In this article, we shall be going over the 5 Best Stocks to Buy Now According to Billionaire Andreas Halvorsen. To read our detailed analysis of Halvorsen’s history, his investment strategy and hedge fund performance, go directly to 10 Best Stocks to Buy Now According to Billionaire Andreas Halvorsen.
5. Brookfield Asset Management Inc. (NYSE:BAM)
Viking Global Investors’ Stake Value: $922.4M
Percentage of Viking Global Investors’ 13F Portfolio: 3.72%
Number of Hedge Fund Holdings: 35
Based in Brookfield Place, Toronto, Brookfield Asset Management Inc. (NYSE:BAM) is a Canadian multinational, and one of the largest alternative investment management companies in the world, with over $725 billion of assets under management in 2022. It focuses on direct control investments in real estate, renewable power, infrastructure, credit and private equity, and is next on Halvorsen’s list of the 5 best stocks to buy now. Halvorsen’s Viking Global is the largest stakeholder in Brookfield Asset Management Inc. (NYSE:BAM), owning over 16 million shares worth at around $922.4 million. This is a result of Halvorsen decreasing his hold over the stock by 8%, with Brookfield Asset Management Inc. (NYSE:BAM) making up for 3.72% of Viking Global’s Q1 2022 investment portfolio. Investor interest in the stock has seen a marked increase in the first quarter of 2022, with 35 hedge funds long the stock, compared to 29 a quarter ago.
Saltlight Capital, an asset management firm, published their Q1 2022 investor letter, a copy of which can be obtained here. They mentioned Brookfield Asset Management Inc. (NYSE:BAM) and this is what they had to say:
“During times like this, it is always helpful to remember what your portfolio is built with. One company that we’ve alluded to in the past is Brookfield Asset Management (NYSE:BAM). We’ve been invested in BAM across our various funds since 2019 and could not describe a more ‘resilient, indispensable and durable’ portfolio company. BAM is one of the largest alternative asset managers in the world, but it has some nuances that make it screen poorly (we’ll get into that). It started life as an industrial conglomerate called Brascan in Canada and so in line with general Canadian culture is understated and stays out of the limelight.
Bruce Flatt has been the CEO for over two decades and is the type of manager that we seek to partner with: honest, trustworthy, and extremely capable. We highly recommend watching these two videos: a Google talk in 2018 and this David Rubenstein interview to get a sense of Flatt. Importantly, BAM is not just about Flatt and his singular investing skills as many asset managers are. This is a widely scaled business. We’ve been impressed with the caliber of up-and-coming executives operating the individual businesses which give us confidence that the BAM culture will be retained for many decades to come.
BAM is unique in that it is an asset manager of third-party capital (called Limited Partners or LPs) but it also co-invests with its investors using its own capital. It certainly eats its own cooking (something that we can resonate with). Therefore, the intrinsic value should be comprised of invested capital plus the discounted value of future fee income. On top of this, if they generate outsized returns, they earn performance fees over an agreed-upon hurdle rate (called “carried interest”). BAM has an enviable track record, but a big part of their differentiation is that they run an internal operating business as well. Alongside investing staff, they have operators, engineers and domain experts that can optimize the operations of their investments. This allows them to buy cheap ‘fixer uppers’, send in their operators and re-sell them at a premium valuation. This is their secret sauce.”
