Brett Girard, CPA, CA, CFABrookfield Asset ManagementBAM.TOCOMMENTFeb 12, 2024

BAM is a play on lower interest rates, but interest rates are higher now. A play on private credit and private equity, which people are taking a dimmer view on. Probably has the most torque to a reversal in those narratives.

He prefers the parent, BN. Very soberly priced. Very diversified, benefits from the whole Brookfield story. The safer bet, but both good buys here.

Yield on BAM is 3.3%, but stock's very expensive, and is now coming down. BN's yield is 0.5%, so that won't do it for you. BEPC's yield is 3.9% but, again, it's so expensive; even worse, balance sheet has slipped over last 3-4 years.

He doesn't see anything for this investor.

With its complex structure, difficult for general analysts to accurately declare its value. Just because it dips 10%, still have to be careful. The space operates in multi-year cycles. Not recession-proof. 

Quality franchise and track record. If you don't own it, buy a bit here; add a bit more if it goes down.

Q3 was intact. Very big infrastructure fundraising for 2026. Steady as she goes at 24x PE for 16% growth, not bad. Asset managers had a rough time recently. Not first place he'd put new $$ for risk/reward, but a very reasonable hold. Yield just over 4%.

Both are really good choices, but BN is probably the better way to go.

Can be a staple Canadian company in portfolios, set it and forget it. Really good management structure. Big move off April lows, hasn't done a lot in the last year, in a sideways trading pattern. Nothing about this name scares him here. Perhaps 15-20% upside from here. $100 target seems aggressive to him.

Doesn't think the pullback is anything specific to Brookfield. Similar charts for KKR and BX. Headline worries about private credit and private debt. Brookfield's not really involved in the worrisome part of the private equity business. They deal with high-quality institutional investors. Guiding for 15% dividend growth. Good for income seekers.

He own BN-T instead; half of their business is BAM. BAM is the partner of choice for large construction projects like nuclear and he likes that, but he dislikes the lack of opacity. He has taken some shares off the table. It's priced for perfection.

Stock's been swinging around a lot. Since the spinout, now a pure asset manager and not a capital-heavy owner of assets. Private credit, infrastructure, and real assets are exactly where institutions want exposure as public markets stay volatile. Future upside relies on fundraising momentum, not financial engineering.

In that space, she owns BN and BLK instead.

He owns the parent, BN, instead. Still, quite likes BAM. Has more of a dividend than BN, and BAM is more of a pure play on the underlying business. Up 143% in past 5 years. Should be able to double in next 5 years, and you get the dividend as well.

Wind at its back with infrastructure. Great fundraising. Everything Brookfield touches seems to turn to gold. Good investment. See his Top Picks.

First, consider your tax consequences. Both are risk-on assets. In general, he's inclined in this direction. Today, a more attractive opportunity than the banks. Basically the Brookfield thesis, but with a more defined fee stream and dividend yield. Attractive for a Canadian-constrained portfolio.

Interesting, but APO is a better alternative asset manager. APO has more levers, depth, faster growth, and cheaper price. 

Very well run. Owns this in his firm's growth mandate. Huge capital resources from the parent company. JV with CCO and US government is a massive $80B, huge runway. Lots of smaller companies are wannabees, but there's only one Brookfield. A nice place to invest.

Good question. The asset management piece is narrower than the entire Brookfield. It's a great, well-run company, so either one is fine. Overall, parent company might be a bit better longer term. But from time to time the asset management business will shine because of specific things going on in its universe.

As to which is better, it's a coin flip at any point in time.

Third-party wealth and asset management. Huge part of the BN stable of subsidiaries. BN owns part of this one, so his firm owns it indirectly by owning BN. No quarrel with owning.

Chart shows a bit of a basing pattern. Has gone sideways this year. Lets you stand on the shoulders of people who can see a bit further in this world and are good at picking up investments. Core holding, buy today. He also owns BN. See his Top Picks.

Sensational performer since it was spun out. Has had a meaningful re-rating, partially resulting from controversial decision to be domiciled in the US; this allows them to be included in large US indices, benefitting from passive ETF buying. Will do well, but likely won't outpace the parent BN to the same extent as the last number of years.