Brookfield Asset Management: Alternative Cash Flows - [Business Breakdowns, EP. 85]

30 snips

Nov 25, 2022

Nima Shayegh, an expert from Rumi Capital Partners, delves into the intricacies of Brookfield Asset Management, a titan with $750 billion in assets. He discusses Brookfield's unique investment strategies and its evolutionary operating structure that sets it apart from competitors. Shayegh highlights the firm's resilience in economic downturns and their innovative approaches, including a strategic spinoff that could enhance shareholder returns. The conversation also addresses key risks and the importance of client relationships in Brookfield’s continued success.

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ANECDOTE

Brookfield's Century-Long Evolution

Brookfield's roots trace back over a century, starting as an infrastructure operator in Brazil.
It evolved into Brascan, a sprawling conglomerate including real estate, mining, and even the Toronto Blue Jays.

INSIGHT

Brookfield's Differentiators

Brookfield's large balance sheet and principal investor background differentiate it.
This creates alignment and enables reinvestment, driving long-term value compounding.

INSIGHT

Compensation Strategy

Brookfield's compensation strategy prioritizes long-term equity ownership over high cash salaries.
This attracts and retains individuals focused on long-term wealth creation.

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This is Matt Reustle and today we are breaking down the giant alternative asset manager, Brookfield. Today Brookfield boasts $750bn in assets under management, and it’s a global footprint that includes many noteworthy office buildings and key infrastructure assets. To break down Brookfield, I’m joined by Nima Shayegh from Rumi Capital Partners. We cover Brookfield's powerful history, the evolutionary changes in the operating structure, and what separates Brookfield from other big managers. We started with Blackstone, we covered Vanguard, and now we hope you enjoy this breakdown of Brookfield.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Show Notes

[00:02:19] - [First question] - The size and scale of Brookfield and what they do

[00:04:52] - How they invest through their balance sheet

[00:06:54] - How Brookfield achieved the scale it has today

[00:10:36] - What differentiates Brookfield from their competitors in alternative assets

[00:14:31] - Their unique employee compensation strategy

[00:18:19] - The various segments of their business that helped them achieve their scale

[00:21:05] - Breaking down the economic structure of their revenue streams

[00:25:50] - Percentage of revenue generated by performance and management fees

[00:27:13] - Complex corporate structure and getting comfortable with it as an investor

[00:29:33] - Overview of their ownership structure and its prior scrutiny

[00:32:32] - Brookfield’s philosophy on debt writ large

[00:36:04] - Their strategy and approach to capital allocation

[00:40:11] - Important growth metrics they track most closely

[00:45:57] - Insights and benefits behind merging with other alternative managers

[00:47:23] - How interest rates impact an asset manager like Brookfield

[00:50:12] - Correlation between rising inflation and dividend stock selloffs

[00:52:38] - Other major risks that might pose a threat to Brookfield’s growth

[00:53:51] - Major lessons from intimately studying Brookfield