Brookfield Asset Management Voting Ord Shs Class A T.BAM

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Morning Report: Insiders buy as Brookfield builds a super brand 

December 8, 2021

It has been a hundred years in the making, but Brookfield Asset Management (BAM) believes it is on the road to establishing itself as a global super brand in its space. The key has been finding huge investable markets where it can apply its active value-oriented investing approach. According to Chief Investment Officer Sachin Shah, Brookfield's five core segments are mature areas of opportunity, each with a multi-trillion dollar investable universe.

Historically, Brookfield has been associated with real estate investing. Indeed, in 2016 real estate represented about 42% of assets under management (AUM), according to a September 2021 company presentation. That share has dropped to 36% this year. While its real estate AUM has grown by 50% over the past 5 years to US$219 million (M), its growth has been eclipsed by private equity, up 328% (US$77M AUM), infrastructure, up 217% (US$95M AUM), and renewables, up 90% (US$59M AUM). Only its credit area (+29%) has grown more slowly. However, credit remains the second-largest area in terms of absolute AUM at US$156M. Meanwhile, trailing 12-months EPS is back on the rise at $2.74 as of September 30th compared to a loss a year earlier.

As for the future, the company is upbeat on all five core areas, particularly in the area of infrastructure where it believes a supercycle is underway. In terms of new infrastructure plays, it has its eye on software as an area of major opportunity. Meanwhile, after some selling in the summer, insiders are back buying this fall.