Not sure if this is the right place, but I trust the investors on this board so I am asking the question here.
I have owned Brookfield Asset Management for a few years now. It has always felt like a Berkshire type investment company with very smart guys allocating capital and creating investments in many different areas of the market and they have a great track record.
Up until a short time ago, the ticker was BAM, but recently they spun off the Asset Management portion of the business separate from the rest of the company. This rolled out company is now BAM, with the remainder of the investment company under the BN ticker. They have done this before in the past but it usually is a rollout of high dividend assets and keeps the “growth” portion under the main company.
For me, I want to own these smart money managers so I have always stayed with BAM. This time, I have not sold either and am trying to decide if I should keep BN or seek and add to BAM, or keep both, or maybe even staying with BN (and selling BAM).
Anybody else in here own BAM? If so what do you think of the two companies now and why?
Because of the spinoff I also own both BAM and BN.
Even after reading a lot on the two companies I’m still not sure how this will play out so I hold both for now.
Usually I regret selling companies(or sell the wrong one) so I’ll just see how it goes.
One thing to understand at this point is that BN holds 75% of new BAM’s stock, so a huge portion of its value, at least for now, is tied to BAM. The new BAM is effectively becoming a yield vehicle, paying out 90% of its distributable cash flow. The move may help the market award a higher multiple on that stock, which helps not only shareholders of new BAM, but also shareholders of BN. The move should help the market price the new BAM more favorably since it’s able to invest more directly in it.
Thanks Jim. If I did the math right that means about 17% of BN is BAM stock, but I imagine they will sell off some of that as time goes on.
So it seems like hanging onto BAM at least until some earnings and dividends get announced is a good idea then. I wonder what type of yield they expect to have?
I have always liked asset managers just because their free cash flows are usually good as new funds don’t require much in the way of new expenses.
