Newspaper icon
The latest issue of Financial Standard now available as an e-newspaper

Brookfield pursues asset management spin-off

Following shareholder feedback, Brookfield has confirmed it will spin off its asset management business later this year.

In a company update, Brookfield said it would own 75% of the new entity while 25% would be distributed to shareholders before the end of the year.

The special distribution of shares would be around US$12 per share, chief executive Bruce Flatt said.

The company is planning to list a new entity which will reportedly house its real estate, infrastructure, credit, private equity and renewable energy assets.

The company said creating a 'pure-play' asset manager is expected to increase its investor base.

"Today, some potential investors interested in our asset management business may be put off by the need to also understand and value our proprietary investments (or they may avoid making this effort by taking our proprietary assets into account at a severe discount)," Brookfield said.

"Having a new security or "currency" that is well understood and appreciated by the public markets will maximise optionality for us as we continue to scale and diversify our asset management platform."

Flatt added: "Our asset management business is one of the leading alternative investment firms in the world, managing the capital of over 2000 global institutional investors and a growing list of high-net-worth investors. We are excited about this next chapter of our growth."

The move would see Brookfield become "asset light", which was Brookfield's stated objective when it first flagged the possibility of a spin-off last year. Excluding the asset management business, Brookfield has investment capital of about US$75 billion, it said.

"The bottom line is that today's Brookfield consists of two businesses that are very different in nature but work together very well," the company said.

"Looking forward, we believe that each of these businesses has incredible potential to expand further. To achieve this growth, however, we have concluded that they should now be separated, while preserving the benefits of their complementary nature and alignment."

Read more: BrookfieldBruce Flatt