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

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.D | 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.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

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Post by retiredcfon May 13, 2022 8:46am

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Post# 34680815

TD

As mentioned, it's on their Action Buy List with a $79.00 target. GLTA

Brookfield Asset Management Inc.

(BAM-N, BAM.A-T) US$45.43 | C$59.17

Core DE Up 28% Y/Y; Spinning Out 25% of the Asset Manager Event

Q1/22 DE of $0.73/share was slightly above the Street/TDSI at $0.69/$0.68, on higher-than-expected disposition gains on principal investments.

Impact: SLIGHTLY POSITIVE

Strong Q1/22 Results: Core DE increased 28% y/y, reflecting 21% growth in fee- related earnings and higher distributions from principal investments. Fee-bearing capital of $379bln was up 19% y/y and 4% q/q, and BAM expects 2022 to be another record year for fundraising, with significant first closes on the latest flagship infrastructure and private equity funds anticipated in Q2/22. BAM recognized $303mm of gross carried interest in Q1/22, which may position it to outperform vs. its target of realizing up to $1bln in 2022.
Asset Manager Spin-out: BAM intends to spin out a 25% stake in the asset manager by year-end. The distribution has an expected value of ~$12.00/share (~$20bln public float) and should be tax-free for Canadian/U.S. shareholders. The spin-out will be a pure-play alternative asset manager, and is expected to have a 90% dividend payout ratio, while the surviving corporate entity, which will own 75% of the manager plus the balance-sheet investments, will remain focused on long-term capital appreciation. We believe that a spin-out will make the manager's financial results much easier to analyze and compare vs. the peers, which should attract a larger investor base and higher valuation multiple. Other benefits include the optionality of using the new security/currency for M&A, and the potential to attract wider Brookfield brand recognition, which should be valuable as the retail wealth market becomes an increasingly important fundraising channel. With BAM's share-price down ~25% year-to-date, and the peers down ~23-35%, we are not surprised that confirmation of the spin-out did not provide a positive share-price catalyst; however, we would argue that the high likelihood of a spin-out, along with BAM's relative scale and attractive weighting to real assets (including a leading position in infrastructure/renewables and first-mover advantage in impact investing) have contributed to BAM's relative outperformance vs. the peers. We also note that BAM has repurchased $170mm of shares year-to-date, something which it does opportunistically.

TD Investment Conclusion

We believe that BAM shares provide exposure to a world-class asset management franchise and a high-quality portfolio of real assets.