Overview

Brookfield Oaktree Holdings, LLC (BOH) is an alternative investment management company that reported net income of $247.9 million in Q1 2024, an increase of $154.8 million compared to Q1 2023.

Key Highlights

• Incentive income increased to $115.3 million due to larger tax-related distributions from Credit and Private Equity funds
• Interest and dividend income increased 81.7% to $121.4 million due to higher income from investments in Opportunities Funds XI and XII
• Net income increased 165% to $247.9 million primarily due to higher incentive income and investment returns

Financial Performance

• Incentive income increased $55.9 million or 94.2% due to larger tax-related distributions from closed-end funds
• Interest and dividend income increased $54.6 million or 81.7% primarily due to higher income from investments in Opportunities Funds XI and XII
• Net income increased $154.8 million or 165% to $247.9 million due to higher incentive income and investment returns

Revenue and Expense Trends

Revenues

• Incentive income increased in Q1 2024 due to larger tax-related distributions from Credit and Private Equity funds
• Higher interest and dividend income was driven by Opportunities Funds XI and XII investments

Expenses

• Incentive income compensation decreased $32.2 million or 55% due to lower SPAC costs
• General and administrative costs increased $1.5 million or 78.9% primarily due to higher foreign exchange losses
• Consolidated fund expenses rose $6.5 million or 46.1% due to expenses from newly consolidated Opportunities Fund XII

Balance Sheet and Liquidity

Assets

As of March 31, 2024, BOH had the following assets:

• Cash & cash equivalents: $58.1 million
• U.S. Treasuries and other securities: $250 million
• Corporate investments: $1.4 billion
• Receivables and other assets: $140.7 million

Liabilities

As of March 31, 2024, BOH had the following liabilities:

• Accounts payable and accrued expenses: $91.6 million
  
• Due to affiliates: $22.1 million
• Debt obligations: $217 million

Liquidity

• As of March 31, 2024, BOH had $308.1 million of cash and securities on an unconsolidated basis
• BOH has credit capacity through debt agreements and equity offerings
• BOH expects continued distributions to preferred and common unitholders

Business Outlook

• Alternative asset managers like BOH depend on financial markets and investor demand
• BOH benefits from diversification across investment strategies and revenue mix
• Weak economies can dampen some revenue but present opportunities across strategies
• Interest rate increases may continue to provide a headwind for investment returns