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  5. BAM: Comments on the quarter? [Brookfield Asset Management Ltd. Class A Limited Voting Shares]
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Q: Comments on the quarter?
Asked by Kelly on May 09, 2024
5i Research Answer:

BAM EPS of 90c handily beat estimates of 33c; revenue of $884M missed estimates of $1.06B. Brookfield Asset Management may be challenged to keep pace with its 18% annual fee-bearing capital organic-growth target this year after a sluggish 1Q. Still, a recovery in share price of some of its perpetual affiliates so far in 2Q, as well as a potential acceleration of fundraising the remainder of 2024, are tailwinds. The $20 billion of capital raised is shy of the $90-$100 billion annual run-rate, yet could pick up from expected closings of three flagship funds and an improved capacity to generate insurance and retail inflows. Margin expansion has yet to meaningfully materialize, though direct cost growth is moderating, and gains could come in the near term. BAM closed its AEL insurance deal, bringing an additional $50 billion of fee-bearing capital and at least $125 million of annual fees. While not a perfect quarter, we have no concerns here. The stock offers upside potential over time and a dividend of 3.89% that is destined to grow.