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Brookfield Assets Cross Half Trillion Dollars, Helped by Oaktree

Scott Deveau

(Bloomberg) -- Brookfield Asset Management Inc.’s said its assets swelled to more than half a trillion dollars at the end of the third quarter and it had over $65 billion in capital available to continue its spending spree.

Assets ballooned to almost $511 billion after the Toronto-based alternative asset manager closed its purchase of a 61.2% stake in Oaktree Capital Group at the end of the quarter.

“All of this positions us well for the coming several years,” Bruce Flatt, Brookfield chief executive officer said in a letter to investors Thursday with its quarterly results. “As our cash generation continues to grow, we will need to decide if, when, and how to return capital to shareholders.”

The company’s next round of funds, including credit, should reach $100 billion, he said.

Brookfield shares reached a record high of C$77.23 in Toronto and have gained 45% this year for a market value of about C$79 billion ($60 billion).

Low Rates

Institutional investors are increasingly looking to alternative assets managers, like Brookfield, with interest rates low and potentially going lower when a global slowdown occurs, Flatt said.

With rates in Japan and Europe already in negative territory, Brookfield believes the world is in a new phase of global rates in a range of -2% to 2% for the next five to seven years, he said.

“This is particularly relevant for us and will positively impact on all asset values and businesses that generate cash,” he added.

Fee-related earnings from the company before performance fees increased 35% year over year, excluding the impact of the Oaktree acquisition, which closed at quarter end, Brookfield said. Brookfield’s net income grew to $1.8 billion during the third quarter, from $941 million during the same period last year, it said.

To contact the reporter on this story: Scott Deveau in New York at sdeveau2@bloomberg.net

To contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Jacqueline Thorpe, Carlos Caminada

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