More consolidation is coming to asset management, Brookfield has predicted.
In a letter alongside the asset manager’s quarterly results yesterday, chief executive Bruce Flatt said the challenging financial market would force smaller players to find homes inside larger institutions, causing a handful of industry giants to emerge.
“Every industry eventually goes through consolidation… [The] alternatives industry is in the midst of this today,” he wrote.
The Toronto-based firm manages $834bn in assets and is the world’s second-largest alternative asset manager after Blackstone.
“In virtually all sectors, from banking and insurance to consumer products and technology, there are up to 10 industry-leading players,” Flatt added.
Brookfield has been one of the biggest buyers in the industry after it took control of credit manager Oaktree Capital Management in 2019. This quarter it paid $174mn to boost its stake in Oaktree to 68%, from 64%.
Late last year, Brookfield spun off its asset management operations into a publicly listed company, separating it from a broader corporate empire that owns more than $30bn of real estate globally.
Brookfield’s asset management arm generated $547m in fee-related earnings during the first quarter, an 11% increase from a year ago and ahead of consensus analyst forecasts.
These earnings were buoyed by $19bn in new capital it raised during the quarter for funds ranging from private equity to real estate, credit-oriented investments and infrastructure.
