Brookfield Asset Management Voting Ord Shs Class A T.BN.PF.D

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

Financial Services Asset Management

Brookfield Asset Management Ltd. is a global alternative asset manager. The Company invests client capital for the long-term with a focus on real assets and essential service businesses that form the backbone of the global economy. It 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. Its products have three categories, which include long-term private funds, perpetual strategies and liquid strategies. These are invested across five principal strategies: renewable power and transition, infrastructure, real estate, private equity, and credit.

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Brookfield Asset Management Voting Ord Shs Class A > TD

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Post by retiredcfon Jan 05, 2021 8:41am

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Post# 32222387

TD

It remains on their Action Buy list with a $57.00 target. GLTA

Brookfield Asset Management Inc.

(BAM-N, BAM.A-T) US$39.45 | C$50.44

Proposing to Privatize BPY with Institutional Partners Event

BAM, alongside institutional partners, has made a proposal to acquire the 38% of BPY that it does not already own for $16.50/unit (total value of $5.9bln).

Impact: SLIGHTLY POSITIVE

We do not anticipate that this announcement will be surprising to investors, as BAM has repeatedly expressed strong conviction that BPY is trading at a substantial discount to the intrinsic value of its real-estate portfolio, and has recently demonstrated that conviction by funding a recent substantial issuer bid in combination with institutional partners at ~$12.00/unit.
A privatization would depart from BAM's strategy of simplifying its structure by establishing separate public vehicles for each of its major verticals, and would result in less transparency for investors in monitoring the performance of and in valuing the company's invested capital in real estate. On the other hand, we believe that a privatization will provide BAM with considerably more flexibility to structure its ownership of BPY's portfolio and to realize the intrinsic value. In particular, we could envision the portfolio being carved up by asset class (office, retail, etc.) and/or by geography to seed various perpetual core real-estate strategies, whereby BAM's percentage ownership of BPY's portfolio will temporarily increase post-transaction, but could ultimately decline below the current 62% over time. It is also possible that, in the absence of a publicly-traded unit price, investors/analysts might value BAM's stake in BPY's portfolio at less of a discount to its IFRS value, which was $15bln as of Q3/20 (i.e., ~$27.00/BPY unit and ~$9.65/BAM share).
Although BAM's proposal is just that at this stage, and includes an undisclosed level of institutional participation, we calculate that the transaction will be slightly accretive to BAM's OFFO/share if the company funded 100%. BPY has established a committee of independent directors to evaluate BAM's proposal.

TD Investment Conclusion

We see a prolonged period of near-zero interest rates as a favourable backdrop for BAM, as it should only increase investor appetite for alternative investment products as fixed-income substitutes. Furthermore, we anticipate that BAM will capitalize on market dislocation resulting from the pandemic to enhance its franchise, as it has done in previous cycles.