Brookfield Asset Management .(BAM) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Fee related earnings increased by 16% to $676 million, while distributable earnings rose by 12% to $613 million [8][34] - Capital raised in the quarter totaled $22 billion, with a total of $97 billion raised over the past twelve months, driving fee bearing capital to $563 billion, a 10% increase year over year [8][34] Business Line Data and Key Metrics Changes - Infrastructure business saw major transactions totaling over $30 billion in enterprise value, including significant acquisitions like Colonial Pipeline and Duke Energy Florida [21][22] - Real estate monetization activity increased significantly, with $15 billion in sales across various sectors, including senior housing and hospitality [23] Market Data and Key Metrics Changes - The fundraising environment is described as robust, with a notable increase in capital raised in Europe and a strong performance in complementary strategies [48] - The demand for high-quality assets is reflected in the significant increase in monetization activity, with over $55 billion in asset sales announced year to date [22][23] Company Strategy and Development Direction - The company is focused on long-term investment themes of digitalization, decarbonization, and deglobalization, particularly in AI infrastructure and renewable energy [10][43] - Strategic partnerships have been formed, including a $10 billion public-private investment program with the Swedish government and a renewable energy agreement with Google [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current market environment, highlighting strong demand for mission-critical assets and the ability to deploy capital effectively [15][33] - The company anticipates continued growth in fundraising and investment activity, supported by a robust pipeline and favorable market conditions [33][34] Other Important Information - The company is expanding its private wealth and retirement platform, Brookfield Wealth, aiming to raise over $30 billion in capital this year [30] - A quarterly dividend of 43.75¢ per share was declared, payable to shareholders of record as of August 29 [42] Q&A Session Summary Question: Fundraising backdrop and expectations for 2026 - Management characterized the fundraising environment as incredibly robust, expecting this year to surpass last year's fundraising totals [46][48] Question: Access to the broader retirement market - Management emphasized that success will depend on having the right products to meet investor needs, with a focus on real assets that provide stable cash flows [50][53] Question: Growth in the U.S. retail channel and Just acquisition - The Just Group acquisition is expected to add stable fee-bearing capital, enhancing the company's footprint in the UK retirement market [56][57] Question: Real estate market outlook - Deployment in real estate has doubled year to date, with a robust recovery in the capital markets supporting high-quality platforms [73][75] Question: Expense outlook and margin expansion - Management expects expenses to grow around 10% year over year, with a focus on building capabilities in various areas [78][80]