BROOKFIELD ASSET MANAGEMENT LTD reported a rise in first-quarter profit, driven by strong fundraising and an increase in fee-bearing capital. The company's distributable earnings grew 7% to $702 million, or 43 cents per share, surpassing the average analyst estimate of 42 cents per share. First-quarter revenue was $1.34 billion, a 24.1% year-over-year increase but $110 million below expectations. Following $108 billion in fundraising over the past 12 months, the company's fee-bearing capital rose 12% year-over-year to $614 billion. The company will hold an earnings conference call at 10:00 AM Eastern Time.
During the quarter, BROOKFIELD ASSET MANAGEMENT LTD raised $21 billion through its own investment efforts, including $13 billion for credit, $3.4 billion for infrastructure, $1.4 billion for private equity, and several billion for real estate. This compares to $35 billion raised in the fourth quarter. The firm deployed $20 billion of capital during the quarter, up from $13 billion in the prior quarter. Additionally, it realized or agreed to sell $8 billion of investments, down from $46 billion in the previous quarter.
CEO Connor Teskey stated, "We have significant available capital to deploy as opportunities arise; we hold market-leading positions in the fastest-growing alternative segments; and we have limited exposure to areas under significant market pressure." Teskey succeeded Bruce Flatt as CEO in February, with Flatt continuing as Chairman of the asset manager. Flatt currently serves as CEO of parent company Brookfield Corporation and is focused on transforming BROOKFIELD ASSET MANAGEMENT LTD into an investment-led insurance company.
Since the start of the year, BROOKFIELD ASSET MANAGEMENT LTD has raised $67 billion, including a $6 billion first close for its flagship private equity strategy and a mandate to manage assets of Just Group, a retirement services company recently acquired by its affiliate, Brookfield Wealth Solutions.
**Energy Transition Focus** BROOKFIELD ASSET MANAGEMENT LTD manages over $1 trillion in assets. As surging electricity demand rekindles interest in atomic energy, the firm is solidifying its key role in nuclear construction. Last year, the U.S. government announced an agreement committing at least $80 billion to partner with Westinghouse, backed by BROOKFIELD ASSET MANAGEMENT LTD, to build nuclear reactors across the United States. Earlier this week, BROOKFIELD ASSET MANAGEMENT LTD agreed to form an atomic power plant development company with startup The Nuclear Company, initially focusing on reviving a potentially abandoned project in South Carolina.
The asset manager has closed several deals over the past two months, including partnering with Caisse de dépôt et placement du Québec (CDPQ) to acquire Canadian renewable energy company Boralex Inc. for C$9 billion (approximately $6.6 billion, including debt), and selling its stake in La Trobe Financial to Abu Dhabi's Axight.
**Blackstone Group LP and KKR & Co LP Outpace Industry, BROOKFIELD ASSET MANAGEMENT LTD's Performance Deemed "Solid"** Blackstone Group LP's first-quarter distributable earnings surged 25% year-over-year to $1.8 billion, while KKR & Co LP's adjusted net income grew 20%, both significantly exceeding BROOKFIELD ASSET MANAGEMENT LTD's 7% growth rate. Apollo's FRE soared 30%. Although BROOKFIELD ASSET MANAGEMENT LTD's profit exceeded expectations (43 cents vs. 42 cents expected), its growth rate notably lagged behind peers, reflecting the lower elasticity of its more "infrastructure + real asset"-oriented, steady strategy in a high-interest-rate environment.
Notably, BROOKFIELD ASSET MANAGEMENT LTD's revenue of $1.34 billion, while up 24.1% year-over-year, fell $110 million short of market expectations. The firm's fee-bearing capital reached $614 billion, a 12% year-over-year increase, with $108 billion raised over the past 12 months and an additional $67 billion raised year-to-date, maintaining its position among industry leaders in absolute scale. However, KKR & Co LP's fee-paying AUM grew at 18%, and Blackstone Group LP's performance fee-eligible AUM reached $635 billion, surpassing BROOKFIELD ASSET MANAGEMENT LTD. Over 90% of KKR & Co LP's capital is perpetual or committed for eight years or longer, whereas BROOKFIELD ASSET MANAGEMENT LTD has not disclosed similar data, making it difficult for the market to assess the "stickiness" of its fee-bearing capital. Blackstone Group LP's insurance channel AUM stands at $280 billion, up 18% year-over-year, highlighting its first-mover advantage in retailization and perpetual capital.
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