The fast-growing credit arm of Brookfield Asset Management Ltd. BAM-T led a US$29-billion fourth-quarter fundraising windfall as investors continue to pour money into the market for private loans.
Brookfield raised about US$20-billion through its credit division in the quarter ended Dec. 31, much of it from business units the asset manager has built over the past five years. The division is now its largest business, managing US$317-billion of the more than US$1-trillion of assets the company oversees.
The credit arm makes tailored private loans to corporate and commercial borrowers against real estate, infrastructure and assets such as equipment, consumer finance and even music royalties.
Investors in Brookfield’s various funds – many of which are pension plans, sovereign wealth funds, endowments, family offices and wealthy individuals – have been keen to put money into private credit, which has produced good returns on higher interest rates even as other asset classes, such as real estate and private equity, had a harder year.
Brookfield raised US$9.2-billion in the quarter from its Oaktree funds and strategies, which stem from a 2019 acquisition. A further US$6.6-billion came from insurance clients, through a business Brookfield has largely assembled over the past four years.
About a year ago, Brookfield formed what is now its credit division by drawing together lending operations from different asset classes. The company also bolstered the group with acquisitions, which included buying a 51-per-cent stake in private credit lender Castlelake LP. And it is expecting demand for credit products to grow, from insurance companies or potential regulatory changes that would allow regular investors to own private credit products in retirement accounts.
Over all, the credit group accounted for about 60 per cent of the US$135-billion Brookfield raised over the course of 2024. And the asset manager expects to pull in more money this year.
“There’s no doubt we’re feeling very, very good about 2025 fundraising,” said Connor Teskey, Brookfield Asset Management’s president, on a conference call with analysts Wednesday. “We do expect it to be better than 2024.”
In a letter to shareholders, chief executive officer Bruce Flatt and Mr. Teskey said they are expecting a good market for buying and selling assets this year, driven in part by “vast demand for investment” in infrastructure and renewable energy. Brookfield made US$16-billion of new investments and sold US$9-billion of assets in the fourth quarter.
Mr. Teskey said Brookfield does not expect the tariffs the Trump administration has imposed on trading partners such as Canada, Mexico and China to have a meaningful impact on its investments. Businesses producing goods that cross borders account for only a small part of its investment portfolio, he said, and contracts on assets such as infrastructure help protect investors from price increases.
“It’s not going to change our strategies or our growth prospects,” he said.
Similarly, as Brookfield invests heavily in building data centres and renewable energy sources to power new forms of artificial intelligence, Mr. Teskey is not expecting the advent of more efficient AI models such as the one released by Chinese company DeepSeek to put a dent in demand for electricity or computing power.
As efficiency gains “potentially bring down the cost of artificial intelligence, they’re only going to make that product more available to a wide variety of users,” he said. “And that will create more widespread demand going forward, which obviously increases demand for the AI infrastructure that we seek to finance.”
The asset manager’s distributable earnings – a proxy for its cash flows – increased 11 per cent to US$649-million in the fourth quarter. Distributable earnings per share of 40 U.S. cents were just above the consensus estimate of 39 U.S. cents among analysts.
Fourth-quarter profit was US$688-million, or 42 U.S. cents per share, compared with US$374-million, or 23 U.S. cents per share, in the same quarter last year.
The asset manager raised its quarterly dividend 15 per cent, for an annual dividend of US$1.75.