Brookfield Asset Management‘s former head of venture investing, Josh Raffaelli, has accused the firm in a new lawsuit of misleading LPs, backtracking on capital commitments and putting its venture strategy “out to pasture.”
The suit, which also accuses Brookfield of wrongful termination, offers a rare public glimpse into a senior investor’s dispute with a former employer.
It also provides behind-the-scenes context on Brookfield’s decision to merge its venture funds with capital solutions provider Pinegrove Capital, a move the firm confirmed earlier this year.
Notably, one of Raffaelli’s claims—that Brookfield wanted to wind down its venture funds to free itself from LP obligations after it bore heavy losses in its commercial real estate—doesn’t quite match up with the firm’s performance.
Brookfield’s real estate holdings took a dip during the pandemic, but the asset manager’s financials quickly bounced back. Brookfield Corporation’s net income grew from $573 million in 2020 to nearly $2.9 billion in both 2021 and 2022, and its total investment income went from -$65 million to $490 million between 2020 and 2022, according to annual shareholder reports. And since then, its financial performance has remained strong.
Raffaelli, a former principal at DFJ, joined Brookfield in 2017 and built out its venture strategy, from investing from Brookfield’s balance sheet to raising three funds totaling over $1.75 billion. He led investments in ServiceTitan, Deliverr and xAI, and left the firm at the end of 2024.
Raffaelli claims he lost out on returns-based compensation totaling some $46 million due to his termination. His lawsuit claims that Brookfield passed on several opportunities that would have generated returns for the firm’s LPs, which include Caisse de dépôt et placement du Québec and Pennsylvania’s pension plan for public school employees.
Shortly before Raffaelli’s departure in November 2024, a large foreign conglomerate offered to invest between $75 million and $100 million into Brookfield’s venture fund, which the CEO of Brookfield’s private equity group rejected, according to the lawsuit.
And when the opportunity came to invest in an AI startup—xAI, according to The New York Times—the firm allegedly instructed Raffaelli to invest only $5 million instead of the planned $25 million, because Brookfield Corporation did not want to increase its obligated LP commitments to its asset management division, the lawsuit alleges.
The suit further claims that Brookfield did not disclose to LPs its decision to pull out of commitments to its venture and private equity funds, and also says Pinegrove inflated its own AUM.
“This suit is absolutely without merit and these baseless claims run counter to how Brookfield manages its business,” Brookfield spokesperson Kerrie McHugh said in a statement to The New York Times. “We will vigorously defend against this meritless suit, which was brought by a disgruntled former employee.”
Correction, May 14: An earlier version of this article inaccurately listed the Ontario Teachers’ Pension Plan as an LP in Brookfield.
Brookfield Place in Toronto.
Featured image by Gary Hershorn/Getty Images
Learn about our editorial standards.
