We came across a bullish thesis on Brookfield Corporation (BN) on Substack by 310 Value. In this article, we will summarize the bulls’ thesis on BN. Brookfield Corporation (BN)’s share was trading at $51 as of April 23rd. BN’s trailing and forward P/E were 164.52 and 13.30 respectively according to Yahoo Finance.
A portfolio manager with a stack of financial documents, illustrating the asset management industry.
Brookfield Corporation (BN) had an impressive 2024, with its stock delivering a 56% return. Yet, despite this market-beating performance, it lagged behind peers such as KKR and Apollo, which returned approximately 78% each. This divergence has prompted closer scrutiny into Brookfield’s valuation, particularly in the context of the broader pullback in alternative asset managers following fears surrounding tariffs, recession risks, and a slowdown in exits and fundraising. While all alternative managers face similar macro pressures, Brookfield stands out as potentially mispriced relative to peers, making it a compelling opportunity for investors willing to navigate its complex structure.
A key metric to consider is Brookfield’s 2025E Distributable Earnings (DE) multiple. At just 13.2x DE, Brookfield trades at a meaningful discount to Apollo (14.6x), KKR (20.1x), and Blackstone (24.3x). This is particularly notable given that Brookfield, Apollo, and KKR each manage over $500 billion in fee-bearing capital (FBC), and all four firms share characteristics such as strong perpetual capital bases, diversified alternative investment strategies, and consistent historical growth. Brookfield, in fact, leads in perpetual capital with 88% of its FBC held in such vehicles. Despite these similarities, Brookfield is trading as though it is an inferior platform—a gap driven largely by its complicated financial structure.
Brookfield’s valuation story is best understood through the lens of its “Plan Value,” its internal terminology for sum-of-the-parts (SOTP) valuation. The company pegs this value at $91.76 per share, versus a market price near $46, implying the stock trades at roughly half its intrinsic value. This Plan Value includes publicly traded holdings (Brookfield Asset Management, Infrastructure Partners, Renewable Partners, and Business Partners), which together make up 44% of Brookfield’s total investment value and offer transparency via daily market pricing. The remaining components include carried interest (both realized and projected), general partnership stakes in private funds, a growing insurance business valued at 15x DE, and the contentious Brookfield Property Group (BPG) segment.
The latter two elements—projected carried interest and BPG’s real estate equity—are the most debated. Critics question the aggressiveness of capitalizing future carry and the true equity value of BPG’s assets. However, even under a conservative scenario where Brookfield realizes no future carry and BPG’s real estate is deemed worthless, the SOTP valuation still lands at $59.34—over 20% above the current stock price. This substantial margin of safety underscores how Brookfield’s complexity, rather than its fundamentals, is likely to blame for its valuation gap.
This complexity stems from Brookfield’s roots. The firm’s leadership—including Bruce Flatt, Jack Cockwell, and Brian Lawson—are accountants by training. As such, they have engineered Brookfield’s structure for tax efficiency and asset protection, not to obfuscate value. While this has made the financials harder for generalist investors to dissect, it also reflects thoughtful long-term stewardship.
On the earnings front, the largest portion of DE (36%) comes from Brookfield Asset Management, representing fees net of expenses, taxes, and minority interests. Another 19% of DE derives from direct investments—essentially the cash flow Brookfield receives from its GP stakes in private funds. This latter figure likely understates the value of those interests, as it doesn’t reflect embedded growth or future realizations. Overall, Brookfield’s DE stream is highly durable and well diversified.
In short, Brookfield represents a misunderstood but fundamentally strong opportunity. The combination of a large discount to its intrinsic value, robust perpetual capital base, and diverse earnings streams make it attractive. If the market re-rates Brookfield closer to peers or even begins to value it based on a conservative interpretation of Plan Value, the upside is substantial. Given the strong 2024 performance, conservative valuation assumptions, and structural advantages in its platform, Brookfield offers a compelling risk/reward proposition for investors who can look past the accounting intricacies and focus on the core value drivers.
Brookfield Corporation (BN) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held BN at the end of the fourth quarter which was 37 in the previous quarter. While we acknowledge the risk and potential of BN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.