November 6, 2009 / 1:41 PM / in 9 years

UPDATE 3-Brookfield profit falls but acquisitions eyed

* Q3 EPS $0.17 vs EPS $0.27 yr-ago

* Exceeds estimates for $0.03 EPS, but shares fall

* Eyeing acquisitions in infrastructure, property (Recasts with comment from conference call, analyst)

TORONTO, Nov 6 (Reuters) - Profit at Brookfield Asset Management Inc (BAMa.TO) fell about 35 percent in the third quarter, but the investor in property, power and infrastructure assets said it was sitting on huge amounts of capital and ready to pursue acquisitions.

Toronto-based Brookfield, a major stakeholder in Brookfield Properties BPO.TO, one of Manhattan’s biggest office landlords, said on Friday its profit dropped as lower power prices in the sluggish economy offset slight increases in rent income.

Earnings fell to $112 million, or 17 cents a share, from $171 million, or 27 cents, a year earlier, and Brookfield shares fell 2.4 percent in late afternoon trade on the Toronto Stock Exchange.

Total revenue dipped to $3.0 billion from $3.2 billion, while fees earned rose to $157 million from $109 million.

Analysts said the focus this quarter was less on results than on what the big investor plans to do with its $3.8 billion in core liquidity — capital that Chief Executive Bruce Flatt said put Brookfield in an enviable position to make acquisitions as distressed companies sell off assets.

“Access to this significant amount of capital places us in a select group of large investors who have both, in our view, both the capital and human resources to pursue recapitalization transactions on a global basis where it makes sense for us,” Flatt told analysts on a conference call.

“We have been focused on new asset acquisitions and as one of the priorities that will take the lion share the next 10 to 18 months.”

Mark Rothschild, a real estate analyst at Genuity Capital Markets, said Brookfield’s confidence in pursuing acquisitions should make for an interesting few months as the company competes to snap up real estate and infrastructure assets.

“There is no question this company has been extremely successful in purchasing at distressed times, and they are not the type of management team to overpromise,” Rothschild said.

“On this conference call they showed extreme confidence in not just pursing deals but in closing on deals. So I think it could be really interesting to see what they can do.”

While Brookfield’s largest businesses are commercial office and renewable power, Flatt focused on infrastructure as he discussed possible deals, noting that there “are just many, many opportunities out there” — to the extent that Brookfield did not even have enough staff to keep up.

“We don’t have the people and the time to look at them all,” Flatt said, before adding that “We’re not worried the opportunities are going away because the capital markets have gone up.”

Flatt said the company made progress on several fronts in the three months ended Sept. 30, including the launch of new funds and the generation of $1.3 billion of new liquidity through equity issuance and asset monetizations.

Brookfield declared a dividend of 13 cents per Class A common share, as well as all of the regular monthly and quarterly dividends on its preferred shares. (Reporting by Andrea Hopkins, Editing by Frank McGurty)

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