tag:blogger.com,1999:blog-5389144729834496735.post3920126202173207731..comments2024-03-17T05:15:55.634-04:00Comments on The Brooklyn Investor: Brookfield Asset Management (BAM)Unknownnoreply@blogger.comBlogger20125tag:blogger.com,1999:blog-5389144729834496735.post-18445893299077483512021-05-07T14:00:28.813-04:002021-05-07T14:00:28.813-04:00Asset management advisors help companies manage th...Asset management advisors help companies manage their assets in a variety of ways. They provide useful information regarding how assets must be managed properly and are also responsible for organizing these assets into easily accessed and easy to use formats which makes for convenience in the part of their clients. <a href="https://www.agrusslawfirm.com/blog/northwood-asset-management-group" rel="nofollow">nam group</a><br /><br />Seo Leenahttps://www.blogger.com/profile/17490936196427284120noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-70869336642216366562021-02-17T01:30:28.043-05:002021-02-17T01:30:28.043-05:00Just watched the speech "evolution of a value...Just watched the speech "evolution of a value investor" from Tom Gayner once again, while I am in the middle of analysing BAM in these days (your analysis being very insight- and helpful, thanks!".<br /><a href="https://www.omegawmg.com/" rel="nofollow">best asset management companies in mn Minnetonka</a>OMEGA Wealth Management Grouphttps://www.blogger.com/profile/00235410266955599812noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-87223866841772486042017-02-13T11:02:46.437-05:002017-02-13T11:02:46.437-05:00As I just posted to a comment above yours, I like ...As I just posted to a comment above yours, I like BAM a lot, and I like the management etc. There are no problems as far as I'm concerned. My only issue is that it feels like the extremely low interest rates pushed a lot of capital into their area. Cap rates following interest rates makes sense so it's not really a problem; that's natural. <br /><br />But if feels like a lot of institutional capital has run into infrastructure/real estate in a chase for yields. Of course this is also true to some extent with the stock market, but the stock market is usually considered much higher risk so is not a substitute for fixed income investments whereas infrastructure/real estate sort of is (due to the stable cash flows). <br /><br />And I just feel like the magnitude of it is so big that I worry about what happens when interest rates normalize. There is plenty of cushion, I think, as there is in the stock market for interest rates to go up without it being too damaging to asset prices. <br /><br />But for me, it's just a vague feeling. <br /><br />Plus, I have never really been a big fan of real estate / infrastructure in general. But if I wanted exposure in those areas, I would definitely consider BAM. <br /><br />Sorry for not being very helpful... kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-2253774534587322002017-02-13T10:57:57.282-05:002017-02-13T10:57:57.282-05:00Hi,
I haven't followed too closely but I thi...Hi, <br /><br />I haven't followed too closely but I think BAM is great. My only reservation is where we are cyclically in the area. I think a lot of capital was driven into infrastructure/real estate looking for income due to the extremely low interest rates. So for me it's just been an issue of worrying about too much capital going into a certain area. <br /><br />Having said that, if anyone is going to do well in the area, BAM is certainly a great candidate to put up great numbers going forward whatever the environment (meaning, if things turn bad, they will probably do better than others). kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-70118946731365709802017-02-12T08:28:16.299-05:002017-02-12T08:28:16.299-05:00Just watched the speech "evolution of a value...Just watched the speech "evolution of a value investor" from Tom Gayner once again, while I am in the middle of analysing BAM in these days (your analysis being very insight- and helpful, thanks!".<br /><br />So I focussed on the "4 lenses" of Gayners investment process. (1. High Returns on Capital, 2. management with integrity and talent/ability, 3. reinvestment opportunities, 4. valuation). Focussing these lenses on BAM, you seem being positive on the points 2 and I guess 4, as the price has stayed constant, while FFOs have been rising.)<br /><br />If I got you right, than it is the reinvestment opportunities and the returns on capital - but the latter only for the next years - that leave questions, as the market seems being "too perfect" and it might or should deteriorate (.. your graph with the "cap rate spreads" above). And that - as for you I guess - left me with a stomach rumble. These points seem to be the key.<br /><br />Starting with lens 3 (which is the most important, following Gayner), it isn't that hard to me, getting to a conclusion. Flatt is a proven value investor and he is willing and able to recognize, what's best for the cash inflows - paying out dividends, buying back stock, investing into new real assets etc. You haven't written that much about that above - but still I guess, you'd agree. <br /><br />Reading your article here again and looking at the cap spreads it hit me, that even the problems with narrowing spreads in any case would only be a temporary problem. BAM has a proven record for a much longer timeframe and to me it doesn't seem, as if the change in spreads have had a meaningful impact on the overall picture over the last decades. It was just growing and compounding. If that's true (and I am not completely certain - it's just thinking loud about a thesis), that would let look BAM like having a worst case scenario of underperformance (deducted from your arguments above) in results only for some years. It wouldn't change the longterm outlook for real assets in general and for BAM regarding the 4-lens-test in particular. So looking at BAM from this standpoint, BAM would pass the most important lens number 3 of its 4-filter-test. Putting it the other way around: A bad outlook for a security for some years combined with a cheap valuation should be seen as an opportunity. Or do you think the outlook will be bad for decades to come?<br /><br />Thinking about why BAM has outperformed over decades regardless of spreads between bonds and real assets I guess that is for several reasons (repeating some points from above and adding new ones):<br />- Flatt is a value investor with a worldwide focus. Thus spreads in the US might shrink; but maybe at the same time in Greece, Africa, Brasil od India those might widen? Why should BAM loose it's ability to find assets with bigger returns, while it's growing and widening it's focus? The growth of inflows should - if anything - lead to presences in further countries, thus this moat of opportinities would widen.<br />- Thinking about cap rates alone, falling cap rates might not only have a negative impact. BAM positions part of its equity alongside with investors investments into real assets. Thus if the cap rates go down, the value of BAMs equity tied to real assets goes up and so does carried interst; so if the spread narrows only because of falling real asset rates, that would push earnings for some time.<br /><br />My conclusion is BAM is both able and integer. they have a great culture. They have been able giving high returns on capital and even if that wouldn't work for some years, I see no reason in your arguments above, why this should ultimately end. <br /><br />Would be interested to read, what you think about my thoughts, as I appreciate your thoughts and experience a lot.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-47517565860156657002017-02-01T12:40:20.589-05:002017-02-01T12:40:20.589-05:00https://bam.brookfield.com/en/events-and-presentat...https://bam.brookfield.com/en/events-and-presentations<br /><br />I read your article quite often and now compared the graphs you referred to above wit hnew numbers. That's impressive:<br />- Fee related earnings in 2019 are expected at around 1.150mn dollar as of june 2016 (above: 875mn dollar)<br />- fee bearing capital: Was expected to be below 100bn dollar as of today - stands at 108bn dollar<br /><br />And so on. And the price seems quite cheap - cheaper than when you wrote the article. In comic language: BAM!<br /><br />Would be quite interesting to read, what you think about the progress of BAM, Brooklyninvestor.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-65025249318119099652015-11-13T07:14:24.886-05:002015-11-13T07:14:24.886-05:00I don't know that there is anything new there,...I don't know that there is anything new there, and the comparison to Enron is a stretch. There can be investigations for all sorts of things, and often nothing much comes from them so I wouldn't worry too much about each little investigation here and there.<br /><br />As for the black-boxness of BAM, I'm not sure about that either. It's true that it's hard to come up with a value for the assets, but I think you pretty much know what the assets are. Berkshire Hathaway is a black box too as there is no way to really analyze the various parts of it, not to mention the insurance reserves. But we depend on the conservativeness of BRK and how they have performed in the past to reassure ourselves that the reserves are sufficient. <br /><br />JPM, a favorite of mine for a while, is a big, black box too. No way to evaluate the trillions in derivatives positions etc... But here too, you have to depend on the history of the management, culture etc... How have they done over time? And JPM has done really well in a real-life stress test in 2008-2009, and came out really well. <br /><br />So even if things are black boxes, there are ways to evaluate them.<br /><br />As for BAM, I don't know it as well as, say, BRK or JPM, but I lean towards trusting that management than not.kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-60011658039732051212015-11-13T01:41:16.460-05:002015-11-13T01:41:16.460-05:00What do you make of these new allegations?
http:/...What do you make of these new allegations?<br /><br />http://www.valuewalk.com/2015/11/brookfield-asset-management-sec/<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-14725287595552821502015-08-28T07:24:03.128-04:002015-08-28T07:24:03.128-04:00It is interesting. It is interesting. kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-47247288547787871992015-08-28T05:25:03.047-04:002015-08-28T05:25:03.047-04:00What do you think of Glenn Greenberg opening up a ...What do you think of Glenn Greenberg opening up a big stake in BAM?<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-29256806060947156012015-07-05T16:13:15.592-04:002015-07-05T16:13:15.592-04:00Abee -
I thought the paper you linked to was an ...Abee - <br /><br />I thought the paper you linked to was an interesting counterweight. But it was written in early 2013 and mostly seemed to cover the 2010 to 2012 period. Based on more recent history, I am having trouble buying some of the financing based arguments. But I do agree that the complex structure makes BAM much more difficult for amateurs like me to get a handle on. David R.http://creditforums.comnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-36958695336405372182015-06-24T23:08:11.776-04:002015-06-24T23:08:11.776-04:00abee, what's the criticism on the CEO?abee, what's the criticism on the CEO?villainxnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-31735675909457159452015-06-24T16:23:36.004-04:002015-06-24T16:23:36.004-04:00Yeah, I read all the sirf stuff and I didn't s...Yeah, I read all the sirf stuff and I didn't see anything. It seemed like they were reaching a little bit to make a bear case, but it didn't really seem like there were any problems. You can take anything and present them in a positive or negative way. I think one of the arguments was that BAM is a pyramid, like the trusts in the 1920's, but that, to me, is way, way off. <br /><br />And yes, BX and KKR and others have the same sort of economics as BAM. BX is the gold standard in this area and I have always wanted to make a post about BX here, but never got around to it. APO is also pretty interesting; I may make a post about them soon. <br /><br />kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-83197050391023920942015-06-24T16:19:28.662-04:002015-06-24T16:19:28.662-04:00Hi, I think it's pretty straight forward; bala...Hi, I think it's pretty straight forward; balance sheet value plus gp value. But the question is what you think the gp is worth. Is it worth 20x? 15x? I don't think it's particularly overvalued or undervalued. But if they grow as they say, it can perform pretty well.... kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-75235476666605872072015-06-24T16:01:15.720-04:002015-06-24T16:01:15.720-04:00Nice article. I have never really looked in depth ...Nice article. I have never really looked in depth into BAM but I know it can be quite a controversial stock. For example I know a few ppl that view their financials with suspicion. http://sirf-online.org/2013/03/11/paper-world-of-brookfield-asset-management/ and not everyone is in love with their CEO.<br /><br />Asset Management companies are a great business and the same case for GP earnings can be made for BX, KKR and other, FYI. <br /><br />On the ground BAM has been a shrewd buyer and seller of assets so I have to give them that but I currently have no idea about the stock. I do know that if they simplify the B/S and continue to focus on being a pure play AM, their multiple and stock will probably do very well. <br /><br />Thanks for the Lou Simpson tip <br /><br />abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-14776976299871743382015-06-24T09:54:56.184-04:002015-06-24T09:54:56.184-04:00Hi kk,
How do you think about valuation? Is the ...Hi kk, <br /><br />How do you think about valuation? Is the fair value about $29 as you cited, or perhaps you think it's still not expensive considering other factors? <br /><br />Thanks for your thoughts. <br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-34813492398417769422015-06-22T19:45:07.612-04:002015-06-22T19:45:07.612-04:00I am still thinking about BAM as an investment. I...I am still thinking about BAM as an investment. I have been a fan of theirs (and BIP) for 5 or so years now. To loosen up language a bit, I would say BAM is playing the same game as a lot of sponsors of MLPs out there, except MLPs are overwhelmingly tied to the oil and gas sector (and hence the selloff in crude and related capex decisions). BAM on the other hand is largely focused on global real estate, but also has its hands in renewable energy and general infrastructure investments. <br /><br />While I am quite unhappy with market valuation, sluggish growth, negative real interest rates, etc. it has occurred to me that BAM may flourish in exactly this sort of environment -- which has already persisted much longer than I thought or what any of the market forecasts have indicated. It would seem to fit in nicely from a risk / reward perspective with my current "i don't like the market or the economy" portfolio. <br /><br />One other thought: while I do like management and its track record, the scale of the projects they are undertaking is quite large. Execution risk does remain an issue.<br />Dnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-60573237490759700102015-06-21T09:24:10.463-04:002015-06-21T09:24:10.463-04:00Oh yeah, and in the slides, BAM says that they are...Oh yeah, and in the slides, BAM says that they are globally diversified (and by asset class) so they have more opportunities. If the U.S. is fully priced, they can go elsewhere. I think they said emerging markets and Europe is where opportunities are now. There is always some place having trouble, and that's where they will go to find assets. <br /><br />This is very different from those guys that focus only on NYC commercial real estate, for example... kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-89422711886154499542015-06-21T09:21:32.045-04:002015-06-21T09:21:32.045-04:00Well, it's good to be aware of where we are in...Well, it's good to be aware of where we are in the cycle, and we are definitely not at the bottom of one in this asset class. But one thing about BAM is that owning BAM is not the same as owning a static portfolio of real assets. They are very active; they will sell 'mature' properties and roll into developing ones (forgot what terms they use). So they are not interested, really, in owning a trophy asset and holding onto it for 100 years or anything like that. They will sell those at full price and buy something that needs work, or something that is sold by a distressed seller etc...<br /><br />Plus if their AUM keeps growing, their fee income will keep growing. <br /><br />And then even if you have a dip, like Munger always says, the strong ones will use that dip to get bigger and better. And BAM is pretty active and has many levers to get bigger if we hit hard times. <br /><br />So in that sense, it's pretty interesting. You have to keep in mind, though, that even if BAM does really well in a downturn, the stock price will get hit hard just like it did in the crisis. That's inevitable and something people have to keep in mind before getting into this thing, or getting into it too big... (well, even BRK went down 50%!) <br />kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-6784606298916076662015-06-20T10:05:36.817-04:002015-06-20T10:05:36.817-04:00thanks for the writeup - i realize that this blog ...thanks for the writeup - i realize that this blog is not about market timing etc, and that BAM has proven they can adapt well, but it may be worth mentioning that on a recent conference call Sam Zell made comments along the lines of that at this point in the cycle, he'd rather be a seller of anything commercial than a buyer. maybe not important b/c as you said w/ the munger/simpson analogy great minds can disagree on the same investment, but something worth thinking about!Anonymousnoreply@blogger.com