Brookfield To Spin Off $80B Asset Management Business, Including Its CRE Holdings

Brookfield Asset Management plans to publicly list 25% of its asset management business in a deal that would value the new entity at $80B.

The firm said in a letter to shareholders this week that it would offer up a quarter of its asset management business in an effort to make the company "asset-light." CEO Bruce Flatt previously told shareholders the Toronto-based company had less appeal than competitors because of its assets on hand, according to Reuters. Brookfield also feared some investors might balk at exposure to the company's other businesses, such as its reinsurance arm. 

The special distribution of shares will be around $20B, about $12 per share, Flatt said, and is expected to happen by the end of the year. The parent company and the new unit will both trade on the New York Stock Exchange and the Toronto Stock Exchange.

“Having a new security or ‘currency’ that is well understood and appreciated by the public markets will maximize optionality for us as we continue to scale and diversify our asset-management platform,” Flatt said in a first-quarter 2022 letter to shareholders, reported by Bloomberg.  

Brookfield shares fell to $45.59 as of early Thursday morning.  

Brookfield has been publicly considering this move since February, Bisnow reported previously, hoping to capitalize on investor eagerness for real estate and private credit. This would not be the first time the company has spun off a business. It listed Brookfield Asset Management Reinsurance Partners last year via a special dividend to shareholders and previously spun out Brookfield Business Partners, its private equity unit, as well as Brookfield Renewable Partners.