To Brookfield Asset Management, generating money comes naturally. The company has approximately $150 billion in assets under management, including commercial properties, power generation interests, and infrastructure holdings. It owns commercial, retail, residential, and development properties in the Americas, Europe, Asia Pacific, and the Middle East. Through its 50% stake in Brookfield Office Properties, it is one of the largest commercial landlords in Lower Manhattan. Brookfield also owns some 180 power-generating facilities, including hydroelectric and wind plants, through its 68% stake in Brookfield Renewable Energy. Other assets include a minority stake in mall owner General Growth Properties (GGP).
The company's largest business segments are its private equity and development operations (43% of total revenues) and asset management and related services (21%). These are followed by Brookfield's property (more than 300 million sq. ft. of space), infrastructure, and renewable power operations. The company's real estate activities span the office, residential, industrial, and retail sectors, as well as real estate finance. In renewable power, Brookfield has been building up its holdings by increasing its stake in Brookfield Renewable Energy and buying or constructing new power facilities.
Brookfield has a wide variety of operations around the world. The US accounts for 30% of its sales, while Australia accounts for 22%. Canadian and Brazilian holdings each contribute nearly 20% of revenues. The company also has some operations in Europe and in other regions.
Despite challenges in the US residential market, as well as a number of young investments that haven't yet brought significant returns, 2011 Brookfield's profits rose 35% to $1.7 billion, while revenues rose $14% to $15.9 billion. The company is hopeful that the types of investments it specializes in -- especially property, power, and infrastructure assets -- will only improve as the world continues on its path to economic recovery. With investments in emerging markets, which today represent more than 40% of the world's gross domestic product, the company is also positioned for future growth.
Brookfield's private equity arm often takes stakes in struggling companies or distressed assets it can then turn around. For example, it won a bidding war with rival investor Simon Property Group in 2010 to acquire bankrupt US mall operator GGP. (It is now GGP's largest shareholder.) Also that year it acquired a majority stake multifamily developer and operator Fairfield Residential as part of that company's restructuring efforts. In 2011 the company acquired a $1 billion portfolio of defaulted property loans in New Zealand.
The company is also always on the lookout for opportunities to invest in promising markets with high barriers to entry, as well as opportunities to sell assets to raise more capital. In a deal to boost its asset management operations, the company acquired the European high-yield fund management business of Pall Mall Investment Management.
Through a recently launched joint venture with property investor Hillwood, Brookfield is venturing into the US industrial market, with a keen eye on large warehouses. In 2012 Hillwood acquired majority ownership in Verde Realty, a REIT that specializes in industrial distribution properties along the US/Mexico border, for $886 million.
A separate joint venture with Peninsula Land was formed in 2012 to primarily invest in property in India. Other recent investments include toll roads in Spain and an electricity transmission cable connecting Long Island, New York to Connecticut. – less