Brookfield profit climbs on success of wealth unit

Distributable earnings reached US$1.26 billion, or 80 cents a share

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Published Nov 14, 2024  •  Last updated 0 minutes ago  •  2 minute read

A woman with a dog exits the Brookfield Place retail concourse in New York on March 26, 2015. Photo by Victor J. Blue/Bloomberg

Brookfield Corp.’s earnings soared in the second quarter, boosted by strong results from its wealth solutions business as the company hunts for growth outside its home markets.

The Toronto-based investment firm, which owns a majority stake in Brookfield Asset Management Inc., reported distributable earnings of US$1.26 billion, or 80 cents U.S. a share, excluding gains on asset sales. That rose 19 per cent over the same period a year ago.

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The increase came as profits from Brookfield’s wealth division doubled during the quarter. On Thursday, a subsidiary of the wealth unit agreed to reinsure US$1.4 billion of U.K. pension liabilities, marking the firm’s first transaction outside of North America.

Brookfield now expects to more than double its wealth business assets to US$300 billion in the next five years as it expands in the U.S. and pushes into new markets such as the U.K. and Asia, chief executive Bruce Flatt said in a letter to shareholders.

“We are now a top-tier underwriter of annuities in the U.S. market,” Flatt said. “Next up is the U.K. pension risk transfer markets, followed by Asia, armed with the knowledge and skills that we have built in the U.S.”

The wealth unit — run by Sachin Shah — was previously known as Brookfield Reinsurance. It completed its acquisition of American Equity Investment Life Holding Co. earlier this year, in a move that almost doubled its insurance assets.

Brookfield’s wealth business caters to the insurance and re-insurance industries and has amassed nearly US$140 billion in such assets globally. The company entered the reinsurance business in Japan last month and hired Tomohide Yokooka, formerly of Barclays Plc, as managing director and country head, Bloomberg News previously reported.

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Slower growth

Other Brookfield businesses reported more muted growth during the quarter, while earnings from the property group declined by roughly seven per cent compared with the prior year.

The Canadian firm closed or executed more than US$30 billion of financings in the last few months as liquidity returns to the market on the backdrop of declining interest rates, Flatt said. Brookfield repurchased approximately US$1 billion of shares over the last twelve months.

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In late 2022, Brookfield Corp. reorganized, spinning off the asset management unit to appeal to investors who wanted a play on the company’s growth without being as exposed to its direct holdings, which include one of the world’s largest portfolios of office real estate.

Last month Brookfield Asset Management moved its head office to New York from Toronto to gain access to more U.S. stock indexes and attract more investors. Mark Carney, chair of Brookfield Asset Management, is also chair of Bloomberg Inc.

Bloomberg.com

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