Shares of Brookfield Asset Management (BAM 4.67%) surged as much as 13.8% by 2:45 p.m. ET on Thursday. The main factor driving up the giant alternative asset manager’s share price was its strong third-quarter results.
Brookfield Asset Management reported $1.2 billion of operating funds from operations (FFO) in the third quarter, a 30% increase from the prior-year period. The company benefited from the strength of its asset management business — fee-related earnings increased 20% year over year to $531 million — and its investments across private equity, real estate, infrastructure, and renewable energy.
Brookfield had an excellent quarter raising capital from investors. Inflows totaled $33 billion as it closed several new funds, including its fifth flagship infrastructure fund and sixth flagship private equity fund. Those inflows grew its fee-bearing capital to $407 billion, up 19% year over year.
The company continues to find attractive opportunities to put investor capital to work. Brookfield committed to $31 billion of new investments in the quarter. Notable deals included a funding partnership with semiconductor giant Intel to help finance half the $30 billion cost of building new chip factories in Arizona. Brookfield also formed a partnership to buy Deutsche Telekom’s tower business in Germany, along with one with Cameco to own Westinghouse. These investments set the stage for future investment returns and growth.
Brookfield Asset Management continues to benefit from the steady shift of investor capital from the public stock and bond markets into alternative investments. That’s growing the company’s fee-bearing capital while enabling it to complete larger deals. That trend should allow Brookfield to continue producing market-beating total returns in the coming years.
Matthew DiLallo has positions in Brookfield Asset Management and Intel and has the following options: long January 2025 $30 calls on Intel, short December 2022 $40 puts on Brookfield Asset Management, short January 2025 $30 puts on Intel, and short November 2022 $55 calls on Intel. The Motley Fool has positions in and recommends Brookfield Asset Management and Intel. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, short January 2023 $57.50 puts on Intel, and short January 2025 $45 puts on Intel. The Motley Fool has a disclosure policy.