Rather than fretting about the financial storm that has hurt its own shares Brookfield Asset Management Inc. is waiting in the wings with $20-billion (U.S.) in capital for value opportunities created by turmoil in the markets.
The Toronto-based firm, which has more than $95-billion in assets under management, is signalling its willingness to make a big move if the right investment surfaces.
"Readying operations, balance sheet and mindset for substantial opportunity should it present itself," the company said in presentation materials posted on its web site in conjunction with an investor day being held in New York on Tuesday.
This could involve taking advantage of "sizable" distressed investment opportunities in the credit-strapped United States by acquiring control positions in companies in need of financial or operational turnarounds.
Brookfield has recently made investments of this type in companies including bathroom fixture manufacturer Maax Corp., U.S. paper maker Longview Fibre Paper and Packaging Inc., and natural gas producer Insignia Energy Ltd.
Brookfield has steadily been sharpening its focus on the management of renewable power, property and infrastructure assets.
Lately its shares have taken a hit alongside those of other companies in the financial services sector. Shares of Brookfield Properties Corp., which Brookfield half owns, have also fallen on fears about the Manhattan office market and the future of its largest tenant there, Merrill Lynch & Co., which is being purchased by Bank of America Corp.
However despite the punishment it has taken in the stock market, Brookfield said its operations have been largely unscathed by the global credit crisis.
As a buffer against global uncertainty, and to help prepare for the resulting opportunities, Brookfield has raised capital through financings, sold off non-core assets, and taken out $3.5-billion in credit insurance to hedge against potential increases in financing costs, according to the presentation.
Brookfield is actively developing and marketing six investment funds with $9-billion in capital, and said its long-term focus on real estate and infrastructure assets appears to be aligned with the interests of investors.
Its target investors include U.S. pension funds, foundations and sovereign wealth funds.
In a breakdown by sector, Brookfield said it plans to grow in the power sector through acquisitions, development projects and through rising electricity prices.
It is also looking for acquisitions and development opportunities in its infrastructure division, which focuses mainly on transportation, utilities and timber assets.
In its real estate operations, Brookfield said it will look to capitalize on U.S. housing woes and search for value where property owners are overleveraged.
The company, which already has significant real estate holdings in Brazil, will also look to expand its assets beyond North America and the office sector.