Brookfield Asset Management Announces Strong Second Quarter Results

$37 billion of Capital Raised Year-to-Date;
On Track to Achieve Record Inflows of Close to $150 Billion in 2023

Closed Record $27 Billion for Infrastructure Fund to Date

Committed to New Investments of $50 Billion Year-to-Date

BROOKFIELD, NEWS, Aug. 09, 2023 (GLOBE NEWSWIRE) -- Brookfield Asset Management Ltd. (: BAM, TSX: BAM) today announced financial results for the quarter ended June 30, 2023.

Connor Teskey, President of Brookfield Asset Management stated, “We delivered strong results in the second quarter, showcasing the resilience of our business and stability of our fee streams that are driven by nearly 85% of fee-bearing capital attributable to long-term perpetual funding sources. Year-to-date, we committed to investments worth $50 billion. The scale, stability, and diversity of our businesses continue to differentiate our franchise with clients and counterparties.”

He added, “We also continue to see very strong momentum on the fundraising side. We’ve made terrific progress so far this year, having raised $37 billion of capital to date and expect this to accelerate in the second half of the year as we progress our efforts on recently launched funds. With these fundraising efforts, combined with approximately $50 billion of additional insurance inflows, we expect to raise close to $150 billion of capital this year which should drive meaningful earnings growth in 2024 and beyond.”

Operating Results

Brookfield Asset Management Ltd.
Net income for the publicly traded entity Brookfield Asset Management Ltd. (BAM, Financial) totaled $109 million for the quarter. BAM owns a 25% interest in our asset management business and the remaining 75% is owned by Brookfield Corporation. In order to provide meaningful comparative information, the following discussion relates to the financial results on a 100% basis for our asset management business (Brookfield Asset Management).

Brookfield Asset Management¹

Brookfield Asset Management’s distributable earnings were $527 million for the quarter and $2.2 billion over the last twelve months. Fee-related earnings comprise approximately 100% of distributable earnings for both the quarter and the last twelve months. Robust fundraising efforts and strong capital deployment activities drove quarterly fee-related earnings to $548 million for the quarter, representing an increase of 6% compared to the prior year period.

Operating Highlights
We have raised $74 billion over the last twelve months, with $17 billion raised during the second quarter and $37 billion raised year-to-date. Notable fundraising updates since the beginning of the second quarter include:

• We closed on $3.4 billion of capital for our fifth flagship infrastructure fund. We have now closed on $27 billion for this vintage, making it the largest infrastructure draw-down fund ever raised. This vintage will continue to grow as we close out more capital commitments before year end.
• Our third infrastructure debt fund has raised $4.3 billion to date, surpassing our previous fund size of $2.7 billion. We anticipate a final close later this year, tracking a total fund size over $5 billion, well surpassing our initial fund target.
• We held a significant first close for Oaktree’s twelfth flagship opportunistic credit fund for $3.0 billion, with a second close targeted for the third quarter. Oaktree’s direct lending fund also held a first close in the second quarter and has now raised $3.3 billion, with additional closes anticipated in the second half of the year.
  

Fee-bearing capital was $440 billion at the end of the second quarter, an increase of approximately $8 billion during the quarter and $48 billion or 12% over the past year.

• The above increase in fee-bearing capital contributed to growth in fee-related earnings to $2.2 billion over the last twelve months, representing a 16% increase over the prior period, excluding performance fees.
  

We committed to investments worth $50 billion across a number of high-quality businesses and assets. Notable transactions since our last earnings announcement include:

• Our infrastructure business entered into a definitive agreement to acquire Compass Datacenters, in a deal valued at approximately $6.0 billion. With numerous data centers across the U.S., Canada, and Europe, Compass Datacenters compliments our infrastructure digitalization investment strategy. The deal is expected to close by the end of the year.
• Our renewables business announced its acquisition of Duke Energy Renewables, an integrated developer and operator of renewable power assets, at an enterprise value of $2.7 billion. Our fifth flagship infrastructure vintage committed equity of $1.1 billion.
• Our private equity business agreed to acquire Network International in a take-private deal valued at approximately $3.0 billion. Network’s digital commerce business operates across the Middle East, providing technology-enabled payments solutions to merchants and financial institutions. This investment aligns with Brookfield’s goal of further expansion in the Middle East and continued digitalization efforts across all businesses.
  

We advanced or completed $15 billion of monetizations through the first half of 2023, generating strong multiples of capital and IRR’s.

• Our global portfolio of essential service businesses and assets mainly generate contracted or regulated inflation-linked revenues, which are highly cash generative and continue to be very attractive to buyers in the current economic environment. In that regard, since the start of the year, we monetized $15 billion of assets at premium valuations, including $5 billion of asset sales within our real estate business and $10 billion of infrastructure assets.
• Notable sales across the business included the sale of a high-quality portfolio of office campuses in India, a hospitality investment portfolio in the US, and a 12.5% interest in a U.S. gas pipeline. As we look forward, we have a number of other sales processes under way and our monetization pipeline remains very strong.

As of June 30, 2023, we have $83 billion of uncalled fund commitments.

• Total investable capital includes $2.9 billion of cash and cash equivalents, as well as $83 billion of uncalled fund commitments, of which $40 billion is not currently earning fees across our strategies, and will earn approximately $400 million of fees annually once deployed. This excludes any capital that our 75% shareholder has on its balance sheet and in its insurance operations; we currently also have no debt.
  

Strategic Initiatives
Subsequent to quarter end, Brookfield Reinsurance (BNRE) and American Equity Investment Life Holding Company (AEL) entered into a definitive agreement whereby BNRE is set to acquire all of the outstanding shares of common stock of AEL it does not already own in a cash and stock transaction that values AEL at approximately $4.3 billion. Once the transaction is closed, we expect BAM to manage $50 billion of additional insurance fee-bearing capital, which will earn approximately $125 million of annual base fee revenue. BAM will not contribute any capital into the transaction and will not assume any insurance liabilities on its balance sheet.

Regular Dividend Declaration & Establishment of Dividend Reinvestment Program
The board of directors of Brookfield Asset Management Ltd. declared a quarterly dividend of $0.32 per share, payable on September 29, 2023, to shareholders of record as of the close of business on August 31, 2023.