No. of Recommendations: 6
I bought a pinch of Brookfield Corp (BN) today, but the position is tiny. Years ago I owned Brookfield Asset Management, now Brookfield Corp. BN owns some premier properties, and they're very good at attracting co-investors in the properties. Their business model of having co-investors and charging them a management fee has worked quite well for them. (Years ago they just owned properties without co-investors.) Before the distribution of the management business a week ago fee related earnings (FRE) made up half the value of the company. BN still owns 75% of the management business, which is now called Brookfield Asset Management (BAM). BN's share of the net asset value of the properties makes up the remainder of BN's value. Essentially Brookfield distributed 1/8th of its value to shareholders last week in the form of shares in the the new BAM. I've been re-looking at the value of BN and BAM. For the moment I'm using a value for BN of about $39 USD/share, which is far lower than Brookfield itself uses. Before the distribution Brookfield estimated the value of the company to be $82 to $94, which would put BN at about 7/8ths of that post-distribution. The closing price of BN today was $31.39.
BN is a way of owning real estate and infrastructure. While I consider BN to be a good company, I personally don't put it up there with companies like Berkshire Hathaway or Alphabet, my largest two holdings. Just FWIW.
