Brookfield’s Premium Valuation Rests on Fee-Bearing Capital Growth and Execution

BAM’s recent financial results underscore a continuing upward trajectory: in fiscal 2024, fee-related earnings rose about 17% year-over-year, capital raised exceeded $135 billion, and fee-bearing capital expanded to $539–$549 billion through early-2025. [1][2] These metrics align well with management’s expectations and suggest momentum is recovering from slower growth earlier in 2024. [1][2]

Valuation is one of the primary tension points in assessing BAM: while the company benefits from fee amplification, diversified real asset exposure, and structural tailwinds in private markets, its pricing commands a premium. Its trailing and forward P/E multiples near the low 30s (33–34×) and EV/Revenue approximations around 19–20× are elevated compared to many asset managers. [3][4][7] The premium is partially justified by BAM’s lighter balance-sheet risk relative to conglomerates with insurance or heavy infrastructure liabilities. [6][5]

Strategic actions taken by BAM and its parent Brookfield Corporation (BN)—most notably the February 2025 merger and consolidation of asset-management operations, HQ relocation to New York, and potential conversion of BN’s ownership into publicly tradable shares—aim to reduce opacity and unlock valuation. [5] These steps should narrow the discount between market valuation and ‘‘plan value,’’ a Brookfield metric reflecting intrinsic worth. However, the degree of discount compression will heavily depend on sustained performance, especially in carrying interest, fund monetizations, and fee growth. [2][6]

Income investors will note the ~3.3% yield and management’s intent to pay out 90% of distributable earnings. [2] Still, payout sustainability requires continued growth in distributable earnings and careful capital deployment. Risks include valuation volatility in public affiliates, sensitivity to interest rates, and competition in fee compression. With the current elevated multiples, missteps in performance or macro headwinds could pressure returns. [2][3][6]