The Canadian Investor - Breaking down Brookfield Asset Management

Episode Date: July 12, 2020

In this episode we discuss Brookfield Asset Management (BAM) and its subsidiaries. BAM is one of the largest companies listed on the TSX and is a global force in the infrastructure, real estate, renewable power and asset management. Tickers of stocks discussed : BAM, BAM-A.TO, BEP, BEP-UN.TO, BIP, BIPC, BIP-UN.TO, BIPC.TO, BPY, BPY-UN.TO, BBU-UN.TO, BBU--- Send in a voice message: https://anchor.fm/the-canadian-investor/messageSee omnystudio.com/listener for privacy information.

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And today, after request upon request, and even though we've talked about this wonderful company many, many times, it deserves a full in-depth episode to the complex nature that is Brookfield Asset Management, ticker BAM.A on the TSX and just BAM on the New York Stock Exchange. It's been an incredible performer. Since 2010, the stock has returned 350% and it was at 500% pre-pandemic March levels, currently at around 70 billion in market cap, but still down 27% from pre-pandemic highs.

27% from pre-pandemic highs. Now, this company is not the most simple structure, so we're going to help you understand this business. So, Brookfield Asset Management is the parent company of a large group of real assets under Brookfield Property Partners, which is publicly traded under BBY, Brookfield Renewable Partners under ticker BEP, which is their renewable energy business, and Brookfield Infrastructure Partners, ticker BIP, as well as Brookfield Business Partners, ticker BBU. business partners, ticker BBU. And then they also have a wing that invests in public securities. And we'll get into what those investments are. So Simon, how are we doing? And then give us the lowdown on those individual subsidiaries. Oh, I'm doing well. And yeah, I think it's been a long time coming for BAM for Brookfield Asset Management. I mean, we probably could study this business for a full year and not fully understand it,

I feel like, because there's a lot of stuff to unpack and it's just a massive business altogether. So before we get started, I wanted to, because we'll refer to this term pretty often and we have talked about it when it came to REITs or real estate. So we do talk a lot about FFO. And for the most part, when you look at any of the Brookfield, whether you look at BAM itself or any of its subsidiaries, and I'm going to struggle the whole episode with that word, I'm telling you now. And FFO, so Funds From Operations, so they define it, and that's generally the way it's defined, as net income attributable to shareholders prior to the fair value changes. Basically, it's depreciation and amortization, deferred income taxes, and

includes realized disposition gains that are not recorded in net income as determined under regulations. So the FFO also includes a company share of equity accounted investment on a fully diluted basis. So I know it's a bit of a mouthful. Basically what it means is in the funds from operation, they try to remove non-cash items. So it's a bit like looking at the cash flow statement, but they also try to normalize it for gains, for acquisitions, but also sales. So did you have any comments on that, Brayden? Anything else to add for FFO? No, that's a very good breakdown. It is a cash metric that is the holy grail nirvana of metrics in real estate. And anything that's

spinning off cash, cash flow being the primary effect of their business being affected by real assets, they need to adjust for those kinds of things. So that is a great description. Yeah. And especially for Brookfield that a lot of their assets are actually physical assets. So it doesn't mean that, you know, even though you're, you know, an asset, technically an accounting principle will be depreciating. Well, it's not always the case in terms of actual value. So it's important to to just remember about that. Just when you look at their financial statement, because depreciation kind of eats into your income. But in reality, it's a non-cash item.

And we've talked about that in a previous episode. Yeah. But before you dig into that, it's important to preface that this company is their bread and butter of all what they do is real assets, real tangible assets. So it's important from an accounting perspective to understand that what you had just mentioned, because this business invests in tangible, real development assets in renewable energy, infrastructure, and real estate on a global perspective. So it's just, it's important to understand that. Yeah, exactly.

So we're going to start with the first, well, just kind of randomly start the first one, probably my favorite one. So Brookfield Renewable Partners. So really, they have five main lines of business in BEP. Solar, wind, hydro, distribution, and storage. They've historically been very heavily dominated in hydro, but they've been diversifying in solar and wind. Most recently, solar and wind has been added because they purchased a controlling stake in Terraform Power. And they actually announced in March that they would purchase the rest of the Terraform Power units and Terraform Power. And they actually announced in March that they would purchase

the rest of the Terraform Power units and Terraform Power shareholder, which I am one. I'm actually a shareholder of Terraform and BEP. So for each share of Terraform Power that I have, I'll receive 0.381 BEP units. And I know they mentioned that it should close towards the end of the year. I'm not sure if it's Q3 or Q4, but that will be realized towards the end of the year. And one of the reasons, obviously, that I really like BEP is because I think the long-term trends are looking towards renewable energy. Even Brookfield, they do mention it in some of their shareholder information that one of the reasons they're investing even more in solar is because it's making a lot more sense economically. So the cost of producing those solar panels, for example, and those wind turbines and so on has gone down tremendously in past years. Whereas, so they're not as expensive, but they're also more efficient so that's one of

the big things that they're really investing heavily in and it's one of the companies for that reason that I really like regardless if you're looking at Brookfield itself or the stock market in general I think it's a really great company they've been increasing their dividends for years I think their target is five to% per year. I haven't read anything that they won't be on track for that this year. And they shouldn't really be too much affected by any terms of downturn in terms of the coronavirus. They have long-term contracts in terms of selling that energy. they have long-term contracts in terms of selling that energy. So that's a bit of a breakdown for BEP. Do you have anything else to add, Brayden, as an environmental engineer? Yeah, no. This business is obviously one that I understand very well. And electricity has tons tailwinds as the amount of power per person goes up in all developing markets and emerging markets. And it was interesting to hear, I watched Bruce Flatt, the CEO on Bloomberg, he did an interview this month with them on the kind of landscape during COVID-19 with real estate and what he sees in renewable energy. And not only

is there tailwinds in power, but in renewable energy, there's tons. And it was interesting to hear his take. I love hydro. I work in hydro. It's an incredibly good source of power, it's clean, it's reliable, and it provides baseload, he's seeing that costs per megawatt hour of solar come down to actually be the lowest cost. Now, it does not have storage capabilities, which has been its kind of downfall for a long, long time. But from a pure generation perspective, he sees tons of growth in solar. And we're seeing that on a macro trend right now. Not so much in Canada, but on a global perspective, they're going to see lots of cash go into solar. And they're seeing really good yields off those investments.

So, I mean, this is an incredible business and one that's going to be, you know, have lots of secular trend growth behind it for a long time to come. Yeah, and those companies too. And this will apply for most of the Brookfield subsidiaries, whether we're looking at BEP, BIP as well, to some extent BPY. But you'll notice if you guys look at their balance sheet, there's a lot of debt on the balance sheet, but it doesn't worry me as much as other companies. For example, the oil sector, like we talked last week, where they're really dependent on a bunch of different factors in terms of their cost, but also their revenue. Whereas BEP and this, the one we're talking about right now is their revenue or funds from operation,

they tend to remain pretty stable. I know the water levels tend to affect a bit the production from hydro itself, but overall they tend to be very, very stable in terms of cash flows. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission-free

so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. Calling all DIY do-it-yourself investors. Blossom is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are

using the app. Every time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends, and there's other stuff like learning Duolingo style education lessons that are completely free. You can search up Blossom

Social in the app store and join the community today. I'm on there. I encourage you go on there and follow me, search me up. Some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead, blossom social in the app store, and I'll see you there. Yeah, totally. And think about as we transition from regular combustible engine cars to EVs, although that adoption is taking a long time, electricity is going to be growing in demand over time. And the amount of contracts that are going to be growing in demand over time. And the amount of contracts that are going to be needed from the Brookfield Renewable Partners of the world is going to be strong moving forward.

Yeah, exactly. So we'll move on to Brookfield Infrastructure Partners. So this, the ticker is BIP. Brookfield Infrastructure Partners, similarly to, I guess, BEP. They invest. I mean, actually, I have a question for you, Braden. It's kind of funny. We say like there's BEP, but then Brookfield Infrastructure Partners.

But it's funny because to me, it's still to some degree infrastructure, even if you look at BEP, right? Am I wrong in that? No, they're both still core infrastructure projects. But BEP focuses on the actual power generation assets. Infrastructure can mean a whole whack of things, including the distribution of energy. And you're seeing acquisitions like the distribution of energy happen in Saudi Arabia. I believe they just bought a bunch of assets there. And that would be also energy. I mean, it's gas pipelines, but it's still in a similar space. They do all kinds of core infrastructure developments all over the world. And what is really interesting about BIP is the amount of room for growth, the runway for growth in their more developing nations like India. They have a head office there in Mumbai. And they're seeing really, really nice growth from being the ones to build some of that core infrastructure.

Yeah. And yeah, I was just kind of mentioning that because it is true. It is kind of infrastructure to some level. But BIP, you're totally right. So they have railways. They have data centers. They have liquid natural gas distribution centers. They have infrastructure, toll roads as well.

So they have infrastructure all around the world. And again, for the most part, it's fee-bearing infrastructure. So they do receive some very constant cash flows from that. So it goes to say the same thing as BP as you'll notice BIP has a lot of debt as well but it's not something I would worry about just because it's very stable in terms of company and they're looking to increase their funds from operation at about a rate of six to nine percent every year and the same thing when it comes to their dividend hopefully they'll be able to achieve that this year with all the uncertainty.

But I really don't have a reason to believe that they won't be able to achieve that. And it's really, I mean, this to me, it's one of my bigger holdings. Same thing for BEP. And these are companies that you can really set and forget. They're great for your TFSA or an RRSP. It gets a little more complex, and I think that's something we should mention. Be careful in having those businesses in taxable accounts. So if you don't have a registered account like a TFSA or RRSP, for example, the structure, because it's a limited partnership, can get very complicated when you're

doing your taxes. So make sure you do your due diligence when it comes to that. But you should be fine when it comes to having a TFSA or RRSP. Yeah, very good point to mention that. So lastly, is in my opinion, why you're seeing volatility and it drop off so much from March highs is the real estate business, which is primarily invested in office and retail. Obviously, two sectors that are not loved by the market, nor either of us. Do you want to just talk a little bit about that business? Yeah, so BPY, so Brookfield Property Partners. So this is one of my former holdings that I sold maybe a month ago, if I remember correctly. The main reason, not that I don't trust Brookfield,

I think it's a really well-managed business. They're really good at finding undervalued opportunities and purchasing them. And then when they've achieved full value, what they'll do is they'll sell them and then reinvest that money in what they find being good value. So whether we're looking at Brookfield Property Partners, Brookfield Infrastructure Partners, Brookfield Renewable Partners, they have a similar strategy. So I really don't have a reason to question Brookfield as a whole, but I'm not a fan of some of the assets that they have in the current climate. So don't get me wrong, they're very, for the most part, really high quality assets, but they tend to be focused in two sectors that have been very hard right now in real estate. So we have commercial

real estate, but we also have, my God, retail real estate. Well, I don't know why I'm having so much trouble with remembering that one. It's an obvious one too. But yeah, so one of their big thing is they have high quality properties in those two sectors. But those two sectors have been struggling even more. So I would say retail. There's been a lot of government subsidies. I've talked about that in the last few episodes that were given to businesses in order to make their rent. So I'm not sure where this is going long term and I do have some doubts that it will I think they're being a

bit too optimistic when it comes to BPOI that's my own personal opinion and I could completely be completely wrong about that I think it's trading about $15 a share right now and maybe you know it'll go through the roof within a few years I really really don't know. But there's a lot of challenges in, especially retail, I would say, the future of retail, I really don't know what it's going to look like. And there's been a lot of bankruptcies in retail, there's been some recent one that happened, I think right now we're on track this year to, we're actually over the bankruptcy level in retail businesses in the US and Canada than we had all of last year. And that's even with the government subsidies.

So it could get a lot worse in those sectors. And one of the things that they've done that I'm not a fan of, but I do understand why they're doing it, is they've actually purchased some retail businesses to basically keep the tenant within their properties. So they've partnered up with Simon Property Group on that. You bring up a good point because as much as I think Bruce Flatt is an incredible manager, the CEO, and has had the secret sauce for years now, Brookfield buying distressed assets, as they are true value investors of real assets at heart.

After listening to some of the things he's had to say and reading his reports, I worry that he is slightly too optimistic on the future of retail, brick and mortar and the future of offices. Now, he talks a lot a bit about as humans being very social beings, and that a zoom call, you can never really truly meet someone. And when he when he when I say that, I mean, in, in the office. And I do truly agree with him on that. I do, however, think he's being slightly optimistic with the real estate business. Now, what I will say is as value investors ourselves, I look at the entire Brookfield empire. And if that's dragging the stock down is the real estate sector, which will be fine long-term, but has some,

some, uh, some headwinds in front of it. It looks super attractive from that valuation. So if the market can keep hating real estate and I can keep buying BAM, I am a happy investor. Yeah, exactly. And I mean, BAM as a whole, and like you said it when we just started, so it's been dragged down by the most part by BPUI. So if you guys, I mean, you don't have to go much into detail for that. Just look at the chart for the past year of BP, BIP, BBY, BAM and I think the business partners have not performed all that well either but you'll see the difference between all of them and you'll notice that like Brayden said the property partners is really the one that's been dragging down on BAM. So anything else on BPUI or we'll go over to, which one do you want to do next, Brayden?

I'm just going to give a little bit of a lowdown on the asset management business, which is I get questions all the time and we're going to shift to this as a question for later in the show. But do you go ahead and own the subsidiaries, which are publicly traded, that we've been talking about? Or do you just own BAM? And my answer to that has been not only for simplicity's sake, just own BAM, but also one of the best parts of their business is the fact that they have

$290 billion plus of fee-bearing capital that they're collecting fees on for managing for investors who are looking for alternative assets. And this is among all of the awesome parts of their business, like renewable energy and infrastructure globally. This is a business that has tons of runway for growth. So again, they operate in 30 countries. They have over 150,000 employees, which is really, really impressive. Over the last year, they raised $45 billion of capital across the business, $40 billion in capital of high quality investments globally, and they've realized $12 billion in net sales of assets. So it's been an incredible

compounder, growing revenue at 20% compound annual growth rate and free cash of almost 25% a year over the last 10 years. So it has been performing very well, dividends growing very quickly and with a very safe payout ratio. And it's just a good place to be. place to be. So the asset management business is really interesting because Brookfield projects massive appetite growth for real assets across the world, which has been a trend for over 20 years. And so this is what's really interesting, right? As bond yields go to zero, investors are looking for fixed income or alternative assets. Where do they go? They're not going to go for bonds. Bond yields are crap. So where do they go? They go to alternative assets that are going to give

them yield. And that's exactly what Brookfield operates on. So not only is that good for their subsidiaries, but it's also good for investors who are looking to grow money and get a yield on these types of investments. And Brookfield can supply that with the asset management businesses, which is growing very fast. So they spin off obscene amounts of cash. Low interest rates is good for pretty much every part of the business, like literally every part of the business, including the asset management business. And they've been really, really disciplined value investors. So when we talked about Bruce Flatt, maybe being a little optimistic about the return of commercial real estate, maybe Sam and I are dead wrong on that.

Maybe he's completely right. I mean, his track record speaks for itself. And he has data beyond what we're seeing. I mean, he's not going to go out and say, yeah, things look really bad for our real estate business. But he mentioned some figures that, you know, do provide some positive sentiment moving out of a lockdown. So I'm sure that they're seeing all kinds of good deals on safe assets that are going to provide yield for them.

So I get that. They have offices in Toronto, New York, Brazil, London, Dubai, Mumbai, Shanghai, Hong Kong, and Sydney. So their footprint globally to be able to see deals that other people are not seeing and the amount of liquidity that they can inject is really, really high compared to anyone else. So they're able to do deals and see deals that no one else is really looking for. And that's been kind of a lot of their secret sauce. They've had some really, really successful spinoffs that no one would have ever even thought of. So it comes down to a really smart management team and very, very disciplined.

And they look for deals that no one really even really wants to touch. Like we're talking about something that closed like right at the beginning of the pandemic of hotels. Again, not something that the market likes right now. However, it has worked for them. So we'll see what happens in the future. 10 years ago, they generated $1.4 billion in free cash. And in 2019, they did 6.3. That is very, very good growth. And without missing a beat, that ticks up about 20% a year. So they have hit on all of their metrics that they've promised. And they see a very, very bright future

with yields on bonds and interest rates being so low. These are positives for this business. So I polled Reddit the other day and I said, which TSX stock would you own for the next 10 years? And perhaps this is biased because I prefaced the post. I said, okay, I'll go first. I'll take BAM. Then BAM became a very clear winner in that post. Saw lots of CN Rail, things that I'd owned for the next 10 years. So lots of safe stuff. But there is Canadian consensus that this stock is really, really cheap right now.

And it was even more cheap, down 40% when the pandemic started. So I'm still seeing a really, really good deal on this stock. And I think anyone entering now is going to see really, really nice returns in the future. So I guess this is a question for you, Simon. You own the subsidiaries publicly traded separately. Do you own BAM? Because I personally just own BAM for simplicity. And I believe that the asset management business with 290 billion in free fee bearing capital is one of the better parts of the business. So I'm interested to hear your take on what people can do if they should own the subsidiaries and BAM, if they should just own BAM

or own them on their own. I mean, do you have options here? Yeah. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer

myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. BlossomTrade.com. Calling all DIY, do-it-yourself investors. Blossom is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are using the app. Every time I go on there, I am shocked.

The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. I am shocked. The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends, and there's other stuff like learning Duolingo style education lessons that are completely free. You can search up Blossom Social in the app store and join the community today. I'm on there.

I encourage you go on there and follow me. Search me up. Some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead. Blossom Social in the app store and I'll see you there. Yeah, so I own only BEP and BIP. The reason, I mean, my reason is pretty simple why I own them.

The main reason is that I wanted to have more pure plays into infrastructure and renewable energy. more pure plays into infrastructure and renewable energy. And I wanted to, I had a little bit of BBY before that, but it was a very small portion compared to BIP and BEP. And now, obviously, I don't really want too much exposure to that for the reasons we have explained earlier. I do agree with you with the asset management portion. That's very attractive. I'm not a big

fan of their business services either. Just some of the, it's not a bad subsidiaries in itself. But so just to give you guys an example of the type of businesses that they own. So they own Genworth Canada, they own healthcare in terms of healthcare providers in Australia and New Zealand as well. They own construction services. They own also Royal, well, I'll say it in French, Royal Le Page or Royal Le Page. So they own a bunch of different businesses. So those are a little less stable than the BIP and BEP, in my opinion. So that's the main reason why I selected those two,

is just I wanted some more pure plays into infrastructure and renewable energy. But anyone looking for, like Brayden said, for something easy to do, and just, you know what, I just want something easy, I can just put it in one business, I don't have to worry about the rest, then BAM is probably your right choice. If you're looking to have just a pure play into renewable energy, infrastructure, real estate, then you might want to look at the subsidiaries. So that would probably be my take on that. Yeah. And if I was to own the subsidiaries on their own, I would own the two that you own as well. So we're completely aligned on that. I think the

bull case for those two subsidiaries, BIP and BEP, are the strongest. And they also pay some really nice growing dividends as well. What's the yield on BIP these days, north of 6%? dividends as well. What's the yield on BIP these days? North of 6%? No, it went down. So I think it's around 450. Sorry, 4.5%. And they actually had a special dividend like three months ago. So if you guys see the dividend kind of being skewed a little bit is because they spun off the BIP limited partnership to a BIP corporation. So the reason that they actually did that was to attract institutional investors, but also people that have these and funds that have them for taxable accounts. Because like I mentioned earlier, it gets quite complex, especially in the US when you do your taxes, if you have them in taxable accounts.

So what they did is they gave you a certain amount of shares for each share of BIP that you have into the BIP Corporation. BIPC is the ticker on the U.S. and BIPC.TO. But that because you got all those shares, it's calculated as uh kind of a special dividend if you'd like so you got your regular dividend as well and you had a uh kind of new share so i got i think like 15 new sharesil uh i checked my quest account bam was trading at 40 bucks and it was at 90 you know pre-pandemic i was like whoa what's going on not only was it down but they actually did a three for two reverse split um it's just like why do you need to do that i don't know uh but they're always doing interesting stuff and even researching the company i i don't know if it's on purpose

i'm going to give the benefit of the doubt and say it's not but it is really difficult to understand the business from their investor relations page and deep dives into even annual reports, presentations, quarterly reports. They almost pride themselves in being this complex black box. And I don't know if that's intentional, but it sure is one of the most complicated structures. And before, it used to all be Brookfield. And then a couple years ago, they split off into a bunch of different units. And then obviously the subsidiary is being publicly listed. BAM's going to own this controlling stake percentage of each one.

It all seems a bit outrageous, to be quite frank. But they're seeing an optimization somewhere. And management's been so smart that I trust it and I back it. And this is Canada Berkshire Hathaway. It has to be the Berkshire Hathaway of Canada. It is. It's Berkshire Hathaway of Canada. It is. It's Berkshire Hathaway of Canada. And it's like owning Berkshire, where if someone says, I only own one stock and it's Brookfield

Asset Management, I would say, oh, your portfolio is diversified more than anyone who owns 10 individual companies. Like it is instant diversification and real assets. So if you're looking also for diversification from just equities, although BAM is an equity, what they're actually owning and buying is real assets that provide value on a global scale. And they pride themselves on ESG as well, on the renewable business and providing core infrastructure for developing nations is not only good returns for them, but it's providing real value for all of the world as they operate in so many countries.

So if someone asks me, Brayden, what is the one company I just opened a trading account? What is the one company I should own? And I will say, if you're patient and you want to hold something for a long time, start with BAM.

Oh, not GameStop? Nice one. I know, it's been a while we haven't talked about game stop recently that's that's a that's a good little snipe there yeah game stop i wonder what it's trading for hopefully zero um i still think they're alive but i mean uh the one that we actually forgot to talk about is the last one. So Oak Tree Capital. Oak Tree. That's right. Good catch. Oak Tree Capital.

So Brookfield actually took a controlling stake in Oak Tree Capital in 2019. I mean, I would have liked to dive a bit more into that one. Their website, the Oak Tree Capital website, wasn't working when I tried today and yesterday. They're old school folks over there at Oatree. Yeah, exactly. I know a little bit about Oatree Capital. It was led by and still is by Howard Marks. Howard Marks has a really good book about market cycles. If you guys are

interested in learning more about that, I've mentioned it before, but he does talk as well about Oak Tree Capital in there. So that's why I know a bit more about it. So Oak Tree Capital, one of the big things that they made a lot of money with is during the financial crisis in 2008-2009. So they invested in distressed asset, but more specifically, corporate bonds. So they invested even in some junk bonds because they were selling for pennies on the dollars. And what our marks and his team did over there is they assessed, okay, I mean, i mean yes they're selling they're not great bonds but they're selling so cheaply um oftentimes if i remember correctly they were selling for like 25 cents uh on the dollar for these bonds when yeah they had a high risk of default but

probably not as high as the uh the price they were selling at. So that's the type of investment that O3 Capital will do. And obviously, getting a lot of value out of those investments and what we've talked about with Brookfield Asset Management makes a whole lot of sense that they would have taken a controlling stake in them. Yeah, there's really nice synergy from what they do. Um, and also, uh, proven management team as well, which is very core to their business. So Brookfield here at a 45 bucks, but split adjusted. I was talking about that split they did, uh, earlier in the year, split adjusted $60.

I liked it at $90. So you've got to really like it at split adjusted $60. And you're seeing all kinds of Canadians just talk about Brookfield being really cheap right now. Even cheaper before, obviously. It's come back a little bit. But this is just a great business. And if you're a Canadian, in my opinion, the core backbone of an equity portfolio. Do you have anything else to add on the business? I think we have given Brookfield our two cents.

No, I mean, I think whatever approach you take, if you're interested in investing in Brookfield are two cents? No, I mean, I think whatever approach you take, if you're interested in investing in Brookfield, whether you invest in BAM or any of the other subsidiaries that we talked about, I think it really depends on what you're looking for. Like I said, if you want more pure play into something, you'll probably want to do like I did. into something you'll might you'll probably want to do like i did uh if you're a retiree you'll probably want to invest more in the bip or bp just to collect that sweet dividend uh but aside from that if you want a really easy approach like brazen just said i don't think you can go wrong with just owning them itself keep it simple my man simple is profitable uh i swear by that all right folks as always getstockmarket.com thank you so much for the outrageous support uh lately and and the support

on stratosphere 2.0 that is launching september time frame making some really good progress on it. It is going to be one-stop shop for managing your portfolio, all the research. It's going to be the cleanest data source on the planet. I'm still looking for, I don't have a cap on beta testers. So give me an email, braden, B-R-A-D-E-N at stratosphereinvesting.com. And let me know. Shoot me an email. I'll add you to the list. We're looking at September timeframe. And then as always, getstockmarket.com has resources there for you, redirects to my website.

And you can see all the things that we work on. That'll do it for this week, guys. We will see you in a week's time. The Canadian investor is not to be taken as investment advice. Braden or Simone may own securities mentioned on this podcast. Always make sure to do your own research and due diligence before making investment decisions. Thanks for listening to this episode of The Canadian Investor. To get a list of the top Canadian dividend stocks right

now and other valuable investing resources, go to GetStockMarket.com.