Pedestrians walk past Brookfield Place in New York in May 2020.Frank Franklin II/The Associated Press
Brookfield Asset Management Ltd. BAM-T has moved its head office to New York as part of a revamp of its corporate structure aimed at attracting a broader array of shareholders, in part by listing its shares on more stock indexes.
Brookfield announced it has reregistered the head office of the asset manager in New York, confirming a plan floated with investors at a presentation in the city in early September. The company is also moving ahead with a share exchange that will make all of the asset manager’s shares publicly traded, but will not change the balance of ownership. The company’s corporate parent, Brookfield Corp. B-N, will still own 73 per cent of Brookfield Asset Management.
The changes to the corporate structure “will not result in any changes to the operations or strategic plans of BAM or BN and will have no effect on the tax treatment of their respective dividends,” Brookfield said in a news release.
Brookfield executives previously confirmed that the company is keeping its Canadian incorporation and its listing on the Toronto Stock Exchange, which gives it a prominent place in Canadian stock indexes.
The changes follow from a 2022 spinoff that listed 25 per cent of the shares in Brookfield Asset Management in public markets, which then increased to 27 per cent. Since then, parent Brookfield Corp. has owned the rest of the asset manager through a privately held stake. That has given the asset manager a market capitalization – about US$23-billion at current prices – that reflects 27 per cent of the business and is far less than its actual value.
Brookfield Corp. intends to exchange its stake for new shares, while ensuring that it controls the asset manager as long as it owns a majority of the voting shares. Once all Brookfield Asset Management shares are publicly traded, its market capitalization would be roughly US$85-billion. That higher value, combined with the reregistered New York headquarters, would help the company qualify to be listed in U.S. stock indexes such as the Russell 2000 Index.
To be eligible to join the S&P 500 index of larger-capitalization companies, Brookfield would need to make further changes that are not currently up for consideration.
The share exchange requires shareholder approval and Brookfield has called a special meeting on Dec. 20 to hold a vote.