TSX:BAM - Post Discussion
Post by
retiredcf on Jun 23, 2021 8:31am
TD
Maintained on their Action Buy List with a US$63.00 target. GLTA
Brookfield Asset Management Inc.
(BAM-N, BAM.A-T) US$50.31 | C$61.88
Highlights of Investor Meetings
Event
We hosted BAM for a series of virtual investor meetings in Montreal.
Impact: NEUTRAL
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Supportive Market Backdrop: BAM's businesses were generally very resilient in 2020 and should perform strongly in 2021. Q1/21 FFO was a record $2.8bln, and the reopening of the global economy, large fund closes, asset sales into highly receptive capital markets, and continued capital deployment into new investments should drive continued momentum. Notably, selling assets at robust prices should crystallize strong investment performance and related carried interest recognition, and in turn, support fundraising activity.
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Strong Fundraising Environment: BAM's latest flagship fundraising cycle is underway, and the backdrop appears so conducive that we believe the company may exceed its $100bln target. The latest flagship distressed debt fund has raised $14.7bln to-date and should hold a final close soon. BAM has also launched fundraising for its fourth flagship real-estate fund and inaugural Global Transition Fund, which should hold first closes in 2021, and expects to launch fundraising for its next flagship infrastructure and private equity funds in late-2021/early-2022.
Record Liquidity: BAM's liquidity is a record $80bln, including $62bln of uncalled fund commitments and $18bln of core liquidity. Capital deployment has become more challenging in most developed markets, but the company still sees opportunities in India, China, and Europe, as well as in businesses harder hit by the pandemic, including hotels, travel/tourism, and in-person retail.
BAMR Spinoff/BPY Privatization: Brookfield Reinsurance (BAMR) will commence trading on June 28. The shares are structured to provide an equivalent economic exposure to BAM through an alternative security. BAMR is expected to be more tax-efficient vs. BAM and will provide a unique opportunity for small- cap investors to own BAM. The BPY shareholder vote is on July 16 and the privatization should close in Q3/21. We anticipate more details on how the company intends to reposition BPY's real-estate portfolio, at the Investor Day.
TD Investment Conclusion
We believe that an investment in BAM provides exposure to a very high-quality portfolio of real assets, with the added leverage of a world-class asset management franchise. We see the latest fundraising cycle as a source of catalysts for the stock.
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