Author Topic: BAM - Brookfield Asset Management  (Read 289841 times)

John Hjorth

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Re: BAM - Brookfield Asset Management
« Reply #950 on: March 14, 2019, 08:09:35 AM »

I think there is great deal of truth in the recent posts by Spekulatius, villainx, Peregrino & walkie about what this in reality is about for Mr. Marks & Co.

Oaktree 2018 10-K, p. 28:

Quote
... Risks Relating to Our Business

Given our focus on achieving superior investment performance with less-than-commensurate risk, and the priority we afford our clients’ interests, we may reduce our AUM, restrain its growth, reduce our fees or otherwise alter the terms under which we do business when we deem it appropriate—even in circumstances where others might deem such actions unnecessary. Our approach could adversely affect our results of operations. ...
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai


petec

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Re: BAM - Brookfield Asset Management
« Reply #951 on: March 14, 2019, 08:12:09 AM »
I think there will be greater benefits given Trump's tax act... there are all kinds of rules in place regarding who and how qualified opportunity zone funds work, and one of the odd rules is that at time of sale, the buyer needs to buy the equity interest to get to the asset rather than buying the asset outright.  This requires inside knowledge of the entity to avoid long-tail risks and now that this can be done in-house using the distributions on distressed bonds, Brookfield can create the ultimate tax efficient fund without material market risk or tax liability despite realization of assets...

I'm going to have to reread this several times ;)

walkie518

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Re: BAM - Brookfield Asset Management
« Reply #952 on: March 14, 2019, 09:53:51 AM »
I think there will be greater benefits given Trump's tax act... there are all kinds of rules in place regarding who and how qualified opportunity zone funds work, and one of the odd rules is that at time of sale, the buyer needs to buy the equity interest to get to the asset rather than buying the asset outright.  This requires inside knowledge of the entity to avoid long-tail risks and now that this can be done in-house using the distributions on distressed bonds, Brookfield can create the ultimate tax efficient fund without material market risk or tax liability despite realization of assets...

I'm going to have to reread this several times ;)

there is certainly opportunity on the private equity side or really anywhere there are realizations, but bonds tend to pay on a more regular basis and have liquidity

if Oak Op Fund 1 buys the next bankruptcy's bonds for 20 cents on the dollar, the company reorgs, the bonds are converted into equity or paid off in event of liquidation, that can be material tax hit ... instead, Oak Op Fund 1 sells the cap gain portion and takes a position in Brookfield RE Op Zone Fund 1...this defers the tax for some time and initial capital outlay plus a little can be distributed to LPs, Brookfield RE Op Zone Fund 1 then uses fresh cash to invest 90% of funds in designated op zones and thereby defers taxation and to the available extent does step-up of basis per the tax act

more clear? 


villainx

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Re: BAM - Brookfield Asset Management
« Reply #953 on: March 14, 2019, 12:38:33 PM »
I forgot for which sub or whether it was with BAM, but during recent investor day the new opportunity zones were discussed as really big opportunity areas for companies like BAM (and sub).

vince

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Re: BAM - Brookfield Asset Management
« Reply #954 on: March 14, 2019, 01:15:18 PM »
I forgot for which sub or whether it was with BAM, but during recent investor day the new opportunity zones were discussed as really big opportunity areas for companies like BAM (and sub).

Really? How sure are you it was Bam or a bam sub?

Williams406

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Re: BAM - Brookfield Asset Management
« Reply #955 on: March 14, 2019, 01:48:39 PM »
Came across Opportunity zones when FRP holdings (real estate developer and quarry owner) disclosed that they were investing a portion of the proceeds from a RE sale (with a lot of capital gains) in to a joint venture with another developer targeting an opportunity zone. Depending on how many zones will exist and how large they are, the concept could be very significant for a player like BAM, I would think. Put a fund together targeting Opp. zones, identify and execute positive ROI projects that make sense on their own merit, rake in the fees by allowing investors with capital gains on other investments to defer taxes.

vince

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Re: BAM - Brookfield Asset Management
« Reply #956 on: March 14, 2019, 02:22:22 PM »
Came across Opportunity zones when FRP holdings (real estate developer and quarry owner) disclosed that they were investing a portion of the proceeds from a RE sale (with a lot of capital gains) in to a joint venture with another developer targeting an opportunity zone. Depending on how many zones will exist and how large they are, the concept could be very significant for a player like BAM, I would think. Put a fund together targeting Opp. zones, identify and execute positive ROI projects that make sense on their own merit, rake in the fees by allowing investors with capital gains on other investments to defer taxes.

I definitely agree about the potential, they could create some successful asset gathering with those funds.  But do you remember Bam specifically addressing the opportunity?

gokou3

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Re: BAM - Brookfield Asset Management
« Reply #957 on: March 14, 2019, 02:55:07 PM »
Came across Opportunity zones when FRP holdings (real estate developer and quarry owner) disclosed that they were investing a portion of the proceeds from a RE sale (with a lot of capital gains) in to a joint venture with another developer targeting an opportunity zone. Depending on how many zones will exist and how large they are, the concept could be very significant for a player like BAM, I would think. Put a fund together targeting Opp. zones, identify and execute positive ROI projects that make sense on their own merit, rake in the fees by allowing investors with capital gains on other investments to defer taxes.

I definitely agree about the potential, they could create some successful asset gathering with those funds.  But do you remember Bam specifically addressing the opportunity?

2018 Investor Day - BPY presentation, page 69.

villainx

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Re: BAM - Brookfield Asset Management
« Reply #958 on: March 14, 2019, 03:14:45 PM »
Came across Opportunity zones when FRP holdings (real estate developer and quarry owner) disclosed that they were investing a portion of the proceeds from a RE sale (with a lot of capital gains) in to a joint venture with another developer targeting an opportunity zone. Depending on how many zones will exist and how large they are, the concept could be very significant for a player like BAM, I would think. Put a fund together targeting Opp. zones, identify and execute positive ROI projects that make sense on their own merit, rake in the fees by allowing investors with capital gains on other investments to defer taxes.

I definitely agree about the potential, they could create some successful asset gathering with those funds.  But do you remember Bam specifically addressing the opportunity?

2018 Investor Day - BPY presentation, page 69.

Yes, it was BPY.  Long day there and lots of info, but of course, what applies to BPY applies to certain degrees to BAM. 

https://bpy.brookfield.com/~/media/Files/B/Brookfield-BPY-IR-V2/ir-day/2018/ir-day-2018-bpy-transcript-final.pdf

vince

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Re: BAM - Brookfield Asset Management
« Reply #959 on: March 14, 2019, 03:20:05 PM »
Came across Opportunity zones when FRP holdings (real estate developer and quarry owner) disclosed that they were investing a portion of the proceeds from a RE sale (with a lot of capital gains) in to a joint venture with another developer targeting an opportunity zone. Depending on how many zones will exist and how large they are, the concept could be very significant for a player like BAM, I would think. Put a fund together targeting Opp. zones, identify and execute positive ROI projects that make sense on their own merit, rake in the fees by allowing investors with capital gains on other investments to defer taxes.

Yes, it sure does, much appreciated.

I definitely agree about the potential, they could create some successful asset gathering with those funds.  But do you remember Bam specifically addressing the opportunity?

2018 Investor Day - BPY presentation, page 69.

Yes, it was BPY.  Long day there and lots of info, but of course, what applies to BPY applies to certain degrees to BAM. 

https://bpy.brookfield.com/~/media/Files/B/Brookfield-BPY-IR-V2/ir-day/2018/ir-day-2018-bpy-transcript-final.pdf