Brookfield Asset Management Voting Ord Shs Class A BXDIF

Primary Symbol: T.BAM Alternate Symbol(s): BKFPF | T.BN.PF.D | T.BN.PR.K | T.BN.PF.E | T.BN.PR.M | T.BN.PF.F | BRPSF | T.BN.PR.N | BRFPF | BKFAF | T.BN.PF.G | T.BN.PR.R | BKAMF | T.BN.PF.H | T.BN.PR.T | BKFDF | BAM | T.BN.PF.I | T.BN.PR.X | T.BN.PF.J | T.BN.PR.Z | BAMGF | T.BN.PF.K | T.BN.PF.A | BAMKF | T.BN.PF.L | T.BN.PF.B | T.BN.PR.B | BKFOF | T.BN.PF.C | BROXF | BRCFF

Financial Services Asset Management

Brookfield Asset Management Ltd. is primarily engaged in providing alternative asset management services. The Company provides its services through an ownership interest in an alternative asset management business, which is carried on by Brookfield Asset Management Inc. (Brookfield) and its subsidiaries. Its products have three categories, which include long-term private funds, perpetual strategies and liquid strategies. The Company's wholly owned subsidiaries include 2451634 Alberta Inc. and Brookfield UK Employee Co Limited. Brookfield is a global alternative asset manager with assets under management across real estate, infrastructure, renewable power and transition, private equity and credit. Brookfield offers a range of alternative investment products to investors around the world, including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors.

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Brookfield Asset Management Voting Ord Shs Class A

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Post by retiredcfon Sep 14, 2022 9:09am

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Post# 34961329

TD Raise Target

By a buck to US$73.00. GLTA

Brookfield Asset Management Inc.

(BAM-N, BAM.A-T) US$51.33 | C$66.66

Investor Day Outlines Substantial Runway for Growth

Event

Yesterday, BAM hosted an Investor Day.

Impact: POSITIVE

Asset Manager: BAM expects to grow FBC to $1tln over the next five years (~20% CAGR) by: 1) deepening existing relationships (i.e., cross-selling); 2) originating new relationships; 3) accessing new distribution channels (e.g., retail wealth); and 4) broadening its product offering. Notably, the macro backdrop favours BAM's heavy weighting to real assets, which offer significant inflation protection (~55% of FBC). The company is a global leader in real estate, is dominant in infrastructure/renewables, and is a first-mover in transition investing.
Insurance Solutions: BAM has deployed ~$4bln of equity to insurance to-date, which the company expects to generate 15%-20% returns over time, as the high levels of cash/liquid financial assets are redeployed to higher-yielding strategies. The company has $40bln of insurance AUM and sees the potential to reach $225bln by 2027.
Capital: The corporation will own 75% of the manager and 100% of insurance. DE of $3.7bln (pro forma) is expected to reach $9.3bln in 2027 (~20% CAGR), which will be available to support growth, with associated optionality. Excess FCF will be returned to shareholders (H1/22 share repurchases of $450mm).
Five-Year Outlook: BAM outlined potential upside to $175-$198/share in 2027 for investors who hold both the manager and the corporation (total annualized return of ~30%+ vs. the current share-price). The partial distribution of a pure-play asset manager should attract a higher valuation for the manager, while preserving the synergies of the "Brookfield ecosystem", and will make the corporation's NAV much more transparent (~70%-75% will be in publicly-traded securities).

TD Investment Conclusion

We see very attractive upside vs. the current share-price and continue to view BAM as a core holding. Our target price assigns no value to carry, applies a 25x multiple to FRE, and values real estate at a ~30% discount to IFRS, and still offers a >40% implied return. We believe that the long duration/high growth-rate of BAM's FBC supports a 25x-30x FRE multiple and note that carry contributed TTM DE of ~ $0.30/share and has an accumulated but unrealized balance of ~$3.35/share. BAM also continues to sell real estate at premiums (not discounts) to IFRS.