Bruce Flatt · Brookfield Asset Management

Update for Brookfield Shareholders

Bruce Flatt's March 2020 update to Brookfield shareholders

Published 23 Mar 2020Investor letter · Investment

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The view as filed on 23 Mar 2020, not a statement of what the author thinks today.

From the 6-K, as filed with the SEC

What to notice

1
Flatt opens with figures: about $12 billion of largely undrawn credit lines, about $5 billion of liquid assets, and corporate debt with no near-term maturities.

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Why read it

Shows how a capital-heavy business explains its resilience in a crash: liquidity, debt maturities and where capital will go, before any reassurance.

About this letter

Bruce Flatt, chief executive of Brookfield Asset Management, sent this letter to shareholders on 23 March 2020, the day the US stock market reached its low in the first weeks of the pandemic. Brookfield filed it the same day as an exhibit to a 6-K, the form a Canadian issuer uses to report to the SEC between annual filings.

The letter is three pages long and was written to answer one question: whether the company could withstand what was happening. Flatt lists the liquidity and the long-dated financing Brookfield held, describes which businesses would slow, and explains where it intended to invest, including through Oaktree, the credit manager it had partnered with the year before. He closes with a short argument about the difference between a share price and the value of the business behind it, and a reminder that a falling price is a chance to buy.

Companies

Brookfield Asset Management BAM
Oaktree Capital Management

Themes

crisis
risk
capital allocation
long term thinking