Q2/22 Operating FFO/share was in line with our forecast; asset manager spinoff remains on track
NYSE: BAM | USD 52.97 | Outperform | Price Target USD 63.00
Sentiment: Neutral
Our initial take: BAM just reported Q2/22 results, with Operating FFO/share (OFFO) of US$0.69 in line with our US$0.70 forecast, with FRE slightly ahead of our forecast and Invested Capital OFFO slightly below our forecast. BAM said it remains on track to complete the spinoff of its asset manager by the end of 2022. In terms of key metrics:
• Consolidated OFFO/share was in line with our estimate: Q2/22 Operating FFO (OFFO) of US$1,154MM (US$0.69/share) was in line with our US$1,180MM (US$0.70/share) forecast. On a Y/Y basis OFFO/share was +38%. The variance to our forecast primarily reflected slightly lower-than-forecast FRE and Invested Capital OFFO slightly below our forecast.
• Fee related earnings (FRE) was slightly ahead of our estimate: Q2/22 FRE of US$525MM (US$0.32/share) was slightly ahead of our US$495MM (US$0.30/share) forecast. On a Y/Y basis, FRE/share was +4%.
• Fee bearing capital (FBC): Q2/22 consolidated FBC (incl. Oaktree at 100%) was US$392B, +3% Q/Q from US$379B in Q1/22 and +21% Y/Y from US$325B in Q2/21. The Q/Q change primarily reflected growth in Private Equity, Credit & Other and Real Estate. • Invested capital (Hard NAV) OFFO/share was slightly below our estimate: Q2/22 Invested capital OFFO of US$629MM (US $0.36/share) was slightly below our US$685MM (US$0.40/share) forecast. On a Y/Y basis Invested capital OFFO/share was +96%. • Reported FFO/share was below our estimate: Q2/22 Reported FFO of US$1.4B (US$0.84/share) was below our US$1.6B (US $0.96/share) forecast. On a Y/Y basis Reported FFO/share was -16%. The variance to our forecast primarily reflected lower-than-
forecast realized carried interest.
Conference call today at 10:00am ET; webcast only (link can be found on Brookfield’s website).