Author Topic: BAM - Brookfield Asset Management  (Read 307430 times)

chrispy

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Re: BAM - Brookfield Asset Management
« Reply #220 on: August 09, 2017, 01:24:55 PM »
WSJ published an article today about possible inconsistent valuing of their Brazilian toll road:

https://www.wsj.com/amp/articles/brookfields-toll-road-to-riches-1502271002

Didn't have any impact on BAM or BIP share price today. Earnings are out tomorrow and I'm sure it will be discussed.


chrispy

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Re: BAM - Brookfield Asset Management
« Reply #221 on: August 09, 2017, 01:25:18 PM »
WSJ published an article today about possible inconsistent valuing of their Brazilian toll road:

https://www.wsj.com/amp/articles/brookfields-toll-road-to-riches-1502271002

Didn't have any impact on BAM or BIP share price today. Earnings are out tomorrow and I'm sure it will be discussed.

LongTermView

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Re: BAM - Brookfield Asset Management
« Reply #222 on: August 09, 2017, 04:52:28 PM »
WSJ published an article today about possible inconsistent valuing of their Brazilian toll road:

https://www.wsj.com/amp/articles/brookfields-toll-road-to-riches-1502271002

Didn't have any impact on BAM or BIP share price today. Earnings are out tomorrow and I'm sure it will be discussed.

This is a lot like the http://www.barrons.com/articles/how-fair-are-brookfields-fair-value-estimates-1459570693 article from April of last year.

Neil Downey asked about this during the call and Brian Lawson answered noting that it is a rehash from Barron's with a number of fundamental inaccuracies and that it is misleading.

Here are some of the things Brian said:
Quote
...the management fees that Brookfield earns are based on the stock market capitalization of our listed affiliates, and not based on the IFRS valuations or book values.

And in fact if you look at the company that owns those assets that you referred to, Brookfield Infrastructure Partners, most of the assets owned by BIP are not actually mark-to-market at all because they are concessions. And so the IFRS value is only a fraction of what the value of the company is. And this is clearly evidenced by the fact that BIP has sold many businesses over the past number of years [for proceeds] significantly above IFRS values. We’ve observed that when investors look at a company like BIP, they’re really looking at the ability of it to increase its cash flows and therefore pay a good dividend [(reliable) and one that increases steadily over time] and again none of this is influenced by the IFRS valuations.

And again, the other point we’d like to make and this comes to your comment on the questions raised about the values of our tariffs, which is our Brazilian toll road operations, in particular. And the suggesting that we had widely [differing] values [that] we [assign] to it and again, that’s just not true. We did not revalue this asset over that time period. In fact, this is an even -- we don’t even use fair value accounting or for our tariffs. Just to clarify the confusion around that one. The increase in the value of our tariffs was due to two factors and two factors only; first, we invested another $700 million of cash in the business to fund capital projects and purchase in our interest; and second, the exchange rate for the Brazil currency went up by over 20% during [the] period. So this had nothing to do with our change in our valuation of the business.

Here is the transcript: https://seekingalpha.com/article/4097663-brookfield-asset-managements-bam-ceo-bruce-flatt-q2-2017-results-earnings-call-transcript?part=single
« Last Edit: August 10, 2017, 01:17:16 PM by LongTermView »

LongTermView

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Re: BAM - Brookfield Asset Management
« Reply #223 on: September 23, 2017, 12:50:09 PM »
https://www.wsj.com/articles/amazon-inks-office-space-deal-on-manhattans-far-west-side-1506011956
Quote
The retail giant signed a 15-year lease to take about 360,000 square feet at Five Manhattan West, a revamped building that is part of Brookfield Property Partners L.P.’s new eight-acre development, Brookfield said Thursday.

Amazon said it plans to open its office at Five Manhattan West in 2018, creating a primary location for the company’s advertising division with teams in marketing, product design and engineering.

Amazon will invest $55 million to build out its new office space located at 450 W. 33rd St., which Brookfield has rebranded as Five Manhattan West.

...

The lease will bring the building’s occupancy to 99%, Brookfield said.

chrispy

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Re: BAM - Brookfield Asset Management
« Reply #224 on: September 29, 2017, 03:55:39 PM »
BAM predicts a 22% return over the next 5 years.  Current share price is ~$41 and they are estimating $104 in 2022. 

The numbers in their presentations documenting the past growth of pretty much every aspect of the company are simply amazing.  We will see what the future holds!

https://bam.brookfield.com/en/events-and-presentations

LongTermView

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Re: BAM - Brookfield Asset Management
« Reply #225 on: September 29, 2017, 05:28:17 PM »
That slide on page 87 of the first presentation is the one that caught my eye. The footnote says that the estimated total return includes dividends.

villainx

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Re: BAM - Brookfield Asset Management
« Reply #226 on: September 29, 2017, 05:34:23 PM »
BAM predicts a 22% return over the next 5 years.  Current share price is ~$41 and they are estimating $104 in 2022. 

The numbers in their presentations documenting the past growth of pretty much every aspect of the company are simply amazing.  We will see what the future holds!

https://bam.brookfield.com/en/events-and-presentations

It's intrinsic value at 104.  Who knows how that it translate to share price?

scorpioncapital

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Re: BAM - Brookfield Asset Management
« Reply #227 on: September 30, 2017, 02:50:33 AM »
In that $104 slide, they have a line for
carried interest and fee related interest
but no line for the 'distributions received' which is a line item on page 64...Is that included in the first two?

I see they generated 1.8 billion free cash flow today.
The 2022 prediction would be (if outflows grow a little slower and the distributions received stay the same) $2.7 billion + $1.4 billion = $3.8 billion - ~$800m outflows = $3 billion/year.

At blended average of 15x that's $45 billion in 5 years based on multiple of fcf ($40 billion today's market cap)
or at 20x = $60 billion.

It'd be nice to know what they are predicting for the distributions . But it seems but I don't see more than a double in 5 years or an 80 billion market cap either way.

racemize

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Re: BAM - Brookfield Asset Management
« Reply #228 on: September 30, 2017, 06:59:16 AM »
In that $104 slide, they have a line for
carried interest and fee related interest
but no line for the 'distributions received' which is a line item on page 64...Is that included in the first two?

I see they generated 1.8 billion free cash flow today.
The 2022 prediction would be (if outflows grow a little slower and the distributions received stay the same) $2.7 billion + $1.4 billion = $3.8 billion - ~$800m outflows = $3 billion/year.

At blended average of 15x that's $45 billion in 5 years based on multiple of fcf ($40 billion today's market cap)
or at 20x = $60 billion.

It'd be nice to know what they are predicting for the distributions . But it seems but I don't see more than a double in 5 years or an 80 billion market cap either way.

Generally, I'd say a two column approach of net invested capital and some multiple of asset management fees is more appropriate.  Using FCF only doesn't give them full credit for compounding invested capital as the increasing value largely doesn't show up in earnings/FCF.

John Hjorth

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Re: BAM - Brookfield Asset Management
« Reply #229 on: October 22, 2017, 10:27:09 AM »
I started yesterday to dive into this investment. It's just daunting. As already posted earlier in this topic, it's a complicated beast. Thanks for all contributions so far in this topic [I have read and studied the whole topic today, back from the original starting post] - they seem to be of great help, to get at least some kind of grip - [perhaps even a firm one] on this thing.
”In the race of excellence … there is no finish line.”
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