Mr. Connor Teskey reports

BROOKFIELD ASSET MANAGEMENT ANNOUNCES STRONG SECOND QUARTER RESULTS

Brookfield Asset Management Ltd. has released its 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 per cent 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

Net income for the publicly traded entity Brookfield Asset Management totalled $109-million for the quarter. Brookfield Asset owns a 25-per-cent interest in its asset management business and the remaining 75 per cent is owned by Brookfield Corp. In order to provide meaningful comparative information, the following discussion relates to the financial results on a 100-per-cent basis for its asset management business (Brookfield Asset Management).

Brookfield Asset Management's distributable earnings were $527-million for the quarter and $2.2-billion over the last 12 months. Fee-related earnings comprise approximately 100 per cent of distributable earnings for both the quarter and the last 12 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 per cent compared with the prior year period.

Operating highlights

The company has raised $74-billion over the last 12 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:

• It closed on $3.4-billion of capital for its fifth flagship infrastructure fund. It has now closed on $27-billion for this vintage, making it the largest infrastructure drawdown fund ever raised. This vintage will continue to grow as it closes out more capital commitments before year-end.
• Its third infrastructure debt fund has raised $4.3-billion to date, surpassing its previous fund size of $2.7-billion. The company anticipates a final close later this year, tracking a total fund size over $5-billion, well surpassing its initial fund target.
• It held a significant first close for Oaktree's 12 flagship opportunistic credit fund for $3-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 per cent over the last year:

• The above increase in fee-bearing capital contributed to growth in fee-related earnings to $2.2-billion over the last 12 months, representing a 16-per-cent increase over the prior period, excluding performance fees.

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

• Its infrastructure business entered into a definitive agreement to acquire Compass Datacenters, in a deal valued at approximately $6-billion. With numerous data centres across the United States, Canada and Europe, Compass Datacenters complements the company's infrastructure digitalization investment strategy. The deal is expected to close by the end of the year.
• Its 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. Its fifth flagship infrastructure vintage committed equity of $1.1-billion.
• Its private equity business agreed to acquire Network International in a take-private deal valued at approximately $3-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.

The company advanced or completed $15-billion of monetizations through the first half of 2023, generating strong multiples of capital and IRRs:

• Its 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, it monetized $15-billion of assets at premium valuations, including $5-billion of asset sales within its 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 U.S. and a 12.5-per-cent interest in a U.S. gas pipeline. As it looks forward, it has a number of other sales processes under way and its monetization pipeline remains very strong.

As of June 30, 2023, the company has $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 its strategies, and will earn approximately $400-million of fees annually once deployed. This excludes any capital that its 75-per-cent shareholder has on its balance sheet and in its insurance operations; it currently also has 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, it expects Brookfield Asset to manage $50-billion of additional insurance fee-bearing capital, which will earn approximately $125-million of annual base fee revenue. Brookfield Asset will not contribute any capital into the transaction and will not assume any insurance liabilities on its balance sheet.

Regular dividend declaration and establishment of dividend reinvestment program

The board of directors of Brookfield Asset Management declared a quarterly dividend of 32 cents per share, payable on Sept. 29, 2023, to shareholders of record as of the close of business on Aug. 31, 2023.

Quarterly earnings call details

Investors, analysts and other interested parties can access Brookfield Asset's second quarter 2023 results, as well as the shareholders' letter and supplemental information, on its website under the reports and filings section.

To participate in the conference call today at 11 a.m. EST, please preregister on-line. Upon registering, you will be e-mailed a dial-in number and unique PIN.

The conference call will also be webcast live on-line. For those unable to participate in the conference call, the telephone replay will be archived and available until Aug. 9, 2024, or available on its website.

About Brookfield Asset Management Ltd.

Brookfield Asset Management is a leading global alternative asset manager with approximately $850-billion of assets under management across renewable power and transition, infrastructure, private equity, real estate, and credit.

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