A Top Asset Manager Focused on the Environment

Brookfield Asset Management Inc. (TSX:BAM.A)(NYSE:BAM) seems to believe the operating experience it has gained in transitioning from carbon-intensive to net-zero carbon will make it better owners of many of these assets.

| More on:

Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) has been growing fast. The company has produced phenomenal returns for long-term investors over the last 30 years and continues to do so. Brookfield has illustrated, time and again, that size does not impede growth. The company took advantage of the COVID-19 pandemic to purchase several assets at bargain prices, including the company’s own property arm.

Investing alongside institutional clients who are like-minded

Recently, the company has been using various assets to create or grow perpetual, private, core real estate funds. Brookfield also recently indicated that the company plans to commit over $2 billion of the company’s own capital to the Global Transition Fund and will be investing that alongside institutional clients who are like-minded and have long-term goals. Brookfield appears to believe that this represents a unique opportunity to create a new asset class while addressing one of society’s current greatest needs.

Beginning of a 30-year movement to net-zero carbon

In addition, Brookfield seems to believe the world is at the beginning of a 30-year movement to net-zero carbon. This transition will affect virtually every business in every country. China, currently one of the largest generators of electricity from coal, has recently committed to being net-zero carbon across the country’s entire economy before 2060. The new United States (U.S.) administration has committed to clean energy by 2035, and the European Union (E.U.), the United Kingdom (U.K.) and Canada are all accelerating towards the energy transition.

Owner and operator of certain essential infrastructure assets

There appears to be no disputing that the world overall is moving from fossil fuels to lower-carbon energy. This transition will benefit all renewables, nuclear energy, and potentially hydrogen. Within the envelope of net-zero carbon, Brookfield looks set to continue to own and operate certain essential infrastructure assets globally that transport fuel.

Laser focused on the duration of cash flows

Further, Brookfield appears to believe that natural gas will play an important role in this energy transition, particularly in Asia, and potentially serve as a bridge to hydrogen. Brookfield has assured investors that when it acquires these assets, that it will be laser focused on the duration of cash flows. Also, Brookfield has indicated that it will operate natural gas assets while prioritizing contributions to the transition to net-zero carbon and with plans to ensure that the assets continuously do better.

Transitioning from carbon-intensive to net-zero carbon

Furthermore, Brookfield seems to believe the operating experience it has gained in transitioning from carbon-intensive to net-zero carbon will make it better owners of many of these assets. Brookfield’s Global Transition Fund is focused on the build out of new renewables globally, as well as the operations surrounding investment by businesses to accelerate the transition to net-zero carbon.

Capital and skills to operate natural gas assets

In short, while Brookfield acknowledges that there are many companies that will have the capital and skills to operate natural gas assets, it believes that there will be many that need the company’s operating expertise and access to capital to achieve business goals. This is the objective of Brookfield’s new fund, and the company appears to be excited about what it can accomplish.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool owns shares of and recommends Brookfield Asset Management. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV. Fool contributor Nikhil Kumar has no position in any of the stocks mentioned. 

More on Investing

exchange traded funds
Dividend Stocks

1 Top High-Yield Dividend ETF to Buy to Generate Passive Income

An ETF designed as a long-term foundational holding pays generous monthly dividends.

Read more »

Canadian Dollars bills
Dividend Stocks

Invest $10,000 in This Dividend Stock for $2,430.12 in Passive Income

This dividend stock has proven time and again it's a safe, reliable stock that still has the power to explode…

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

3 Canadian Dividend Stocks to Consider Adding to Your TFSA in 2025

If you're looking for long-term, undervalued dividend stocks to pick up in your TFSA, consider these first.

Read more »

dividends grow over time
Dividend Stocks

These Are the Top 4 Undervalued Stocks to Buy Right Now

These four undervalued stocks offer a change to get in on great value long term, with promising futures ahead.

Read more »

Canadian dollars are printed
Dividend Stocks

Build a Cash-Gushing Passive-Income Portfolio With Just $25,000

An investment of $25,000 in these high-yield Canadian dividend stocks can help you earn $1,955 in tax-free passive income.

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

1 Superb Canadian Dividend Stock Down 17% to Buy in Bulk

This dividend stock is a standout option.

Read more »

stock research, analyze data
Dividend Stocks

Where Will Canadian Tire Stock Be in 5 Years?

With Canadian Tire stock still trading roughly 20% off its all-time high, is it one of the best investments you…

Read more »

worker holds seedling in soybean field
Dividend Stocks

Is Nutrien Stock a Buy for Its 4.2% Dividend Yield

Nutrien stock is bouncing back with a 13% gain in 2025. With rising crop prices and a solid 4.2% dividend…

Read more »