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Brookfield Asset Management: Diversified Assets, Diversified Income Streams

edit Businessman using calculator next to laptop
Image source: Getty Images.

Written by Chris MacDonald at The Motley Fool Canada

Many investors may be well aware of Brookfield Asset Management (TSX:BAM) and what the company does. Indeed, Brookfield has been making headlines for its various growth initiatives, such as its expansion of operations in Germany and a favourable shareholder vote result.

However, this is also a stock that’s worth diving into, whether it be for these recent developments or other catalysts. Let’s dive into why the company’s diversified income streams are worth considering in a period of macro uncertainty.

About Brookfield Asset Management

Brookfield Asset Management is primarily in the business of alternative asset management. The company operates, invests, and owns a diverse range of assets in renewable energy, real estate, power, private equity, and infrastructure companies.

Notably, Brookfield is among the largest investors in renewable power and climate transition assets, with an electricity generating capacity of 31,000 megawatts (MW). The company boasts a total AUM (asset under management) of $850 billion with more than 2,000 employees. It has operations across five continents, spanning countries including the U.K., U.S., UAE, Canada, India, China, Australia, Brazil, and Colombia.

Brookfield Asset Management has a diversified portfolio of income streams from diverse business sectors. These include renewable power and transition, infrastructure, private equity, real estate, credit business, and insurance solutions.

Renewables are a key focus for long-term investors

In the renewable power business, Brookfield and its subsidiaries operate hydroelectric facilities with 250 MW capacity in the U.S. alone. These assets have perpetual asset lives and high cash margins. The company has proven its ability to deliver clean and reliable energy and storage capacity to support the decarbonization of grids. From its Hydro business sector, Brookfield has an impressive installed capacity of 8,100 MW across 229 facilities.

The company also owns wind power facilities across lucrative power markets in Europe, Asia, South America, and North America. It owns a total of 105 wind power facilities with a total capacity of 5,400 MW.

Brookfield Asset Management is also amongst the largest infrastructure investors in the world operating in sectors like transport, data, utilities, and midstream. The company, through its private equity business, aims to acquire high-quality businesses which are in the business of essential products and services.

Recently, Brookfield Asset Management raised $28 billion to invest in the infrastructure sector. The company’s management team believes that this investment will be fruitful due to the degloablization mega-trend, and I tend to agree. Notably, the company has already invested 40% of its capital in six business sectors, such as renewable energy, transport, telecom assets, data centres, etc.

Bottom line

Brookfield Asset Management is one of the well-established alternative asset management companies with a truly global presence. Accordingly, for investors looking for alternative asset exposure, this is a top pick.

The post Brookfield Asset Management: Diversified Assets, Diversified Income Streams appeared first on The Motley Fool Canada.

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Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management. The Motley Fool has a disclosure policy.

2023