable debt (mezzanine debt) structure, operationally intensive 2.15 GW of assets under construction from the company’s books, Brookfi eld and it rides on the concept of macro in India. Saini, who joined the rushed in to buy it. It gave them an growth that we believe in and that’s fi rm in mid-2018, has managed to exposure to renewable developers like fundamental to how we look at new deploy nearly $580 million to build ReNew Power and Acme Power. It opportunities as well,” adds Agrawal. the renewables portfolio with his still has an exposure to Acme Power. “I am impressed with Brookfi eld’s 60-member operational team. “The deal essentially makes operational capabilities and Brookfi eld made inroads in the us a partner of choice for them. collaborative approach to problem Indian renewables ecosystem in We will use this as an entry solving. Brookfi eld is a global 2017, when globally it acquired point to engage with Acme for enterprise that brings in its best TerraForm for $1.4 billion adding their operating and upcoming practices to play for making an an over 5,000 MW portfolio of renewable assets,” adds Saini. impact in India. Its talented team operating wind and solar assets to Unlike other private equity fi rms, in India has been great partners, its existing platform, expanding BAM is hoping to fi rst buy debt and our teams regularly engage its renewables footprint in its core and then get a seat at the table to to discuss various ideas. I look markets and establishing operating do equity deals. While renewables forwarding to further strengthening platforms in new high-growth as an asset class has seen some our partnership with Brookfi eld and markets, such as India and China. headwinds over the last few years due wish them all the success in India By virtue of that deal, it got access to a drop in merchant prices, large and beyond,” says Mukesh Ambani, to 300 MW in India—200 MW of fi rms like Brookfi eld are confi dent chairman and managing director solar power and 100 MW of wind that renewables is the future. at Reliance Industries Limited. assets. After Saini joined, until May Another concept where Brookfi eld 2019, he spent time building the is betting big globally is transition or now, the plan for Brookfi eld operational team, hiring a CEO, a head funds. These diff er from a typical is to grow these portfolios in of commercial department and other ESG fund in that a transition fund F their verticals and expand department heads. As Saini says, “We helps companies in the traditional

JULY 2, 2021 • FORBES INDIA REAL ESTATE SPECIAL COVER STOR Y

sector to change their input and based realtor Total Environment. the Ebitda to cash conversion high and output materials to green resources, “We align our interests with the can Brookfi eld add value starting day basically transitioning, say, the shareholder or the business owner zero of the investment?” says Joshi. power source to become net carbon and add value by giving time and And that’s how he devised his strategy zero through use of this capital. acting like an equity partner,” he adds. called ‘four by two’—four core sectors “We are going to actively and two types of deals ( and participate in the global trend of n India, Brookfi eld has dabbled equity control deals) with cheque transitioning into a net carbon zero in large deals across asset heavy sizes north of $200 million. economy, which we think is a $100 I sectors but, in 2020, it made its And after getting a go-ahead on trillion opportunity over the next fi rst bet in pure play private equity this strategy from the global head of couple of decades. We can buy into deals. Led by Aditya Joshi who private equity at Brookfi eld, Cyrus businesses that are carbon emitters, as joined as the managing director for Madon, Joshi created a heat map to long as we can underwrite the thesis private equity at the fi rm, Brookfi eld identify their initial target and fi nally that we can facilitate the transition of has already deployed $1.5 billion zeroed in on IndoStar Capital. these businesses to a net carbon zero across two deals over the last year “They had a very strong strategy emission, leveraging our operating or so. It fi rst went and acquired towards small-ticket retail lending expertise, clean energy knowledge a majority control in Everstone- for commercial vehicles and and access to capital. This opens up a backed non-banking fi nancial aff ordable housing, which are the plethora of opportunities,” says Saini. services fi rm IndoStar Capital Ltd two segments in the NBFC space As defi nitions for sustainable and took over its management. The that we actually like,” says Joshi. fi nancing and bonds expand to vertical’s focus will be on It was a Saturday morning breakfast include social bonds, transition bonds and joint control opportunities at Taj Land’s End in Bandra that and sustainability-linked bonds, in fi nancial services, tech kicked off this deal in July 2019. And renewables isn’t just about solar, wind services, healthcare and industrials. after a long, stringent, due diligence or hydro anymore. As Saini keeps Joshi, who joined the fi rm after process, Joshi and Ranjan were 30 repeating, “We have to be creative.” working for Apax Partners, read all convinced that this was a platform Besides these control transactions, of Brookfi eld’s investment committee they wanted to buy into. On January Brookfi eld in India also has a special memos to understand the fi rm before 30, 2020, they closed the deal. investments unit which takes care he started working on the deals. It’s Since Brookfi eld has taken over the of large-scale structured capital when he realised that Brookfi eld management, the NBFC, which earlier solutions, with equity-linked and looks at three to four things in any had an 80-20 corporate to retail equity-like returns. Unlike all the company anywhere in the world. loan book ratio has reversed it to a other investments of Brookfi eld “How durable is the sector? Is the 70-30 retail to corporate book ratio. across the sectors it is present in, the company providing an essential Joshi adds, “We are going to special investment team is focussed service? Are there barriers to entry? Is ramp down the corporate book on non-control situations. The down to zero. Our focus will be investment mandate is sector and commercial vehicle lending, mainly instrument agnostic with solutions “WE ARE GOING TO used commercial vehicle lending, for structured , rescue aff ordable housing and SME lending. fi nancings, distressed recapitalisations RAMP DOWN THE All three categories are secured and hard asset fi nancing. NBFC CORPORATE lending categories, which is a great “We are looking for typically BOOK TO ZERO. place to be in the NBFC space. We will complex situations where you’ve make this into a 100 percent small- got to underwrite large businesses, OUR FOCUS WILL ticket retail lending book very soon.” which may have complexities around BE COMMERCIAL While Joshi took time to close business or legal situations, where you VEHICLE LENDING, A the deal, it wasn’t the fi rst time he need somebody to move really fast was going through the company. At and provide a structured solution for GREAT PLACE TO BE his previous fi rm, he and IndoStar that situation or that environment,” IN THE NBFC SPACE.” had been collectively looking at says Dev Santani, managing director buying another home fi nance at the fi rm who looks after special Aditya Joshi NBFC. While that deal didn’t go situations. Santani has deployed $240 managing director, private equity through, the learnings remained. million across two deals, including a “With respect to IndoStar, $130 million investment in Bengaluru- Everstone did not sell any shares

FORBES INDIA • JULY 2, 2021 BROOKFIELD

and was looking for a partner to today. Those are the kind we’re make a primary investment and buy interested in. We’ve learned a lot out other minority shareholders. about the space. And our team in We have a strong relationship with India has done a lot of activity in Anuj and his team at Brookfi eld. the sector and I think we will grow We experienced that they don’t cut pretty dramatically in that space.” corners, are aggressive when they As Brookfi eld taps into various identify what they want, and are verticals, one question that has come long-term commitment partners,” up over time in the Indian deals says Sameer Sain, co-founder ecosystem is that big companies and CEO of Everstone Group. have managed to raise more capital, Sain, who has known Ranjan something Ranjan agrees with. for over a decade, says that most According to him, a combination of their relationships have led to of factors has led to this—the fi rst repeat transactions at Everstone. “ANUJ AND HIS TEAM being few funds can write such large While it bought its fi rst asset in AT BROOKFIELD cheques and investors want to go January, by December Brookfi eld and invest in what they believe is had ended up buying another DON’T CUT going to be the best in the space. of Everstone’s asset, Everise, a CORNERS, ARE While Brookfi eld’s team has Singapore-headquartered, next- been busy working on deals, where generation customer experience (CX) AGGRESSIVE WHEN does the future lie in terms of solutions and technology company. THEY IDENTIFY investments? Gupta answers after “The case with Everise was WHAT THEY WANT a pause, “We are looking at assets slightly diff erent. We were eyeing like data centres. While these are an exit while looking to roll over AND ARE LONG- still early days in the country, I a small stake in the business. We TERM PARTNERS.” think the data economy and data 31 also realised that given our rollover infrastructure will be built out in stake, we were choosing a partner Sameer Sain India over the coming years.” and not just an exit, and once again, co-founder, CEO, Everstone Group While most global fi rms bring in the partnership with Brookfi eld has their expert knowledge to India, in been extremely positive,” says Saini. the case of Brookfi eld, it has taken Everise fi rst acquired C3, a US- learnings from India. The fi rm’s based BPO company, from Stone ups, companies which typically have technology capability has actually been Point Capital in December 2016. evolving business plans and lesser built in India and it is now continuing Over the years, Everise has visibility on revenues and cash fl ows. to build that expertise in New York diversifi ed from a pure-play call Though it does not invest in and elsewhere. It is now looking at centre business into an end-to-end start-ups, to support the ongoing tech services businesses all over the vendor of customer experience Covid-19 relief eff orts across India, world with the help and support of management and digital services. it has committed funds towards a the India team as that business model Currently, the platform off ers services non-profi t —United Way Bengaluru was developed and scaled in India. in healthcare, emerging technology that is partnering with ACT Grants, As Brookfi eld readies itself for and smart home segments with a non-profi t coalition created by the bigger deals, Ranjan believes the customers primarily in the US. Indian startup ecosystem to fi ght fi rm is now ready to tackle almost “And it’s probably one of the most the pandemic. These funds will be any sector, as it has done deals in exciting businesses we’re involved in directed towards the procurement, varied sectors and that too by cutting today. We are looking at other similar deployment, and distribution of the largest cheques in each one of types of businesses in the country, I oxygen concentrators to public them. Before rushing off to his next think bolt-ons give an opportunity medical centres across India. meeting, Ranjan says, “Just the fact where we can buy businesses, but “But there are incredible cash fl ow, that India, which did not exist for also separately operate investment generative technology businesses, Brookfi eld in 2014, and only had a opportunities in the space,” says both in software and tech services, small offi ce in a hotel in 2009, is now Ranjan, though he adds that the that exist in India. And these are approaching half our size in Canada, fi rm is still in its early days with companies that can have signifi cant where the company actually started its respect to investing in tech start- growth, but generate a real yield operations, is pretty phenomenal.”

JULY 2, 2021 • FORBES INDIA