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Rookie Investor
Posted: 10 March 2025 22:07:57(UTC)
#4398

Joined: 09/12/2020(UTC)
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LondonYank84;337160 wrote:
Johan De Silva;336842 wrote:
I have added to KKR that is now some way off it's 200 day average. At some discount to LY again. Hope to repeat a BN experience. This is a second batch today and priced at $113.52/£87.81

KKR have proven performance without being a tech fund so it adds some diversification. I think they are well positioned to do some buying after they had a equity raise announcement this week.

I have very little clue about the valuation. Sold some HGT that held up to fund this!


Have done the same, selling some HGT to add to dollar cost average down into KKR @ $106 today.

Not for the faint of heart though - it trades a bit like a levered S&P fund so If US markets continue to sell off, it will too. It it will also rip higher on any recovery than the UK listed PEs…

Last month performance:
SPY -7%
Brookfield Corp -15%
Blackstone -17%
Apollo -22%
KKR -27%






I'm not one to blindly follow a random on a youtube channel, but I have wondered about buying BN for some time now (never owned it) and especially now given the falls, but since it is an incredibly complex firm to understand and value I sought out some help and found the following:

https://www.youtube.com/watch?v=pRAPQMq3F8Q

Not sure if there is something to be concerned about but if there is a lot of private assets being bought at expensive valuations, that too with a lot of debt (so debt squared in some cases...) then I find it an incredibly risky bet potentially. Add that to interest rates likely to stay high for longer, I wonder what the risk-reward for BN, and others like it, really is?
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3 users thanked Rookie Investor for this post.
Auric on 10/03/2025(UTC), LondonYank84 on 11/03/2025(UTC), Johan De Silva on 11/03/2025(UTC)
John Bran
Posted: 11 March 2025 09:19:16(UTC)
#4408

Joined: 01/09/2017(UTC)
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1 user thanked John Bran for this post.
dlp6666 on 11/03/2025(UTC)
LondonYank84
Posted: 11 March 2025 11:45:33(UTC)
#4399

Joined: 23/12/2022(UTC)
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Rookie Investor;337161 wrote:


I'm not one to blindly follow a random on a youtube channel, but I have wondered about buying BN for some time now (never owned it) and especially now given the falls, but since it is an incredibly complex firm to understand and value I sought out some help and found the following:

https://www.youtube.com/watch?v=pRAPQMq3F8Q

Not sure if there is something to be concerned about but if there is a lot of private assets being bought at expensive valuations, that too with a lot of debt (so debt squared in some cases...) then I find it an incredibly risky bet potentially. Add that to interest rates likely to stay high for longer, I wonder what the
risk-reward for BN, and others like it, really is?


You are right - it does have complexity due to its balance sheet (which the 'asset light' GPs do not have). For this reason, I suspect it will always trade at a discount to its NAV. The FT did a big article on Brookfield this past week, specifically looking at these various overlapping relationships.

However, BN has a lot of exposure to public subsidiaries, which provide a transparent pricing point for a large % of its assets. You can then back out how much the market is discounting the other parts of the business. In this case, the market is effectively discounting the rest of the business by 80%...! This is the math that has attracted Bill Ackman to build a position:



Brookfield are very shrewd operators and management are heavily incentivised via owning a large portion of BN to find ways to release value.
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5 users thanked LondonYank84 for this post.
Sheerman on 11/03/2025(UTC), Newbie on 11/03/2025(UTC), Rookie Investor on 11/03/2025(UTC), Johan De Silva on 11/03/2025(UTC), Auric on 12/03/2025(UTC)
Johan De Silva
Posted: 11 March 2025 13:11:10(UTC)
#4409

Joined: 22/07/2019(UTC)
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I am going to be adding to Apollo too because of the smaller market cap it has more room to grow, bit more in credit and the 3 diversify well along side a public tech fund... should it like the CEO says "get lucky". Long term SIPP.

The fact we have been benefitting from the dollar rally over recent years, the unwinding of which will like be a headwind rather than a tailwind. As for rates, yeah European rates are heading higher and need to go higher as Europe needs to spend. But US rates I think are more likely to go down with inflation (and/or increasing recession fears) and I don't want to open the politics can of worms. But it could happen. Despite the macro, the fed will most likely hold rates.
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Sheerman on 11/03/2025(UTC)
Rookie Investor
Posted: 11 March 2025 22:25:22(UTC)
#4400

Joined: 09/12/2020(UTC)
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LondonYank84;337235 wrote:
Rookie Investor;337161 wrote:


I'm not one to blindly follow a random on a youtube channel, but I have wondered about buying BN for some time now (never owned it) and especially now given the falls, but since it is an incredibly complex firm to understand and value I sought out some help and found the following:

https://www.youtube.com/watch?v=pRAPQMq3F8Q

Not sure if there is something to be concerned about but if there is a lot of private assets being bought at expensive valuations, that too with a lot of debt (so debt squared in some cases...) then I find it an incredibly risky bet potentially. Add that to interest rates likely to stay high for longer, I wonder what the
risk-reward for BN, and others like it, really is?


You are right - it does have complexity due to its balance sheet (which the 'asset light' GPs do not have). For this reason, I suspect it will always trade at a discount to its NAV. The FT did a big article on Brookfield this past week, specifically looking at these various overlapping relationships.

However, BN has a lot of exposure to public subsidiaries, which provide a transparent pricing point for a large % of its assets. You can then back out how much the market is discounting the other parts of the business. In this case, the market is effectively discounting the rest of the business by 80%...! This is the math that has attracted Bill Ackman to build a position:



Brookfield are very shrewd operators and management are heavily incentivised via owning a large portion of BN to find ways to release value.


Thank you LondonYank, this makes sense. I am sceptical of that YouTube so called "expert" with one example I think he does not seme to understand the fact that the consolidated debt on BN's B/S much of it is non-recourse and tied to only the specific asset the debt is funding.

I started a position today on this dip and might add to it when future opportunities arise and I have the cash. I also already own it via PSH who seem to have piled more into it late last year.
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