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People walk to Brookfield Place off Bay Street on the day of the annual general meeting for Brookfield Asset Management shareholders in Toronto, May 7, 2014. REUTERS/Mark Blinch/FilesMark Blinch/Reuters

Brookfield Asset Management Inc. continues to rake in money from investors, closing two new funds and reporting it has reached US$325-billion in capital – with a goal to add US$100-billion in its current round of fundraising.

Brookfield attracts major investors to its giant portfolios of what it calls “alternative assets” – real estate, infrastructure, energy and distressed debt. The assets – US$626-billion worth as of June 30 – are placed in partnerships, some of which trade on U.S. and Canadian exchanges, and other private funds. Brookfield invests its own money alongside the capital from outsiders.

The company reported Thursday that earnings from investors’ fees – an important component of its overall profits – jumped to US$483-million in the second quarter from US$324-million in the same period last year. Net income for the quarter, which also included investment gains, was US$2.43-billion, versus a US$1.49-billion loss last year.

Chief executive Bruce Flatt told investors in his quarterly shareholders’ letter the company expects to add about US$50-billion in outside capital this calendar year, and anticipates it will add US$25-billion from real estate income and sales.

Since the end of the second quarter, Brookfield has announced it has raised US$9-billion for its fourth flagship real estate fund and US$7-billion for its ESG-focused Global Transition Fund.

Mr. Flatt said Brookfield has 2,000 institutional clients who invest in an average of 2.1 Brookfield funds. Five years ago, it had 425 clients who were in 1.8 funds, on average.

“This means that not only are we gaining new clients, but we are also seeing an increase in the number of Brookfield products they participate in,” he said. “The scaling of our flagship products, the diversification of our product offering and penetration of new fundraising channels should lead to meaningful growth for our asset management franchise.”

At the end of the quarter, Brookfield spun out its new insurance business, Brookfield Asset Management Reinsurance Partners Ltd., and this week announced the venture would make its first big acquisition, a US$5.1-billion purchase of Texas insurer American National Group Inc. The new reinsurance enterprise already holds Brookfield’s pension-risk-transfer business, begun in 2016, and has a deal to buy up to US$10-billion in annuities from American Equity Investment Life Holding Co.

Mr. Flatt said Brookfield has “a line of sight to at least [US]$40-billion” in capital in the insurance business.

Following the end of the quarter, Brookfield also took Brookfield Property Partners LP (BPY) private, removing the venture’s stock listings from the Toronto and New York exchanges. Mr. Flatt has offered a full-throated defence of commercial real estate, particularly office buildings, throughout the COVID-19 pandemic, and Brookfield said public investors, who were disenchanted with BPY’s ownership of malls and other retail real estate, were undervaluing the shares.

Mr. Flatt continued his paean to Brookfield’s US$30-billion real estate portfolio on Thursday, saying US$16-billion of it is “an irreplaceable portfolio of high-quality mixed-use office and retail anchored properties in global gateway cities. On balance we intend to hold these assets for a very long time, if not forever.”

The remaining US$14-billion of real estate is more “opportunistic,” Mr. Flatt said. “Virtually all of these assets will be monetized opportunistically over the next five to seven years, with the proceeds then available to invest across the entire franchise.”

Assuming reasonable returns, Mr. Flatt said, Brookfield should generate US$15-billion from the sales, and the core properties that are not for sale should generate US$10-billion in total income over several years. The resulting US$25-billion of capital “will fuel the next phase of growth for Brookfield,” he said.

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