Brookfield Asset Management revalues real estate portfolio

TORONTO - Brookfield Asset Management Inc. reported a loss in its latest quarter as it revalued its real estate portfolio lower amid the pandemic.

The Toronto-based company, which keeps its books in U.S. dollars and has many operations outside Canada, said Thursday the loss for the quarter attributable to shareholders amounted to $656 million US or 43 cents per diluted share for the quarter ended June 30.

The second-quarter loss in its latest quarter compared with a profit of $399 million US or 24 cents per diluted share in the same quarter in 2019.

Brookfield said most of its operations continued to generate favourable operating profits, but some of its operating businesses were affected by the economic shutdown in the second quarter.

The company holds large interests in several publicly traded partnerships, including a 53 per cent stake in Brookfield Property Partners, which reported last week that it had been significantly affected by closures in its hospitality and retail assets due to the pandemic.

“The good news is that those operating businesses that were impacted are now all recovering, and the balance of the year should be better,” Brookfield said in a letter to shareholders.

Brookfield said that as emergency government aid put in place at the height of the pandemic tapers, it expects companies will increasingly be in need of cash and there will be opportunities for it to invest.

It has $77 billion US in deployable capital, including $16 billion US of cash, financial assets and undrawn lines of credit in BAM and its affiliates, as well as $61 billion US of uncalled fund commitments from other entities that are available for new transactions.

“Over the next three, six, nine and 12 months, we believe many companies will require significant equity to repair their balance sheets and continue to grow. With $77 billion of capital available for investing, we expect to participate in many of these situations in a variety of ways,” it said.

“We believe markets have recovered to levels that do not reflect the reality of the underlying economic environment. As a result, we are being patient with our capital, but we expect the pace of investment to increase over the next 12 months as opportunities present themselves.”

The data infrastructure business owns cell towers in six countries and data centres in 14 countries as well as fixed and wireless networks serving more than 2.5 million residential and enterprise customers.