Q: I noticed that Brookfield DTLA, a BAM subsidiary, has defaulted on a series of office building morgages with their preferred dropping from $30 to $0.50. Also I have read frequently that Brookfield's financial structure is highly integrated and complex.
Do you see see any risk here or should I maintain my position. Thanks
Do you see see any risk here or should I maintain my position. Thanks
5i Research Answer:
This is quite old news now, and has previously been discussed here. BAM manages third party funds, and is not directly on the hook for these defaults. Certainly it is not good news but not likely to be material for the parent company. The accounting can be complex but the company has created massive shareholder value over decades. Its structure is set up both to save taxes and to allow funding to subsidiaries. Complicated, for sure, but not concerning.