How Brookfield does leverage

Non-recourse financing, long-term maturities and little-to-no financial maintenance covenants are the order of the day.

The CEO of Brookfield’s private equity business, Cyrus Madon, gave analysts an insight into how the giant firm is approaching leverage use in a low-cost financing environment. In short: if the asset can handle it, the firm is raising finanance “with little-to-no” financial maintenance covenants “all day long as much as we can.” They are certainly not alone.

Elsewhere in earnings-related comments: “The balance sheet is carrying less risk now than last year. That is another way of saying we have more dry powder.”

Jan Erick Back, CFO for Bahrain-listed asset manager Investcorp, explains the results of the firm’s two secondaries transactions, in which balance sheet holdings were sold down to Coller Capital and HarbourVest, in an earnings call on Tuesday. Reuters reports: the asset manager cut private equity co-investments by almost a fifth to reduce risk on its balance sheet in a move aimed at allowing the firm to navigate the current economic cycle amid trade and geopolitical tensions.

Email prepared by Toby Mitchenall.