Brookfield Asset Management to Spin Out Asset Management Business

Posted on 05/12/2022

Brookfield Asset Management Inc. disclosed plans to spin off its asset management business into a separate publicly listed company. Under the plan, Brookfield Asset Management will distribute a 25% stake in the new company to its shareholders by the end of this year as a first step. Brookfield will initially retain a 75% interest in the new company. The transaction will result in two companies: an alternative asset management firm and a capital investor of its proprietary assets.

Brookfield Asset Management invests its own capital as well as third-party capital.

Brookfield invests its own money as well as on behalf of clients, two businesses that it says are different in nature but work together well.

In an earnings call on May 12, 2022, CEO Bruce Flatt said “based on our estimate of values, shareholders will receive a special distribution of $20 billion of shares, which is somewhere around $12 per share.” The distribution of shares will be tax-free for both Canadian and U.S. stockholders.

The transaction remains subject to approval of current shareholders.

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