Brookfield Targets UK Pension Market for Growth as Earnings Jump 30%

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(Bloomberg) — Brookfield Corp. is eyeing faster international growth in its insurance and wealth business, with a particular focus on the UK, after that division helped propel the firm’s earnings in the first quarter. 

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The company’s distributable earnings climbed to $1.3 billion, or 82 cents a share, excluding gains on asset sales, according to a statement Thursday. That was an increase of 30% compared with the prior year. 

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The jump was driven by rising profit in the division known as Brookfield Wealth Solutions, which rose 57% to $430 million, exceeding the combined earnings from Brookfield’s operating businesses in infrastructure, renewable energy, real estate and private equity. 

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Brookfield expects quarterly earnings in that unit to reach $500 million in the near term, Chief Executive Officer Bruce Flatt said in a letter to shareholders. To date, most of its acquisition activity in wealth solutions has been in the US, but now the company is turning its attention to other markets, he added, noting that it’s now got a license to participate in the UK pension-risk transfer business.

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“With over £500 billion ($665 billion) of corporate pension transfers to insurance companies expected over the next decade in the UK, this represents a key market for continued growth,” Flatt said. 

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Brookfield plans to “slowly migrate” some of its real estate assets into insurance accounts it manages. Last year, the insurance business held investments of $1.2 billion in “real estate partnerships associated with Brookfield office and retail real estate properties,” according to public records. 

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The firm’s assets are not immune to disruption from the trade war, but they’re “insulated” because many of its operating businesses don’t rely on the cross-border movement of goods, Flatt said.

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Brookfield expects the demand for electricity in the US to continue to rise amid President Donald Trump’s effort to boost industrial, manufacturing and data center activity, Flatt wrote. While shifting US energy policy introduces some risk to the renewable power sector, it also presents opportunity. 

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“We believe the growth prospects for low-cost, mature renewable technologies are stronger than ever, as they will play a crucial role in meeting these increasing generation capacity requirements.”  

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Brookfield has repurchased $850 million of its shares so far this year. 

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In late 2022, Brookfield Corp. reorganized, spinning off Brookfield Asset Management as a “pure play” fund manager to appeal to investors who wanted growth without being as exposed to its direct holdings, which include one of the world’s largest portfolios of office real estate. Last year, Brookfield moved its head office to New York from Toronto to try to gain inclusion in more US stock indexes and attract more investors.

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