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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 4.7billion,a74.7 billion, a 7% increase compared to 2023, while fee-related earnings increased by 10% to 2.5 billion [81]. - The company raised over 135billionintotalfundraisingacrossflagshipandcomplementaryfundofferingsin2024[78].Feebearingcapitalincreasedby135 billion in total fundraising across flagship and complementary fund offerings in 2024 [78]. - Fee-bearing capital increased by 82 billion, or 18%, to 539billionin2024,with87539 billion in 2024, with 87% being long-dated or perpetual [80]. Assets Under Management - As of December 31, 2024, the company had 1 trillion in Assets Under Management and 539billioninFeeBearingCapital,with87539 billion in Fee-Bearing Capital, with 87% of the Fee-Bearing Capital being long-dated or perpetual in nature [38][47]. - The renewable power and transition segment had 126 billion in AUM and 58billioninFeeBearingCapitalasofDecember31,2024,indicatingstronggrowthpotentialinlowcarbonenergyinvestments[56].Theinfrastructuresegmentmanaged58 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 97billioninFeeBearingCapitalasofDecember31,2024,focusingonessentialgoodsandservicesacrossvarioussectors[61].AsofDecember31,2024,thecompanyhasover97 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 94billioninfeebearingcapital[64].ClientandEmployeeEngagementThecompanyhasover2,300clients,includingsomeoftheworldslargestinstitutionalinvestors,andcontinuestogrowitsprivatewealthchannel,whichrepresentsover894 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% of capital raised [39]. - The company employs over 2,500 investment and asset management professionals globally, supporting its diverse investment strategies and client service [40]. - The total number of full-time operating employees increased by 2% to approximately 250,000 in 2024 [98]. - The company has approximately 650 investment and asset management professionals dedicated to real estate strategies, supported by 24,500 operating employees [64]. Strategic Initiatives - The company is actively pursuing strategic M&A opportunities to expand its capabilities and enhance its growth trajectory [43]. - The company aims to deepen existing institutional relationships and develop new ones, while also accessing new distribution channels, including high net worth individuals and retail [38]. - BAM acquired a 51% stake in Castlelake's fee-related earnings and committed to invest approximately 1 billion in Castlelake's investment strategies and funds [93]. - The Catalytic Transition Fund raised 2.4billioninitsinitialclose,includinga2.4 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].