It’s been a tough environment for companies like Brookfield Asset Management (TSX:BAM), especially in terms of fundraising. But there’s a reason I say companies like Brookfield Asset Management stock.
Where others continue to fall behind in the fundraising department, Brookfield Asset Management stock has seen quite a lot of growth. In fact, the company has raised US$19 billion so far this year.
So, what’s the secret?
Thinking outside the United States
Part of the difficulty for companies similar to Brookfield Asset Management stock is that they focus on raising funds at home. BAM stock doesn’t put itself in a box but has grown far beyond it. In particular, its success in recent months comes from fundraising in the Middle East and Asia. The company has already raised almost US$100 billion in the last year, and management believes there is even more on the way.
Diversification has been key to the company’s success, with about US$825 billion in assets under management as of writing and operations in 30 countries. Looking outside North America has proven beneficial, with about 40% of its fundraising has come the Middle East and Asia alone.
And again, management believes this is only set to increase, and even further beyond these two areas. There are more opportunities to be had in non-United States locations, according to the chief executive officer. And this could set it up for even more success.
And even more earnings
During the latest quarter, Brookfield Asset Management stock reported a profit at US$516 million for the quarter. This was a quite large 48% increase year over year from US$348 million. Distributable earnings were also quite impressive, up 15% to US$563 million. And those are the funds bound for the hands of investors.
Furthermore, while its fee-bearing capital came in at US$432 billion, the company expects to more than double that to US$1 trillion over the next five years alone. So, how on earth does it expect to do that?
Diversification is key
It’s no secret that over the last few decades Brookfield has diversified with spinoffs in every type of industry. This includes with Brookfield Asset Management stock. It now touches every type of real estate and private equity area and continues to seek out more opportunities to diversify.
The company has now taken about US$17 billion to make even more acquisitions in the near future. This will include power generation, shipping, and more opportunities to support global growth. Despite all this promise, however, shares have remained steady in the last year. Hardly shifting a significant amount.
Even so, this comes from strong performance in a poor market. Meanwhile, the stock continues to offer investors dividends at 3.88%. And while the stock is new, Brookfield has been around since 1899. So, there is plenty of growth and expansion to look back on for investors.
Bottom line
Brookfield Asset Management stock has created opportunities again and again for itself and investors. The company continues to expand and create spin offs in every sector that promises growth. The asset manager hasn’t shied away from seeking fundraising outside of North America, and it’s proven to be quite beneficial. Investors will likely see far more growth in the next year and even more in the decades beyond.
