Brookfield Corp. is benefitting from its momentum-gaining investment subsidiary, Brookfield Asset Management Ltd., which continues to grow its bottom line through global acquisitions and its credit business, says one expert.
“They have aspects of infrastructure, renewable energy, real estate, data centres... there’s a lot to look at with Brookfield across the board, but we’re pleased with their numbers,” Christopher Ballard, managing director at Check Capital Management Inc., told BNN Bloomberg in a Thursday interview.
Ballard’s comments came after Brookfield reported fourth quarter results earlier in the day, showing net income attributable to shareholders of US$432 million, amounting to a profit of 25 cents U.S. per diluted share for the quarter ended Dec. 31.
Though the company said quarterly revenue was down from a year earlier, distributable earnings rose compared to the last three months of 2023. Brookfield shares were up by roughly two per cent in afternoon trading Thursday.
Ballard said Toronto-based Brookfield’s success as a company is dependent on its subsidiaries, like Brookfield Asset Management, whose credit arm is now the largest driver of growth within the entire corporation.
Brookfield Asset Management, which is its own publicly traded company, reported on Wednesday that it raised US$29 billion in the fourth quarter, beating estimates, with $20 billion coming from its credit business. Ballard called the quarterly numbers “fabulous.”
Ballard added that of Brookfield’s subsidiaries, its asset management firm earns the best rate of return on capital, so the strong numbers reported there are “accretive” to Brookfield’s bottom line.
“When they also raise these assets, they can sit on them for quite a while before deploying them so they can almost time the growth story for the parent company as a whole, and they’ve been growing 15 to 20 per cent annualized now for quite a while,” he explained.
“Brookfield Asset Management now manages more than $1 trillion, they are a global leader in investment in infrastructure and all different aspects of renewable energy across the world.”
Ballard said that Brookfield is also at the forefront of large-scale investments in the global build-out of artificial intelligence (AI) technology.
Last week, Bloomberg News reported that the company plans to invest more than $20 billion to develop AI infrastructure in France over the next five years.
Ballard said that Brookfield is also focused on rewarding shareholders by continuing to buy back stock, as well as increasing its dividend, which the company announced is being raised by a penny to nine cents U.S. per share.
“So, all those aspects are kind of what we’re looking at to make sure that they’re firing on all cylinders, which they really are,” he said.
“You’re going to be hard-pressed to overstate how much of a global leader that Brookfield is across various segments all over the world. They are rapidly growing, and they don’t seem to be stopping anywhere in the near future.”
With files from Bloomberg News and The Canadian Press
