Q: I am hearing concerns about private equity. I understand it's mostly about debt concerns. Can you summarize the concerns.
I'm not sure if BN is part of this but have always been a bit concerned with Brookfield's opacity.
BN and its related companies (BEP, BIP, BAM) make up a fairly significant chunk of my portfolio (c.20%) because I've had a lot of faith in them.
I wonder about your level of faith in them or whether concerns over private equity warrants a bit of a pullback.
Kevin
I'm not sure if BN is part of this but have always been a bit concerned with Brookfield's opacity.
BN and its related companies (BEP, BIP, BAM) make up a fairly significant chunk of my portfolio (c.20%) because I've had a lot of faith in them.
I wonder about your level of faith in them or whether concerns over private equity warrants a bit of a pullback.
Kevin
5i Research Answer:
Our faith remains quite high overall. Recent private equity concerns have stemmed from loans to software companies, and "gated" funds at some equity shops. BN et al have less exposure than others in this area. BN also has a massive amount of capital available to either withstand a downturn or, more likely, make more investments at better valuations. We cannot comment on position sizes, but we would remain quite comfortable with a large position overall. The recent decline we think reflects the situation well and the long term potential from here remains attractive.