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Brookfield Asset Management Ltd. reported earnings that beat estimates and raised its quarterly dividend, as its results were boosted by strong fundraising and capital deployment.

The Toronto-based firm posted distributable earnings of US$586 million in the fourth quarter, or 36 cents U.S. per share, according to a statement Feb. 7. That beat the 34 cents U.S. per share average estimate of analysts surveyed by Bloomberg.

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The firm ended the year with US$457 billion of fee-bearing assets, up four per cent from September, and now manages US$916 billion in total. It aims to reach US$1 trillion of fee-bearing assets by 2028.

The stock fell 0.9 per cent in premarket trading in New York.

Brookfield Asset Management spun out of parent company Brookfield Corp. in late 2022 to manage its fee-bearing assets, in a bid to appeal to shareholders seeking to invest in its asset management business without exposure to its real estate and other so-called real assets. The new company charted an ambitious course, setting lofty goals for assets under management and broadening its product offerings.

But the move coincided with rising rates and post-pandemic challenges in its real estate business, its second-largest segment. Brookfield sees the current property turmoil as an opportunity, and is trying to raise a new US$15-billion real estate fund. The firm said Wednesday that it is completing a first close of US$8 billion for its fifth flagship real estate fund.

“We had strong performance in our first year following our listing,” president Connor Teskey said in the statement. “We raised US$93 billion of capital which, combined with the approximately US$50 billion anticipated upon the closing of the American Equity Investment Life insurance account, brings the total to US$143 billion.”

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Brookfield had set a target of raising US$150 billion. The firm garnered US$10 billion in the first close of its second global transition fund. In December, Brookfield closed a record US$30 billion infrastructure fund.

Over the past two years, higher interest rates have crimped fundraising and deal making for alternative asset managers. In a letter to shareholders, Teskey and Brookfield chief executive Bruce Flatt sounded an optimistic tone on rates over the next two years.

“It appears that central banks have been successful in dealing with inflation and that interest rates will be going lower around the world in 2024 and 2025,” they wrote. “If this occurs, capital market activity and stock markets should be strong.”

With improving liquidity and record levels of dry powder on the sidelines, “we expect a very busy period of transaction activity in the next few years, and valuations for real assets should respond accordingly,” the executives said. The firm expects to launch several products to grow different parts of the business, they added.

Last week, Anuj Ranjan took over as CEO of its private equity division as the firm seeks to expand the unit in a tough period for the broader buyout industry. Ranjan replaced Cyrus Madon, a Brookfield veteran.

Brookfield has created a financial infrastructure group focused on opportunities in digital infrastructure and has tasked the former Worldpay CEO Ron Kalifa to lead it.

— With assistance from Erin Fuchs.

Bloomberg.com

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