Brookfield Asset Management Voting Ord Shs Class A T.BAM

TD

[retiredcf]

Not sure why the SP is down but there's certainly potential for TD to raise their current target of US$70.00. GLTA

Brookfield Asset Management Inc.

(BAM-N, BAM.A-T) US$57.38 | C$71.77

Strong FRE Growth, Steady FFO on Invested Capital in Q2/21 Event

BAM reported Q2/21 results and provided a business update. The conference call is at 11:00 a.m. ET. Dial-in: 1-866-688-9425 (conference ID: 5186345).

Impact: POSITIVE

• Q2/21 Results: OFFO was $0.50/share, up 25% y/y, although somewhat below our forecast of $0.54. Fee-related earnings grew 49% y/y, including the first incentive distribution from BBU since Q3/18. FFO from invested capital was stable y/y. Total FFO was $1.01/share, up 38% y/y, reflecting the benefit of ongoing capital recycling activity. Distributable earnings (DE) totaled $0.79/share in Q2/21 and $4.05/share for the TTM.

• Fee-Bearing Capital: Fee-bearing capital increased 17% y/y to $325bln. BAM raised over $8bln of capital during Q2/21, and subsequently held a $7bln founders' close on its inaugural Global Transition Fund, and a $9bln first close on its latest flagship real estate fund, with the size of those two funds expected to exceed $30bln (combined) before they close for capital. Fundraising for the latest opportunistic credit fund is almost complete at $15bln, the largest yet for that strategy, and the team has been particularly active, with the fund already 62% invested/committed. BAM expects to launch the fundraising for its sixth private equity fund shortly, as the predecessor is >75% committed, and continues to anticipate launching the next vintage of its infrastructure strategy in late-2021/early-2022.

• Carried Interest: BAM recognized $325mm of gross carried interest in Q2/21, primarily reflecting strong realizations in its infrastructure, real estate, and credit strategies, meaning that BAM has already exceeded its target of realizing $1bln of gross carried interest during 2021. The company is now realizing carry within at least one fund across each of its businesses, and expects to recognize it on a more frequent/regular basis in the future. The gross unrealized carried interest balance, a forward-looking indicator, increased to $5.3bln vs. $4.7bln in Q1/21 (at BAM's share). There were increases all major investment strategies, but the sequential increase was primarily driven by higher valuations in the credit funds, as well as the flagship infrastructure, real estate, and private equity funds.

• Liquidity: BAM has $78bln of available liquidity, including $18bln of core liquidity and $60bln of uncalled fund commitments.