Brookfield Asset Management raised US$29 billion in the fourth quarter, most of it through its credit business, which has become its largest driver of growth.
Distributable earnings climbed 11% from a year earlier to $649 million, the firm said in a statement Wednesday. That amounted to 40 cents per share, slightly above the 39-cent average estimate of analysts surveyed by Bloomberg.
The credit arm collected $20 billion of new capital, almost half of which came through Oaktree funds and strategies, with another $6.6 billion coming from insurance clients. Brookfield’s global transition fund took in $3.5 billion of capital, and its real estate flagship fund raised around $500 million.
“Credit has grown substantially within our business over recent years and now represents the single largest source of our assets under management,” Chief Executive Officer Bruce Flatt and President Connor Teskey said in a letter to investors.
Last year, the New York-based firm created an arm that aggregates its credit business across Brookfield’s infrastructure and real estate lending funds under one umbrella, and also includes partnerships with Oaktree Capital Management, European credit manager LCM Partners, Primary Wave, Castlelake LP and 17Capital.
Alternative asset managers have been expanding beyond private equity in recent years to become major players in credit markets. Blackstone Inc. and Apollo Global Management Inc. also count credit as their largest businesses.
Brookfield’s total fee-bearing capital increased to $539 billion, up 18% from a year earlier but unchanged from the third quarter. Shares fell as much as 2% in New York.
Brookfield, which manages more than $1 trillion of assets, sees “conditions that are favorable for both capital deployment and monetization,” Flatt and Teskey wrote in the letter, citing demand for investments that deliver data centers, telecom towers, fiber and renewable power. Earlier, the firm said it plans to invest €20 billion ($20.7 billion) to develop data centers and AI infrastructure in France over the next five years, most of which will be allocated to data center investments.
Brookfield is well positioned to benefit if alternative asset managers get access to defined-contribution plans such as 401(k)s, Teskey said in a call with analysts. While the timing of that potential change is uncertain, it seems increasingly positive each day, he added.
“Our focus on long-duration inflation index asset classes and credit would really lend up well towards appealing to the capital and therefore it’s something that we remain ready and focused on should the regulation change,” Teskey said.
President Donald Trump’s return to the White House is widely expected to create an opening for fund managers to expand their presence in individual retirement accounts.
Last year, the asset manager moved its head office to New York from Toronto to try to gain inclusion in more US stock indexes and attract more investors. The US represents Brookfield’s largest employee base, as well as the majority of its revenues and assets under management. The firm expects the board’s composition “to increasingly reflect our US focus.”
With assistance from Ilya Banares
Layan Odeh, Bloomberg News
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