Brookfield Trio

10/09/2015 9:00 am EST

Focus: MLPS

In a review of unconventional partnerships, Robert Rapier of MLP Investing Insider, highlights a trio of related outfits involved in property, renewable energy, infrastructure and private equity.

Brookfield Asset Management (BAM), a global alternative asset manager, has three affiliates which are publicly traded partnerships akin to MLPs.

We note, however, that their Canadian primary listings, Bermuda legal domicile and global operating reach create a layer of tax complexity and potential complications.

Brookfield Infrastructure Partners (BIP)

Brookfield Infrastructure was formed to own global infrastructure assets that generate stable cash flows, including utility networks in North and South America, Europe, and Australia.

Its communications infrastructure includes about 7,000 multi-purpose towers and active rooftop sites and 5,000 km of fiber backbone in France.

Close to 90% of BIP's cash flow comes from regulated businesses or long-term contracts and roughly 70% is indexed to inflation.

Since 2009, the partnership has grown funds from operations (FFO) per unit at a compound annual growth rate (CAGR) of 23%, and over the same time period, grew the distribution per unit at a CAGR of 12%.

For the quarter ended June 30, BIP generated FFO of $208 million versus $180 million for Q2 2014. The company declared a quarterly distribution of $0.53 per unit, which translates to an annualized yield of 5.6%.

Brookfield Renewable Energy Partners (BEP)

Brookfield Renewable owns renewable power generation facilities valued at $20 billion. 80% of its power is produced by 204 hydroelectric stations on 75 river systems.

It also owns 28 wind facilities and two natural gas-fired plants in the US, Canada, Brazil, and Europe.

Over the next five years BEP will invest $500 to $750 million at targeted returns of 15-20%. BEP has a current yield of 6.3%.

Brookfield Property Partners LP (BPY)

Brookfield Property owns, operates, and invests in office, retail, multi-family, and industrial assets. It has $61.4 billion in assets and interests in over 100 premier office properties and 150 best-in-class retail malls around the globe.

BPY is active in the US, Canada, the UK, Australia, and Brazil. Since 1989 BPY has invested over $30 billion of equity in properties. BPY currently yields 5.3%.

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