Brookfield Corp. plans to merge its shares with those of Brookfield Wealth Solutions into a single listed entity to simplify the structure and support the next evolution of Brookfield.
Brookfield Corp.'s profit rose in the fourth quarter as the company reported record earnings from its asset manager and strong growth in its wealth business.
The money manager reported distributable earnings of $1.5 billion, or 63 cents a share, excluding gains on asset sales, according to a statementBloomberg Terminal Thursday.
The financial results were "supported by our asset management business recording $112 billion of inflows, the continued growth of our wealth solutions business, and our operating businesses generating resilient and growing cash flows," Brookfield Corp. President Nick Goodman said in the statement.
The parent company owns a majority stake in Brookfield Asset Management. The asset manager's distributable earnings grew 7.5% during the quarter to $746 million, with the wealth unit's profit jumping 24%, "supported by strong investment performance and continued expansion of the insurance asset base," the firm said in the statement. This more than offset the 18% drop in earnings from the operating businesses.
Shares advanced 1.2% to $47.20 at 11:16 a.m. in New York.
Brookfield expects to end the year with around $200 billion of insurance assets, up from more than $140 billion now, Brookfield Wealth Solutions Chief Executive Officer Sachin Shah told analysts on Thursday.
The firm plans to grow the insurance business both organically and via acquisitions. "We are prioritizing and identifying opportunities for scale as markets soften through selective M&A, organic growth and expansion of our reinsurance capabilities," Shah said.
The Canadian firm is pressing ahead with plans to morph into an investment-led insurer. Last week, Bruce Flatt stepped down as CEO of the asset manager as he turns his attention to Brookfield Corp., which he continues to run.
Flatt intends to merge Brookfield Corp. shares with those of Brookfield Wealth Solutions into a single listed entity, to simplify the structure and "support the next evolution of Brookfield, with one entity conducting all of our insurance and balance sheet investment activities," he said in a letter to shareholders.
The merger will add capital to the insurance operations, which will drive growth of the "overall business and the advancement of our real asset focused investment strategy," he said.
Brookfield Corp. and the wealth arm would continue to operate under existing management teams, investment processes, and risk frameworks, according to a person familiar with the matter.
Last year, the firm combined Brookfield Business Partners and its sister entity, Brookfield Business Corporation, into a single publicly traded vehicle, eliminating the dual-listed structure.
Brookfield will assess making similar changes to its other listed entities, including infrastructure, Flatt said.