Brookfield Asset Management sees the money flowing in from real estate. The company has approximately $200 billion in assets under management, including commercial properties, power generation interests, and infrastructure holdings. It owns commercial, retail, residential, and development properties in the Americas, Europe, Asia Pacific, and the Middle East. Through its Brookfield Office Properties subsidiary, it is one of the largest commercial landlords in Lower Manhattan. Brookfield also owns some 200 power-generating facilities, including hydroelectric and wind plants, through its 63% stake in Brookfield Renewable Energy. Other assets include a minority stake in mall owner General Growth Properties (GGP).
The company has seven core business segments: Property, Service Activities, Residential Development, Private Equity, Infrastructure, Renewable Energy, and Asset Management. Brookfield is especially focused on developing, owning, and operating real estate assets, including property (office, residential, industrial, and hotels), infrastructure (utilities, transport, energy, timberland, and agriculture), and renewable energy (hydroelectric and wind power facilities) -- activities that make up nearly 50% of its revenue.
The company's Service Activities segment (which made up 19% of revenue in 2014) provides construction management and contracting services, as well as global corporate relocation, facilities management, and residential brokerage services. The Residential Development segment (15% of revenue) builds homes and condos and develops land. Its Private Equity segment (14% of revenue) typically invests in "out-of-favor sectors" and distressed or under-performing companies in Canada or the US in need of restructuring or redirection, or provides event-driven financing to mid-market companies in the two regions.
Toronto-based Brookfield has a wide variety of holdings around the world, with operations in Asia, Australia, Europe, the Middle East, North America, and South America. About 33% of its revenue came from its business in the US in 2014, while its next largest markets were in Canada (19% of revenue), Australia (17% of revenue), Europe (12%), and Brazil (10% of revenue).
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The fund's institutional investors include sovereign wealth funds, insurance companies, and pension plans.
The company's revenues and profits have been trending higher over the past few years as it's acquired more property assets, and as property and portfolio-company valuations have risen in the strengthened economy.
Brookfield's revenue reversed course in 2014, however, falling 12% to $18.4 billion mostly as its Private Equity income declined 38% after it sold off two of its revenue-generating forest product investments. Its Asset Management income also shrank 35%, mostly because in 2013 it had recognized a large non-recurring large client investment gain.
Despite revenue declines in 2014, the firm's net income jumped 47% to $3.11 billion mostly thanks to a $3 billion-increase in fair value gains on its investment properties and equity investments in office and retail properties which benefited from lower discount rates and higher rental income. Brookfield's operating cash levels grew by more than 10% to $2.6 billion for the year thanks to higher cash earnings.
Brookfield Asset Management is always on the lookout for acquisition opportunities and other ways to invest in out-of-favor, promising markets with high barriers to entry, as well as opportunities to sell assets to raise more capital. A key investment strategy for 2015 included investing in commodities and commodity-related businesses in Brazil (where there is a lack of capital in the market) and in Europe (where governments, companies, and banks continue to aggressively deleverage). The firm is also hopeful that the types of investments it specializes in -- especially property, power, and infrastructure assets -- will only grow in value as the world real estate markets continue to heat up.
Brookfield regularly performs fund offerings to raise capital for future investments. In 2013, the company closed on its Brookfield Infrastructure Fund II, with commitments of $7 billion (easily exceeding its original target of $5 billion). Also that year, Brookfield closed on its Timberlands Fund V, with commitments of $1 billion. That fund will invest in timberlands around the world, with an emphasis on the US, Brazil, and Australia.
Mergers and Acquisitions
In 2017 Brookfield offered to buy TerraForm Power for about $1.6 billion. The company already held a 12% stake in the power provider.
In February 2016, Brookfield Asset Management agreed to buy Rouse Properties for $2.8 billion. The deal was expected to close by the third quarter of 2016.
In January 2015, Brookfield Asset Management expanded its exposure to its second- and third- largest markets after it agreed to buy the remaining 50% stake of the Canadian and Australia facilities management business that it didn't own from joint-venture partner Johnson Controls Inc for $200 million.
In early 2014, the company privatized its Brookfield Office Properties subsidiary after acquiring the 51% share stake that it didn't already own.
The company kept itself busy in 2013 with a string of widely varied acquisitions. Major purchases that year included a minority stake in warehouse/distribution parks developer EZW Gazeley (with extensive holdings in Europe); an increase of its positions in mall owners General Growth Properties and Rouse Properties; all of Los Angeles commercial property owner MPG Office Trust (for $443 million); and all of business park developer Industrial Developments International ($595 million). It bought a portfolio of 19 apartment communities in North Carolina, South Carolina, and Virginia from Babcock & Brown Residential, further boosting its multifamily portfolio.
The company also launched refrigeration unit Brookfield Cold Storage in 2013 after acquiring the Canadian logistics operations of Millard Refrigerated Services. The deal included more than 16 million cu. ft. of storage space in two facilities located in Toronto and Calgary.