Brookfield Corporation
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| Company type | Public |
|---|---|
| NYSE: BAM TSX: BAM.A | |
| Industry | Real estate |
| Founded | 1899 |
| Founder | William Mackenzie, Frederick Stark Pearson |
| Headquarters | , |
Area served | Global |
Key people | Frank J. McKenna (Chairman of the Board) J. Bruce Flatt (CEO) |
| Services | Financial services |
| Revenue |  $15.921 bn (2010) |
| $3,345.00 mn (2011) | |
| $1,957.00 mn (2011) | |
| Total assets | $151,720 bn (2011) |
| Total equity | $26,098 bn (2011) |
Number of employees | 23,000[1] |
| Subsidiaries | Brookfield Renewable Energy Partners Brookfield Incorporações Brookfield Office Properties Inc. Brookfield Infrastructure Partners LP |
| Website | www.brookfield.com |
Brookfield Asset Management Inc. is a Canadian real estate company that manages a global portfolio of assets valued at over $150 billion, and invested on behalf of clients. The firm's assets are concentrated in real estate, renewable power generation, infrastructure and private equity.
The Brookfield name was not widely known outside of investing circles until more recently when it came into the news mainstream as owners of Zuccotti Park, the home to the Occupy Wall Street movement.
The company was originally founded in the 1890s as a builder and operator of electricity and transport infrastructure in Brazil; the company's earlier name of "Brascan" reflected this history ("Brasil" + "Canada"). The company provided electricity and tram services in São Paulo and Rio de Janeiro, and was known as "The Light," short for Brazilian Traction, Light and Power Co. Ltd. Over the past century, the company expanded steadily, and is now an owner and operator of $150 billion of real assets, with 23,000 operatign employees in over 100 offices. Brookfield's public subsidiairies include Brookfield Office Properties, based in New York, Brookfield Infrastructure Partners, Brookfield Renewable Power, Brookfield Canada Office Properties, Brookfield Residential Properties and Brookfield Real Estate Services.
Assets
- Property: $81 billion
- Power: $18 billion
- Infrastructure: $20 billion
- Public Securities: $21 billion
- Private Equity: $26 billion
- Development Activities: $7 billion
The company's asset management offerings include alternative-type investments, structured financial products, traditional fixed income and equities and finite-risk reinsurance. Its financial services group, Brookfield Financial, provides advisory services, acquisition financing, bridge loans and project financing. In addition, Brookfield Asset Management owns a significant stake in a real estate services company offering home relocations, property appraisals, move-in services and home transaction closing services, and capital market services, including financial advisory, securities underwriting, and property brokerage. Brookfield Asset Management invests through public, listed companies and through private funds. The company's institutional clients mainly include governments, sovereign wealth funds, pension plans, institutions, corporations and high-net-worth individuals.[2]
The company's corporate headquarters are located in Toronto and New York City.
Brookfield has $23 billion of assets under management in Canada, $90 billion invested in the United States, $16 billion invested in Australia and Asia, $18 billion in South America and $5 billion in Europe and the Middle East.
Its major investments presently include the World Financial Center in New York, First Canadian Place in Toronto, Brookfield Infrastructure Partners, Transelec and Brookfield Renewable Energy Partners.
Brookfield's infrastructure assets include a major Australian railway and coal terminal, and several European ports.
It formerly controlled such major companies as Noranda Inc., Falconbridge Limited, John Labatt, Royal Trust, Macmillan Bloedel and London Life.
History
- 1899: The São Paulo Railway, Light and Power Company was founded by William Mackenzie, Frederick Stark Pearson and others (the word "Railway" would later be changed to "Tramway")
- 1904: The Rio de Janeiro Tramway, Light and Power Company was founded by Mackenzie's group
- 1912: Brazilian Traction, Light and Power Company Limited is incorporated in Toronto as a public company to develop hydro-electric power operations and other utility services in Brazil, becoming a holding company for the two previous companies
- 1916: Great Lakes Power Company Limited is incorporated to provide hydro-electric power in Sault Ste. Marie and the Algoma District in Ontario
- 1966: Brazilian Traction, Light and Power Company Limited changes its name to Brazilian Light and Power Company Limited
- 1969: Brazilian Light and Power Company Limited changes its name to Brascan Limited (BL)
- 1979: the company's Brazilian assets are transferred to Brazilian ownership (e.g., Eletropaulo and Light S.A.), the company meanwhile having diversified to other areas
Recent history
In 2005, the company changed its name to Brookfield Asset Management (BAM). As part of a number of purchases in 2007 Brookfield acquired Multiplex Group construction company for $6.1 billion and renamed it Brookfield Multiplex, and also acquired Longview Fibre Company, expanding its timberlands platform to 2.5 million acres (10,000 km²). In 2008, Brookfield Infrastructure Partners was spun out of the holding company, and subsequently merged with Australia's Prime Infrastructure in a $1 billion transaction. In 2010, Brookfield Renewable Enegy Partners was launched as an exchange-listed global renewable power company, with a portfolio of hydroelectric and wind power plants in Canada, the United States and Brazil. Brookfield led a successful restructuring of General Growth Properties, the second largest owner of U.S. shopping malls, in 2010. In 2011, the company increased its share of General Growth Properties to 38%.[3] In 2012, the company announced plans to spin out its global property holdings to shareholders in Brookfield Asset Management by distributing units in a new entity, Brookfield Property Partners.[4] In June 2012, Brookfield Office Properties announced plans to acquire a portfolio of three office buildings and a development site in the City of London for $829 million from Hammerson Inc., a British real estate company focused on retail developments. In July, 2012, Brookfield and Spanish toll road operator Abertis announced plans to acquire a toll road network in Brazil. At the same time, Brookfield acquired full control of toll road assets in Chile.
Brookfield Class Action
The Brookfield class action lawsuit arose out of a Brookfield affiliate allegedly using it's $31.5 million convertible debenture position issued in December 2007 to transfer the assets from Birch Mountain Resources.[5] PricewaterhouseCoopers(PwC) was appointed receiver of Birch Mountain Resources in November 2008 at the request of Tricap Partners Ltd., after Birch Mountain had defaulted on it's debts. The assets included nearly 1 billion tonnes of limestone reserves, along with permits and leases for limestone and other minerals covering over 700,000 additional acres. The assets were transferred to Tricap Partners Ltd, now operating under the Hammerstone Corporation, a subsidiary of Brookfield Special Situations Group, for approximately $50 million. [6] The assets from the Hammerstone Project were valued at over $1.6 Billion dollars in an independent NI 43-101 Technical Report conducted by AMEC in 2006. The study also looked at market demand and supply in the area.[7] The Birch Mountain common stock traded as high as $7.99 in 2006 and went to less than .01 cent a share by November 2008. The Birch Mountain Shareholders for Justice began their fact finding and filed a lawsuit against Brookfield Asset Management on September 22, 2010 with the Superior Court of Justice in Ontario, Canada. The lawsuit challenges the acquisition and transfer of the approximately $2 billion asset from a public company, Birch Mountain Resources, to a private company, the Hammerstone Corporation, a subsidiary of Brookfield Special Situations Group (formerly Tricap Partners LTD). [8]
Both Brookfield and the plaintiff spent much of 2011 arguing on whether the trial should be held in Ontario, where Brookfield Asset Management is incorporated, or in Alberta, where the assets are located. The defendant, Brookfield, filed a motion that the plaintiff lacked jurisdiction in Ontario with the Superior Court of Justice and was upheld by the courts.[9] The lawsuit against Brookfield Asset Management is still on-going as of July 2012 and currently has a pending proceeding with the Supreme Court of Canada to decide jurisdiction.
The Hammerstone Corporation is currently operating the quarry which recently announced a new business contract.[10]
The Hammerstone Project was an expansion of Birch Mountain Resources' Muskeg Valley Quarry in Northern Alberta, near Fort McMurray, where Birch Mountain owned mineral rights on nearly one million acres in the heart of the oil sands region. The Hammerstone Project had approximately 1 billion tonnes of proven and probable limestone reserves for use to meet the projected demands for limestone and limestone products in the Athabasca region to the year 2060, where there is a known shortage of quality aggregate and limestone materials. Limestone products were to include construction aggregate for concrete and asphalt, as well as limestone-based products for cement and flue-gas desulphurization(FGD) for the oil sands extraction process. [11]
Controversies
Kerzner lawsuit
In January 2012, two investors in a loan with Brookfield filed a lawsuit in Delaware asking that the court restrain a Brookfield - Kerzner International deal from being closed.[12]In the lawsuit, the investors allege that Brookfield engaged in "brazen self-dealing" and collusion with junior lender PCCP and servicer Wells Fargo to complete the deal in violation of the loan agreement.[13] The court granted a temporary injunction pending a hearing, and according to Brookfield senior vice president of communications and media, Andrew Willis, the firm cancelled its offer to acquire the property.[14] According to Willis, Brookfield decided to walk away after a Delaware judge issued the injunction.[13] The lawsuit was a negotiating tactic on the part of the two investors, and they subsequently agreed to a restructuring that allowed Brookfield to acquire the property.[15]
São Paulo, Brazil
In 2012, Brazilian authorities announced that they were investigating allegations that a managing partner at Brookfield bribed São Paulo building officials. The bribes reportedly totaled $789,851. Silvio Antonio Marques, a São Paulo state prosecutor confirmed the civil and criminal investigations to the Wall Street Journal and added that the reporting individual also provided documentation of the misconduct by Brookfield employees. A former Brookfield employee, who is being sued by Brookfield for embezzlement and is being investigated by Brazilian authorities, reported the alleged bribes to both the authorities in Brazil and to the U.S. Securities and Exchange Commission.[16]
References
- ^ "2011 Annual Report" (PDF). Brookfield Annual Report.
- ^ Pachner, Joanna."Brookfield Asset Management: A perfect predator",Canadian Business, Canada, 16August2010 Retrieved 23September2012
- ^ "Brookfield to buy Fairholme's General Growth stake". Reuters. 18 January 2011. Retrieved 7 March 2012.
- ^ Brookfield Property Partners
- ^ Mazurkewich, Karen. "Piling up the profits as the markets go down",National Post, U.S. 2December2008 Retrieved 23September2012
- ^ "Birch Mountain names receiver",’’Calgary Herald’’, Canada, 7November2008 Retrieved 22July2012
- ^ Whiteley, Don. "Oilsands with a Twist of Limestone",’’Stockhouse.com’’, Canada, 30June2006 Retrieved 22July2012
- ^ Gray, Jeff. "Squeezed-out Birch Mountain shareholders take on Brookfield",’’The Globe and Mail’’, Canada, 15November2011 Retrieved22July2012
- ^ Todd, Jeffrey. "Brookfield fights legal battle in Canada over asset transfer",’’The Nassau Guardian’’, Bahamas, 26January2012 Retrieved 22July2012
- ^ "Trimac Transportation gets $36M limestone hauling contract from Hammerstone",’’The Canadian Press’’, Canada, 31May2012 Retrieved 22July2012
- ^ Shute, Toby."A Lode of Limestone at Birch Mountain",’’The Fool.com’’, U.S, 20June2007 Retrieved 5July2012
- ^ Dames, Candia (13 January 2012). "Legal Battle for Atlantis". Nassau Guardian. Retrieved 24 September 2012.
- ^ a b Todd, Jeffery (18 January 2012). "Brookfield: Everything is still on the table". Nassau Guardian. Retrieved 24 September 2012.
- ^ Brandt, Nadja (17 January 2012). "Brookfield Cancels Agreement for Kerzner's Atlantis Resort". Bloomberg Businessweek. Retrieved 24 September 2012.
{{cite web}}: Unknown parameter|coauthors=ignored (|author=suggested) (help) - ^ Jinks, Beth (27 April 2012). "Kerzner Hands Atlantis Bahamas to Brookfield, Palm to Dubai". Bloomberg Businessweek. Retrieved 24 September 2012.
- ^ Karmin, Craig; Trevisani, Paulo (19 September 2012). "Brookfield Faces Brazil Accusations". Wall Street Journal. p. C12.
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