BAM - Brookfield Asset Management

[james22]

I really don't think that Berkshire would have any interest in acquiring Brookfield or any of its subsidiaries, and it's interesting to me that even though both of them have broad reach, they almost never encounter one another or partner on any investments.

MINNEAPOLIS, MINNESOTA--(Marketwire - Oct 30, 2012) - HomeServices of America, Inc.™, a Berkshire Hathaway affiliate, and Brookfield Asset Management (BAM.A)(BAM)(EURONEXT:BAMA), announced today that they have partnered to introduce Berkshire Hathaway HomeServices®-a new franchise brand that joins the existing brands and affiliate networks of Prudential Real Estate and Real Living Real Estate.

Berkshire Hathaway HomeServices® combines the financial strength of both organizations, coupled with the operational excellence of HomeServices and superior real estate franchising experience of Brookfield.

https://finance.yahoo.com/news/homeservices-brookfield-announce-residential-real-131516461.html

[james22]

I do agree they are nicely complementary, tiddman.

I'd be OK if they were my only two positions.

[cubsfan]

Berkshire has partnered up with Brookfield a couple times. As Berkshire has with Luecadia.
And I think their is plenty of mutual respect. But Tiddman's points are still worth thinking about.
They operate and finance growth differently.

Personally, as raised a few posts back - I'd hate to see BAM acquired by Berkshire, as I'm looking
at BAM as long run compounder. Other than a stock swap, I think a cash offer might undervalue BAM.

My two largest positions.

[tiddman]

Seems like between owning BRK, BAM and FFH one could likely have a sustainable long term portfolio that over time generates substantially more than the S&P 500 and is easy to maintain. Thoughts?

I know that FFH is a favorite around here but I've never liked it at anything above book value.  Whereas I think Berkshire is undervalued at 1.4x book I think FFH is significantly overvalued at the same metric.  It is the operating businesses and recurring earnings that make the difference.  I am much more interested in both Berkshire and Brookfield for this reason, the operating businesses, and the ability to reinvest capital.  I don't feel that FFH has the same qualities.

[karthikpm]

Seems like between owning BRK, BAM and FFH one could likely have a sustainable long term portfolio that over time generates substantially more than the S&P 500 and is easy to maintain. Thoughts?

I know that FFH is a favorite around here but I've never liked it at anything above book value.  Whereas I think Berkshire is undervalued at 1.4x book I think FFH is significantly overvalued at the same metric.  It is the operating businesses and recurring earnings that make the difference.  I am much more interested in both Berkshire and Brookfield for this reason, the operating businesses, and the ability to reinvest capital.  I don't feel that FFH has the same qualities.

+1
I own all three but have to agree with your comments. However, FFH is becoming a better operating business

[tiddman]

What non-insurance operating businesses does Fairfax have?

[John Hjorth]

That must go to some Fairfax topic, tiddman [ : - ) ]

However, I very much appreciate your condensed write-up in this topic of Berkshire vs. Brookfield. I suppose only a long term investor - and very well wandered - in both can do such an impressive write-up within max. 15 lines.

Thank you. - I really hope that you'll post more frequently here on CoBF going forward.

[villainx]

Folding BAM into BRK kinda makes sense for both.  BAM can put BRK cash to good use, especially since a lot of stuff is capital/organic/M&A intensive, and has loads of operational expertise.  BAM doesn't have to be as dependent on various funding source. 

But my sense is that unless BRK gives a great deal, BAM is more than happy with whatever it's doing.  BAM might get some benefits under BRK, but it can do any deal it wants with what it has.  And like BRK, BAM seems to take enormous pride with working with their investors.

There are also lots of different insider/controlling shareholders (from what I understand) to work out a BAM sale. 

[Shane]

Through Berkshire Hathaway Energy - Berkshire already invests quite a bit in infrastructure (Utilities).  Given the success of BAM with less traditional infrastructure (I'm thinking toll roads, Ports, etc...) I am a bit confused as to why Berkshire hasn't moved into the space.  Am I perhaps missing something?

Does anyone who has followed MidAmerican/BHE know why they haven't branched out into other hard assets?

[cubsfan]

Might be as simple as BAM provides substantial management and operating expertise, and Berkshire does not.