Brookfield Asset Management Inc. is a Canadian multinational company that is one of the world's largest
alternative investment
An alternative investment, also known as an alternative asset or alternative investment fund (AIF), is an investment in any asset class excluding stocks, bonds, and cash. The term is a relatively loose one and includes tangible assets such as ...
management companies, with over US$725 billion of assets under management in 2022. It focuses on direct control investments in real estate, renewable power, infrastructure, credit and private equity. The company invests in distressed securities through Oaktree Capital, which it bought in 2019. Brookfield's headquarters are in
Toronto
Toronto ( ; or ) is the capital city of the Canadian province of Ontario. With a recorded population of 2,794,356 in 2021, it is the most populous city in Canada and the fourth most populous city in North America. The city is the anch ...
. It also has corporate offices in
New York City
New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
,
London
London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
, São Paulo, Mumbai, Shanghai, Dubai, and
Sydney
Sydney ( ) is the capital city of the state of New South Wales, and the most populous city in both Australia and Oceania. Located on Australia's east coast, the metropolis surrounds Sydney Harbour and extends about towards the Blue Mounta ...
Frederick Stark Pearson
Frederick Stark Pearson (July 3, 1861 – May 7, 1915) was an American electrical engineer and entrepreneur.
Biography
Dr. Frederick Stark Pearson was the son of Ambrose and Hannah (Edgerly) Pearson. He graduated from Tufts University in 1883 wi ...
. It operated in the construction and management of electricity and transport infrastructure in Brazil.
In 1904, the Rio de Janeiro Tramway, Light and Power Company was founded by Mackenzie's group.
In 1912, Brazilian Traction, Light and Power Company was incorporated in Toronto as a public company to develop hydro-electric power operations and other utility services in Brazil, becoming a holding company for São Paulo Tramway Co. and Rio de Janeiro Tramway Co. In 1916, Great Lakes Power Company was incorporated to provide hydro-electric power in Sault Ste. Marie and the Algoma District in Ontario.
In 1959,
Edper Investments Edper Investments Ltd. was the primary holding company and investment vehicle for brothers Edward Bronfman and Peter Bronfman between 1959 and 1995. At its peak in the 1980s and early 1990s, Edper was one of the largest corporate conglomerates in ...
Edward Bronfman
Edward Maurice Bronfman, (November 1, 1927 – April 4, 2005) was a Canadian businessman, philanthropist, and member of the Bronfman family.
Born in Montreal, Quebec, the son of Allan Bronfman and the nephew of Samuel Bronfman, founder of ...
, acquired Brazilian Traction, Light and Power Company for $15 million. In 1966, Brazilian Traction, Light and Power Company changed its name to Brazilian Light and Power Company, and again in 1969, changed its name to Brascan Limited. Brascan is a
portmanteau
A portmanteau word, or portmanteau (, ) is a blend of wordsEletropaulo and Light S.A.), the company meanwhile having diversified to other areas. The company provided electricity and tram services in São Paulo and Rio de Janeiro. After a restructuring, the company's Brazilian portfolio operated as Light S.A., short for Brazilian Traction, Light and Power Co. Ltd.
In 2002, Bruce Flatt was appointed CEO of Brascan. In 2005, after 37 years, Brascan Corp. was renamed to Brookfield Asset Management Inc. Between 2013 and 2018, the company and its subsidiaries invested approximately $10 billion in Brazilian energy, infrastructure and real estate developments, including acquisitions of oil pipelines from energy companies such as Petroleo Brasileiro SA.
In 1992, Brookfield and Johnson Controls was established through a merger in Canada of Brookfield and Johnson Controlsa building systems and facility management company that was founded in the late 19th century by
Warren S. Johnson
Warren Seymour Johnson (November 6, 1847 – December 5, 1911) was an American college professor who was frustrated by his inability to regulate individual classroom temperatures. His multi-zone pneumatic control system solved the problem. Johnson ...
, whose invention of the first electric room thermostat helped launch the building control industry. By 2012, Brookfield and Johnson Controls became an established industry leader with 11,500 locations across Canada. In 2007, Brookfield Asset Management acquired the
Multiplex
Multiplex may refer to:
* Multiplex (automobile), a former American car make
* Multiplex (comics), a DC comic book supervillain
* Multiplex (company), a global contracting and development company
* Multiplex (assay), a biological assay which measu ...
, an Australian international construction contracting company founded in 1962 by John Roberts. which was valued at that time at approximately A$7.3 billion. It was renamed Brookfield Multiplex in 2016. In 2012 Brookfield Asset Management and Johnson Controls Global WorkPlace Solutions (GWS) merged to create Brookfield Johnson Controls.
In 2015, Brookfield Asset Management became the ultimate parent company of what is now Brookfield Global Integrated Solutions (BGIS), when it acquired control of Brookfield Johnson Controls from its joint venture partner,
Milwaukee
Milwaukee ( ), officially the City of Milwaukee, is both the most populous and most densely populated city in the U.S. state of Wisconsin and the county seat of Milwaukee County. With a population of 577,222 at the 2020 census, Milwaukee i ...
-based Johnson Controls. At that time, an activist investor had been putting pressure on Johnson Controls to divest of its real estate division. The facilities management business was renamed Brookfield Global Integrated Solutions (BGIS) as part of Brookfield's plan to establish a "leading global facilities management provider". BGIS expanded rapidly following Brookfield's taking control of BGIS in 2015, In 2016, when BGIS acquired the US-based data centre facility management serviceMcKinstry FMSwhich had over "350 engineers, technicians, planners and program managers", BGIS became one of the largest facility management companies serving date centres in North America. By 2017, when Gord Hicks was named as Toronto-based BGIS' CEO, the company had 7,000 staff members and 100 clients in the United States, the United Kingdom, Asia, and Canada, which included contracts with the Canadian federal government. By 2022, according to a
Carleton University
Carleton University is an English-language public research university in Ottawa, Ontario, Canada. Founded in 1942 as Carleton College, the institution originally operated as a private, non-denominational evening college to serve returning Wo ...
School of Public Policy and Administration analysis of federal government contracts for real estate management, the Government of Canada spent over $1 billion on contracts with BGIS in 2021-2022, representing the largest vendor contracts at that time. The vendor with the second largest federal government contracts in 2021-2022 was IBM Canada with a contract valued at c. 476 million. In 2019 Brookfield Asset Management sold its BGIS shares to CCMP Capital Advisorsan American private equity investment firmfor over CAD$1.3 billion with Hicks remaining as CEO. and was awarded the 2020 Private Equity Deal of the Year for the BGIS sale.
By 2018, Brookfield's major public subsidiaries included Brookfield Infrastructure Partners, Brookfield Renewable Partners, Brookfield Property Partners, and Brookfield Business Partners. In August 2018, Brookfield purchased Westinghouse Electric Company, a manufacturer of large nuclear reactors, out of bankruptcy for $4.6 billion.
On March 13, 2019, Brookfield Asset Management announced that it had agreed to buy most of Oaktree Capital Management for about $4.7 billion, creating one of the world's largest alternative money managers. On July 31, 2019, the sale of Vodafone New Zealand Limited to a consortium comprising Infratil Limited and Brookfield Asset Management Inc. was settled.
In a deal in October 2019, Brookfield bought
The Leela Palaces, Hotels and Resorts
The Leela is an Indian luxury hotel chain founded in 1986 by C. P. Krishnan Nair and currently owned by Brookfield Asset Management.
History
The Leela hotels were founded as part of The Leela Group, which was named after the founder C. P. ...
, an Indian luxury hotel chain located in New Delhi, Bengaluru, Chennai, Udaipur, in a US$530 million settlement, marking the entry of Brookfield in India's hospitality market.
In 2020, in response to the
COVID-19 pandemic
The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identi ...
, Brookfield's CEO Bruce Flatt assessed that the economic fallout was "much more manageable" than previous meltdowns.
In October 2020, Mark Carney, departing Governor of the Bank of England, became a vice-chair of Brookfield, leading the firm's environmental, social and governance (ESG) and impact fund investment strategy.
On April 25, 2022, it was announced the Brookfield and
Simon Property Group
Simon Property Group, Inc. is an American real estate investment trust that invests in shopping malls, outlet centers, and community/ lifestyle centers. It is the largest owner of shopping malls in the United States and is headquartered in In ...
Intel
Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world's largest semiconductor chip manufacturer by revenue, and is one of the developers of the x86 ser ...
signed a $30billion partnership with Brookfield to fund its recent factory expansions. As part of the deal, Intel would have a controlling stake by funding 51% of the cost of building new chip-making facilities in
Chandler, Arizona
Chandler is a city in Maricopa County, Arizona, United States, and a suburb in the Phoenix-Mesa-Chandler Metropolitan Statistical Area (MSA). It is bordered to the north and west by Tempe, to the north by Mesa, to the west by Phoenix, to t ...
, with Brookfield owning the remaining 49% stake, allowing the companies to split the revenue from those facilities.
On December 9, 2022, the company's name was changed from Brookfield Asset Management Inc. to Brookfield Corporation. Brookfield Corporation then spun-off 25% interest in their asset management business into the new publically listed Brookfield Asset Management Ltd.
Reactions and lawsuits
In September 2010, a group called Birch Mountain Shareholders for Justice filed a lawsuit with the
Ontario Superior Court of Justice
The Superior Court of Justice (French: ''Cour supérieure de justice'') is a superior court in Ontario. The Court sits in 52 locations across the province, including 17 Family Court locations, and consists of over 300 federally appointed judges.
...
against Brookfield Asset Management, challenging an acquisition and transfer of assets. Birch Mountain had run into financial troubles and accused Brookfield of financial engineering that resulted in Brookfield acquiring the company's $1.6 billion limestone quarry for $50 million. According to Birch Mountain, Brookfield had made use
death spiral financing Death spiral financing is the result of a badly structured convertible financing used to fund primarily small cap companies in the marketplace, causing the company's stock to fall dramatically, which can lead to the company's ultimate downfall.
...
and
insider trading
Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider informati ...
. After five years of litigation the case was dismissed, based on the fact that Birch Mountain had failed to present credible evidence. In May 2015, the plaintiffs filed a notice of appeal, but their case was likewise dismissed two years later.
In 2009, Brookfield sued financial and insurance giant
American International Group
American International Group, Inc. (AIG) is an American multinational finance and insurance corporation with operations in more than 80 countries and jurisdictions. , AIG companies employed 49,600 people.https://www.aig.com/content/dam/aig/amer ...
(AIG) in a Manhattan federal court, alleging that AIG's collapse caused default provisions in interest-rate swaps. The suit stemmed from AIG's acceptance of a $182.3 billion bailout package from the federal government, which Brookfield argued overturned AIG's bankruptcy protection. The insurance firm countersued, claiming that Brookfield was trying to get out of its $1.5 billion debt to AIG. The litigation ended with Brookfield paying $905 million to settle the lawsuit.
In March 2013, the Southern Investigative Reporting Foundation called into question Brookfield's makeup. The analysis written by Roddy Boyd accused the company of using a pyramidal control structure, alleging that a small group of shareholders hold outsized power and may easily utilize the capital of other investors without risking their own.
In 2013, a Brazilian prosecutor filed charges against the company's local division, alleging the company paid bribes to local officials, which is also a violation of U.S. federal criminal law. The bribes were allegedly used to pave the way for Brookfield to build a shopping center in
São Paulo
São Paulo (, ; Portuguese for ' Saint Paul') is the most populous city in Brazil, and is the capital of the state of São Paulo, the most populous and wealthiest Brazilian state, located in the country's Southeast Region. Listed by the GaW ...
. The U.S. Securities and Exchange Commission also opened a formal investigation into the company about the bribery charges. The company denied the charges. The U.S. Department of Justice also opened a criminal investigation into the company regarding these allegations, and did not end up making any arrests. According to the Stanford Law School
Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act of 1977 (FCPA) (, ''et seq.'') is a United States federal law that prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests.
The FCPA is applicable worl ...
Clearinghouse, which studied the case, the investigation and filing of charges was initiated by a whistleblower and anonymous tip. Later it was revealed that the whistleblower was the former CFO of a Brookfield subsidiary. She claims she was fired for refusing to participate in Brookfield's bribery scheme. The company disclosed the investigations on several 6-K forms between 2013 and 2015.
In August 2018, Brookfield signed a 99-year lease on the financially troubled 666 Fifth Avenue skyscraper, of
Donald Trump
Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
Trump graduated from the Wharton School of the University of P ...
's son in law
Jared Kushner
Jared Corey Kushner (born January 10, 1981) is an American businessman and investor. He served as a senior advisor to 45th U.S. president Donald Trump, his father-in-law. Since leaving the White House, Kushner founded Affinity Partners, a priv ...
. The deal raised suspicions that the Qatar Investment Authority, a major investor in Brookfield, was attempting to influence the
Trump administration
Donald Trump's tenure as the List of presidents of the United States, 45th president of the United States began with Inauguration of Donald Trump, his inauguration on January 20, 2017, and ended on January 20, 2021. Trump, a Republican Party ...
.
In November 2020, it was revealed that Brookfield might be partnering with telecommunications giant Rogers Communications to introduce condominiums to the site of the Rogers Centre, halving the space available for sport. The original multi-purpose stadium and its land cost $570 million, significantly funded by taxpayers, yet was sold 15 years later to Rogers for just $25 million.
In February 2021, Mark Carney, Vice Chairman and Head of Impact Investing and ex Governor of the Bank of England, had to retract an earlier claim that the $600 billion Brookfield Asset Management portfolio was
carbon neutral
Carbon neutrality is a state of net-zero carbon dioxide emissions. This can be achieved by balancing emissions of carbon dioxide with its removal (often through carbon offsetting) or by eliminating emissions from society (the transition to the " ...
. He based his claim on the fact that Brookfield has a large
renewable energy
Renewable energy is energy that is collected from renewable resources that are naturally replenished on a human timescale. It includes sources such as sunlight, wind, the movement of water, and geothermal heat. Although most renewable energy ...
portfolio and "all the avoided emissions that come with that". The claim was criticized as an accounting trick, as avoided emissions do not counteract the emissions from investments in coal and other fossil fuels responsible for a
carbon footprint
A carbon footprint is the total greenhouse gas (GHG) emissions caused by an individual, event, organization, service, place or product, expressed as carbon dioxide equivalent (CO2e). Greenhouse gases, including the carbon-containing gases carbo ...
of about 5,200 metric tons of carbon dioxide. The company is actually aiming to be net-zero by 2050, which is decades behind leading companies.
Finances
For the fiscal year 2018, Brookfield Asset Management reported earnings of US$3.584 billion, with an annual revenue of $56.771 billion, an increase of 39.2% over the previous fiscal cycle. Brookfield Asset Management's shares traded at over $38 per share, and its market capitalization was valued at over $40.8 billion in November 2018.
See also
*
Edper Investments Edper Investments Ltd. was the primary holding company and investment vehicle for brothers Edward Bronfman and Peter Bronfman between 1959 and 1995. At its peak in the 1980s and early 1990s, Edper was one of the largest corporate conglomerates in ...