Should You Hold Brookfield Asset Management (BAM)?

SaltLight Capital Management, an investment management company, released its third-quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund returned -10.10%. The global market fluctuations affected the fund’s performance in the third quarter. The fund’s investment in concentrated portfolio businesses can result in higher volatility, but better returns may also offset volatility. In addition, please check the fund’s top five holdings to know its best picks in 2022.

In the third-quarter letter, SaltLight Capital discussed stocks like Brookfield Asset Management Inc. (NYSE:BAM). Based in Toronto, Canada, Brookfield Asset Management Inc. (NYSE:BAM) is an asset management company. On November 11, 2022, Brookfield Asset Management Inc. (NYSE:BAM) stock closed at $46.80 per share. One-month return of Brookfield Asset Management Inc. (NYSE:BAM) was 19.82% and its shares lost 20.97% of their value over the last 52 weeks. Brookfield Asset Management Inc. (NYSE:BAM) has a market capitalization of $76.832 billion.

SaltLight Capital made the following comment about Brookfield Asset Management Inc. (NYSE:BAM) in its Q3 2022 investor letter:

“We’ve spoken about Brookfield Asset Management Inc. (NYSE:BAM) (down 32% YTD), our North American alternative asset manager in our 1Q22 and 2Q22 letters extensively. Rising interest rates will likely adjust some portfolio valuations however offsetting this is that Brookfield is positively exposed to inflationary assets. Management held an investor day last quarter and upgraded their five-year targets.

The spin-off transaction will be completed in the next month, and we’ll start to receive back some enviable cash flow. The spun-off manager will likely trade at a 6%-8% yield on distributable earnings and given the growth in the underlying asset management business, this could grow at c. 12-15% per annum. 81% of Brookfield’s funds are perpetual or greater than ten years in duration, which means that the base revenues are recurring to at least 2032.

We think that there will be many more opportunities for BAM in the ‘re-shoring’ of key industries like the recent $15bn Intel Fab funding deal[2]. Few private equity funds can invest these kinds of sums in one deal and over-indebted sovereign balance sheets are unlikely to offer much support. This leaves a wide opportunity for scaled investment managers like Brookfield.”

Brookfield Asset Management Inc. (NYSE:BAM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Brookfield Asset Management Inc. (NYSE:BAM) at the end of the second quarter, which was 35 in the previous quarter.

We discussed Brookfield Asset Management Inc. (NYSE:BAM) in another article and shared Cooper Investors’ views on the company. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.


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Disclosure: None. This article is originally published at Insider Monkey.