Brookfield Asset Management profit falls for first time since spinout

financialpost.com:

Brookfield Asset Management Ltd. reported its first quarterly decline in profit since it spun out of its parent company amid a drop in fees from some permanent capital vehicles.

Distributable earnings were US$547 million, or 34 cents US a share, in line with the average estimate of analysts in a Bloomberg survey and down from US$563 million in the same three months a year earlier. Total fee revenue fell in three of its five main business lines, driven by lower fees from affiliated firms like Brookfield Renewable Partners LP and Brookfield Property Group LLC.

Brookfield was spun out from parent Brookfield Corp. in late 2022 to appeal to shareholders looking to invest in its asset management business without being exposed to its real estate and other so-called real assets. The firm said it raised US$20 billion of capital in the first quarter, including around US$10 billion across more than a dozen credit strategies.

Shares of Brookfield Asset Management fell as much as 4.8 per cent, the most intraday in nearly a year, before paring losses. The stock was down almost three per cent to US$38.65 at 10:15 a.m. in New York.

The firm is pushing further into credit, which is now its largest business line by fee-bearing capital and people. Brookfield said it boosted its stake in Oaktree Capital Management LLC by five per cent, bringing its total ownership stake to 73 per cent, after earlier this week taking a stake in private-debt firm Castlelake LP.

“With more than $100 billion of dry powder to invest, both the diversity of our business mix and our global footprint mean that we remain very well-positioned to capture investment opportunities,” Connor Teskey, president of Brookfield Asset Management, said in a statement.

Fee-related