Brookfield Floats Plan for $100B Asset Management Spin Off 

Global investment giant Brookfield is floating plans to spin off part of its asset management business into a separate, “asset-light” company worth up to $100 billion, according to statements by the Canadian firm’s top leadership this past week.

In a shareholder letter announcing record net income of $12.4 billion in 2021, chief executive Bruce Flatt said the equity value of the Canadian firm’s separated asset management business would likely be in the range of $70 billion-$100 billion, which excludes the $50 billion in equity capital that Brookfield has invested in its various subsidiaries.

The new business would be separately listed from the existing Brookfield Asset Management, Flatt told analysts in a Thursday call.

“The BAM parent may own a part of it and we’re going to separate and distribute to our shareholders a part of the business,” he said.

Asia Operation Growing Fast

Brookfield, which manages $650 billion in assets globally, said its Asia Pacific business continues to grow at a faster pace than any other regional operation, heading towards $100 billion in total assets across Australia, China, Korea, Japan and India.

A strategic decision to have a regional office on the ground in Shanghai has helped amass $13 billion in assets across China, including wind and solar projects, distributed electricity generation, offices, warehouses, retail and mixed-use developments, multi-family residences and industrial businesses.

Last month, Brookfield announced its backing of a China-focused infrastructure vehicle led by Sequoia China, the mainland branch of the famed Silicon Valley venture capital firm.

The Sequoia China Infrastructure Fund aims to invest in infrastructure developments supporting the mainland’s digital economy, new energy and life science sectors with both physical facilities and financing. The fund recently closed at an undisclosed sum after submitting an SEC filing last October.

“We believe that the local presence and technology prowess of Sequoia, and our experience in property and infrastructure, will create a powerful combination for Chinese entrepreneurs as they build out their operations,” Flatt said in the shareholder letter.

Brookfield’s South Korean moves have included the “extremely successful acquisition and turnaround” of IFC Seoul, a 5.5 million square foot (510,967 square metre) mixed-use complex acquired from AIG Global Real Estate in 2016. In Australia, meanwhile, the firm has $30 billion in assets that include utilities, ports, offices, hospitals, nursing homes, data centres, and residential and industrial properties.

Indian Data Centre Strategy

In India, Brookfield’s infrastructure division last year formed a 50:50 joint venture with NYSE-listed Digital Realty to establish a data centre platform in India called BAM Digital Realty.

That JV made its first acquisition in July, when it paid INR 600 crore ($80 million) to acquire a 30 acre (12.1 hectare) plot in India’s Navi Mumbai from developer K Raheja Corp, with plans to develop a data centre on the site, according to the local Business Standard newspaper.

The India initiative was Brookfield’s second data centre strategy in the region, after the firm’s 2019 acquisition of Australian-based hyperscale data centre operator DCI Data Centre.

In the shareholder letter, Flatt mused that one-third of Brookfield’s business could be in APAC markets one day, led by China and India with their vast populations and need for backbone infrastructure.