By Andrea Hopkins
TORONTO Feb 14 Brookfield Asset Management Inc notched its best year ever in 2013, more than doubling its funds from operations in the fourth quarter, as investor hunger for real assets drove profits and the company cashed in on big bets made during the financial crisis.
The Canadian property, power and infrastructure investor said on Friday its consolidated net income rose 9 percent to $850 million, or $1.08 per share, in the fourth quarter and was up 39.5 percent to $3.4 billion in 2013 as a whole.
The results, which came in largely in line with market expectations, helped drive the company's shares up 1.0 percent to C$43.19 in early afternoon trade on the Toronto Stock Exchange.
Funds from operations (FFO), a measure of cash flow for real estate management companies, more than doubled in the fourth quarter and was up 149 percent in the full year as Brookfield said it harvested gains from investments made during the financial crisis, when assets were cheap.
Brookfield's FFO rose to $1.03 billion, or $1.59 per share, in the fourth quarter ended Dec. 31, from $459 million, or 67 cents per share, a year earlier, mostly due to carried interest on private funds received during the quarter, it said.
Assets under management rose to $187 billion at the end of 2013, with fee-bearing capital up 32 percent to nearly $80 billion.
"In hindsight, many of these were exceptional investments," Brookfield Chief Executive Bruce Flatt said in a letter to shareholders.
But with the U.S. economic recovery gaining strength and rival institutional investors flocking to assets like real estate in a search for higher yields, the company said it will increasingly shift its focus to emerging markets, where deals are still cheap compared to the United States, where prices are rising.
"That's the attraction of these other markets; it's simply that on a relative basis, they are currently offering greater investment opportunities and this is largely the result of the U.S. recovery taking hold and continuing the cash flow availability that has come from that, and therefore significant competition coming back," Flatt told analysts on a conference call.