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Brookfield Shifts Head Office to New York to Qualify for Indexes

Benjamin Klein, senior portfolio manager at Baskin Wealth Management, joins BNN Bloomberg to discuss his top stocks this Canadian earnings season.

(Bloomberg) -- Brookfield Asset Management moved its head office to New York from Toronto to gain access to more US stock indexes and attract more investors.

The shift aims to increase “BAM’s visibility among a much broader universe of active public investors who benchmark against these indices,” the Canadian alternative asset manager said in a statement late Thursday.

The move “makes sense” because the US accounts for the biggest share of Brookfield Asset’s employees and revenue, Chief Financial Officer Hadley Peer Marshall told investors in September, adding that Brookfield would remain incorporated in Canada. The move won’t result in any changes to operations, strategic plans, or dividend tax treatment, according to Thursday’s statement.

Parent company Brookfield Corp. will also swap its currently unlisted 73% stake in Brookfield Asset Management for publicly-traded stock. BAM will issue Class A shares to its parent company in exchange for the shares currently owned by the parent and its subsidiaries in a one-for-one exchange.

The size of Brookfield Corp.’s economic stake in BAM won’t change, but the switch would simplify Brookfield Asset’s structure and ensure the publicly traded entity reflects its value — a market capitalization of about $85 billion based on the current stock price, compared with about $23 billion today, the company said.

Brookfield Asset shareholders will vote on the swap at a meeting scheduled Dec. 20.

Brookfield Corp. spun out 25% of its asset management unit almost two years ago into the publicly-traded BAM, which manages the firm’s fee-generating assets and manages about $1 trillion of assets.

Shares of the asset manager fell 1.4% to $53.04 in New York, but have gained around 32% since the start of the year.

Mark Carney, chair of Brookfield Asset Management, is also chair of Bloomberg Inc.

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