Brookfield Asset Management Sees Profits Drop on Lower Fees

Brookfield Asset Management reported its first quarterly profit drop after its split from Brookfield due to lower fee collections.
May 8, 2024
Brookfield Asset Management reported its first quarterly profit drop after its split from Brookfield due to lower fee collections.
  • BAM’s quarterly earnings came in at $547M, or 34 cents a share, well below last year’s take.
  • Lower quarterly revenue prompted the firm to push into diverse credit strategies and a fresh round of capital raising.
  • BAM also increased its stake in Oaktree Capital Management and partnered with Castlelake LP, signs of strategic credit expansion.
Key Takeaways

Brookfield Asset Management reported its first quarterly profit drop after its split from Brookfield Corp. (BN) in 2022, due mostly to lower fee collections.

Feeling The Burn

BAM faced its first profit drop since becoming independent, with distributable earnings totaling $547M, down from $563M a year ago. The firm witnessed lower fee revenue across three of its five key business lines, including affiliated entities like Brookfield Renewable Partners and Brookfield Property Group.

Credit Expansion Empire

In response, Brookfield is pushing harder into credit strategies, raising $20B in capital in Q1, and has already made significant investments in credit-related ventures like Oaktree Capital Management and private debt firm Castlelake LP (which enjoyed $1.5B in Brookfield investment).

Brookfield’s foray into the credit sector, now its primary business line in terms of fee-bearing capital, saw it magnify its stake in Oaktree Capital Management by 5%, solidifying its ownership at 73%. 

Strategic Growth Initiatives

Brookfield’s steady rise in fee-related earnings, climbing marginally to $552M YoY, signifies the firm’s global resilience amid changing market dynamics. With a vision to reach $1T in fee-bearing assets by 2028, the firm’s strategic realignment towards credit, alongside its traditional real estate and infrastructure focus, will be hard to beat.

Apart from bolstering credit endeavors, Brookfield is also busy acquiring businesses and diversifying into sectors with long-term resilience, like logistics and renewable energy.

What’s Next?

Amassing over $459B in fee-bearing assets and engaging in substantial insurance asset acquisitions, Brookfield’s aggressive approach to M&A and its industry-leading investment deals with key players like Microsoft (MSFT) underscore its too-big-to-fail dominance. 

And thanks to aggressive capital raising, plus a dedicated credit arm under Craig Noble, the company aims to leverage over $100B in available funds to capitalize on diverse investment opportunities globally.

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