Brookfield Asset Management’s 5-Year Horizon: Navigating the Future of Global Investments

Brookfield's Next Chapter: Can This $900B Giant Outsmart Market Volatility?

Digital Transformation Meets Real Assets

Brookfield's betting big on infrastructure 2.0—think data centers, renewable energy grids, and crypto mining facilities. They're not just building bridges anymore; they're wiring the digital economy.

Global Expansion or Strategic Retreat?

Emerging markets beckon with higher yields, but geopolitical risks loom large. Will Brookfield double down on Asia and Latin America, or play it safe with North American core assets?

The ESG Tightrope Walk

Sustainable investing isn't optional anymore. Brookfield's renewable portfolio might save the planet—or just their PR team's sanity. Because nothing says 'we care' like a solar farm next to an oil pipeline.

Liquidity vs. Long-Term Plays

Private assets offer juicy returns but tie up capital for decades. In a world of instant gratification, can Brookfield convince investors to stay patient? Spoiler: they'll need more than fancy PowerPoint slides.

Five years from now, Brookfield will either be the undisputed king of alternative assets—or just another fund manager explaining to investors why 'long-term' doesn't mean 'never'.

What does Brookfield Asset Management do?

Brookfield Asset Management is, as its name indicates, an asset manager. That basically means that it collects money from others and invests that cash on their behalf. It doesn't do this out of the kindness of its heart, it charges fees based on the amount of cash it is managing.

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For most asset managers, the key figure to watch is assets under management (AUM). However, Brookfield Asset Management handles a significant amount of its own money. So it reports fee-bearing capital, which is the key number to watch when you consider the company's income-generating ability and its growth.

Regardless of whether you look at AUM or fee-bearing capital, there are two factors to consider. First, the amount of money Brookfield Asset Management oversees can grow because new capital is invested (or it buys smaller competitors). Second, assets can expand because the market is rising and increasing the value of the capital it is already managing. Both can also work in reverse, of course. However, the bigger impact will almost always come from the impact of bull and bear markets.

Brookfield Asset Management is focused on five asset categories: renewable power, infrastructure, real estate, private equity, and credit. These are all positioned to benefit from growth trends that management has targeted, including digitization, decarbonization, and deglobalization. This is where the story starts to get interesting.

Brookfield Asset Management has big growth plans

At the end of the second quarter Brookfield Asset Management had roughly $1 trillion in AUM and $560 billion in fee-bearing capital. The second figure is the most important, as noted above. The company's goal is to increase its fee-bearing capital to $1.1 trillion by the end of 2029. So, in roughly five years or so, Brookfield Asset Management's revenue-earning ability will roughly double if things go according to plan.

The increase in fee-bearing capital is expected to result in fee-related earnings growth of 17% a year, annualized. That's a huge number that is expected to support dividend growth of around 15% a year. If that growth comes to pass, the dividend will roughly double in size in five years. If you are a dividend growth investor, that should sound very enticing.

However, you also have to add in the not-so-minor fact that Brookfield Asset Management's current dividend yield is nearly 2.9%. That's more than twice theindex's (^GSPC 1.52%) tiny 1.2% yield. So if you like income, you will also find Brookfield Asset Management appealing. Growth and income in one investment is a powerful combination.

Brookfield Asset Management will be bigger

Basically, the big goal for Brookfield Asset Management over the next five years is to get bigger in multiple different ways. The Core focus is growing its fee-bearing capital, but that will trickle down into earnings growth and dividend growth. And that will likely make this Canadian asset management shop attractive to a wide array of investors.