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(Bloomberg) — Brookfield Corp. is merging its shares with those of its insurance business as the firm pushes ahead with its plans to transform itself into an investment-led insurer, the company said in its first-quarter earnings statement.
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The merger of the parent company and the insurance business will improve Brookfield Corp.’s overall capital structure and give it access to the combined group’s asset base to pursue growth, Chief Executive Officer Bruce Flatt said in a letter accompanying the statement on Thursday.
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The asset manager’s distributable earnings before realizations rose to $1.4 billion in the first quarter, a 7% increase from the prior year, according to the statement. Profits from the wealth business, which includes insurance, were $430 million — unchanged from a year ago — while its property group’s fell to $120 million during the quarter, down from $215 million.
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This is the latest move in Brookfield’s plan to simplify its corporate structure. Last year, the firm combined Brookfield Business Partners and its sister entity, Brookfield Business Corporation, into a single publicly traded vehicle, eliminating the dual-listed structure. The company is considering making similar changes to its other listed entities, including infrastructure and energy.
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“This combination is expected to allow us to fully utilize our permanent capital base — an incremental approximately $145 billion of cash, equities, real estate, and other investments—to support the growth of our insurance operations,” Flatt said in the letter.
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Brookfield has raised $67 billion since the start of the year, including $23 billion for investment strategies and $44 billion of insurance capital. After the acquisition of pension-risk-transfer company Just Group, Brookfield’s insurance assets grew to $180 billion.
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