Brookfield Corp. Chief Executive Officer Bruce Flatt said the Toronto-based alternative asset manager will consider accelerating share buybacks if the company’s stock continues trading well below the firm’s estimate of its real value.

“We expect to continue to use our cash resources to repurchase shares in the market. If the discount persists, we will also consider other options, including a tender offer,” Flatt said in a letter to shareholders Thursday. 

The company returned US$15 billion to shareholders last year, including roughly US$700 million in open-market share repurchases, it reported in an earnings release on Thursday.

Brookfield Corp.’s net income fell to US$44 million in the fourth quarter from around US$3.5 billion a year earlier — lower than the $919 million average estimate from analysts surveyed by Bloomberg.

Shares of Brookfield rose 2.4 per cent  to $50.77 at 9:33 a.m. in Toronto.

Funds from operations — a closely watched metric for Brookfield — came in at US$1.8 billion, compared with US$1.7 billion a year earlier. Operating funds from operations for the real estate business dropped to US$179 million from US$421 million a year earlier.

REAL ESTATE

Brookfield’s Flatt said that some of its real estate assets “will eventually find its way into our insurance business due to its long-duration nature, making these assets ideally suited to match the long-duration liabilities created by our insurance operations.”

More than US$30 billion of the Canadian firm’s capital is invested in real estate directly and through private funds, according to the letter. 

Earlier this week, Credit Suisse analyst Andrew Kuske cut his recommendation on Brookfield Corp. to neutral from outperform after reassessing the near-term value of the firm’s property group.

Brookfield is is pushing ahead with growing its reinsurance business as it leans on credit to drive its target of US$1 trillion of fee-bearing assets by 2027.

This is the first earnings report since Brookfield Corp. spun off 25 per cent  of its asset-management unit last year into a publicly traded entity called Brookfield Asset Management, which manages the firm’s fee-generating assets. The move aims to streamline the structure of Brookfield, which managed around US$800 billion of assets as of the end of 2022.

The spin-off “is a milestone in Brookfield’s evolution and sets us up to execute on the next phase of growth, while adding approximately $40 billion of liquid assets to our investment portfolio,” Brookfield President Nick Goodman said in a statement Thursday. 

The newly spun-out unit — which released its first quarterly earnings report Wednesday — managed US$418 billion in fee-bearing capital at the end of December across real estate, infrastructure, credit, private equity and renewable power. The company raised a record US$93 billion in capital last year.