Brookfield Corporation(NYSE: BN) has quietly been one of the top-performing stocks over the past 30 years. The global investment manager delivered an astounding 27,000% return over the last three decades (19% annualized), crushing the S&P 500 (11% annualized). That return would have grown a $10,000 investment made in Brookfield 30 years ago into more than $1.8 million.
The company believes its best days could be ahead. It is entering a transformative growth phase, aiming to capitalize on three global megatrends: AI infrastructure, retirement wealth solutions, and a real estate recovery. Brookfield anticipates that its strategic focus on these growth catalysts will drive significant value creation in the coming decades, supporting my strong conviction that buying Brookfield today could set investors up for life.
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Brookfield is a thematic investor. It invests capital in global megatrends that should drive outsize returns over the long term. The company believes that artificial intelligence (AI) can become the most impactful general-purpose technology in human history. However, AI can’t achieve its immense potential without the physical infrastructure needed to support its adoption at scale. The company estimates that the world needs to invest more than $7 trillion over the next decade to build AI factories (specialized data centers) and related infrastructure, laying the foundation for this technology to thrive.
The company is laying the groundwork to become a leader in supporting AI infrastructure by investing an estimated $200 billion in the coming years to build AI factories across North America and Europe. It recently partnered with Bloom Energy in a $5 billion deal to power these facilities with fuel cells.
Brookfield believes that AI infrastructure is a multidecade opportunity to deploy capital at high returns across its platform. It sees this sector eventually becoming its largest business. These investments to build out AI infrastructure should help drive robust earnings growth in the coming years.
Aging populations are creating future challenges for retirement. There’s a widening gap between retirement savings and future income needs as companies shift more of the burden of retirement savings to individuals by favoring 401(k) plans over pension plans. That’s creating a structural need for wealth solutions to help individuals generate the stable income they’ll need to cover their expenses in retirement.
This trend drives Brookfield’s belief that more individual investors will seek out alternative investments to help them bridge this gap. As a global leader in alternative investments with over $1 trillion in assets under management (AUM), Brookfield is in an excellent position to offer individual investors solutions that help meet their retirement income needs. Its asset management business (Brookfield Asset Management) has been launching new products, such as a tailored private equity fund and an asset-based finance product, to create new ways for individual investors to access its leading platform.
Additionally, the company has been building a wealth solutions business from the ground up (Brookfield Wealth Solutions). It has acquired several insurance companies to increase its scale and reach. The company sees a tremendous opportunity to offer annuities to individuals, providing them with stable and attractive returns for their retirement accounts.
Real estate has long been a core aspect of Brookfield’s investment strategy. The company manages several real estate investment funds. It also directly owns real estate on its balance sheet (Brookfield Property). Overall, the company manages over $278 billion in real estate assets across various property types, including offices, malls, residential properties, and logistics facilities.
Higher interest rates over the past few years have compressed the value of its real estate portfolio. However, instead of retreating from the sector like many other investors, Brookfield has been going on the offensive by investing over $60 billion into real estate over the past five years. That has put the company in an even stronger position to capitalize on the eventual recovery. It now has an even more dominant real estate platform, positioning it to deliver outsized returns as the sector begins its long-awaited recovery.
Brookfield’s goal is to deliver compound annual returns of 15% or more, a target it has exceeded over the last three decades. Backed by leadership in AI infrastructure, innovative retirement solutions, and a dominant real estate platform, Brookfield is uniquely positioned to deliver robust returns for long-term investors. This underpins my conviction that buying Brookfield today is a powerful investment for the future.
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Matt DiLallo has positions in Brookfield Corporation. The Motley Fool has positions in and recommends Brookfield and Brookfield Corporation. The Motley Fool has a disclosure policy.
