Author Topic: BAM - Brookfield Asset Management  (Read 189593 times)

racemize

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Re: BAM - Brookfield Asset Management
« Reply #580 on: August 13, 2018, 10:12:47 AM »
Seems like some of your guys are deep in the weeds on BAM.  Is BPR (the GGP successor REIT) going to have the same fee arrangement with BAM as BPY (expenses + management fee + incentive fee)?  I suspect that it will (although I'm not sure I've seen , but I didn't hit that going through the deal docs.  Didn't make it all the way through yet...not sure that I will.  Thanks!

I think it should be similar, but they are waiving fees for the first year (I think).


John Hjorth

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Re: BAM - Brookfield Asset Management
« Reply #581 on: August 13, 2018, 10:47:27 AM »
Seems like some of your guys are deep in the weeds on BAM.  Is BPR (the GGP successor REIT) going to have the same fee arrangement with BAM as BPY (expenses + management fee + incentive fee)?  I suspect that it will (although I'm not sure I've seen , but I didn't hit that going through the deal docs.  Didn't make it all the way through yet...not sure that I will.  Thanks!

I think it should be similar, but they are waiving fees for the first year (I think).

I have read what Joel just posted, too. However I can't immediately find the source.
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CorpRaider

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Re: BAM - Brookfield Asset Management
« Reply #582 on: August 13, 2018, 11:35:18 AM »
Makes sense.  Thanks gents.

John Hjorth

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Re: BAM - Brookfield Asset Management
« Reply #583 on: August 13, 2018, 01:53:30 PM »
Just a note here, now that we are actually right now talking about GGP and its successor REIT BRP:

I think that it was a while back while reading the AGM presentations not so long ago for BAM ... -  It was about priorities going forward, presented as bullet points in that particular presentation ... I ended up very puzzled, thinking: "What? - GGP integration isen't mentioned in the priorities there?" ... Then I finally ended up pushing that particular thing away from me mentally, thinking: "Well, talking about that [at that time] would actually be like selling the fur of the bear before shooting it." [related to not-yet GGP shareholder approval of BAM take-over bid].

-And now, we have a description of what BAM actually plans to do with the GGP properties, in the 2018Q2 shareholder letter. To me, it reads pretty daunting. -For BAM, it's "just" "in the course of ordinary business".
« Last Edit: August 13, 2018, 01:57:30 PM by John Hjorth »
”In the race of excellence … there is no finish line.”
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OnTheShouldersOfGiants

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Re: BAM - Brookfield Asset Management
« Reply #584 on: August 13, 2018, 02:20:40 PM »
Bruce Flatt will be coming through our office this week for a meeting. Anyone have a question they would like have answered?

racemize

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Re: BAM - Brookfield Asset Management
« Reply #585 on: August 13, 2018, 02:50:57 PM »
Bruce Flatt will be coming through our office this week for a meeting. Anyone have a question they would like have answered?

These are my current questions:

1) BPY focuses on FFO growth + dividends as a measure of returns to investors; however, BPY is marked on BAM's balance sheet as its IFRS values.  These IFRS values appear to be in line with NAV estimations, and as BAM has emphasized in the past, properties have generally sold close to those values.  Accordingly, shouldn't we be able to use IFRS growth + reinvested dividends as a proxy for IV growth of BPY?  If so, since 2011, BPY's IFRS has grown at around 9% a year since 12/31/2013, which is below the targeted 12% returns.  How should we think about this?  Is this because of the irregularity of timing of when unrealized gains are reflected?  Does it have to do with the development pipeline, which presumably has depressed IFRS values until the projects are completed?

2) Where does the fee related overhead go (e.g., the 30% of fee earnings that are subtracted for costs)?  Is it mostly compensation to underlying managers?

3) Given that the public entities are largely directed towards core type investments (e.g., BPY) and have permanent equity, why is there a need to create new private permanent core funds, which would seem to have very similar characteristics?  Is it because there is value to private partners to have non-listed investments (e.g., which do not mark-to-market in the same way)?

4) Each of the sub-entities report FFO/AFFO in different ways.  For example, BIP's AFFO does not adjust for preferred unit distributions or incentive distributions, whereas BEP's AFFO is post-preferred unit distributions, but before incentive distributions.  Additionally, investors have to adjust these numbers by hand to determine the "owner earnings" attributable to them as the earnings those investors receive will be post these distributions.  Has Brookfield considered presenting an "owner AFFO" value for each of the sub-entities?

5) In a related manner, BPY now shows opportunistic realized gains with an adjustment to get to an approximation of AFFO, but there are significant gains outside of BPY which are not included.  Additionally, it appears that these additional realized gains are no longer reported in the supplemental, which puts investors a little in the dark if they were attempting to create an AFFO that had a "smoothed out" value for disposition gains (i.e., including both core and opportunistic disposition gains).  Is there a reason these disposition gains are no longer reported and/or is there a way to get to an AFFO value that includes all of the gains (e.g., using a 3 or more year average disposition gain figure)?

Jerry Capital

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Re: BAM - Brookfield Asset Management
« Reply #586 on: August 14, 2018, 06:19:22 AM »
Those are great questions including the last two.

Thank you for posting

TorontoRaptorsFan

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Re: BAM - Brookfield Asset Management
« Reply #587 on: August 14, 2018, 12:18:02 PM »
Bruce Flatt will be coming through our office this week for a meeting. Anyone have a question they would like have answered?

Does he any have any book recommendations? What's a typical day like for him.
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