Brookfield Asset Management says it is creating BAM Reinsurance as a new publicly traded business similar to Brookfield Renewable and Brookfield Infrastructure.
The Toronto-based asset management company is at the top of a diverse group that is a global player in real estate, infrastructure, renewable power, private equity and credit.
In total, the group manages about US$575 billion in assets.
BAM Reinsurance’s role within the broader group will be to to grow its presence in reinsurance, which is a type of large-scale insurance for insurance companies.
Brookfield Asset Management plans to create the new entity by paying a special dividend in the form of BAM Reinsurance shares to holders of Brookfield class A shares.
“BAM Reinsurance is intended to provide our shareholders with a choice of holding either shares of Brookfield or the new shares of BAM Reinsurance, depending on what is most attractive to them based on their own circumstances,” said Nick Goodman, Brookfield’s chief financial officer.
The success of its recent public listing of Brookfield Renewable has encouraged the parent company to offer a similar structure for reinsurance, Goodman said.
The announcement came as Brookfield, which keeps its books in U.S. dollars, reported net income attributable to shareholders of US$172 million or 10 cents per share for the quarter ended Sept. 30, down from a profit of US$947 million or 61 cents per share a year ago.
Funds from operations, a key measure for Brookfield, totalled US$1.04 billion or 65 cents per share for the quarter, up from US$826 million or 54 cents per share in the same quarter last year.
While most of Brookfield’s operating segments showed increased funds from operations compared with last year, real estate’s portion plunged to $90 million from $271 million and residential’s fell to $37 million from $42 million.
“Our third quarter results reflect the strength of both our operating businesses and our asset management franchise,” Brookfield chief executive Bruce Flatt said in a statement ahead of the company’s analyst call.
“We generated record operating FFO [funds from operations] in the quarter, and over the last 12 months earned a record $2.8 billion of cash available for distribution and/or reinvestment,” Flat said.