Brookfield Asset Management (NYSE: BAM) invests in physical assets, including real estate, energy, and infrastructure investments. The firm has over $100 billion in assets under management. Essentially a publicly-traded private equity firm, Brookfield earns over 50% of its revenue by owning, renting, and operating office and residential properties. The firm also invests in global hydroelectric power generation plants, timberlands, and electricity transmission infrastructure in Brazil and Canada. Brookfield invests capital on behalf of its institutional investors and itself. In most cases, institutions provide funds for BAM to manage.
Rising Interest rates as well as fluctuating foreign exchange rates affect BAM operations. When interest rates rise, Brookfield (and the firms whose money Brookfield manages) is less inclined to borrow and make leveraged investments. Brookfield is headquartered in Canada and owns and operates properties, power plants, and timberlands across the globe, making the firm subject to worldwide foreign exchange rates. Also, adverse weather conditions around the globe hurt BAM's timberland and hydroelectric power segments.
In 2009, BAM had $100 billion in total assets under management. The company generated $454 million in net income on $12.1 billion in total revenues. This represents a 30.0% decline in net income and a 6.4% dip in total revenue from 2008.
BAM divides its business into the following segments.
BAM owns and operates real estate, power plants, and timberlands around the world, and are affected foreign exchange rates. With major holdings outside of Canada (especially in the US), Brookfield stands to lose from a falling dollar.
Brookfield's Power Generation and Development segments are both at the mercy of global weather conditions. Not only is Brookfield's Development segment affected by bad weather conditions, but its Power Generation operations are vulnerable as well. In general, Brookfield, more than most asset managers, is subject to adverse weather conditions around the globe.
Though no asset managers totally match the distribution of assets of Brookfield, a few do overlap BAM operations. Competitors are primarily companies that also invest in physical capital, which include the Vornado Realty Trust (VNO), SL Green Realty (SLG), and Boston Properties (BXP).