-
Brookfield Infrastructure Partners L.P. (BIP.UN)
-
Brookfield Renewable Corporation Class A Exchangeable Subordinate Voting Shares (BEPC)
-
Brookfield Corporation Class A Limited Voting Shares (BN)
-
Brookfield Asset Management Ltd. Class A Limited Voting Shares (BAM)
Q: Hey folks, hope everyone is enjoying the summer season. I own basically an equal weighting of BN (4%), BAM (4%), BEP(4%) in our various accounts. I'd like to buy a 4% position in BIP. Now comes my question, should I be a lumper or splitter - that is, am I ok looking at these as 4% positions, or would I be better to look at this as 12% position moving to 16% wrt Brookfield products??
5i Research Answer:
We think to some degree, investors could look at Brookfield names as separate entities because although they are all under the Brookfield family, each name has different economics, leverage and debt profiles. For example, BEP.UN and BIP are renewable and utilities themes, respectively, while BAM is a capital-light asset manager. As a result, the position sizing for each should be capped depending on an investors’ risk tolerance. That being said, while we think each name should be looked at individually, there are some co-integrations between the companies, and this does raise the risk profile of having too large a combined position in the names.