Brookfield bets big on insurance as real estate investments ebb
Brookfield sourced existing assets to launch a private REIT last month
For Brookfield Asset Management, insurance may be the new real estate.
The firm is in the process of spending $6.5 billion to take Brookfield Property Partners private after the real estate wing, flush with mall and office holdings, took a beating during the pandemic.
Meanwhile, Brookfield announced Monday it would invest billions to bulk up its newly-public insurance arm.
Brookfield Reinsurance Partners, the recent spin-off of Brookfield Asset Management, agreed to buy insurance company American National Group for $5.1 billion in an all-cash deal. American National stockholders will earn $190 in cash per share, a premium of about 10 percent to the firm’s $172.80 closing price Friday.
The acquisition comes over a month after Brookfield said it would take its reinsurance unit — a business focusing on insurance for insurance companies — public. The firm moved to expand insurance operations on the heels of low interest rates and similar acquisitions by peers
such as KKR & Co., S&P Global reported last fall.
Chief Executive Officer of Brookfield Reinsurance Sachin Shah called the latest acquisition a “milestone in the continued expansion of our insurance business.”
Meanwhile, the firm has spent the past several months doing damage control on a real estate unit that reported $2 billion in losses last year. Brookfield Asset Management announced in April that Brookfield Property Partners would be taken private — a transition that would shield the portfolio’s performance from the eyes of analysts, investors and short-sellers. The privatization completed late last month, according to Yahoo! Finance.
Brookfield Asset Management last month said it would use existing assets through subsidiary Oaktree Capital Management to launch a private real estate investment trust, according to Bloomberg.
Oaktree’s REIT has just $478 million in total assets to which Brookfield will contribute $400 million via its interest in three multifamily and office properties, a small venture for Brookfield which manages $609 billion, Bloomberg reported.
The firm, however, has proved it’s capable of scaling up operations in the past, Bloomberg said.
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