BAM - Brookfield Asset Management

[Spekulatius]

So I keep saying this, but I thought I'd put a little more thought / numbers around it. Please note that I'm not even taking BPY's corporate leverage into consideration here. My view is this: BPY should trade at a BIG discount to its comps. BPY has far higher balance sheet risk and is subject to a good bending over by BAM who will ultimately prioritize mothership value.

 

All operating metrics are pre-corona and backward looking.

 

BPY's NOI composition:

 

Core Office:

$1.3 billion of NOI,  $17 billion of debt (7.6% debt yield on a consolidated basis)

Office geographice breakdown:

 

Retail

$1.7 billion of NOI, $21 billion of debt (8.0% debt yield on a consolidated basis)

 

LP Investments: bunch of 50-60% levered value-add properties dependent on investment sales market for realization.

 

Going in cap rates to value retail and office: 4.7% and 5.3%.

 

Debt is 30% floating, 70% fixed and looks to be pretty well termed out.

 

 

Now let's see where all this stuff is located and what that looks like in comparable securities:

 

A full 20% of the office portfolio is in London. Where does London office trade in the public market?

 

As a comparable, I'll throw out British Land's office portfolio. BL does derive 40% of its value from retail so it's not a pure comp, but nevertheless, British Land's office portfolio is of similar quality to Brookfield's London exposure (97% occupied, Facebook is 9% of rents, centrally located at major transit hubs).

 

British Land has 3.7 billion pounds of debt (at 2.8% interest costs)  and is doing about 450-480mm pounds of annualized NOI equivalent (they call it "net rental income"). Notice the difference with BPY? British Land's NOI (let's use 450mm pounds): 450 / 3700 = 12% debt yield versus BPY's 7.6%. Now we could say "well BL has more retail...UK retail sucks". I would agree with that pushback but if you zero out BL's retail then BL leverage would be about the same as BPY's. Retail sucks, but NOI proabbly won't be zero. I therefore conclude that BRitish Land has materially less leverage than BPY.

 

British Land is perhaps slightly more "expensive" but still has 100-200% upside to a more normal 70-100% of NAV.  British Land trades for 311 pence versus last reported NAV of 850, about 36% of NAV. British Land is "cheap" to NAV on an absolute basis. Cap rates used for the NAV's are similarly optimistic to BPY's.

 

So that's 20% of the office portfolio. I'm sure there's a better british office REIT to compare to; please feel free to correct me.

 

 

25% of office NOI is in downton and midtown NYC. I urge anyone who owns BPY to go check out the VNO thread that I obnoxiously bump every few days. Let's take a look at VNO's balance sheet. Vornado has about $1 billion of office NOI at share and $200mm of retail NOI at share for total of $1.2 billion. By the least generous calculation Vornado has about $10 billion of debt ($5.6 billion of mortgages, $2.8 billion of unconsolidated share of mortgages, some minor corporate obligations). We could go as high as $11 if we count the preferreds. $1.2 billion / $10-$11 billion = 10-12% debt yield. Again, we find a comparable that carries far less leverage than BPY. I encourag anyone to take a close look at VNO's balance and realize that this is a very punitive way of calculating VNO's debt considering the $9 billion of unencumbered assets they own, $1 billion of cash on the balanche sheet, $ 1 billion of unencumbered 220 central park south which is 90% sold, $1 billion + retial JV preferred equity that attaches at very low LTV, etc. I'm not trying to be precise. I'm trying to illustrate that VNO's balance sheet is better than BPY's which I don't think is that disputable.

 

 

VNO trades for $30. PRe-corona NAV as calc'd by VNO is in the mid $90's, sell side mid $80's. Again 100-200% upside.

 

6% is in Houston (scary, have you seen HHC?), 7% is in DC (JBG Smith is 20-30% levered and is going to be HQ2's dominant landlord and trades at a 40% discount to NAV)

 

 

For sake of time I'm going to leave office.

Let's go to retail.

 

 

Macerich has $8.0 billion of debt at share according to their September presentation. I'm doing quick anlaysis so there could be a lot of adjustments. It's well-laddered and mostrly mortgages of the non-recourse single asset variety. I think NOI is about $860mm for a debt yield of 10.7% compared to BPY's retail debt yield of 8.0%. I conclude that BPY is more levered than MAC. MAC trades for $5. Pre-corona NAV was $40-$50 / share. Simon offered like $80 a few years back. To the extent that malls deserve to exist, MAC offers lots of upside.

 

I presume SPG has a better balance sheet than MAC, but I'm trying to cover as much of BPY in a limited amount of time.

 

I'm not going to address the LP investments other than to say that value-add/real estate opportunity funds carry 50-65% leverage, typically with short term floating rate leverage, and they use por-forma optimistic cap rates (the same ones used in all these NAV figures that get no respect in the public market). If you tried to secondary a brookfield real estate PE fund in the PE secondary market, I doubt you would get par. maybe 50-80 cents.

 

We then overlay all that with corporate level leverage.

 

I'll be clear in saying that I think BPY could return 100-200-300-400% and that it has the most upside of probably all of these at $7 / share. But I think you can create very similar assets at similar discounts with far lower leverage and better balance sheets.

 

To create a synthetica BPY: I'd buy VNO, BL, MAC/SPG, some canadian office REIT?, some multi-family REITs see thread), and I'd call up a PE secondary broker and buy brookfield's RE funds for lower than par (this is obviously not easy).

 

I always caution these kind of "look at a presentation for 10 minutes and draw a sweeping conclusion" but I just want BPY unitholders to think about the alternative.

 

I agree with everything thepupil started. BPY is overleveraged and compared to comps overvalued. That’s without even taking into account external Management and the fees along with it. There is absolutely no reason to own this. If you like BAM, just align yourself with Management and buy BAM. No reason trying to be super smart here.

[Uccmal]

"If you like BAM, just align yourself with Management and buy BAM. No reason trying to be super smart here"  fr. Spekulatius.  Or just do this.

 

Right now I am waiting for a much cheaper entry into BAM.  I already have lots.  Any addition has to be insanely cheap.  I figure we get there on the next leg down.  I have target prices for a whole slew of long positions I want.  I am unwilling to compromise on price, no matter what. 

 

[Xerxes]

hey guys, a question about the subs:

 

what is the right away to think about them. As a unit/shareholder of say BIP, BEP etc, that equity that you own, what does it consists of? Are the actual hard assets (ports, infrastructure, buildings etc.) that are directly owned by BIP, BEP, BYP part of the assets to which you can lay a claims as an equity owner. The portion of the assets that are in the fund that BIP, BEP, BYP do not own (i.e. institutional money), those I presume are not reflected in the balance sheet ?  if so, is the right way to think about them is as mini-asset manager in their own right under BAM i.e. the larger asset manager.

 

why is Bruce Flett sees the subs as no different than any other institutional client (I heard him saying that once), thereby allowing public community to participate more directly in the underlying asset (as if they were a sovereign fund) as oppose to the asset mgmt side ?

 

Also, when BIP, BEP, BYP were spun off some years back, was there additional capital raised … or was it a pure spin off.

 

Also, philosophically, can we think of BX in the same vein as BAM with the exception that it never spun off its subs/funds. I understand that BAM grew out of a real asset manager that started off investing third party capital at one point and that BX was a private equity shop that also had a M&A arm. Fast forward, 20-30 years later, is it a correct to categorize them both as asset managers (involved in real estate, private equity, credit etc) or is there a distinct difference between them.

[Spekulatius]

hey guys, a question about the subs:

 

what is the right away to think about them. As a unit/shareholder of say BIP, BEP etc, that equity that you own, what does it consists of? Are the actual hard assets (ports, infrastructure, buildings etc.) that are directly owned by BIP, BEP, BYP part of the assets to which you can lay a claims as an equity owner. The portion of the assets that are in the fund that BIP, BEP, BYP do not own (i.e. institutional money), those I presume are not reflected in the balance sheet ?  if so, is the right way to think about them is as mini-asset manager in their own right under BAM i.e. the larger asset manager.

 

why is Bruce Flett sees the subs as no different than any other institutional client (I heard him saying that once), thereby allowing public community to participate more directly in the underlying asset (as if they were a sovereign fund) as oppose to the asset mgmt side ?

 

Also, when BIP, BEP, BYP were spun off some years back, was there additional capital raised … or was it a pure spin off.

 

Also, philosophically, can we think of BX in the same vein as BAM with the exception that it never spun off its subs/funds. I understand that BAM grew out of a real asset manager that started off investing third party capital at one point and that BX was a private equity shop that also had a M&A arm. Fast forward, 20-30 years later, is it a correct to categorize them both as asset managers (involved in real estate, private equity, credit etc) or is there a distinct difference between them.

 

Yes, I think BAM can be compared to BX or KKR to some extend, except BX really doesn’t have permanent holding. They will sell everything of the right price, while BAM keep theirs around to guarantee the Stream of cash from LP to GP permanently.

[John Hjorth]

"If you like BAM, just align yourself with Management and buy BAM. No reason trying to be super smart here"  fr. Spekulatius.  Or just do this.

 

Right now I am waiting for a much cheaper entry into BAM.  I already have lots.  Any addition has to be insanely cheap.  I figure we get there on the next leg down.  I have target prices for a whole slew of long positions I want.  I am unwilling to compromise on price, no matter what.

 

Thank you, Al,

 

On overall basis, I would also argue [as a layman], that we haven't had the experience & pleasure of a firm bottom yet. The whole US is so screwed about this, so it's actually [almost] beyond imagination. It's likely going to become just so much more ugly within the next couple of weeks.

 

-So : Likely more down, from here.

[chompsterama]

So I keep saying this, but I thought I'd put a little more thought / numbers around it. Please note that I'm not even taking BPY's corporate leverage into consideration here. My view is this: BPY should trade at a BIG discount to its comps. BPY has far higher balance sheet risk and is subject to a good bending over by BAM who will ultimately prioritize mothership value.

 

All operating metrics are pre-corona and backward looking.

 

BPY's NOI composition:

 

Core Office:

$1.3 billion of NOI,  $17 billion of debt (7.6% debt yield on a consolidated basis)

Office geographice breakdown:

 

Retail

$1.7 billion of NOI, $21 billion of debt (8.0% debt yield on a consolidated basis)

 

LP Investments: bunch of 50-60% levered value-add properties dependent on investment sales market for realization.

 

Going in cap rates to value retail and office: 4.7% and 5.3%.

 

Debt is 30% floating, 70% fixed and looks to be pretty well termed out.

 

 

Now let's see where all this stuff is located and what that looks like in comparable securities:

 

A full 20% of the office portfolio is in London. Where does London office trade in the public market?

 

As a comparable, I'll throw out British Land's office portfolio. BL does derive 40% of its value from retail so it's not a pure comp, but nevertheless, British Land's office portfolio is of similar quality to Brookfield's London exposure (97% occupied, Facebook is 9% of rents, centrally located at major transit hubs).

 

British Land has 3.7 billion pounds of debt (at 2.8% interest costs)  and is doing about 450-480mm pounds of annualized NOI equivalent (they call it "net rental income"). Notice the difference with BPY? British Land's NOI (let's use 450mm pounds): 450 / 3700 = 12% debt yield versus BPY's 7.6%. Now we could say "well BL has more retail...UK retail sucks". I would agree with that pushback but if you zero out BL's retail then BL leverage would be about the same as BPY's. Retail sucks, but NOI proabbly won't be zero. I therefore conclude that BRitish Land has materially less leverage than BPY.

 

British Land is perhaps slightly more "expensive" but still has 100-200% upside to a more normal 70-100% of NAV.  British Land trades for 311 pence versus last reported NAV of 850, about 36% of NAV. British Land is "cheap" to NAV on an absolute basis. Cap rates used for the NAV's are similarly optimistic to BPY's.

 

So that's 20% of the office portfolio. I'm sure there's a better british office REIT to compare to; please feel free to correct me.

 

 

25% of office NOI is in downton and midtown NYC. I urge anyone who owns BPY to go check out the VNO thread that I obnoxiously bump every few days. Let's take a look at VNO's balance sheet. Vornado has about $1 billion of office NOI at share and $200mm of retail NOI at share for total of $1.2 billion. By the least generous calculation Vornado has about $10 billion of debt ($5.6 billion of mortgages, $2.8 billion of unconsolidated share of mortgages, some minor corporate obligations). We could go as high as $11 if we count the preferreds. $1.2 billion / $10-$11 billion = 10-12% debt yield. Again, we find a comparable that carries far less leverage than BPY. I encourag anyone to take a close look at VNO's balance and realize that this is a very punitive way of calculating VNO's debt considering the $9 billion of unencumbered assets they own, $1 billion of cash on the balanche sheet, $ 1 billion of unencumbered 220 central park south which is 90% sold, $1 billion + retial JV preferred equity that attaches at very low LTV, etc. I'm not trying to be precise. I'm trying to illustrate that VNO's balance sheet is better than BPY's which I don't think is that disputable.

 

 

VNO trades for $30. PRe-corona NAV as calc'd by VNO is in the mid $90's, sell side mid $80's. Again 100-200% upside.

 

6% is in Houston (scary, have you seen HHC?), 7% is in DC (JBG Smith is 20-30% levered and is going to be HQ2's dominant landlord and trades at a 40% discount to NAV)

 

 

For sake of time I'm going to leave office.

Let's go to retail.

 

 

Macerich has $8.0 billion of debt at share according to their September presentation. I'm doing quick anlaysis so there could be a lot of adjustments. It's well-laddered and mostrly mortgages of the non-recourse single asset variety. I think NOI is about $860mm for a debt yield of 10.7% compared to BPY's retail debt yield of 8.0%. I conclude that BPY is more levered than MAC. MAC trades for $5. Pre-corona NAV was $40-$50 / share. Simon offered like $80 a few years back. To the extent that malls deserve to exist, MAC offers lots of upside.

 

I presume SPG has a better balance sheet than MAC, but I'm trying to cover as much of BPY in a limited amount of time.

 

I'm not going to address the LP investments other than to say that value-add/real estate opportunity funds carry 50-65% leverage, typically with short term floating rate leverage, and they use por-forma optimistic cap rates (the same ones used in all these NAV figures that get no respect in the public market). If you tried to secondary a brookfield real estate PE fund in the PE secondary market, I doubt you would get par. maybe 50-80 cents.

 

We then overlay all that with corporate level leverage.

 

I'll be clear in saying that I think BPY could return 100-200-300-400% and that it has the most upside of probably all of these at $7 / share. But I think you can create very similar assets at similar discounts with far lower leverage and better balance sheets.

 

To create a synthetica BPY: I'd buy VNO, BL, MAC/SPG, some canadian office REIT?, some multi-family REITs see thread), and I'd call up a PE secondary broker and buy brookfield's RE funds for lower than par (this is obviously not easy).

 

I always caution these kind of "look at a presentation for 10 minutes and draw a sweeping conclusion" but I just want BPY unitholders to think about the alternative.

 

Super Interesting.  And I have no position or interest in a position.  Thanks for all this

[BG2008]

So I keep saying this, but I thought I'd put a little more thought / numbers around it. Please note that I'm not even taking BPY's corporate leverage into consideration here. My view is this: BPY should trade at a BIG discount to its comps. BPY has far higher balance sheet risk and is subject to a good bending over by BAM who will ultimately prioritize mothership value.

 

All operating metrics are pre-corona and backward looking.

 

BPY's NOI composition:

 

Core Office:

$1.3 billion of NOI,  $17 billion of debt (7.6% debt yield on a consolidated basis)

Office geographice breakdown:

 

Retail

$1.7 billion of NOI, $21 billion of debt (8.0% debt yield on a consolidated basis)

 

LP Investments: bunch of 50-60% levered value-add properties dependent on investment sales market for realization.

 

Going in cap rates to value retail and office: 4.7% and 5.3%.

 

Debt is 30% floating, 70% fixed and looks to be pretty well termed out.

 

 

Now let's see where all this stuff is located and what that looks like in comparable securities:

 

A full 20% of the office portfolio is in London. Where does London office trade in the public market?

 

As a comparable, I'll throw out British Land's office portfolio. BL does derive 40% of its value from retail so it's not a pure comp, but nevertheless, British Land's office portfolio is of similar quality to Brookfield's London exposure (97% occupied, Facebook is 9% of rents, centrally located at major transit hubs).

 

British Land has 3.7 billion pounds of debt (at 2.8% interest costs)  and is doing about 450-480mm pounds of annualized NOI equivalent (they call it "net rental income"). Notice the difference with BPY? British Land's NOI (let's use 450mm pounds): 450 / 3700 = 12% debt yield versus BPY's 7.6%. Now we could say "well BL has more retail...UK retail sucks". I would agree with that pushback but if you zero out BL's retail then BL leverage would be about the same as BPY's. Retail sucks, but NOI proabbly won't be zero. I therefore conclude that BRitish Land has materially less leverage than BPY.

 

British Land is perhaps slightly more "expensive" but still has 100-200% upside to a more normal 70-100% of NAV.  British Land trades for 311 pence versus last reported NAV of 850, about 36% of NAV. British Land is "cheap" to NAV on an absolute basis. Cap rates used for the NAV's are similarly optimistic to BPY's.

 

So that's 20% of the office portfolio. I'm sure there's a better british office REIT to compare to; please feel free to correct me.

 

 

25% of office NOI is in downton and midtown NYC. I urge anyone who owns BPY to go check out the VNO thread that I obnoxiously bump every few days. Let's take a look at VNO's balance sheet. Vornado has about $1 billion of office NOI at share and $200mm of retail NOI at share for total of $1.2 billion. By the least generous calculation Vornado has about $10 billion of debt ($5.6 billion of mortgages, $2.8 billion of unconsolidated share of mortgages, some minor corporate obligations). We could go as high as $11 if we count the preferreds. $1.2 billion / $10-$11 billion = 10-12% debt yield. Again, we find a comparable that carries far less leverage than BPY. I encourag anyone to take a close look at VNO's balance and realize that this is a very punitive way of calculating VNO's debt considering the $9 billion of unencumbered assets they own, $1 billion of cash on the balanche sheet, $ 1 billion of unencumbered 220 central park south which is 90% sold, $1 billion + retial JV preferred equity that attaches at very low LTV, etc. I'm not trying to be precise. I'm trying to illustrate that VNO's balance sheet is better than BPY's which I don't think is that disputable.

 

 

VNO trades for $30. PRe-corona NAV as calc'd by VNO is in the mid $90's, sell side mid $80's. Again 100-200% upside.

 

6% is in Houston (scary, have you seen HHC?), 7% is in DC (JBG Smith is 20-30% levered and is going to be HQ2's dominant landlord and trades at a 40% discount to NAV)

 

 

For sake of time I'm going to leave office.

Let's go to retail.

 

 

Macerich has $8.0 billion of debt at share according to their September presentation. I'm doing quick anlaysis so there could be a lot of adjustments. It's well-laddered and mostrly mortgages of the non-recourse single asset variety. I think NOI is about $860mm for a debt yield of 10.7% compared to BPY's retail debt yield of 8.0%. I conclude that BPY is more levered than MAC. MAC trades for $5. Pre-corona NAV was $40-$50 / share. Simon offered like $80 a few years back. To the extent that malls deserve to exist, MAC offers lots of upside.

 

I presume SPG has a better balance sheet than MAC, but I'm trying to cover as much of BPY in a limited amount of time.

 

I'm not going to address the LP investments other than to say that value-add/real estate opportunity funds carry 50-65% leverage, typically with short term floating rate leverage, and they use por-forma optimistic cap rates (the same ones used in all these NAV figures that get no respect in the public market). If you tried to secondary a brookfield real estate PE fund in the PE secondary market, I doubt you would get par. maybe 50-80 cents.

 

We then overlay all that with corporate level leverage.

 

I'll be clear in saying that I think BPY could return 100-200-300-400% and that it has the most upside of probably all of these at $7 / share. But I think you can create very similar assets at similar discounts with far lower leverage and better balance sheets.

 

To create a synthetica BPY: I'd buy VNO, BL, MAC/SPG, some canadian office REIT?, some multi-family REITs see thread), and I'd call up a PE secondary broker and buy brookfield's RE funds for lower than par (this is obviously not easy).

 

I always caution these kind of "look at a presentation for 10 minutes and draw a sweeping conclusion" but I just want BPY unitholders to think about the alternative.

 

Thepupil doing God's work

[ValueMaven]

Has anyone taken an indepth look into Brookfield Infrastructure Partners...it looks like there is now a C-Corp structure to invest in BIP via BIPC, and I am wondering what others taken on BIP/BIPC might be? 

 

-VM

[Xerxes]

My understanding is that they have the same economic profile. And that you can ask your broker to switch from and to.

 

I got mine few days ago. I am Canadian and have the whole of my BAM holdings  (minus BYP) in RRSP.

So probably I ll call them and ask them to fold everything on the C-Corp or vice versa.

 

Perhaps the c-Corp has better liquidity. 

[Xerxes]

To answer my own earlier question on the difference between BX and BAM

Found This

 

https://www.institutionalinvestor.com/article/b1khz0jwnktxtf/In-the-Epic-Battle-Between-Brookfield-and-Blackstone-Who-Wins

[ValueMaven]

Eh - I thought that was just OK ... didnt really tell us anything we already didnt know ...

 

Looks like Flatt is speaking at Grants Conference in Oct-2020.  That is a fairly well known event, so will be interesting to see what he says. 

[thepupil]

Thepupil doing God's work

 

Well, I'm literally just taking a superficial look at various investor presentations; this isn't rocket science. But I haven't seen any evidence to the contrary. There is the whole "corporate leverage vs asset level leverage" thing that would allow one to argue that BLND's corporate financing strategy is a bit more risky, but MAC/VNO have a lot of non-recourse loans and SPG (mostly corporate) has 5x net debt / EBITDA versus BPY's ~10-12x

 

I think it's fine to own BPY; you just have to be more bullish than owners of SPG/VNO/BLND etc on the state of comm. RE and financing. Or you have to really believe in the power of the Brookfield sponsorship/management.

 

And I think BAM shareholders have to care about BPY as its $695mm / $1,717mm of the "cash flow" generated from the invested capital portion of BAM's balance sheet.

 

I think long term one can be bullish of BAM asset manager component because of the OAK/BAM opportunity set of today is super exciting relative to 6 months ago, but I haven't done nearly the amount of work required to decide what happens to BAM if the BPY source of cash becomes a use of cash if they need to provide some sort of sponsorship and/or the divvy gets cut.

 

 

 

Cash Flow Definition: Distributed cash flow (current) from our listed investments is calculated by multiplying units held as at December 31, 2019 by the current distribution rates per unit. Corporate cash and financial asset distribution is calculated by applying a 8% total return on the average balance over the last four quarters. Distributions on our unlisted investments is four times the current quarter distribution.

 

[ValueMaven]

I am still really interested in this new c-corp for BIP ... BIPC.  I think there could be a decent amount of active and passive assets that might start allocating to BIPC b/c its a C-Corp.  Even still - its the only infra related company I know of that reports FFO - so you really need to understand the drivers of cash flows more broadly.

 

It looks like there are going to be c-corps for BPY, BIP, and soon the renewable biz

[peterHK]

Thepupil doing God's work

 

Well, I'm literally just taking a superficial look at various investor presentations; this isn't rocket science. But I haven't seen any evidence to the contrary. There is the whole "corporate leverage vs asset level leverage" thing that would allow one to argue that BLND's corporate financing strategy is a bit more risky, but MAC/VNO have a lot of non-recourse loans and SPG (mostly corporate) has 5x net debt / EBITDA versus BPY's ~10-12x

 

I think it's fine to own BPY; you just have to be more bullish than owners of SPG/VNO/BLND etc on the state of comm. RE and financing. Or you have to really believe in the power of the Brookfield sponsorship/management.

 

And I think BAM shareholders have to care about BPY as its $695mm / $1,717mm of the "cash flow" generated from the invested capital portion of BAM's balance sheet.

 

I think long term one can be bullish of BAM asset manager component because of the OAK/BAM opportunity set of today is super exciting relative to 6 months ago, but I haven't done nearly the amount of work required to decide what happens to BAM if the BPY source of cash becomes a use of cash if they need to provide some sort of sponsorship and/or the divvy gets cut.

 

 

 

Cash Flow Definition: Distributed cash flow (current) from our listed investments is calculated by multiplying units held as at December 31, 2019 by the current distribution rates per unit. Corporate cash and financial asset distribution is calculated by applying a 8% total return on the average balance over the last four quarters. Distributions on our unlisted investments is four times the current quarter distribution.

 

BPY has a complicated relationship with parentco. BAM is buying BPY stock right now, and BPY is buying BPY stock right now, and BAM routinely funnels cash to BPY via "demand loans", so BAM effectively is buying BPY stock in 2 places at once. 

 

Ultimately, the underlying RE is good, it's a horrendous structure, but that is by design and BAM knows what it's doing when it comes to using structures that make no sense from the outside.

 

That said, I would not own ANY of the LP's simply because the interests are misaligned vs. the pure interests with the parent.

[petec]

Ultimately, the underlying RE is good, it's a horrendous structure, but that is by design and BAM knows what it's doing when it comes to using structures that make no sense from the outside.

 

Surely it makes perfect sense from the outside, given BAM's incentives?

 

Or do you men it's horrendous for outside shareholders?

 

I think the point about BAM and the demand deposits (loans) is key for anyone worrying about BPY liquidity. If BAM has enough cash to buy stock they surely have enough to help BPY through a tough patch - unless they have misjudged this severely.

[petec]

I am still really interested in this new c-corp for BIP ... BIPC.  I think there could be a decent amount of active and passive assets that might start allocating to BIPC b/c its a C-Corp.  Even still - its the only infra related company I know of that reports FFO - so you really need to understand the drivers of cash flows more broadly.

 

It looks like there are going to be c-corps for BPY, BIP, and soon the renewable biz

 

There's already a REIT for BPY. C-corp would make little sense, as I understand it.

[ValueMaven]

Yes - typo re: REIT

 

BTW - Flatt mentioned that over the last 5 months BAM lost every one of its deals to higher bidders... can we come-up with a list? 

 

I can think of the elevator-repair biz, and cincinnati bell  ... what else am I missing?

[petec]

Yes - typo re: REIT

 

BTW - Flatt mentioned that over the last 5 months BAM lost every one of its deals to higher bidders... can we come-up with a list? 

 

I can think of the elevator-repair biz, and cincinnati bell  ... what else am I missing?

 

 

Is it 5 months since G&W?

[ValueMaven]

https://business.financialpost.com/news/fp-street/gip-brookfield-in-talks-to-team-up-for-adnoc-gas-pipelines

 

Global Infrastructure Partners and Brookfield Asset Management Inc. are among investors in talks to jointly bid for a stake in Abu Dhabi National Oil Co.’s natural gas pipelines, which could be valued at about US$15 billion, people with knowledge of the matter said.

[Gregmal]

https://seekingalpha.com/filing/4928242

 

Total pieces of you know what. Reputation? Ha!

 

We all know they dont celebrate Easter. They're the types many of the negative stereotypes are derived from.

[Spekulatius]

https://seekingalpha.com/filing/4928242

 

Total pieces of you know what. Reputation? Ha!

 

We all know they dont celebrate Easter. They're the types many of the negative stereotypes are derived from.

 

WHO declared a pandemic on March 11(pretty late). I would like to know more about the cash moved upstream (from this asset pool that BAM provided lending for) before reserving judgement about the merit of this lawsuit.

 

Generally I agree that BAM just behaves like other private equity guys.

[petec]

https://seekingalpha.com/filing/4928242

 

Total pieces of you know what. Reputation? Ha!

 

We all know they dont celebrate Easter. They're the types many of the negative stereotypes are derived from.

 

WHO declared a pandemic on March 11(pretty late). I would like to know more about the cash moved upstream (from this asset pool that BAM provided lending for) before reserving judgement about the merit of this lawsuit.

 

Generally I agree that BAM just behaves like other private equity guys.

 

Exactly (on both counts).

[ValueMaven]

I'd like to see the letter myself and judge the content ... I cant seem to find it (not filed w/SEC)

 

It's tough to say ... Ashford is in an extremely tough spot - debt is distressed and they have a whole series of busted preferreds and common is below $1.  Could be BAM trying to force a takeunder/wipe the equity out and move in.  I dont know - but again, I'd like to read the letter myself and judge the context. 

[StevieV]

https://seekingalpha.com/filing/4928242

 

Total pieces of you know what. Reputation? Ha!

 

We all know they dont celebrate Easter. They're the types many of the negative stereotypes are derived from.

 

WHO declared a pandemic on March 11(pretty late). I would like to know more about the cash moved upstream (from this asset pool that BAM provided lending for) before reserving judgement about the merit of this lawsuit.

 

Generally I agree that BAM just behaves like other private equity guys.

 

I don't know much about this particular situation, but was there some idea that BAM was different than other alternative asset managers?  Why and how so?  What about the acquisition of OAK?  Wouldn't that change the culture?

 

In any event, the personalities of the leaders of these companies are different.  Compare the tone of Flatt to Howard Marks to Steve Schwarzman.  I'm not sure that means that the companies operate all that differently.

 

I have no strong feelings on BAM being a "better" or "worse" actor than most other public companies.

[fareastwarriors]

Back when I was in finance, Canadians were just friendlier. They might still be sharks but friendlier sharks.