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Brookfield Decides to Spin Off Its Asset-Management UnitLayan Odeh and Scott Deveau
Tue, May 10, 2022,
(Bloomberg) -- Brookfield Asset Management Inc. plans to spin off its asset-management business, according to a person familiar with the matter -- a step designed to simplify the organizational structure at one of the world’s largest alternative investment firms.
The new publicly traded entity will control Brookfield’s fee-generating assets, such as real estate, infrastructure, credit, private equity and renewable energy. The unit’s assets under management were $364 billion as of Dec. 31.
The move will make the Toronto-based firm “asset-light,” a model preferred by investors, as it gives it the option to buy into the asset management unit without taking a piece of its skyscrapers and gas pipelines. Earlier this year, Chief Executive Officer Bruce Flatt told investors that the unit could have an equity value of as much as $100 billion.
A spokesperson for Brookfield declined to comment. Insider reported on the plans earlier.
Flatt said in February that the firm was weighing such a spinoff.
“Its growth path on its own is very compelling,” Flatt said in an investor letter at the time. “Pure-play managers have been more in vogue across global markets because they are easier to value and have attracted higher multiples.”
Brookfield, with $690 billion of assets under management, owns stakes in all its other publicly listed entities. Its balance sheet includes London’s Canary Wharf, One Manhattan West in New York, as well as numerous shopping malls, among other assets.
Brookfield has a history of building businesses and then listing them after they gain scale. Last year, for example, it spun off its reinsurance arm, Brookfield Asset Management Reinsurance Partners Ltd., through a special dividend to shareholders. It did the same thing with its private equity unit, Brookfield Business Partners, and its renewable energy operations, Brookfield Renewable Partners, among others.
Shares of Brookfield rose 1.2% at 1:02 p.m. in Toronto, paring their decline this year to 20%.
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