Published On: Sun, Nov 3rd, 2013

Brookfield Asset Management In The News With Three Major Transactions Totalling $8.9 Billion

Brookfield Asset Management Inc. is a Canadian publicly listed asset management company. Brookfield manages a global portfolio valued at over US$180 billion, invested on behalf of institutional and corporate clients. The firm’s assets are concentrated in property, renewable power generation, infrastructure and private equity.

Brookfield Asset Management is the successor name to its previous corporate identity Brascan Ltd, and the company was founded originally in the 1890s to build, own and operate electrical infrastructure and transportation in Brazil.

Today it is a global conglomerate and operates through a number of major public subsidiaries include Brookfield Property Partners, Brookfield Office Properties, based in New York, Brookfield Infrastructure Partners, Brookfield Renewable Energy Partners, Brookfield Canada Office Properties, Brookfield Residential Properties and Brookfield Real Estate Services.

At one point in its history control of the company was taken over by Edper Investments, a vehicle for the interests of Peter Bronfman, the Toronto cousin of Charles and Edgar Bronfman and who died in 1996. In subsequent years control passed to the management of Edper under the leadership of Jack Cockwell who is until today Chairman of Brookfield in its current form.

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World Financial Center                                                                                                 Jack Cockwell

Those who live in New York will certainly recognize Brookfield’s flagship development there, the vast Cesar Pelli designed Brookfield Place, across the street from World Trade Center which was formerly known as the World Financial Center. Brookfield acquired the complex a few years ago in the fallout from the bankruptcy of Olympia and York who had developed it originally.

For a company so large on any given day there is likely to be something going on, and so it was last week with three major deals being announced

General Growth Properties US$1.4 Billion Transaction

First Brookfield Property Partners agreed to pay US$1.4 billion to acquire shares and warrants in General Growth Properties Inc. This transaction will increase its stake to 32% in America’s second largest holder of shopping malls, with 128 million square feet of leasable space in 123 regional shopping centres represented in 41 states nation wide.

“This transaction provides Brookfield Property Partners with the opportunity to increase its exposure to one of the highest-quality shopping center portfolios in the world at an attractive valuation, ” Richard Clark, CEO of Brookfield Property, said on Friday in a statement.

Brookfield Property, spun off this year from its Brookfield parent and based in Bermuda, is consolidating its holdings. Recently it bid to buy up all the shares in Brookfield’s office unit that it didn’t already own, taking the unit at least temporarily out of direct public gaze. The consolidation would form a landlord with 330 million square feet of office, retail and industrial space, according to a statement made by Brookfield at the time of the offer.

To pay for the General Growth holding US$ $435 million of new equity in Brookfield Property will be issued to the Investment Corporation of Dubai and other institutional investors. Most of the balance will be taken up by Brookfield itself. Brookfield had invested originally in General Growth Properties in 2010, injecting a large dose of equity that enabled it to emerge from its previous bankruptcy.

Shui On Land” US$500 Million Deal

Also last week Chinese developer Shui On Land, the developer controlled by billionaire Vincent Lo, said Brookfield Property partners has agreed to invest US$500 million into its China Xintiandi entertainment complex unit in Shanghai in return for convertible perpetual securities of US$500 million and 415 million warrants to be issued by Shui On exercisable at HK$2.85 per share, according to a statement the company has made to the Hong Kong stock exchange.

Brookfield may invest as much as $250 million in addition within 24 months after the completion of the transaction, it said. Xintiandi, which means New Heaven and Earth in Chinese, is a residential and commercial complex in Shanghai comprised of renovated houses from the 19th and 20th centuries. The project attracted many local and international retailers and restaurants.

Brookfield US$7 Billion Infrastructure Fund

Finally, Brookfield Asset Management said last week it had closed on Brookfield Infrastructure Fund II (BIF II) at US$7 billion, including US$2.8 billion coming from Brookfield Asset Management itself. The fund’s initial target was US$5 billion.

Operating on a global scale, BIF II will follow the strategy of the $2.7-billion Brookfield Americas Infrastructure Fund LP, which closed in 2010. It will focus on transportation, renewable power, utilities and energy assets in North and South America, Europe and Australasia, owning and operating the assets over the long term.

BIF II has more than 60 investors from across the institutional spectrum, ranging from sovereign wealth funds to public and private pension plans. Half of the investors are first-timers to Brookfield funds.

This new second infrastructure fund is among the largest ever raised in the space.

Brookfield Leadership

Brookfield has a deep bench of talented managers in all parts of the group, led by Chairman of the Board Jack Cockwell and CEO Bruce Flatt.

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