Brookfield Asset Management .(BAM) - 2024 Q4 - Annual Report

Financial Performance - The company reported Distributable Earnings, a key measure of financial performance, with an intention to pay out approximately 90% of these earnings to shareholders quarterly [43]. - Fee revenues for 2024 reached $4.7 billion, a 7$2.5 billion [81]. - The company raised over $135 billion in total fundraising across flagship and complementary fund offerings in 2024 [78]. - Fee-bearing capital increased by$82 billion, or 18%, to $539 billion in 2024, with 87$1 trillion in Assets Under Management and $539 billion in Fee-Bearing Capital, with 87$126 billion in AUM and $58 billion in Fee-Bearing Capital as of December 31, 2024, indicating strong growth potential in low-carbon energy investments [56]. - The infrastructure segment managed$202 billion in AUM and $97 billion in Fee-Bearing Capital as of December 31, 2024, focusing on essential goods and services across various sectors [61]. - As of December 31, 2024, the company has over$271 billion in assets under management (AUM) in real estate and $94 billion in fee-bearing capital [64]. Client and Employee Engagement - The company has over 2,300 clients, including some of the world's largest institutional investors, and continues to grow its private wealth channel, which represents over 8$1 billion in Castlelake's investment strategies and funds [93]. - The Catalytic Transition Fund raised $2.4 billion in its initial close, including a$1 billion anchor investment from ALTÉRRA [93]. - Pinegrove Ventures, managing approximately $10 billion in assets, was acquired to enhance BAM's venture investment platform focused on growth and technology [93]. Sustainability and Governance - BAM's sustainability policy aims for net-zero greenhouse gas emissions by 2050 and emphasizes strong governance and ethical standards [114][117]. - The company aims to achieve net zero emissions by 2050 or sooner across operationally managed investments, focusing on decarbonization as a material value-creation opportunity [132]. - The Board oversees major strategic initiatives and sustainability progress, ensuring alignment with shareholder interests [120]. - The company emphasizes the importance of managing sustainability risks and opportunities throughout the investment lifecycle, supported by investment teams [126]. Risk Management - The company maintains a strong risk management culture, focusing on proactive identification and management of risks across various areas [106]. - The company faces risks related to deficiencies in financial reporting and disclosures, which could adversely impact its reputation and financial condition [157]. - The company is subject to numerous laws and regulations that could result in financial penalties and damage to reputation in instances of non-compliance [164]. - The company is exposed to risks from catastrophic events, such as natural disasters and pandemics, which could materially impact operations [199]. Compliance and Regulatory Challenges - Regulatory compliance obligations are increasing, which may lead to higher costs and impact profitability [165]. - The company operates in multiple jurisdictions, including the U.S., E.U., and Canada, which may introduce additional regulatory requirements and compliance costs [166]. - The company is subject to anti-bribery and corruption laws globally, which may lead to significant liabilities and reputational harm if not complied with [176]. - Compliance with evolving sustainability regulations may result in additional costs and impact profitability, particularly under the E.U. Sustainable Finance Disclosure Regulation [205]. Financial Risks - The company may face increased interest costs due to rising interest rates, which could negatively affect financial performance and asset values [187]. - Political instability and changes in government policy in various jurisdictions could adversely impact the value of the company's investments [190]. - Inflationary pressures could affect the company's managed assets and overall financial performance, with potential for increased tariffs and trade barriers adding uncertainty [198]. - Foreign exchange rate fluctuations could adversely impact the company's financial position, especially in markets where the U.S. dollar is not the local currency [183].