Mark Carney, the former governor of the Bank of England, will become the chair of Brookfield Asset Management, the investment arm of the Canadian conglomerate that will be spun off by the end of this year.
Mr Carney, a Canadian and former Goldman Sachs executive, was governor of the Bank of Canada from early 2008 to 2013 before taking up the top job at the BoE. He was hired by Brookfield in August 2020, shortly after stepping down from the UK central bank, and has led the company’s launch of a $15 billion (€14.5 billion) fund aiming to invest in the transition away from carbon-based energy sources and to renewables, which closed earlier this year.
Brookfield is planning to spin off a 25 per cent stake in its asset management unit by the end of 2022 in a manoeuvre aimed at simplifying the structure of the sprawling Toronto-based company and unlocking shareholder value.
The group’s asset management unit oversees $392 billion (€379.9 billion) in fee-bearing assets across real estate, infrastructure, renewable energy, credit and private equity on behalf of institutional investors. Brookfield, one of Canada’s largest corporations, also has more than $40 billion (€38.7 billion) of directly owned net assets, including real estate holdings such as London’s Canary Wharf and large stakes in publicly traded partnerships it has spun off over the past decade.
Bruce Flatt, Brookfield’s current chief executive, will retain his leadership role within the asset management business.
The board of the manager, led by Carney, will consist of Mr Flatt, seven independent directors and the heads of its real estate, private equity and infrastructure businesses, Brian Kingston, Cyrus Madon and Sam Pollock, who will continue to lead their respective businesses.
Brookfield is also clarifying the leadership across its businesses ahead of the spin-off and signalling its eventual succession plans from Mr Flatt by promoting a new generation of leaders, said a source familiar with the matter.
Several executives across Brookfield’s businesses, including Connor Teskey, Anuj Ranjan, Sachin Shah and Nick Goodman, were given higher-responsibility jobs potentially putting them in line to eventually lead the company.
Mr Flatt was named chief executive of Brookfield in the early 2000s, when he was in his 30s, and has steered its growth from an ailing real estate conglomerate into the second-largest alternative investment management business globally. Mr Flatt (57) has no plans to retire, said the source.
“[We] believe it is once again time to further strengthen our senior management team with the elevation of the next generation of leaders, while continuing to have the company’s team working together as collegially and effectively as ever,” Mr Flatt said in a letter to investors published on Thursday alongside the group’s second-quarter earnings.
Brookfield reported a net profit of $1.2 billion (€1.1 billion) that was buoyed by $21 billion (€20.3 billion) in asset sales made during the quarter. It also drew in $56 billion (€54.2 billion) in new assets, putting its available capital to invest at a record $111 billion (€107.5 billion).
Brookfield’s planned spin-off, which was first reported by the Financial Times in February, aims to give shareholders an independent valuation of its fee-based earnings divorced from their more complex holding of real estate and public market interests.
The manoeuvre would make the Canadian company more closely resemble its primary competitor, Blackstone Group, which holds virtually no direct investments on its balance sheet.
Some analysts have valued the entirety of Brookfield’s asset management business at more than $75 billion (€72.6 billion).
– Copyright The Financial Times Limited 2022
