Brookfield Corp. and its subsidiaries are poised to benefit from governments and companies around the world increasing their spending on artificial intelligence infrastructure, an expert says.
“(Brookfield) really has their hands in a lot of different aspects of our lives,” Christopher Ballard, managing director of Check Capital Management, told BNN Bloomberg in an interview Thursday morning.
“(It’s) in a perfect place to grow over a period of time as the world develops and it seems to be right on the cutting edge of this AI infrastructure build out… you don’t really want to think about it on just a quarter-to-quarter basis.”
Ballard’s comments came after the Toronto-based company reported second-quarter earnings that showed deployable capital increasing to a record US$177 billion, as distributable earnings rose 13 per cent.
He said the company and its subsidiary Brookfield Asset Management Ltd. continues to gain momentum through its wealth solutions business, which Ballard called “their future growth engine.”
“They’re making purchases on average of like fixed-income annuities, if you will, and taking those assets and redeploying them at much higher rates of return,” he explained.
“Last quarter they had $391 million of distributable earnings coming from that side of the business which continues to grow at a very rapid clip.”
Brookfield, which manages over $1 trillion worth of assets within a diversified global portfolio that includes renewables, real estate and infrastructure, is also primed to take advantage of the nation-building spending plans being put forward by the federal government, Ballard said.
“The trends bode extremely well, and I believe that at some point in time they will do some partnerships in Canada,” he said. Prime Minister Mark Carney previously served as chair of Brookfield Asset Management before announcing his run for the Liberal Party leadership race early this year.
Ballard said that as an investment, Brookfield is essentially a long-term infrastructure play, and the company is uniquely positioned to benefit from technological innovations that are underway across the world.
“You really do want to think of (Brookfield) as infrastructure, so that has to do with hydropower, electric power, and all power needed to drive these new AI infrastructures,” said Ballard.
“(That’s) where all the spending is going; they’re on the cutting edge and kind of right in the middle of that forefront.”
