Brookfield Asset Management's 1Q Earnings Lifted by Strong Capital Raising

Published: 2025-05-06 07:03:41 ET BN

Published on 05/06/2025 at 07:03

By Robb M. Stewart

Brookfield Asset Management recorded its highest earnings growth in the year's first three months since it went public as a standalone business, as the asset manager was buoyed by capital raised over the last year.

The firm's distributable earnings, a measure of cash that can be returned to shareholders, rose to $654 million, or 40 cents a share, in the first quarter, from $547 million, or 34 cents, a year earlier. Analysts were expecting earnings of $668.8 million, or 41 cents a share, according to FactSet.

Fee-related earnings increased by 26% on last year, to $698 million, in the just-ended quarter, driven by fundraising that included a large close for the fifth vintage of its real-estate flagship fund and solid insurance capital inflows. That growth was dented by a decline in the stock prices of Brookfield's listed affiliates.

Net income came in at $581 million, or 36 cents a share, up from $441 million, or 28 cents, in the same period a year earlier.

Revenue was 22% higher, at $1.08 billion, against $884 million a year earlier.

In a letter to shareholders, Chief Executive Bruce Flatt and President Connor Teskey said that although the near-term outlook remained uncertain, the firm's long-term strategy was unchanged and it was well-positioned to navigate the macroeconomic environment.

The last time market volatility reached current levels was during the onset of the Covid-19 pandemic, a period when Brookfield Asset Management continued to deploy capital and strengthened its market position, they said. Since then, the firm has raised more than $400 billion and grown fee-related earnings by 90%.

Flatt and Teskey said that Brookfield's investments are focused on essential assets, including power, infrastructure, real estate and critical business services. These businesses operate domestically and serve local demand, making them less exposed to tariffs and other global trade shocks. And many of the business are also highly contracted or regulated, which supports durable valuations and liquidity, especially when capital is scarce and investors seek defensive positioning, they said.

Brookfield raised $25 billion of capital in the latest quarter, bringing inflows to more than $140 billion over the past year.

It said it raised nearly $6 billion in the first quarter for its flagship real estate strategy, bringing total capital to $16 billion. With final closings from clients in wealth and regional sleeves still ahead, it promises to be the largest real estate Brookfield has raised.

Brookfield Asset Management, which was created in a 2022 spinoff and is one of several publicly traded Brookfield entities, earlier this month completed an arrangement aimed at broadening its shareholder ownership and simplifying its structure.

After relocating its headquarters to New York from Toronto last year, Brookfield Asset Management took full control of parent Brookfield's asset management business. That means its parent now directly owns a 73% interest in Brookfield Asset Management where it previously had an equivalent stake in the asset management operations.

As of the end of March, the firm had a total of $119 billion of uncalled fund commitments, which includes uncalled fund commitments of $52 billion which isn't currently earning fees but which its said will earn about $520 million of fees annually once deployed. In all it had corporate liquidity of $1.4 billion, not including an inaugural bond offering in April, comprised of cash, short term financial assets, and the undrawn capacity on a revolving credit.

Write to Robb M. Stewart at [email protected]

(END) Dow Jones Newswires

05-06-25 0702ET