Unveiling Brookfield's Financial Performance: A Deep Dive

Brookfield Asset Management, a leading global investment firm, has consistently demonstrated strong financial performance, driven by its diversified business model and strategic approach to investing. As of February 12, 2025, Brookfield reported its financial results for the year ended December 31, 2024, providing valuable insights into the company's earnings and growth. This article will delve into Brookfield's fee-related earnings, distributable earnings, and net income, as well as the factors contributing to these metrics.

Brookfield's fee-related earnings (FRE) and distributable earnings (DE) are key performance indicators that reflect the company's earnings before considering certain non-cash and non-operating items. In 2024, Brookfield's FRE and DE were $2.456 billion and $2.363 billion, respectively, while net income stood at $2.168 billion. The difference between FRE, DE, and net income can be attributed to several factors:

1. Equity-based compensation and other expenses: FRE and DE are calculated after adding back equity-based compensation costs and other expenses. In 2024, this add-back was $208 million for FRE and $199 million for DE. These expenses are not included in net income.
2. Cash taxes: FRE and DE are reduced by cash taxes paid. In 2024, cash taxes were $301 million for FRE and $301 million for DE. Net income includes deferred tax assets and liabilities, which are not reflected in FRE and DE.
3. Non-controlling interest: Brookfield's net income includes the results of its non-controlling interest in Brookfield Corporation (BN). FRE and DE are calculated on a 100% basis for the asset management business, excluding the impact of the non-controlling interest.

Brookfield's strong fundraising and capital deployment activities have significantly contributed to its overall financial performance. In 2024, the company raised over $135 billion in capital inflows, including a record $29 billion in the fourth quarter. This fundraising momentum, combined with annual capital deployments of $48 billion, drove year-over-year growth of 18% for the company's fee-bearing capital and 17% for its fourth quarter fee-related earnings.

The increase in fee-bearing capital led to a rise in fee-related earnings, which reached a record $677 million in the fourth quarter, up 17% year-over-year. This growth was supported by strong fundraising within the company's transition and real estate flagship funds, as well as deployments within its infrastructure debt fund and NAV increases across Oaktree perpetual credit funds.

In conclusion, Brookfield's fee-related earnings, distributable earnings, and net income provide a comprehensive view of the company's financial performance. The differences between these metrics can be attributed to equity-based compensation, cash taxes, and non-controlling interest. Brookfield's strong capital inflows and deployments have driven significant growth in fee-bearing capital and fee-related earnings, contributing to the company's overall financial performance and positioning it for continued success.