• Fee-Related Earnings (FRE): $677 million or $0.42 per share in Q4, up 17% year-over-year; $2.5 billion for the last 12 months.
• Distributable Earnings (DE): $649 million or $0.40 per share in Q4, up 11% year-over-year; $2.4 billion for the last 12 months.
• Fee-Bearing Capital (FBC): Grew by 18% over the past year to $539 billion.
• Organic Fundraising: $29 billion in Q4, contributing to over $135 billion for the year.
• Assets Under Management (AUM): Surpassed $1 trillion.
• Liquidity Position: $1.8 billion at the end of the quarter.
• Dividend Increase: 15% increase to an annualized rate of $1.75 or $0.4375 per share per quarter.

• Warning! GuruFocus has detected 8 Warning Signs with LAD.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Brookfield Asset Management Ltd (NYSE:BAM) raised over $135 billion in 2024, including a record $29 billion in the fourth quarter, showcasing strong fundraising capabilities.
• The company achieved an 18% annual growth in its fee-bearing capital base, reaching $539 billion, which generated $2.5 billion in fee-related earnings.
• BAM strategically expanded its credit origination capabilities and bolstered its fundraising organization, contributing to significant growth in its credit business.
• The company surpassed $1 trillion in assets under management, reflecting its strong market position and growth trajectory.
• BAM announced a 15% increase in its quarterly dividend, demonstrating confidence in its financial health and future prospects.

Negative Points

• The M&A market was slower in 2024, which could impact future growth opportunities if the trend continues.
• Despite strong fundraising, the company experienced significant outflows in its credit business, which affected fee-bearing capital.
• The potential for changes in US tax treatment of carried interest could impact compensation structures and financial outcomes.
• The company's reliance on large-scale transactions may lead to longer deal cycles, potentially delaying capital deployment.
• Market conditions, such as higher interest rates and FX fluctuations, could pose challenges to maintaining growth momentum.

Q & A Highlights

Q: How long do you think the favorable environment for both capital deployment and asset monetization can persist, and how is Brookfield positioning itself to take advantage of it? A: Connor Teskey, President and CEO of Renewable Power & Transition, explained that the current market dynamics are beneficial due to significant liquidity and robust sentiment in asset classes where Brookfield has leadership. This environment is expected to last throughout the year, with potential to extend beyond, allowing Brookfield to capitalize on both deployment and monetization opportunities.

Q: What is the outlook for Brookfield's fundraising in 2025 compared to 2024, and what are the key drivers? A: Connor Teskey highlighted that Brookfield expects 2025 fundraising to surpass 2024 levels, driven by the completion of two flagship funds, the launch of a new flagship, and growth in complementary strategies. Additionally, insurance and high net worth fundraising channels are expected to contribute more than in 2024.

Q: Can you elaborate on Brookfield's strategy and opportunities in investment-grade private credit? A: Hadley Marshall, CFO, noted that Brookfield sees significant opportunities in investment-grade private credit, particularly through its infrastructure and real estate foundations. The firm is expanding capabilities and raising capital in this space, leveraging its capital markets capabilities to find suitable investment-grade opportunities for clients.

Q: How is Brookfield approaching the AI and data center investment opportunity, especially in light of recent developments like the DeepSeek study? A: Connor Teskey explained that Brookfield is well-positioned to capitalize on AI infrastructure investments due to its scale and capabilities in power, data centers, and real estate. Despite potential efficiency gains from AI, the demand for infrastructure remains strong, and Brookfield focuses on long-term contracts with high-quality counterparties.

Q: What are Brookfield's plans for using AI internally to enhance operations and investment processes? A: Connor Teskey mentioned that Brookfield is in the early stages of leveraging AI across its platform to drive cost efficiencies and productivity. The firm is sharing knowledge across its portfolio companies to identify successful AI applications and expects to focus on both cost and revenue enhancements in the future.

Q: How does Brookfield view the potential impact of changes in US tax treatment of carried interest on its compensation structure? A: Connor Teskey stated that Brookfield operates globally and manages different tax treatments of carry in various regions. A change in US tax treatment would not alter Brookfield's global compensation approach, as the firm is accustomed to navigating diverse tax environments.

Q: What is Brookfield's strategy for external growth, particularly in terms of GP acquisitions and using its balance sheet? A: Connor Teskey indicated that Brookfield remains opportunistic in GP acquisitions, focusing on strategic and accretive opportunities. The firm plans to use its balance sheet to fund GP M&A and seed capital for new strategies, leveraging its liquidity and credit capacity to drive organic growth.

Q: How does Brookfield view the transaction environment, and are there mismatches in being a buyer versus a seller across its core strategies? A: Connor Teskey noted that high-quality, cash-generative assets are seeing robust demand, favoring Brookfield's portfolio. The firm is deploying capital in infrastructure and renewable power to fund growth, while also capitalizing on opportunities to sell high-quality assets in a favorable market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.