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Alphyn Capital Management, an investment management firm, released its fourth-quarter 2022 investor letter. The same can be downloaded here. The fund returned 20.4% in the fourth quarter compared to a 7.6% return for the S&P500 Index. For 2022, the fund returned -20.8% compared to the -18.1% return for the S&P 500 Index. The top 10 positions comprised 78% of the portfolio as of 31 December 2022, and the portfolio held 1% in cash. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Alphyn Capital highlighted stocks like Brookfield Asset Management Ltd. (NYSE:BAM) in its Q4 2022 investor letter. Headquartered in Toronto, Canada, Brookfield Asset Management Inc. (NYSE:BAM) is an alternative asset management services providing company. On January 30, 2023, Brookfield Asset Management Ltd. (NYSE:BAM) stock closed at $31.59 per share. One-month return of Brookfield Asset Management Ltd. (NYSE:BAM) was 11.00%, and year-to-date its shares gained 10.18% of their value. Brookfield Asset Management Ltd. (NYSE:BAM) has a market capitalization of $13.021 billion.
Alphyn Capital made the following comment about Brookfield Asset Management Ltd. (NYSE:BAM) in its Q4 2022 investor letter:
"On December 9th Brookfield spun out its management company, which takes the “Brookfield Asset Management Ltd. (NYSE:BAM)” name and BAM ticker. BAM is an “asset lite” alternatives manager, which means that it invests fee money raised from external investors instead of its own balance sheet cash, on which it charges both management and performance fees. BAM has approximately $400bn in Fee Paying Assets Under Management and is set to grow its AUM, and therefore its fees and earnings, by around 20% per annum for the next few years, with most already contracted out. In addition, BAM is well positioned for the current interest rate environment: approximately 60% of BAMs funds invest in real assets (for example, real estate, infrastructure, and clean energy), and about 25% in credit (drawing on subsidiary Oaktree’s expertise in distressed credit, which could benefit from less benign interest rates). The spin, therefore, is an effort to “unlock value” by highlighting BAM’s attractive financials and growth prospects, hopefully leading to a valuation uplift. Asset lite alternative managers with similar financial characteristics trade for 20x P/E vs. 10-12x for “asset heavy” competitors. The parent company, now called Brookfield Corp and with ticker BN, should benefit from this revaluation, too, as it owns 75% of BAM.