Brookfield Corp.’s asset manager, wealth unit boost profits

Brookfield Corp.’s profit rose in the second quarter as earnings from asset management and wealth businesses increased.

Distributable earnings climbed almost 14 per cent to US$1.4 billion, or 61 cents a share, excluding gains on asset sales, according to a statement Thursday.

Profits from asset management were up about 14 per cent to US$740 million, while those from its wealth business, which includes insurance, rose 23 per cent to US$480 million.

Since the start of the year, the money manager has expanded its insurance arm through the acquisition of Just Group in the United Kingdom and the purchase of the remaining shares of Oaktree Capital Management.

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“These initiatives set us up for our next phase of growth, and with over US$200 billion of deployable capital we are well positioned to invest at scale in the opportunities ahead,” president Nick Goodman said in the statement.

Last month, Brookfield’s shareholders approved the simplification of its capital structure, which combines the parent company and the insurance business. The arrangement will also “strengthen our eligibility for inclusion in major United States and global equity indices,” chief executive Bruce Flatt said in a letter to investors.

Brookfield doesn’t view the recent turmoil in the credit markets as a systemic problem and considers it a healthy adjustment following a period of abundant capital, which led to loose underwriting standards in parts of the market, Flatt said in the letter. He added that periods of dislocation have historically created opportunities for Oaktree.