Brookfield Asset Management has shifted its head office to New York from Toronto to position it for broader equity index inclusion — particularly in the U.S. — and also announced changes to its corporate structure.
The about $1 trillion money manager and parent company Brookfield Corp. said late on Oct. 31 that broader index inclusion is expected to lead to increased ownership by passive institutional investors. The move will also increase BAM’s visibility among the investors that benchmark to such indexes. In a presentation at its investor day — held on Sept. 10 in New York — the firm signposted the changes as “examples of potential enhancements.”
BAM and Brookfield Corp. have also agreed to swap the parent company’s currently privately held 73% stake in the money manager for the equivalent in publicly traded shares. That change simplifies the corporate structure of the money management business, makes it easier for investors to understand and value the asset and will also allow BAM’s market capitalization to “accurately reflect the total value of the asset management business,” the news release said.
The market capitalization would be about $85 billion based on the current stock price, compared with the current market capitalization of about $23 billon — reflecting only 27% of the business, Brookfield said.
The firm has set a special meeting for shareholders to vote on the arrangement on Dec. 10. If approved, the change is expected to take effect early next year, subject also to court approval and approvals by the New York Stock Exchange and Toronto Stock Exchange. The arrangement will not result in any changes to operations of strategic plans of the firm, and will also not affect the tax treatment of dividends.
BAM runs assets across renewable power and transition, infrastructure, private equity, real estate and credit strategies. This week, the firm said it inked deals with Saudi Arabia's $925 billion sovereign wealth fund Public Investment Fund, Riyadh, and the kingdom’s about $320 billion public pension fund Hassana Investment Co. to anchor a new private equity fund.
