Author Topic: BAM - Brookfield Asset Management  (Read 307425 times)

villainx

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Re: BAM - Brookfield Asset Management
« Reply #470 on: May 08, 2018, 08:28:16 AM »
BBU will definitely get a ramp up.  I see it as part of the spinoff process where it becomes a legit vehicle for BAM, until 8-12 bil market cap like the other subs.  Like BIP, near term, it likely will find acquisitions that will lead to good performance. 


chrispy

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Re: BAM - Brookfield Asset Management
« Reply #471 on: May 10, 2018, 05:13:12 AM »
Great results.  The carried interest is starting to take off.  Flatt has frequently mentioned how the carried interest will sky rocket over the next years:

"
Fee related earnings increased by 56% to over $1.0 billion over the LTM, attributable to new capital raised across multiple fund strategies and stronger market valuations of our listed partnerships. Earnings included performance fees of $143 million in the quarter from continued strong unit price performance by Brookfield Business Partners.

We also achieved growth in economic net income from our asset management activities, which more than doubled from the prior LTM period to $2.1 billion. Unrealized carried interest was $1.5 billion before costs, or $1.0 billion net of costs in the last twelve months, more than triple that of the prior period. The step-change is a result of our earlier vintage funds starting to generate significant amounts of carried interest for the first time. As our fund series have been growing and should continue to grow, we expect to see continued increases in carried interest, as carry eligible capital grows.

We continue to generate increasingly significant free cash at the corporate level. We receive significant cash flow from our asset management business as well as distributions from our invested capital, which adds to our robust liquidity profile.

On an annual basis, we receive approximately $1 billion in asset management fee related earnings and $1.5 billion of cash distributions from our invested capital annually based on our current profile. After paying approximately $500 million of interest expense, preferred share dividends and corporate costs, we are generating approximately $2 billion of cash flows before common share dividends that is available for distribution or reinvestment. We have few capital requirements at the corporate level and this positions us well to use our cash flow to support larger fund transactions, providing bridge capital, and seeding new fund products.

We have significant liquidity to deploy for future opportunities. This includes $22 billion of third-party private fund commitments and $10 billion of core liquidity.
"

https://bam.brookfield.com/en/press-releases/2018/05-10-2018-122022041
« Last Edit: May 10, 2018, 05:15:39 AM by chrispy »

Uccmal

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Re: BAM - Brookfield Asset Management
« Reply #472 on: May 10, 2018, 06:09:38 AM »
To add fuel to the fire about which unit is better to own (I dont have the answer BTW):

" First quarter funds from operations (“FFO”) also increased significantly to $1.2 billion, an increase of 74% from the prior year. Fee related earnings continue to increase as a result of the growth in fee bearing capital and higher performance fee income. This was due to fee bearing capital growth generated by both increases in new private fund capital and listed issuers. We received a performance fee from Brookfield Business Partners in the quarter as the partnership continues to exceed performance hurdles. The increased contribution from our invested capital reflects improved results across our businesses, including higher pricing in our renewable power and private equity operations. FFO included $473 million of disposition gains from assets sold, including the aforementioned utility asset and a partial sale of a core office property.u"
GARP tending toward value

racemize

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Re: BAM - Brookfield Asset Management
« Reply #473 on: May 10, 2018, 06:25:29 AM »
In Q1, they have already hit their projected value from the 5-year guidance from 2013 investor day.

John Hjorth

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Re: BAM - Brookfield Asset Management Inc.
« Reply #474 on: May 12, 2018, 12:15:30 PM »
cubsfan attended the Bruce Flatt Dinner arranged by Value Investor Conference held on May 4th 2018 in the Berkshire Weekend, and cubsfan's report from the meeting can be read here.

Absolutely worth your time reading, if you're interested in BAM, and thank you for sharing your notes and impressions here on CoBF, cubsfan.
« Last Edit: May 12, 2018, 12:20:34 PM by John Hjorth »
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cubsfan

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Re: BAM - Brookfield Asset Management
« Reply #475 on: May 12, 2018, 01:50:18 PM »
Thanks - always a pleasure John.

gokou3

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Re: BAM - Brookfield Asset Management
« Reply #476 on: May 13, 2018, 12:08:20 AM »
In Q1, they have already hit their projected value from the 5-year guidance from 2013 investor day.

I don't have their 2013 Investor Day powerpoint, but I have the 2014 one.  Their asset management business is on track to meet the most aggressive forecast made back in 2014.  However, it also forecasted an invested capital of $52B in the *least* optimistic case and yet as of 2018Q1 (supplemental page 15) it only has ~$34B.

On the other hand, I understand BAM puts up capital for its own private funds (supplemental page 25). I wonder if the reason for the performance "lag" of the invested capital is due to the reallocation into private funds. But then, I don't see these assets included in page 15 nor in Brookfield's own valuation model in their Investor's Day presentation.


racemize

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Re: BAM - Brookfield Asset Management
« Reply #477 on: May 13, 2018, 12:13:16 AM »
In Q1, they have already hit their projected value from the 5-year guidance from 2013 investor day.

I don't have their 2013 Investor Day powerpoint, but I have the 2014 one.  Their asset management business is on track to meet the most aggressive forecast made back in 2014.  However, it also forecasted an invested capital of $52B in the *least* optimistic case and yet as of 2018Q1 (supplemental page 15) it only has ~$34B.

On the other hand, I understand BAM puts up capital for its own private funds (supplemental page 25). I wonder if the reason for the performance "lag" of the invested capital is due to the reallocation into private funds. But then, I don't see these assets included in page 15 nor in Brookfield's own valuation model in their Investor's Day presentation.

Yes, they are lagging on the invested capital, although I think some of that can be due to spin outs (BBU/Trisura).  Mostly, I track the projected IV, and they have hit that number already, basically by making it up for with the extra fees.

Edit: Also, it is worth noting that in the investor day presentations they typically list the amount of capital available to invest, not the net amount, so that $54 should net down to ~$44 with leverage/overhead capitalization/etc.
« Last Edit: May 13, 2018, 12:15:13 AM by racemize »

osowi

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Re: BAM - Brookfield Asset Management
« Reply #478 on: May 13, 2018, 10:28:00 AM »
Given the history of distributions and spinoffs, Is it better to own BAM in an IRA or non IRA regular account?
thank you in advance.

racemize

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Re: BAM - Brookfield Asset Management
« Reply #479 on: May 13, 2018, 12:59:39 PM »
Given the history of distributions and spinoffs, Is it better to own BAM in an IRA or non IRA regular account?
thank you in advance.

Personally, I view this as a long term holding and they've largely created the subs they wanted, so I would own something else in an IRA that is shorter term.