A ‘contrarian’ approach to investing has been at the heart of Brookfield’s success in the GCC, according to the Canadian private capital firm’s Middle East boss, Jad Ellawn.
Ellawn raised eyebrows in August 2023 when he revealed ambitions to leap from $8bn AuM in the GCC to $15-20bn in ‘three to five years’. Just over two years later, at the end of last year, his firm already had some $16bn in the region. (Brookfield’s global AuM is in excess of $1 trillion.)
‘We’re contrarian investors to begin with,’ Ellawn told Spear’s editor-in-chief Edwin Smith at the Spear’s Summit Abu Dhabi last month. ‘We’re never usually rushing in when people are rushing in. We’re usually rushing out when people are rushing in, and we’re rushing in when people are rushing out.’
Brookfield has had a presence in the UAE since 1997 through its construction business, Brookfield Multiplex, having started constructing buildings in Dubai years before many other investors entered the region. It opened an investment office in 2015, making it an early mover in comparison to many other Western private capital firms.
ICD Brookfield Place, the 1.1 million sq ft building in Dubai’s DIFC, completed in 2020, stands as a monument to the firm’s commitment to the growth of GCC economies. Today the company invests in a wide range of asset classes across the Middle East, from infrastructure and renewable energy to private equity, all while maintaining its strong interest in real estate.
Ellawn emphasised his confidence that the GCC in general, and the UAE in particular, remains exceptionally well-positioned for long-term growth and investment
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‘I would say, by all standards, this is not just a developed country – it is an exceptionally developed country,’ he said. ‘There are other parts in the region though which are still developing and still require a significant amount of capital to get to where they want to, so we’re looking at significantly large infrastructure projects in those markets.’
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Ellawn said that investments within the UAE and the GCC as a whole are becoming more long-term prospects. The nature of property investments throughout the GCC is changing, he emphasised, with investors thinking further into the future.
‘I would say, the nexus of why we’re developing needs to change,’ he said. ‘We are not just developing investor products. We are developing real estate that people will want to live in for the next 30 to 50 years.’
Ellawn noted that demand for commercial property in the GCC is exceptionally strong – particularly in Saudi Arabia. As foreign buyers will be able to purchase property in the kingdom from 21 January, international interest in the Saudi market is likely to grow. Commercial property is already tightly held, with Ellawn noting that 99 per cent of office space was occupied at one point.
‘I think Saudi is a no brainer when it comes to real estate logistics,’ he said. ‘It is exceptionally difficult to find [office space there].’
He was also optimistic about opportunities in the UAE. ‘If you ask me, “is there an opportunity there to really develop [commercial property]?” I think the answer is absolutely yes.’
Behind all of Brookfield’s investment decisions is well-sourced and thoroughly researched data, Ellawn said. He argued that the way the firm was able to leverage proprietary data had provided an advantage over other private capital firms operating in the GCC.
While there is political tension throughout much of the Middle East and the rest of the world today, Ellawn expressed his confidence in the stability of the GCC.
‘Whenever I am asked what I think our biggest risk in the region is, of course, everyone always mentions geopolitical issues, but I would say that, quite frankly, the GCC is one of the safest parts of the world,’ he said.
‘What I am concerned about for the UAE is if the other countries in the rest of the world get it right – because if they get it right, then a lot of the people here might say, “well, maybe I’ll move back”.’
However, owing to the stability the UAE especially has experienced in the past few decades, Ellawn sees people making familial investments within the region, not just financial ones.
‘History will tell you, my family included, that once people come here, they stay here,’ he said. ‘They are educated here, they live here, they marry here, they have children here, and they grow and grow and grow.’
As more people look for long-term residence throughout the GCC, Ellawn noted that investments in education are much needed to support the influx. Brookfield led a group of investors in obtaining a minority stake in GEMS Education, one of the world’s largest private school groups.
As well as education, Ellawn noted that technologies of the future, such as AI datacentres and cryptocurrency, will ensure a stable future for investors and the GCC alike.
‘If you draw a four- to six-hour radius around Dubai or the UAE in terms of flight radius, you are addressing over one third of the world’s population,’ he said. ‘That third is not like the United States. There is no hard currency in place.’
‘Stable coins will most likely become a very big part of those economies,’ he added. ‘It could be better to own a stable coin than perhaps the local currency in those countries.’
Looking to the future of investments within the GCC and the UAE in particular, Ellawn expressed his confidence in the diversifying nature of investments and developments.
‘I think that’s the beauty of our region,’ he said. ‘It’s big enough and dynamic enough that you can continue to circulate capital throughout. You don’t need to be dependent on just one theme.’