Following the partial separation of its asset management business, Brookfield Asset Management, ticker BAM, parent company Brookfield Corporation, ticker BN, had seen its share price remain amorphous on the stock market for several months.
It's true that the complexity of its structure, the opacity of its accounts and a context of extreme stress in the commercial real estate sector - where Brookfield is a leader - were not without cause for concern.
The easing of interest rates and the Group's recent results have lifted the spirits of investors. They could hardly have been unaware that Brookfield's valuation represented a discount of at least 30% on the net value of its assets.
Thus, the market value of the stake in Brookfield Asset Management, doubled by the associated carried interest and the interests in the other listed vehicles administered by the Group - BAM, BAM Asset Management and Brookfield Asset Management - represented a discount of at least 30%.s - BAM, BIP, BEP and others - alone covered the enterprise value - market capitalization minus net debt - of the "flagship" Brookfield Corporation.
On the balance sheet, Brookfield Property Group's real estate, reinsurance business - extremely profitable this year - and the Group's private investments seemed to count for zero. As a result, at less than $35, BN stock seemed to offer a significant margin of safety.
The same recent resurgence of investor interest in Brookfield Asset Management. At less than $40 per share last year, counting the substantial carried interest and Bruce Flatt's - admittedly aggressive - promises of 15% to 20% annual growth at the time of the split as zero, they valued the subsidiary at just twenty times earnings.
