BAM - Brookfield Asset Management

[ValueMaven]

Does anyone have this FT article: "How does it do that? Brookfield and its dividends"

[alpha231616967560]

Does anyone have this FT article: "How does it do that? Brookfield and its dividends"

 

Here you go: https://www.google.com/amp/s/amp.ft.com/content/f6b4c598-7ad7-11e8-bc55-50daf11b720d

 

[gokou3]

Does anyone have this FT article: "How does it do that? Brookfield and its dividends"

 

Here you go: https://www.google.com/amp/s/amp.ft.com/content/f6b4c598-7ad7-11e8-bc55-50daf11b720d

 

Or try this: https://www.outline.com/ZKZKMn

 

Personally, I think it's not worth your 5 minutes' time.

[John Hjorth]

IPE Real Assets [June 28^th 2018]: Top 50 infrastructure managers 2018.

[ValueMaven]

The more I study and analyze BAM, the more I like it over FFH for long-term capital appreciation.  I own both in size, but will likely not add to my FFH position, and contiutally add to BAM throughout time.   

 

Instead of using insurance as float, I wonder if Flatt thinks fee generation is similar from an AUM perspective, and carries a heck of a lot less risk!!

[Spekulatius]

The more I study and analyze BAM, the more I like it over FFH for long-term capital appreciation.  I own both in size, but will likely not add to my FFH position, and contiutally add to BAM throughout time.   

 

Instead of using insurance as float, I wonder if Flatt thinks fee generation is similar from an AUM perspective, and carries a heck of a lot less risk!!

 

The risk is implicit- they may have to support their dependent vehicles.

[John Hjorth]

For BAM to end up in trouble, the cash flow on overall level [in both BAM and BAM subs] has to break to such an extent, that FFO gets negative to a degree and over an extended period of time, so that the dry powder already in place isen't sufficient. So the way to think about such a scenario is to study the dry powder and what would have to happen [i.e. to RE vacancy rates, lease rates etc.] for this to incur.

 

I also think that it is worthwhile to study how did BAM operate and perform going through the GFC [i.e. '07 - '10]. [if I remember correctly, you can't go any longer back than '09 on the BAM website for financials, when BAM switched to IFRS - but one is able to grab Joel's BAM monster compilation via Twitter to do the reading.]

 

- - - o 0 o - - -

 

Being bullish on BAM is to me being optimistic about the whole world going forward will become a better place to live.

[Spekulatius]

For BAM to end up in trouble, the cash flow on overall level [in both BAM and BAM subs] has to break to such an extent, that FFO gets negative to a degree and over an extended periode of time, so that the dry powder already in place isen't sufficient. So the way to think about such a scenario is to study the dry powder and what would have to happen [i.e. to RE vacancy rates, lease rates etc.] for this to incur.

 

I also think that it is worthwhile to study how did BAM operate and perform going through the GFC [i.e. '07 - '10]. [if I remember correctly, you can't go any longer back than '09 on the BAM website for financials, when BAM switched to IFRS - but one is able to grab Joel's BAM monster compilation via Twitter to do the reading.]

 

- - - o 0 o - - -

 

Being bullish on BAM is to me being optimistic about the whole world going forward will become a better place to live.

 

There were two asset managers in Australia that went belly up in 2008 - Allco and Babock & Brown. I think what did them in was that their sponsored vehicles got into trouble and they had significant leverage on the holding level (which held stakes in the units as well). This basically caused a margin call when the units value depreciated to the point where the value wasn’t  coveraging the debt any more. Allco‘s and B&B business model was almost identical to BAM, but BAM survived, while those entities did not. Studying what did B&B and Allco in nevertheless should be useful to find out what happens when credit market seize and the equity markets go down (which are typically related events).

[chrispy]

Is the purpose of Partners Value Investments to avoid that leverage in the holding company?

[John Hjorth]

It actually more the other way around, chrispy.

 

PVF.UN is basically [for the most part] a levered play on BAM, the leverage used being preferred equity. [One more layer of leverage.]

[chrispy]

Yes, I think my wording was unclear. Here is another attempt:

 

Is the leverage at Value Partners and not BAM to avoid blowing the company up in a downturn a la Allco and B&B?

[John Hjorth]

chrispy,

 

The extra layer of leverage at PVF.UN is in that particular legal entity. So if BAM defaults on its financial obligations, PVF.UN will be in the toilet, too. Holders of ordinary units will loose control of the partnership, and the preferred unit holders will likely gain control, one way or another.

 

There is a separate topic for PVF.UN here on CoBF here.

[wisowis]

Enbridge sells assets worth $4.3 billion to Brookfield consortium

https://business.financialpost.com/commodities/energy/enbridge-sells-4-3b-in-assets-to-brookfield-consortium-in-bid-to-reduce-61b-debt-pile

[John Hjorth]

Just as follow-up on the post by wisowis: Bloomberg - Deals [July 4^th 2018]: Enbridge Shakes Debt Woes With $3.3 Billion Sale to Brookfield.

 

The deal is discussed in detail in the Enbridge topic here on CoBF, too.

[ValueMaven]

Amazing that they are able to move on deals like this honestly...

 

This is why I own BAM an have been buying more recently...

 

This is a deal Berkshire should have explored too - between Oncur and this, that is $10bn+ of very high quality, utility like earnings they have missed out on. 

[ValueMaven]

To be more specific here, berkshire made some awesome purchases at amazing prices when Williams Co was looking to delever their balance sheet in 2001 or 2002.  KernRiver pipeline and compression facilties were a total steal b/c Williams needed cash and needed it quickly....I am very happy BAM picked these assets up vs. PE....but as noted above between Oncur and  the noted above, BRK has missed out on $10+ of Utility like assets, which were right in their circle of competence

[Spekulatius]

To be more specific here, berkshire made some awesome purchases at amazing prices when Williams Co was looking to delever their balance sheet in 2001 or 2002.  KernRiver pipeline and compression facilties were a total steal b/c Williams needed cash and needed it quickly....I am very happy BAM picked these assets up vs. PE....but as noted above between Oncur and  the noted above, BRK has missed out on $10+ of Utility like assets, which were right in their circle of competence

 

The price may not have been right for BRK. BAM can pay more, because BIP foots the bill, while BAM cashes in  fees, so growth in size benefits BAM. I am also not sure that the assets are utility like, there are some gathering assets in the packet, which generally have a lower lifespan and are hence of lower quality.

[John Hjorth]

The price may not have been right for BRK. BAM can pay more, because BIP foots the bill, while BAM cashes in  fees, so growth in size benefits BAM. I am also not sure that the assets are utility like, there are some gathering assets in the packet, which generally have a lower lifespan and are hence of lower quality.

 

That's actually a very good point, Spekulatius. Also think about return expectations/hurdle rates for institutional clients participating in the infrastucture fund involved in this transaction.

[racemize]

The price may not have been right for BRK. BAM can pay more, because BIP foots the bill, while BAM cashes in  fees, so growth in size benefits BAM. I am also not sure that the assets are utility like, there are some gathering assets in the packet, which generally have a lower lifespan and are hence of lower quality.

 

That's actually a very good point, Spekulatius. Also think about return expectations/hurdle rates for institutional clients participating in the infrastucture fund involved in this transaction.

 

IRR targets of BIP investments are 15%+, which they have pretty consistently hit.  Owner AFFO growth for BIP has been ~13% CAGR for 5 years, which you get a 4-5% div yield on top.  Anyway, I wouldn't put BIP as an 'asset gatherer', unless they are doing something very different than what they state and what their results have been historically.

[rkbabang]

A Primer On Brookfield Asset Management, By Brian Langis

https://seekingalpha.com/article/4186043-primer-brookfield-asset-management#alt1

 

[EricSchleien]

A Primer On Brookfield Asset Management, By Brian Langis

https://seekingalpha.com/article/4186043-primer-brookfield-asset-management#alt1

 

Brian speaks about BAM on here: https://intelligentinvesting.podbean.com/e/brian-langis-stocks-poutine/

[Liberty]

Brookfield Asset Management is investing in the Kushner Companies' flagship building just as its multibillion-dollar purchase of the nuclear company Westinghouse is under government review. More on what's at stake: https://nyti.ms/2uedy0J

[John Hjorth]

GGP Press Release [July 26^th 2018]: GGP Stockholders Approve Proposed Acquisition of GGP by Brookfield Property Partners.

[saltybit]

GGP Press Release [July 26^th 2018]: GGP Stockholders Approve Proposed Acquisition of GGP by Brookfield Property Partners.

 

Does anyone know why GGP is still trading below even the cash offer of 23.50? (currently at 21.28)

 

[RAFA1989]

GGP Press Release [July 26^th 2018]: GGP Stockholders Approve Proposed Acquisition of GGP by Brookfield Property Partners.

 

Does anyone know why GGP is still trading below even the cash offer of 23.50? (currently at 21.28)

 

It's not all cash and I think there are some people afraid to own BPY or BPR shares.