CA - Brookfield Asset Management: The $1 Trillion Target By 2028 Is Too Rosy

2024-04-05 12:30:37 ET

Summary

• Brookfield Asset Management has experienced significant growth by focusing on non-traditional asset classes such as credit, renewables, infrastructure, and real estate.
• The company has almost quadrupled its fee-bearing capital base from 2018 to 2023 and aims to reach $1 trillion in assets under management by 2028.
• However, there are concerns about BAM's ability to deliver outsized returns, as it has underperformed peers and clearly has struggled to extract the benefits of larger scale.
• In this article, I provide a color on the aspects that, in my opinion, render BAM a subpar investment choice.

Brookfield Asset Management ( BAM ) is one of the most popular and widely known alternative asset managers carrying over $450 billion of fee-bearing capital. A major part of the reason why BAM has experienced a significant growth over the past couple of years is its focus on relatively non-traditional asset classes such as credit, renewables, infrastructure and real estate. All of these segments have gained a notable traction within both the retail and institutional investor space, where having less correlated positions to pure play equities or fixed income with enticing yields have increasingly become relevant for portfolio optimization purposes....

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