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Brookfield Corporation

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Brookfield Asset Management Inc.
Company typePublic
TSX: BAM.A
NYSE: BAM
Euronext: BAMA
S&P/TSX 60 component
IndustryFinancial services
Founded1899; 125 years ago (1899)
HeadquartersBrookfield Place,
Toronto, Ontario
,
Canada
Area served
Worldwide
Key people
Bruce Flatt (CEO)
ServicesPrivate Equity
RevenueDecrease US$63 billion (2020)
Decrease US$707 million (2020)
AUMIncrease US$626 billion (Q2 2021)
Total equityIncrease US$122 billion (2020)
Number of employees
150,000 operating employees
1,000 investment professionals
Subsidiaries
Websitewww.brookfield.com

Brookfield Asset Management Inc. is one of the world’s largest alternative asset management company with US$626bn of AUM. It focuses on direct control investments in real estate, renewable power, infrastructure, credit and private equity. The Company invests in distressed securities through Oaktree Capital, which it bought in 2019. The firm also launched a reinsurance business in 2020. Brookfield’s headquarters is located in Toronto, and it also has corporate offices in New York City, London, São Paulo, Mumbai, Shanghai, Dubai, and Sydney.

History

See also: Edper Investments

The company was founded in 1899, as the São Paulo Tramway, Light and Power Company by William Mackenzie and Frederick Stark Pearson. Operating as in construction and management of electricity and transport infrastructure in Brazil.

In 1904, the Rio de Janeiro Tramway, Light and Power Company was founded by Mackenzie's group.[1]

In 1912, Brazilian Traction, Light and Power Company was incorporated in Toronto as a public company to develop hydro-electric power operations and other utility services in Brazil, becoming a holding company for São Paulo Tramway Co. and Rio de Janeiro Tramway Co.[2]

In 1916, Great Lakes Power Company was incorporated to provide hydro-electric power in Sault Ste. Marie and the Algoma District in Ontario.[3]

In 1966, Brazilian Traction, Light and Power Company changed its name to Brazilian Light and Power Company, and again in 1969, changed its name to Brascan Limited.[2] Brascan is a portmanteau of "Brasil" and "Canada".[citation needed]

In 1979, the company's Brazilian assets were transferred to Brazilian ownership (Eletropaulo and Light S.A.), the company meanwhile having diversified to other areas.[2] The company provided electricity and tram services in São Paulo and Rio de Janeiro, and the Brazilian side after a later restructuring still operates as Light S.A., short for Brazilian Traction, Light and Power Co. Ltd.[4]

In 2005, after 37 years, Brascan Corp. was renamed to Brookfield Asset Management Inc.[5]

By 2018, Brookfield's major public subsidiaries included Brookfield Infrastructure Partners, Brookfield Renewable Partners, Brookfield Property Partners, and Brookfield Business Partners.[6] In August 2018, Brookfield purchased Westinghouse Electric Company, a manufacturer of large nuclear reactors, out of bankruptcy for $4.6 billion.[7]

On March 13, 2019, Brookfield Asset Management announced that it had agreed to buy most of Oaktree Capital Management for about $4.7 billion, creating one of the world's largest alternative money managers.[8] On 31 July 2019 the sale of Vodafone New Zealand Limited to a consortium comprising Infratil Limited and Brookfield Asset Management Inc. was settled.[9]

In a deal in October 2019, Brookfiled bought The Leela Palaces, Hotels and Resorts, an Indian luxury hotel chain located in New Delhi, Bengaluru, Chennai, Udaipur, in a US$530 million settlement, marking the entry of Brookfield in India’s hospitality market.[10][11][12]

In 2020, in response to the COVID-19 pandemic, Brookfield's CEO, Bruce Flatt, assessed that the economic fallout was "much more manageable" than previous meltdowns.[13]

In October 2020, Mark Carney departing Governor of the Bank of England, became a vice-chair of Brookfield, leading the firm's environmental, social and governance (ESG) and impact fund investment strategy.[14][15]

Lawsuits and controversy

In November 2008, in a process supervised by the Alberta courts, PricewaterhouseCoopers (PwC) was appointed receiver of a separate public company, Birch Mountain Resources, after Birch Mountain had defaulted on its debts. Birch Mountain's assets of $50 million were transferred to Tricap Partners Ltd, which operates under the Hammerstone Corporation, a subsidiary of Brookfield Special Situations Group.[16] In September 2010, a group called Birch Mountain Shareholders for Justice filed a lawsuit with the Superior Court of Justice in Ontario, Canada, against Brookfield Asset Management challenging this acquisition and transfer of assets.[17] After five years of litigation the case was dismissed.[18] In May 2015, the plaintiffs filed a notice of appeal[19] which was also dismissed.[20]

In 2009, Brookfield sued financial and insurance giant American International Group (AIG) in a Manhattan federal court, alleging that AIG's collapse caused default provisions in interest-rate swaps. The suit stemmed from AIG's acceptance of a $182.3-billion bailout package from the federal government. The lawsuit backfired and the litigation ended with Brookfield agreeing to pay $905 million to settle the lawsuit.[21]

In 2013, a Brazilian prosecutor filed charges against the company's local division, alleging the company paid bribes to local officials, which is also a violation of U.S. federal criminal law. The bribes were allegedly used to pave the way for Brookfield to build a shopping center in São Paulo. The U.S. Securities and Exchange Commission also opened a formal investigation into the company about the bribery charges. The company denied the charges. The U.S. Department of Justice also opened a criminal investigation into the company regarding these allegations, and did not end up making any arrests.[22][23] According to the Stanford Law School Foreign Corrupt Practices Act Clearinghouse, which studied the case, the investigation and filing of charges was initiated by a whistleblower and anonymous tip. The company disclosed the investigations on several 6-K forms between 2013 and 2015.[24]

In August 2018, Brookfield signed a 99-year lease on Jared Kushner's financially troubled 666 Fifth Avenue skyscraper. The deal raised suspicions that the Qatar Investment Authority, a major investor in Brookfield, was attempting to influence the Trump administration.[25][26]

In November 2020, it was revealed that Brookfield might be partnering with telecommunications giant Rogers Communications to introduce condominiums to the site of the Rogers Centre, halving the space available for sport. The original multi-purpose stadium and its land cost $570 million, significantly funded by taxpayers, yet was sold 15 years later to Rogers for just $25 million.[27]

In February 2021, Mark Carney, Vice Chairman and Head of Impact Investing and ex Governor of the Bank of England, had to retract an earlier claim that the $600bn Brookfield Asset Management portfolio was carbon neutral. He based his claim on the fact that Brookfield has a large renewable energy portfolio and "all the avoided emissions that come with that”. The claim was criticized as accounting tricks as avoided emissions do not counteract the emissions from investments in coal and other fossil fuels responsible for a carbon footprint of about 5,200 metric tons of carbon dioxide.[28][29]

Finances

For the fiscal year 2018, Brookfield Asset Management reported earnings of US$3.584 billion, with an annual revenue of US$56.771 billion, an increase of 39.2% over the previous fiscal cycle. Brookfield Asset Management's shares traded at over $38 per share, and its market capitalization was valued at over US$40.8 billion in November 2018.[30]

Year Revenue
in mil. USD$ 		Net income
in mil. USD$ 		Total Assets
in mil. USD$ 		Price per Share
in USD$
2005 5,256 1,662 26,058 7.61
2006 6,897 1,170 40,708 12.17
2007 9,343 787 55,597 16.74
2008 12,868 649 53,611 13.22
2009 12,082 454 61,902 9.33
2010 13,623 3,195 78,131 13.76
2011 15,921 3,674 91,030 16.72
2012 18,697 2,747 108,644 18.69
2013 20,830 3,844 112,745 22.42
2014 18,364 2,956 129,480 27.22
2015 19,913 2,207 139,514 32.47
2016 24,411 1,518 159,826 32.10
2017 40,786 1,317 192,720 38.17
2018[31] 56,771 3,584 256,281

See also

References

  1. ^ Regehr, Theodore. "Mackenzie, Sir William". Dictionary of Canadian Biography. Retrieved 8 December 2013.
  2. ^ a b c "Brascan Corporation History". International Directory of Company Histories. Retrieved 8 December 2013.
  3. ^ "Industries: Business History of Utilities". Business History. Retrieved 8 December 2013.
  4. ^ "Brazilian Traction Light and Power Company Ltd". Bloomberg L.P. Archived from the original on December 5, 2013. Retrieved 4 December 2013.
  5. ^ Won, Shirley (2005-09-16). "What's in a name? Plenty if it's Brascan". Globe and Mail. Archived from the original on 2016-04-22. Retrieved 2020-04-16.
  6. ^ Brewer, Reuben Gregg (16 September 2018). "Better Buy: Brookfield Infrastructure Partners L.P. vs. Brookfield Asset Management Inc". The Motley Fool. Retrieved 1 October 2018.
  7. ^ Deveau, Scott (27 March 2019). "Brookfield Shuns 'Eat-What-You-Kill' in Private Equity Build-Out". Bloomberg. Archived from the original on 29 March 2019.
  8. ^ "Brookfield to Acquire 62% of Oaktree Capital Management". NASDAQ.com. Retrieved 2019-03-14.
  9. ^ https://www.bellgully.com/about-us/firm-news/vodafone-group-plc-settles-vodafone-new-zealand-sale-to-consortium
  10. ^ "Hotel Leelaventure Limited completes sale transaction with Brookfield". www.theleela.com. Retrieved 2021-08-24.
  11. ^ Sapam, Bidya (2019-10-22). "Hotel Leelaventure completes sale of assets to Brookfield". mint. Retrieved 2021-08-24.
  12. ^ "Most beautiful 5-star hotel in Udaipur, Leela gets sold, Brookfield purchases for 2.13 billion". News Track. 2019-10-26. Retrieved 2021-08-24.
  13. ^ "Brookfield CEO sees coronavirus market meltdown as 'manageable' | Financial Post". 2020-03-23. Retrieved 2020-05-12.
  14. ^ "Mark Carney, ex-head of Bank of Canada and Bank of England, joins Brookfield Asset Management". CBC News.
  15. ^ "Former central banker Mark Carney joins Brookfield to lead environmental, socially driven investing". Retrieved 2021-01-20.
  16. ^ "Birch Mountain names receiver" Archived 11 April 2014 at the Wayback Machine,Calgary Herald, Canada, 7 November 2008 Retrieved 22 July 2012
  17. ^ Gray, Jeff. "Squeezed-out Birch Mountain shareholders take on Brookfield",The Globe and Mail, Canada, 15 November 2011 Retrieved 22 July 2012
  18. ^ McDonald v Brookfield Asset Management Inc Archived 23 September 2015 at the Wayback Machine, 2015 ABQB 281
  19. ^ "In the Court of Appeal of Alberta/Citation: McDonald v Brookfield Asset Management Inc., 2016 ABCA 375" (PDF). 5 December 2016. Retrieved 1 June 2017.
  20. ^ "Case Developments" (PDF). Brookfield Class Action Website. Retrieved 1 June 2015.
  21. ^ "AIG, Brookfield End Litigation Over Financial Crisis". Insurance Journal. 2013-09-24. Retrieved 2020-05-28.
  22. ^ Trevisani, Craig Karmin And Paulo (2013-03-08). "Brookfield Brazil Unit Draws SEC Scrutiny". Wall Street Journal. ISSN 0099-9660. Retrieved 2020-05-12.
  23. ^ "Brookfield's Brazil mall operator charged with bribery". Reuters. 2013-02-05. Retrieved 2020-05-12.
  24. ^ "Foreign Corrupt Practices Act: Investigations Dataset". fcpa.stanford.edu. Retrieved 2020-05-12.
  25. ^ Levin, Bess (12 February 2019). "Qatar Shocked, Shocked to Learn It Accidentally Bailed out Jared Kushner". Vanity Fair. Retrieved 21 January 2020.
  26. ^ "Brookfield: inside the $500bn secretive investment firm". Financial Times. Retrieved 2020-05-12.
  27. ^ Willis, Andrew (27 November 2020). "Rogers seeks to build new ballpark for the Toronto Blue Jays". The Globe and Mail. p. A1.
  28. ^ "Mark Carney Walks Back Brookfield Net-Zero Claim After Criticism". Bloomberg.com. 25 February 2021. Retrieved 2021-03-04.
  29. ^ Simon Lewis (3 March 2021). "The climate crisis can't be solved by carbon accounting tricks". the Guardian. Retrieved 2021-03-04.
  30. ^ "Reports & Filings". bam.brookfield.com. Retrieved 2018-11-07.
  31. ^ "Brookfield Asset Management". Fortune. Retrieved 2019-08-02.
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