Q2/24 Results: DE of $1.35/share included a $0.61 gain on the BAM shares used as partial consideration to acquire AEL. DE of $0.74 excluding the gain was a slight miss vs. the Street/TDSI at $0.76/$0.78, largely due to lower-than-expected carried interest, which is lumpy. Core DE increased 10% y/y to $1.1bln.
Asset Manager: BAM's fee-bearing capital totals $514bln, up 17% y/y, led by the credit platform. BAM expects fundraising to ramp up in H2/24, with flagship funds in credit, real estate, and transition moving towards final closes.
Carried Interest: Realized carried interest was relatively modest at $51mm in Q2/24. BN expects to execute significant asset sales at very attractive returns in H2/24, although not all of those dispositions will trigger realized carried interest, as some are being executed out of more recent fund vintages. The unrealized carried interest balance (net) is $6.6bln (~$4.25/share), up 12% y/y and 4% q/q.
Wealth Solutions: Insurance delivered $292mm of earnings, including an initial contribution from AEL, starting in early May. The spread was stable at ~200bps on the existing portfolio, and was ~170bps including AEL, which BN expects will gravitate back to ~200bps, as it repositions the AEL float. BN acknowledged recent concerns about potential spread compression, and indicated that its primary focus is maintaining an 18-20% ROE, which it may have to trade off against growth, at the margin.
Capital Deployment: BN expects the market backdrop to continue to improve, and
sees increasing opportunities to execute large-scale investments, and also monetize assets in H2/24. BN has ~$150bln of deployable capital, including ~$6bln of corporate liquidity. The company has bought back $800mm of shares YTD and intends to continue repurchasing stock.
Well-positioned for AI: With >230GW of renewable power operating/under development and one of the largest global hyperscale data center platforms, BN is well-positioned
to support AI. The company expects nuclear to become part of the energy mix over
time, and is highly focused on advancing micro/small-sized nuclear batteries in its Westinghouse business.