Brookfield Real Assets Income Fund Inc. (RA)

Verdict

• ALIGNMENT: Below Average

  • The portfolio managers reported no ownership of the fund’s shares (“$0–$10,000” for each manager), and all fund officers and directors together owned less than 1% of the outstanding shares. This means the team running the fund has limited personal ‘skin in the game’. 
  • The 2.19% total expense ratio creates substantial fee drag, but the structure does align incentives somewhat when assets grow, as management fees increase proportionally. However, the fact that management fees are calculated on leveraged assets (Managed Assets rather than Net Assets) means Brookfield benefits more from using leverage than a typical fee structure would suggest.

• Performance: Average

  • Annualized returns of 5.24% significantly lagged broader markets and even simple balanced portfolios, with performance struggling particularly during growth-led environments and rising interest rates that dominated much of the fund’s history. 
  • Multi-sector allocations mean returns may be diluted when only some strategies outperform, and income sustainability depends on real asset sectors facing secular challenges. The persistent discount to NAV (-8.21% currently) suggests the market questions the fund’s value proposition.

• Market Risk: Above Average

  • Holdings are very sensitive to rising interest rates, which depress valuations and increase funding costs for leveraged positions. Downturns reduce demand and occupancy in infrastructure, real estate, and resources investments. 
  • Environmental, regulatory, and technological disruptions threaten traditional asset business models, and international exposures (30-40% of portfolio) add currency, trade, and geopolitical risks. The 2022-2023 rate hiking cycle demonstrated this vulnerability clearly.

• Business Risk: Average

  • Brookfield’s institutional support is strong, but managing a complex strategy across real estate, infrastructure, and natural resources creates execution and focus risks, especially with recent changes among key portfolio managers.
  • The closed-end structure reduces redemption pressure, supporting long-term decisions, but limits flexibility if investor confidence wavers or regulatory changes hit multiple portfolio sectors.

• Debt Risk: Average

  • The fund employs 24.6% leverage, amplifying both returns and losses and increasing risks tied to margin calls and rising interest expenses in tougher credit markets. 
  • Many underlying holdings use additional leverage at the asset level, compounding risk if credit dries up or asset values fall. Currency fluctuations and compliance challenges could require additional capital, especially in infrastructure and resources sectors.

• Liquidity Risk: Below Average

  • Daily liquidity is available via NYSE trading, but market prices can diverge sharply from NAV during stress periods, currently reflected in wide discounts to intrinsic value.
  • Fund shares are tradeable but subject to overall market sentiment, unlike open-end funds that guarantee redemptions at NAV; bid-ask spreads and forced selling can hurt investors in volatile conditions.

• Transparency: Above Average

  • Monthly NAV updates and quarterly portfolio breakdowns provide more detail than private funds, though less than traditional equity funds. Public holdings get market pricing, but attribution across three sectors and multiple geographies makes it difficult for investors to assess true drivers of performance or identify underperformers. 
  • Disclosures about risk management, leverage details, and decision-making processes are adequately provided.

• Disclaimer

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