Q4 2024 Brookfield Asset Management Ltd Earnings Call - Post-Earnings

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Connor Teskey: 2024. Overview. We had a strong 2024 as both earnings and capital raising continued to gain momentum throughout the year, reflecting the strong growth profile of our business and the increasing positive sentiment among market participants. We raised $29 billion during the quarter, our highest level of organic capital raising, bringing total capital raising for the year to over $135 billion. Combined with robust deployment during the same period, fee-bearing capital, or FBC, grew to $539 billion, an increase of 18%, or $82 billion over the past year. The growth in our capital base drove strong earnings and margin improvement. We generated a record $677 million, or $0.42 per share, of fee-related earnings, or FRE, and $649 million, or $0.40 per share, of distributable earnings, or DE, in Q4, representing increases of 17% and 11%, respectively, over the prior year period.

We had a strong 'twenty 'twenty four as both earnings and capital raising continued to gain momentum throughout the year, reflecting the strong growth profile of our business and the increased positive sentiment among market participants, we raised $29 billion during the quarter, our highest level of organic capital raising bringing total capital.

Raising for the year to over $135 billion combined with robust deployment. During the same period fee bearing capital R. F. B C grew to $539 billion, an increase of 18% or $82 billion over the past year.

The growth in our capital base drove strong earnings and margin improvement.

We generated a record $677 million or <unk> 42 cents per share our fee related earnings or FRE and $649 million or <unk> 40 per share of distributable earnings our day in the fourth quarter, representing increases of 17% and 11% respectively.

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This brought FRE and de for the full year to $2 $5 billion or $1 51 per share and $2 $4 billion or $1 45 per share respectively are growing.

Connor Teskey: This brought FRE and DE for the full year to $2.5 billion, or $1.51 per share, and $2.4 billion, or $1.45 per share, respectively. Our growing revenue base and stable costs also enabled margins to expand to 59% in Q4. We continue to benefit from our leadership in the most sought-after alternative asset classes, fueled by significant increases in artificial intelligence, or AI, investment, surging corporate clean energy demand, and the continued growth of private credit in the capital markets. As a result, we expect the momentum in our operating and financial performance to continue throughout 2025. Digitalization is being further propelled by AI. It is already reshaping industries and creating more investment opportunities for us across our digital infrastructure asset classes, data centers, telecom towers, and fiber.

Revenue base and stable costs also enabled margins to expand to 59% in the fourth quarter.

We continue to benefit from our leadership in MS thought after alternative asset classes fueled by significant increases in artificial intelligence or AI investment surging corporate clean energy demand and the continued growth of private credit in the capital markets.

As a result, we expect the momentum in our operating and financial performance to continue throughout 2000 and twenty-five digitally.

Digitalization is being further propelled by AI is already reshaping industries, and creating more investment opportunities for us across our digital infrastructure asset classes data centers telecom towers and fiber. It will also drive immense energy requirements, which necessitates doubling power generation and transmission capacity.

Connor Teskey: It will also drive immense energy requirements, which necessitates doubling power generation and transmission capacity, largely via clean energy sources, as they represent the lowest cost source of power with the fastest speed to delivery. Clean energy continues to be preferred by the world's largest technology companies, whether it's digital infrastructure, renewable power, or nuclear. Brookfield is unique in maintaining a global leadership position in every core technology required for the AI revolution. At the same time, our operating businesses are using AI to drive more automation and productivity, supply chain optimization, and improved customer engagement, enhancing cash flows, and driving stronger investment returns. In private credit, the opportunity continues to be driven by growing recognition from borrowers of the benefits of having a flexible capital partner.

<unk> largely be a clean energy sources as they represent the lowest cost source of power with the fastest speed to delivery.

Energy continues to be preferred by the world's largest technology companies, whether it's digital infrastructure renewable power and nuclear Brookfield is unique and maintaining a global leadership position in every core technology required for the AI Revolution.

At the same time, our operating businesses are using AI to drive more automation and productivity supply chain optimization and improved customer engagement, enhancing cashless and driving stronger investment returns.

In private credit the opportunity continues to be driven by growing recognition from borrowers of the benefits of having a flexible capital partner.

Many of our credit partners have long standing relationships with Brookfield and the experience and Knowhow. We have built from decades of investing in our core sectors enables us to be a sophisticated manager of credit risk as a result credit has grown substantially within our business over recent years and now represents the single largest source of our.

Connor Teskey: Many of our credit partners have longstanding relationships with Brookfield, and the experience and know-how we have built from decades of investing in our core sectors enables us to be a sophisticated manager of credit risk. As a result, credit has grown substantially within our business over recent years and now represents the single largest source of our assets under management. With these supportive tailwinds and our significant growth prospects for 2025 and beyond, we are pleased to announce that our board of directors has approved an increase in our dividend by 15% to $1.75 per share on an annual basis. Business group updates. In Q4, we raised $29 billion, deployed $16 billion, and monetized $9 billion of capital. Highlights during Q4 include Renewable Power and Transition. Fundraising.

Assets under management.

With the support of tailwind and our significant growth prospects for 2025 and beyond we are pleased to announce that our board of directors has approved an increase in our dividend by 15% to $1.75 per share on an annual basis.

Business group updates in the fourth quarter, we raised $29 billion deployed $16 billion and monetize $9 billion of capital highlights during the fourth quarter include renewable power in transition.

Fund raising we raised $4.2 billion of capital, including $3 $5 billion for the second vintage of our global transition flagship strategy.

Connor Teskey: We raised $4.2 billion of capital, including $3.5 billion for the second vintage of our Global Transition Flagship Strategy. We expect to hold a final close for this flagship in H1 2025. Deployment. We deployed $4.5 billion of capital, including $3.2 billion into our acquisition of Neoen, a global leading pure-play renewable development business. We also deployed capital into a partnership with Ørsted, a premium portfolio of contracted operating offshore wind assets in the UK. Subsequent to the end of the quarter, we announced an $850 million investment into Origis Energy, a US renewable energy developer from our Infrastructure Structured Solutions Fund. Monetization. We monetized $1.4 billion of capital, including the sale of Saeta Yield and a partial sale of Shepherd's Flat. Infrastructure. Fundraising. We raised $2.5 billion of capital, including $700 million for our Super Core Infrastructure Strategy, our strongest quarter in over 2 years.

We expect to hold a final close for this flagship in the first half of 2020 five.

Deployment, we deployed $4 $5 billion of capital, including $3 $2 billion into our acquisition of Neo N. A global leading pure play renewable development business. We also deployed capital into a partnership with <unk>, a premium portfolio of contracted operating offshore wind assets.

In the U K.

Subsequent to the end of the quarter, we announced an $850 million investment into origin energy a use renewable energy developer from our infrastructure structured solutions fun.

Monetization, we monetize $1.4 billion of capital, including the sale of Sayyid a yield and a partial sale of shepherds flat.

Infrastructure fund, raising we raised $2 $5 billion of capital, including $700 million for our Super core infrastructure strategy, our strongest quarter in over two years.

We also raised nearly $700 million for our private wealth infrastructure fund and over $500 million for infrastructure structured solutions fun.

Connor Teskey: We also raised $700 million for our private wealth infrastructure fund and $500 million for our infrastructure structured solutions fund. Monetizations. We monetized a total of $300 million of capital, including the sale of our fiber platform in France. Private equity. Fundraising. We raised $1.8 billion of capital, including $1 billion for our Middle East fund and $500 million for the second vintage of our special investments fund. Monetization. Subsequent to the end of the quarter, Clarios, the world's leading provider of advanced low-voltage batteries, completed an up-financing, which funded a $4.5 billion distribution. Real estate. Fundraising. We raised $700 million of capital during the quarter, including $500 million for the fifth vintage of our flagship real estate fund strategy. We expect to hold a final close for this flagship in H1 2025. Deployment.

Monetization, we monetize a total of $300 million of capital, including the sale of our fiber platform in France.

Private equity fundraising we.

We raised $1.8 billion of capital, including $1 billion for Middle East fun and $500 million for the second vintage of our special investments fun.

Monetization subsequent to the end of the quarter Claire is the world's leading provider of advance Luke voltage batteries completed an up financings, which funded a 4.5 billion dollar distribution.

Real estate fundraising, we raised over $700 million of capital during the quarter, including nearly $500 million for the fifth vintage of our flagship real estate fund strategy, we expect to hold a final close for this flagship in the first half of 'twenty twenty-five dip.

Deployment, we deployed $2 $4 billion of capital, including over $800 million in deployment out of the fifth vintage of our real estate flagship fund into a portfolio of U S. Multifamily properties with nearly 5000 units a portfolio of 14 U S student housing assets with nearly <unk>.

Connor Teskey: We deployed $2.4 billion of capital, including over $800 million in deployments out of the fifth vintage of our real estate flagship fund into a portfolio of US multifamily properties with nearly 5,000 units, a portfolio of 14 US student housing assets with nearly 9,000 beds, and Tritax, a publicly listed Pan-European logistics REIT. Monetizations. We monetized $1.8 billion of capital, including the sale of a portfolio of shopping centers in the UK. Credit. Fundraising. We raised approximately $20 billion of capital, including $9.2 billion across Oaktree funds and strategies, $1.7 billion for the fourth vintage of our infrastructure debt fund, and approximately $900 million across our other credit partner managers, $6.6 billion from insurance clients, and approximately $1.3 billion of capital related to a UK reinsurance transaction. Deployment.

9000 beds and pretax a publicly listed Pan European logistics REIT.

Monetization, we monetized $1.8 billion of capital, including the sale of a portfolio of shopping centers in the U K.

Credit fund.

Fundraising, we raised approximately $20 billion of capital, including $9 $2 billion across Oaktree funds and strategies, one $7 billion for the fourth vintage of our infrastructure debt fund and approximately $900 million across our other credit partner managers $6 6 billion.

From insurance clients and approximately $1.3 billion of capital related to a UK reinsurance transaction deployment.

Deployment, we deployed $7 $7 billion of capital, including $2 $4 billion out of our opportunistic credit flagship fund series and over $900 million out of our strategic credit private wealth fund.

Connor Teskey: We deployed $7.7 billion of capital, including $2.4 billion out of our opportunistic credit flagship fund series and over $900 million out of our strategic credit private wealth fund. Building on our momentum and laying the foundation for future growth. In 2024, we delivered strong performance across our franchise, strategically expanded our capabilities and product offerings, and surpassed $1 trillion of assets under management. Delivering strong, consistent performance. We deployed $48 billion of capital in 2024, capitalizing both on short-term pockets of market dislocations and long-term secular trends. These conditions unlocked some of the most attractive investment opportunities we've encountered in years, underscoring the strength of our platform and the advantage of our long-term patient capital approach. Highlights include our investments in Neoen, a leading global renewables developer, GEMS Education, a prominent private education provider in the Middle East, and FirstEnergy, a large-scale US electrical distribution company.

Building on our momentum and laying the foundation for future growth.

In 'twenty 'twenty four we delivered strong performance across our franchise strategically expanded our capabilities and product offerings and surpassed one trillion dollars of assets under management.

Delivering strong consistent performance, we deployed $48 billion of capital in 'twenty 'twenty four capitalizing both on short term pockets of market dislocations and long term secular trends.

These conditions. Unlike some of the most attractive investment opportunities we've encountered in years underscoring the strength of our platform and the advantage of our long term patient capital approach.

Lights include our investments in Neo and a leading global renewables developer Jim's education, a prominent private education provider in the middle East and first energy a large scale U S electrical distribution company.

At the same time demand for high quality essential assets and businesses remained robust reinforcing the resilience and cash generative nature of our portfolio during the year, we sold assets and businesses valued at nearly $40 billion, representing $30 billion of equity capital, notably we sold the con.

Connor Teskey: At the same time, demand for high-quality essential assets and businesses remained robust, reinforcing the resilience and cash-generative nature of our portfolio. During the year, we sold assets and businesses valued at nearly $40 billion, representing $30 billion of equity capital. Notably, we sold the Conrad Hotel in Seoul, a 49% stake in ICD Brookfield Place in Dubai, and our stake in Greenergy, a leading distributor of renewable road fuel in the UK. Earlier this week, in partnership with the French government, we announced a €20 billion infrastructure investment program to support the deployment of AI in France. We also strengthened our leadership position in renewables through our landmark agreement with Microsoft, the largest of its kind, to supply over 10 gigawatts of renewable power over the next 5 years. We are actively developing the core infrastructure needed to support digitalization, which is being accelerated by AI growth.

Brad Hotel and sold a 49% stake in ICD Brookfield place in Dubai, and our stake in Green energy, a leading distributor of renewable road fuels in the U K.

We also strengthened our leadership position in renewables there a landmark agreement with Microsoft the largest of its kind to supply over 10 gigawatts of renewable power over the next five years.

And earlier this week in partnership with the French government, we announced a 20 billion Euro infrastructure investment program to support the deployment of AI in France. We are actively developing the core infrastructure needed to support digitalization, which is being accelerated by a I growth. This comprehensive approach positions us to.

Connor Teskey: This comprehensive approach positions us to play a central role in the ongoing transformation of the digital economy. All the above allowed us to continue to build upon our strong investment track record within our funds to meet or exceed their target returns. Expanding our capabilities. We also strengthened our credit franchise by expanding our investment and fundraising capabilities as we continued to advance our leadership position across critical sectors, laying the groundwork for long-term value creation. This time last year, we formally launched our credit group, which brought together our longstanding capabilities across the firm with our growing portfolio of credit-focused partner managers. The purpose was to coordinate our credit strategies across asset classes and to accelerate the growth of the business. 1 year in, we are realizing the significant benefits of this effort.

A central role in the ongoing transformation of the digital economy.

All the above allowed us to continue to build upon our strong investment track record within our funds to meet or exceed their target returns.

Expanding our capabilities, we also strengthened our credit franchise by expanding our investment in fund raising capabilities as we continued to advance our leadership position across critical sectors laying the groundwork for long term value creation. This time last year, we formally launched our credit group, which brought together our long standing.

And capabilities across the firm with our growing portfolio of credit focused partner managers. The purpose was to coordinate our credit strategies across asset classes and to accelerate the growth of the business. One year end and we are realizing the significant benefits of this effort.

Excluding the one time mandate associated with a L represented approximately 60% of our capital raise in 'twenty 'twenty four today, we have over $300 billion of assets under management within credit and over 600 dedicated investment professionals, we have combined the scale with capabilities across the Brookfield ecosystem too.

Connor Teskey: Credit, excluding the one-time mandate associated with AEL, represented approximately 60% of our capital raise in 2024. Today, we have over $300 billion of assets under management within credit and over 600 dedicated investment professionals. We have combined the scale with capabilities across the Brookfield ecosystem to source attractive, proprietary, and differentiated opportunities. We plan to more than double our platform size over the next few years, differentiating ourselves through knowledge-sharing and strategically leveraging our global scale. This year, we significantly expanded and scaled our investment-grade credit to support our insurance solutions capabilities. Not only has this enabled us to support the growth of Brookfield Wealth Solutions, but it's also opened up the opportunity to provide similar services to other third-party insurers, a very large market.

Source attractive proprietary and differentiated opportunities we plan to more than double our platform size over the next few years differentiating ourselves through knowledge sharing and strategically leveraging our global scale.

This year, we significantly expanded and scaled our investment grade credit to support our insurance solutions capabilities not only has this enabled us to support the growth of Brookfield well solution. That's also opened up the opportunity to provide similar services to other third party insurers a very large market.

Notably we executed our first separately managed accounts or SMA with insurance clients delivering custom tailored credit strategies to meet their specific objectives. A channel we expect to be a major contributor to future capital raising we also strengthened our platform through further strategic acquisitions.

Connor Teskey: Notably, we execute our first separately managed accounts, or SMAs, with insurance clients delivering custom-tailored credit strategies to meet their specific objectives, a channel we expect to be a major contributor to future capital raising. We also strengthened our platform through further strategic acquisitions. Castlelake's leadership position in aviation and asset-based credit continues to broaden our credit platform. SVB Capital, with a leading venture franchise, will join our technology manager, Pinegrove Capital, to further expand our technology and growth footprint. Additionally, we increased our ownership of Oaktree from 68% to 73%, who had one of their top fundraising years on the back of strong demand for credit. These investments are expected to contribute an incremental $70 million of FRE on an annualized basis, adding further scale and diversification to our platform. We paved the way for broader index inclusion.

Catholics leadership position in aviation and asset based credit continues to broaden our credit platform S V B capital with a leading venture franchise will join our technology manager Pine Grove capital to further expand our technology and growth footprint. Additionally, we increased our ownership of Oaktree from 68% to 73.

Person, who had one of the top fundraising years on the back of strong demand for credit. These.

These investments are expected to contribute an incremental $70 million of FRE on an annualized basis, adding further scale and diversification to our platform.

We paved the way for broader index inclusion last year, we introduced our plan to position band for broader index inclusion we have since made significant progress by relocating our corporate headquarters to the U S where most of our senior management is base and which represents our largest employee base as well the majority of our revenues and assets under.

Connor Teskey: Last year, we introduced our plan to position BAM for broader index inclusion. We have since made significant progress by relocating our corporate headquarters to the US, where most of our senior management is based, and which represents our largest employee base, as well as the majority of our revenues and assets under management. As we've previously noted, we also expect the board's composition will increasingly reflect our US focus. Most recently, we completed the acquisition of 100% of our asset management business after shareholders widely endorsed our initiative to exchange Brookfield Corporation's 73% private ownership in our asset management business for an equivalent interest in the public shares of BAM. This transaction simplified our corporate structure, enhanced governance, and enabled the full value of our asset management business, approaching $100 billion, to now be reflected in BAM's market capitalization.

Management as we've previously noted we also expect the board's composition will increasingly reflect our U S focus.

Most recently, we completed the acquisition of 100% of our asset management business. After shareholders widely endorsed our initiative to exchange Brookfield corporations, 73% private ownership and our asset management business for an equivalent interests and the public shares of Bam.

This transaction simplified our corporate structure enhanced governance enabled the full value of our asset management business approaching $100 billion to now be reflected in Banff market capitalization, beginning with our 'twenty 'twenty four annual report to be released in the coming weeks, we will file our financial reports in line with those.

Connor Teskey: Beginning with our 2024 annual report, to be released in the coming weeks, we will file our financial reports in line with those filed by other US domestic issuers. Taken together, these initiatives set the stage for broader index inclusion, diversifying our shareholder base, and enabling us to tap deeper pools of public capital. All signs point to a strong 2025. Our success over the past year positions us well for an even better 2025. The past few years have been the strongest ever for our asset management business, and we've been pleased with our ability to deliver consistent performance and strong growth. The quarter-to-quarter acceleration we saw throughout 2024, particularly in the back half of the year, is expected to continue, driven by our flagship and complementary funds and credit activity.

But other U S domestic issuers taken together these initiatives set the stage for a broader index inclusion diversifying our shareholder base and enabling us to tap deeper pools of public capital.

All signs point to a strong 2025.

Our success over the past year positions us well for an even better 2025.

The past few years have been the strongest ever for our asset management business and we've been pleased with our ability to deliver consistent performance and strong growth.

The quarter to quarter acceleration, we saw throughout 'twenty 'twenty four particularly in the back half of the year is expected to continue driven by our flagship and complementary funds and credit activity. As we look ahead, we see a uniquely strong environment that should enable us to continue to deliver strong performance across fundraising deployment and monetization.

Connor Teskey: As we look ahead, we see a uniquely strong environment that should enable us to continue to deliver strong performance across fundraising, deployment, and monetization. Fundraising. Fundraising should continue to accelerate going forward. Our flagship funds currently in the market, the fifth vintage of our real estate flagship fund, and the second vintage of our global transition flagship fund, are slated for final closes in H1 2025. The 12th vintage of our opportunistic credit flagship fund held its final close in January at a strategy size of $16 billion. This latest round of flagship fundraising has already collectively outraised the prior round by over 15%, and we expect to launch additional flagship strategies in 2025. Our strong flagship franchises form the bedrock upon which we have built additional complementary strategies, and next year's fundraising in these complementary offerings should reach an all-time high for our business.

Raising funds.

Fundraising should continue to accelerate going forward our flagship funds currently in the market the fifth vintage of our real estate flagship fund and a second vintage of our global transition flagship funds are slated for final closes in the first half of 2025.

The 12th vintage of our opportunistic credit flagship fund held its final close in January at a strategy size of $16 billion.

This latest round of flagship fundraising has already collectively outraised the prior round by over 15% and we expect to launch additional flagship strategies and 2025, our strong flagship franchises form the bedrock upon which we have built additional complementary strategies and next year's fundraising in these complementary offerings should.

Reach an all time high for our business.

Lastly, the conversations we're having with clients to customize brought offerings for them enable us to increasingly set ourselves apart from most others within credit we are actively fund raising for the fourth vintage of our infrastructure debt fund and seventh vintage of our real estate debt fund the continued build out of our other credit strategies, including with our.

Connor Teskey: Lastly, the conversations we're having with clients to customize broad offerings for them enable us to increasingly set ourselves apart from most others. Within credit, we are actively fundraising for the 4th vintage of our infrastructure debt fund, and 7th vintage of our real estate debt fund. The continued build-out of our other credit strategies, including with our partner managers Oaktree, Castlelake, LCM, 17Capital, and Primary Wave, will bring additional capital directed into more diversified credit products. With our insurance fundraising channel, Brookfield Wealth Solutions is now at scale and on track to originate in excess of $25 billion of retail annuities and pension risk transfer transactions annually. Across our complementary strategies, we are fundraising for a number of new equity products. This includes our emerging market transition fund, our financial infrastructure fund, and our Middle East private equity strategy.

Partner managers Oaktree Castle Lake L. C. M 17 capital and primary wave will bring additional capital directed into more diversified credit products and with our insurance fund raising channels Brookfield wealth solutions is now at scale and on track to originate in excess of $25 billion of retail annuities and pension risk transfer.

Transactions annually.

Across our complementary strategies, we're fundraising for a number of new equity products. This.

This includes our emerging market transition fund, our financial infrastructure fund and our Middle East private equity strategy, we expect to close shortly our first infrastructure structured solutions fund, which focuses on structured equity and minority control investments and partnership with sponsors developers and corporates in the middle market. We're also fund.

Connor Teskey: We expect to close shortly our first infrastructure structured solutions fund, which focuses on structured equity and minority control investments in partnership with sponsors, developers, and corporates in the middle market. We're also fundraising for our complementary franchises that have established foundations, such as the second vintage of our private equity special investments fund. Finally, our private wealth channel, which has had steady progress over the past few years, should continue to scale in 2025. We have a strong foundation with more than 150 dedicated full-time employees. Our internal research indicates that financial advisors are more open than ever before to learn about alternative products, which gives us the confidence for accelerated growth from our private wealth channel over the next couple of years. Capital deployment and monetization. Historically, an environment that offers compelling valuations for buying assets is not ideal for selling.

Raising for our complementary franchises that have established foundations such as the second vintage of our private equity special investments fun finally, our private wealth channel, which has had steady progress over the past few years should continue to scale in 2020 five.

We have a strong foundation with more than 150 dedicated full time employees. Our internal research indicates that financial advisors are more open than ever before to learn about alternative products, which gives us the confidence for accelerated growth from our private wealth channel over the next couple of years.

Capital deployment and monetization.

Historically, an environment that offers compelling valuations for buying assets is not ideal for sampling.

However, we now see conditions that are favorable for both capital deployment and monetization, allowing us to acquire high quality assets at attractive prices. While also realizing strong values for our mature investments in our infrastructure renewable power and transition platforms, there's vast demand for investment trillions of dollars over the coming years.

Connor Teskey: However, we now see conditions that are favorable for both capital deployment and monetization, allowing us to acquire high-quality assets at attractive prices while also realizing strong values for our mature investments. In our infrastructure, renewable power, and transition platforms, there is vast demand for investment, trillions of dollars over the coming years to deliver data centers, telecom towers, fiber, semiconductor manufacturing, automation, and renewable power. Our global reach and operational expertise in these areas yield a healthy pipeline of investment opportunities. In parallel, many investors remain eager for exposure to high-quality, long-lived assets with dependable cash flows, filling demand for de-risked assets from our earlier vintage funds. In real estate and private equity, fundamentals remain solid and sentiment is rapidly improving. Occupancy rates are healthy across most sectors. New supply has been limited in recent years, and cash flows for quality properties have never been higher.

To deliver data centers telecom towers fiber semiconductor manufacturing automation and renewable power.

Our global reach and operational expertise in these areas yield a healthy pipeline of investment opportunities in.

In parallel many investors remain eager for exposure to high quality long lived assets with dependable cash flows filling demand for derisked assets from our earlier vintage funds and real estate private equity fundamentals remain solid and sentiment is rapidly improving occupancy rates are healthy across most sectors new.

Supply has been limited in recent years and cash flows for quality properties have never been higher.

Meanwhile, the record levels of refinancing activity in 'twenty, and 2020 'twenty, one have led to a number of borrowers who need solutions to their financing in 'twenty 'twenty, five and 'twenty 'twenty, six creating opportunities to lend to or acquire strong assets, which are over financed.

Connor Teskey: Meanwhile, the record levels of refinancing activity in 2020 and 2021 have led to a number of borrowers who need solutions to their financing in 2025 and 2026, creating opportunities to lend to or acquire strong assets which are over-financed. Simultaneously, we are ready to monetize a number of investments where we've created value through our operating expertise. We believe 2025 will be a good year to pursue some of these capital recycling initiatives on favorable terms. The current capital markets environment is increasingly robust and liquid for high-quality businesses, enhancing our ability to monetize assets and return capital for distributions. Since the start of the year, we completed a $5 billion up financing of Clarios, our US-based car battery maker, which supported a $4.5 billion distribution to Brookfield and our partners. We initially invested $3 billion of equity to acquire the business.

Simultaneously, we are ready to monetize a number of investments where we've created value through our operating expertise. We believe 2025 will be a good year to pursue some of these capital recycling initiatives unfavorable terms. The current capital markets environment is increasingly robust and liquid for high quality businesses enhancing our ability to monetize.

Assets and return capital for distributions since the start of the year. We completed a 5 billion dollar of financing of Clariant. Our U S based car battery maker, which supported a $4 5 billion dollar distribution to Brookfield and our partners. We initially invested $3 billion of equity to acquire the business.

Connor Teskey: While the scale of such a transaction is significant, pricing was broadly in line with previously issued debt, and the offering was multiple times oversubscribed. Similarly, we recently executed a $6.1 billion refinancing of our Intel investment, terming out the maturities far ahead of schedule and at much tighter rates than underwriting. While these examples are both specific and recent, we are seeing broad-based support for the financing of our high-quality portfolio, demonstrated by the more than $130 billion of financings we completed in 2024. Closing. We remain committed to being a world-class asset manager by investing our capital in high-quality assets that earn solid returns while emphasizing downside protection. The primary objective of the company continues to be to generate increasing cash flows on a per-share basis and to distribute that cash to you by dividend or share repurchases.

While the scale of such a transaction is significant pricing was broadly in line with previously issued debt and the offering was multiple times oversubscribed.

Similarly, we recently executed a $6 1 billion dollar refinancing of our Intel investment terming out the maturities far ahead of schedule in a much tighter rates than underwriting. While these examples are both specific and recently we are seeing broad based support for the financing of our high quality portfolio.

Grated by the more than $130 billion of financings, we completed in 2024.

Closing, we remain committed to being a world class asset manager by investing our capital in high quality assets that earn solid returns, while emphasizing downside protection. The primary objective of the company continues to be to generate increasing cash flows on a per share basis and to distribute that cash to you by <unk>.

Dividend or share repurchases. Thank you for your interest in Brookfield and please do not hesitate to contact any of US should you have suggestions questions comments or ideas you wish to share.

Connor Teskey: Thank you for your interest in Brookfield. Please do not hesitate to contact any of us should you have suggestions, questions, comments, or ideas you wish to share. Sincerely, Bruce Flatt, Chief Executive Officer, Connor Teskey, President. 12 February 2025.

Speaker Change: Sincerely Bruce Flatt, Chief Executive Officer, Conor Tusky President February 12th 2025.

Speaker Change: Cautionary statement regarding forward looking statements and information.

[Company Representative] (Brookfield Corporation): Cautionary statement regarding forward-looking statements and information. All references to dollars are to US dollars. This letter to shareholders contains forward-looking information within the meaning of Canadian provincial securities laws and forward-looking statements within the meaning of the US Securities Act of 1933, the US Securities Exchange Act of 1934, safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, and in any applicable Canadian securities regulations, collectively, forward-looking statements.

Speaker Change: All references to dollars are to U S. Dollars. This letter to shareholders contains forward looking information within the meaning of Canadian provincial securities laws and forward looking statements within the meaning of the U S. Securities Act of 1933. The U S Securities Exchange Act of 1034 Safe Harbor provisions of the United States Private Securities Litigation Reform Act of 1995.

Speaker Change: And in any applicable Canadian Securities regulations collectively forward looking statements.

[Company Representative] (Brookfield Corporation): Forward-looking statements include statements that are predictive in nature, depend upon or refer to future results, events, or conditions, and include, but are not limited to, statements which reflect management's current estimates, beliefs, and assumptions regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies, capital management, and outlook of Brookfield Corporation and its subsidiaries, as well as the outlook for North American and international economies for the current fiscal year and subsequent periods, and which in turn are based on our experience and perception of historical trends, current conditions, and expected future developments, as well as other factors management believes are appropriate in the circumstances. The estimates, beliefs, and assumptions of Brookfield Corporation are inherently subject to significant business, economic, competitive, and other uncertainties and contingencies regarding future events, and as such, are subject to change.

Speaker Change: Forward looking statements include statements that are predictive in nature or depend upon or refer to future results events or conditions that include but are not limited to statements, which reflect management's current estimates beliefs and assumptions regarding the operations business financial condition and expected financial results performance prospects opportunity.

Speaker Change: <unk> priority targets goals ongoing objectives strategies capital management, an outlook of Brookfield Corporation, and its subsidiaries as well as the outlook for North American and international economies for the current fiscal year and subsequent periods and which in turn are based on our experience and perception of historical trends current conditions and expected future.

Speaker Change: Developments as well as other factors management believes are appropriate in the circumstances, the estimates beliefs and assumptions of Brookfield Corporation are inherently subject to significant business economic competitive and other uncertainties and contingencies regarding future events and as such are subject to change.

[Company Representative] (Brookfield Corporation): Forward-looking statements are typically identified by words such as "expect," "anticipate," "believe," "foresee," "could," "estimate," "goal," "intend," "plan," "seek," "strive," "will," "may," and "should," and similar expressions. In particular, the forward-looking statements contained in this letter include statements referring to the impact of current market or economic conditions on our business, the future state of the economy or the securities market, the Castlelake acquisition, including its expected impact on our business, the anticipated allocation and deployment of our capital, our liquidity and ability to access and raise capital, our fundraising targets, our target growth objectives, and our target carried interest. Although Brookfield Corporation believes that such forward-looking statements are based upon reasonable estimates, beliefs, and assumptions, actual results may differ materially from the forward-looking statements.

Speaker Change: Forward looking statements are typically identified by words, such as expect anticipate believe foresee could estimate goal intend plan seek strive will may and should and similar expressions in particular the forward looking statements contained in this letter include statements referring to the.

Speaker Change: Fact of current market or economic conditions on our business the future state of the economy or the securities market. The Castle Lake acquisition, including its expected impact on our business the anticipated allocation and deployment of our capital our liquidity and ability to access and raise capital or fund raising targets are targeted growth objectives and our targeted carried.

Speaker Change: Interest.

Brookfield Corporation: Although Brookfield Corporation believes that such forward looking statements are based upon reasonable estimates beliefs and assumptions actual results may differ materially from the forward looking statements factors that could cause actual results to differ materially from those contemplated or implied by forward. Looking statements include but are not limited to one returns that are lower than target to be impact.

[Company Representative] (Brookfield Corporation): Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to. 1. Returns that are lower than target. 2. The impact or unanticipated impact of general economic, political, and market factors in the countries in which we do business. 3. The behavior of financial markets, including fluctuations in interest and foreign exchange rates and heightened inflationary pressures. 4. Global equity and capital markets and the availability of equity and debt financing and refinancing within these markets. 5. Strategic actions including acquisitions and dispositions, the ability to complete and effectively integrate acquisitions into existing operations, and the ability to attain expected benefits. 6. Changes in accounting policies and methods used to report financial condition, including uncertainties associated with critical accounting assumptions and estimates. 7. The ability to appropriately manage human capital. 8. The effect of applying future accounting changes.

Brookfield Corporation: Or unanticipated impact of general economic political and market factors in the countries in which we do business three the behavior of financial markets, including fluctuations in interest and foreign exchange rates and heightened inflationary pressures for global equity and capital markets and the availability of equity and debt financing and refinancing within these markets.

Brookfield Corporation: Five strategic actions, including acquisitions and dispositions the ability to complete and effectively integrate acquisitions into existing operations and the ability to attain expected benefits six changes in accounting policies and methods used to report financial condition, including uncertainties associated with critical accounting assumptions and estimates seven.

Brookfield Corporation: The ability to appropriately manage human capital eight the effect of applying future accounting changes nine business competition 10 operational and Reputational risks 11 technological change 12 changes in government regulation and legislation within the countries in which we operate 13 governmental investigations and sanctions.

[Company Representative] (Brookfield Corporation): 9, business competition. 10, operational and reputational risks. 11, technological change. 12, changes in government regulation and legislation within the countries in which we operate. 13, governmental investigations and sanctions. 14, litigation. 15, changes in tax laws. 16, ability to collect amounts owed. 17, catastrophic events such as earthquakes, hurricanes, and epidemics, pandemics. 18, the possible impact of international conflicts and other developments including terrorist acts and cyberterrorism. 19, the introduction, withdrawal, success, and timing of business initiatives and strategies. 20, the failure of effective disclosure controls and procedures and internal controls over financial reporting and other risks. 21, health, safety, and environmental risks. 22, the maintenance of adequate insurance coverage. 23, the existence of information barriers between certain businesses within our asset management operations. 24, risks specific to our business segments, including Asset Management, Wealth Solutions, Renewable Power and Transition, Infrastructure, Private Equity, Real Estate, and Corporate Activities.

Brookfield Corporation: 14th litigation 15 changes in tax laws 16 ability to collect amounts owed.

Brookfield Corporation: <unk> catastrophic events, such as earthquakes Hurricanes and epidemics Pandemics 18, the possible impact of international conflicts and other developments, including terrorist acts and cyberterrorism 19, reintroduction withdrawal success and timing of business initiatives and strategies 'twenty, the failure of effective disclosure controls and procedures and internal controls over.

Brookfield Corporation: Financial reporting and other risks 21 health safety and environmental risks 'twenty to the maintenance of adequate insurance coverage 'twenty three the existence of information barriers between certain businesses within our asset management operations 24 risks specific to our business segments, including asset management wealth solutions.

Power and transition infrastructure private equity real estate and corporate activities and twenty-five factors detailed from time to time in our documents filed with the securities regulators in Canada, and the United States.

[Company Representative] (Brookfield Corporation): 25, factors detailed from time to time in our documents filed with the securities regulators in Canada and the United States. We caution that the foregoing list of important factors that may affect future results is not exhaustive, and other factors could also adversely affect future results. Readers are urged to consider these risks, as well as other uncertainties, factors, and assumptions carefully in evaluating the forward-looking statements, and are cautioned not to place undue reliance on such forward-looking statements, which are based only on information available to us as of the date of this letter or such other date specified herein. Except as required by law, Brookfield Corporation undertakes no obligation to publicly update or revise any forward-looking statements, whether written or oral, that may be as a result of new information, future events, or otherwise. Past performance is not indicative nor a guarantee of future results.

Brookfield Corporation: We caution that the foregoing list of important factors that may affect future results is not exhaustive and other factors could also adversely affect future results.

Brookfield Corporation: Readers are urged to consider these risks as well as other uncertainties factors and assumptions carefully in evaluating the forward looking statements and are cautioned not to place undue reliance on such forward looking statements, which are based only on information available to us as of the date of this letter or such other date specified herein, except as required by law Brookfield Corporation undertakes no.

Brookfield Corporation: <unk> to publicly update or revise any forward looking statements, whether written or oral that may be as a result of new information future events or otherwise.

Brookfield Corporation: Past performance is not indicative nor a guarantee of future results. There can be no assurance that comparable results will be achieved in the future that future investments will be similar to historic investments discussed herein. The targeted returns growth objectives diversification or asset allocations will be met or that in investment strategy or investment objectives will be achieved because of economic condition.

[Company Representative] (Brookfield Corporation): There can be no assurance that comparable results will be achieved in the future, that future investments will be similar to historic investments discussed herein, that targeted returns, growth objectives, diversification, or asset allocations will be met, or that an investment strategy or investment objectives will be achieved because of economic conditions, the availability of appropriate opportunities, or otherwise. Target returns and growth objectives set forth in this letter are for illustrative and informational purposes only and have been presented based on various assumptions made by Brookfield Corporation in relation to the investment strategies being pursued, any of which may prove to be incorrect. There can be no assurance that targeted returns or growth objectives will be achieved.

Brookfield Corporation: The availability of appropriate opportunities or otherwise.

Brookfield Corporation: Target returns and growth objectives set forth in this letter Arthur illustrative and informational purposes, only and have been presented based on various assumptions made by Brookfield Corporation in relation to the investment strategies being pursued any of which may prove to be incorrect. There can be no assurance that targeted returns or growth objectives will be achieved.

[Company Representative] (Brookfield Corporation): Due to various risks, uncertainties, and changes, including changes in economic, operational, political, or other circumstances beyond Brookfield Corporation's control, the actual performance of the business could differ materially from the target returns and growth objectives set forth herein. In addition, industry experts may disagree with the assumptions used in presenting the target returns and growth objectives. No assurance, representation, or warranty is made by any person that the target returns or growth objectives will be achieved, and undue reliance should not be put on them. Cautionary statement regarding the use of non-IFRS measures. This letter to shareholders contains references to financial measures that are calculated and presented using methodologies other than in accordance with IFRS.

Brookfield Corporation: Due to various risks uncertainties and changes, including changes in economic operational political or other circumstances beyond Brookfield Corporation's control. The actual performance of the business could differ materially from the target returns and growth objectives set forth herein. In addition industry experts may disagree with the assumptions used in presenting the target returns and growth objectives no assure.

Brookfield Corporation: Once representation or warranty is paid by any person that the target returns or growth objectives will be achieved and undue reliance should not be put on them.

Brookfield Corporation: Cautionary statement regarding the use of non <unk> measures.

Brookfield Corporation: This letter to shareholders contains references to financial measures that are calculated and presented using methodologies other than in accordance with I FRS. These financial measures, which include distributable earnings as defined below its components and its per share equivalent should not be considered as the sole measure of our performance and should not be considered in isolation from or as a substitute.

[Company Representative] (Brookfield Corporation): These financial measures, which include distributable earnings, as defined below, its components and its per share equivalent should not be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, similar financial measures calculated in accordance with IFRS. We caution readers that these non-IFRS financial measures or other financial metrics are not standardized under IFRS and may differ from the financial measures or other financial metrics disclosed by other businesses and, as a result, may not be comparable to similar measures presented by other issuers and entities. We make reference to distributable earnings, which refers to the sum of distributable earnings from our asset management business, distributable operating earnings from our insurance solutions business, distributions received from our ownership of investments, realized carried interest and disposition gains from principal investments, net of preferred share dividends and equity-based compensation costs.

Brookfield Corporation: For similar financial measures calculated in accordance with I F Rs.

Brookfield Corporation: We caution readers that these non <unk> financial measures or other financial metrics are not standardized under <unk> and may differ from the financial measures or other financial metrics disclosed by other businesses and as a result may not be comparable to similar measures presented by other issuers and entities.

Brookfield Corporation: We make reference to distributable earnings which refers to the sum of distributable earnings from our asset management business distributable operating earnings from our insurance solutions business distributions received from our ownership of investments realized carried interest in disposition gains from principal investments net of preferred share dividends and equity based compensation costs. We also make.

[Company Representative] (Brookfield Corporation): We also make reference to distributable earnings before realizations, which refers to distributable earnings before realized carried interest and disposition gains from principal investments. Net operating income refers to the revenues from our operations less direct expenses before the impact of depreciation and amortization within our real estate business. Our outlook for growth in distributable earnings assumes growth in fee-related earnings and realized carried interest in line with our business plans, which assume growth in our fee-bearing capital consistent with our fundraising plans, capital deployment expectations, maintaining the fee rates we earn on fee-bearing capital, and earning margins consistent with our current margin. Actual results may vary materially and are subject to market conditions and other factors and risks set out above.

Brookfield Corporation: <unk> to distributable earnings before realizations, which refers to distributable earnings before realized carried interest in disposition gains from principal investments and net operating income which refers to the revenues from our operations less direct expenses before the impact of depreciation and amortization within our real estate business our outlook for growth in distributable earnings assumes growth in fee related.

Brookfield Corporation: <unk> earnings and realized carried interest in line with our business plans, which assume growth in our fee bearing capital consistent with our fundraising plans capital deployment expectations, maintaining the fee rates, we earn on fee bearing capital and earning margins consistent with our current margin actual results may vary materially and are subject to market conditions and other factors and risks set out above.

[Company Representative] (Brookfield Corporation): For more information on non-IFRS measures and other financial metrics, see Brookfield Corporation's Q1 2024 press release, which includes reconciliations of these non-IFRS financial measures to their most directly comparable financial measures calculated and presented in accordance with IFRS.

Brookfield Corporation: For more information on non <unk> measures and other financial metrics see Brookfield Corporation's Q1, 2024 press release, which includes reconciliations of these non <unk> financial measures to their most directly comparable financial measures calculated and presented in accordance with I F. R. S.

Brookfield Corporation: Yeah.

Brookfield Corporation: [music] Brookfield Corporation letter to shareholders in Q4 2024.

Bruce Flatt: Brookfield Corporation Letter to Shareholders Q4 2024. Overview. We had a strong year in 2024 with record financial results and the completion of a number of strategic transactions. Our asset management business had over $135 billion of inflows and further expanded its credit platform through a partnership with Castlelake, an asset-backed credit specialist. Our wealth solutions business is now firmly established as a top-tier annuity writer in the US, top two in Canada, and we are just getting started in the UK. Our operating businesses continued to deliver strong results with our high-quality essential service assets and businesses generating stable and growing underlying cash flows. We were active on the investment front and at the same time sold nearly $40 billion of assets at strong returns. This led to the realization of approximately $400 million of net carried interest during the year.

Brookfield Corporation: Overview.

Brookfield Corporation: We had a strong year in 2024 with record financial results and the completion of a number of strategic transactions.

Brookfield Corporation: Our asset management business had over $135 billion of enforce and further expanded its credit platform through our partnership with castle week and asset backed credit specialists. Our wealth solutions business is now firmly established as a top tier annuity writer in the U S top two in Canada, and we are just getting started in the U K our operating businesses.

Brookfield Corporation: Continued to deliver strong results with our high quality essential service assets and businesses generating stable and growing underlying cash flows we were active on the investment front and at the same time sold nearly $40 billion of assets is strong returns.

Brookfield Corporation: This led to the realization of approximately $400 million of net carried interest during the year.

Bruce Flatt: More importantly, as we advance our investment plans and continue to monetize assets, we expect this number to increase meaningfully in the years ahead. Our access to capital remains very strong. During the year, we financed approximately $135 billion of debt across the business. We also accelerated share buybacks and repurchased approximately $1 billion of common shares in 2024. That has continued in 2025, adding further to the intrinsic value per share of the company. To date this year, we repurchased a further $200 million of shares, and as a result of the purchases in the last 12 months, you own 1.5% more of all the assets we own without investing any additional capital. Looking ahead to 2025, we expect the positive momentum in each of our businesses to continue.

Brookfield Corporation: More importantly, as we advance our investment plans and continue to monetize assets. We expect this number to increase meaningfully in the years ahead.

Brookfield Corporation: Our access to capital remains very strong during the year, we financed approximately $135 billion of debt across the business.

Brookfield Corporation: We also accelerated share buybacks and repurchased approximately $1 billion of common shares in 2024.

Brookfield Corporation: That has continued in 2025, adding further to the intrinsic value per share of the company.

Brookfield Corporation: To date this year, we repurchased a further $200 million of shares and as a result of the purchases in the last 12 months you on one 5% more of all the assets, we own without investing any additional capital.

Brookfield Corporation: Looking ahead to 2025, we expect the positive momentum in each of our businesses to continue.

Bruce Flatt: This sets us up well to generate strong growth in our earnings and cash flows, which in turn leads to increased intrinsic value on a per share basis. Markets were constructive despite volatility. Markets were constructive for most of 2024, supported by easing of short-term interest rates by central banks. Growth has been solid and labor markets remain robust, particularly in the US. With inflation tempered, short-term interest rates are stabilizing at levels consistent with more normalized economic conditions. Equity markets have been strong, but also experienced increased volatility caused by potential policy changes and geopolitical tension. Despite this, labor markets are coming into better balance and economic activity continues to be resilient. Market conditions are looking to be increasingly constructive, which should contribute to a resurgence in transaction activity, especially for high-quality assets and businesses like the ones we own. 2025 appears to be another good year.

Brookfield Corporation: This sets us up well to generate strong growth in our earnings and cash flows which in turn leads to increase intrinsic value on a per share basis.

Brookfield Corporation: Markets were constructive despite volatility.

Brookfield Corporation: Markets for constructive for most of 2024 supported by easing of short term interest rates by central banks grosses.

Brookfield Corporation: Growth has been solid and labor markets remain robust, particularly in the U S with inflation temporary short term interest rates are stabilizing at levels consistent with more normalized economic conditions.

Brookfield Corporation: Equity markets have been strong, but also experienced increased volatility caused by potential policy changes and geopolitical tension. Despite this labor markets are coming into better balance and economic activity continues to be resilient.

Brookfield Corporation: Market conditions are looking to be increasingly constructive which should contribute to a resurgence in transaction activity, especially for high quality assets and businesses like the ones. We own 2025 appears to be another good year, our intrinsic value in 2024 increased 19% our share price 55% are stopped.

Bruce Flatt: Our intrinsic value in 2024 increased 19%, our share price 55%. Our stock price performance was very strong in 2024, increasing by 55%. More importantly, our ability to consistently generate attractive investment returns has led to the continued growth of our intrinsic value over a long period of time. The intrinsic value of each share increased by $15 in 2024. At our best estimate, the intrinsic value now backing each one of your shares is approximately $100, which was a 19% total return in 2024. This underpins the conservative investment you own, and all else being equal, should allow you to earn a greater return than the underlying performance of our business. As an indication of the returns that can be generated for investors over the longer term, outlined below are our stock market returns on a compound return basis over the past 30 years.

Brookfield Corporation: This performance was very strong in 2024, increasing by 55%.

Brookfield Corporation: More importantly, our ability to consistently generate attractive investment returns has led to the continued growth of our intrinsic value over a long period of time.

Brookfield Corporation: The intrinsic value of each share increased by $15 in 2024 at.

Brookfield Corporation: But our best estimate intrinsic value no backing each one of your shares is approximately $100, which was a 19% total return in 2024.

Brookfield Corporation: This underpins the conservative investment Yonne, and all else being equal should allow you to earn a greater return than the underlying performance of our business.

Brookfield Corporation: As an indication of the returns that can be generated for investors over the longer term.

Brookfield Corporation: While below our stock market returns on a compound return basis over the past 30 years.

Bruce Flatt: For reference, $1 million invested 30 years ago in Brookfield Corporation is worth $185 million today, representing an annualized return of 19%. Over the longer term, our stock price and intrinsic value per share have tracked each other. To review the reference charts and endnotes, please find the Q4 2024 shareholder letter on our website at bn.brookfield.com. Our operating results were also strong. We generated strong results in 2024. Each of our businesses leveraged their operating platforms to generate growing cash flows, monetizations continued to accelerate, and our balance sheet is robust. Financial results. Distributable earnings, DE, before realizations were a record $4.9 billion, or $3.07 per share for the year. This represents an increase of 15% per share over the prior year. Earnings benefited from strong fundraising momentum in our asset management business, continued growth in our Wealth Solutions business, and stable cash flows across our operating businesses.

Brookfield Corporation: For reference $1 million invested 30 years ago, and Brookfield Corporation is worth $185 million today, representing an annualized return of 19%.

Brookfield Corporation: Over the longer term, our stock price and intrinsic value per share of crack to each other.

Brookfield Corporation: A review of the referenced charts and end nodes. Please find the Q4 2024 shareholder letter on our website at <unk> Dot Brookfield Dotcom. Our operating results were also strong <unk>.

Brookfield Corporation: We generated strong results in 2024.

Brookfield Corporation: Each of our businesses leveraged their operating platforms to generate growing cash flows monetization continued to accelerate on our balance sheet is robust.

Brookfield Corporation: Actual results.

Brookfield Corporation: Distributable earnings D E before realizations were a record $4.9 billion or $3.07 per share for the year. This represents an increase of 15% per share over the prior year.

Brookfield Corporation: Earnings benefited from strong fundraising momentum and our asset management business continued growth in our wealth solutions business and stable cash flows across our operating businesses.

Bruce Flatt: As tailwinds continue to turn in our favor, we are well positioned to drive further earnings growth and create significant value in the business in 2025. Asset Management. Our asset management business generated distributable earnings of $694 million, or $0.44 per share in the quarter, and $2.6 billion or $1.67 per share for the year. Earnings were supported by strong fundraising momentum with total inflows of over $135 billion in 2024. Our latest round of flagship funds have raised approximately $40 billion across our second global transition fund strategy, our fifth opportunistic real estate fund strategy, and our flagship opportunistic credit fund strategy. The closing of the mandate with American Equity Life, AEL, and the contribution from strategic partnerships also added significantly to inflows during the year.

Brookfield Corporation: <unk> continued to turn in our favor we are well positioned to drive further earnings growth and create significant value in the business in 2025.

Brookfield Corporation: Asset management our asset.

Brookfield Corporation: Asset management business generated distributable earnings of $694 million 44 per share in the quarter and $2 $6 billion or $1 67 per share for the year.

Brookfield Corporation: Earnings were supported by strong fundraising momentum with total inflows of over $135 billion in 2024.

Brookfield Corporation: Latest trying to flagship funds have raised approximately $40 billion across our second global transition fund strategy, our fifth opportunistic real estate fund strategy on our flagship opportunistic credit fund strategy.

Brookfield Corporation: Closing of the mandate with American equity life E O and the contribution from strategic partnerships also added significantly to inflows during the year.

Bruce Flatt: Fee-bearing capital ended the year at $539 billion, representing an 18% increase and leading to a 17% growth in fee-related earnings compared to the prior year quarter. Notably, margins continue to expand due to the operating leverage inherent in our asset management business. Looking ahead to 2025, we expect to hold final closes for our latest flagship funds and continue to actively deploy capital, which should contribute to further strong earnings growth. Wealth Solutions. Our Wealth Solutions business generated distributable operating earnings of $421 million, or $0.26 per share in the quarter, and $1.4 billion or $0.85 per share for the year, an increase of close to 100% compared to the prior year. The business is scaling rapidly amidst a very attractive market backdrop.

Brookfield Corporation: Fee bearing capital ended the year at $539 billion, representing an 18% increase and leading to a 17% growth in fee related earnings compared to the prior year quarter.

Brookfield Corporation: Notably margins continue to expand due to the operating leverage inherent in our asset management business.

Brookfield Corporation: <unk> ahead to 2025, we expect to hold final causes for our latest flagship funds and continue to actively deploy capital, which should contribute to further strong earnings growth.

Brookfield Corporation: Well solutions.

Brookfield Corporation: Our wealth solutions business generated distributable operating earnings of $421 million or 26 cents per share in the quarter and $1 $4 billion or <unk> 85 per share for the year, an increase of close to a 100% compared to the prior year. The business is scaling rapidly amidst a very attractive market backdrop, followed.

Bruce Flatt: Following the close of AEL, we are now firmly established as a top-tier writer of retail annuities in the US, and with growth in our pension business, the annual origination potential of the business is in excess of $25 billion. The scaling of our credit franchise is supporting the growth of the business, and the performance of our investment portfolio is allowing us to maintain attractive spreads and generate very strong earnings. During the year, we originated approximately $19 billion of retail and institutional annuity sales. This includes $1.3 billion of UK pension liabilities that we reinsured in Q4. This is our first transaction outside of North America as we expand into new markets and further diversify the business. These inflows contributed to the increase in our insurance assets to over $120 billion at the end of the year.

Brookfield Corporation: The cause of E. O. We are now firmly established as a top tier writer of retail annuities in the U S and with growth in our pension business. The annual origination potential of the business is in excess of $25 billion. The scaling over credit franchise is supporting the growth of the business and the performance of our investment portfolio is allowing us to maintain attractive.

Brookfield Corporation: Spreads and generate very strong earnings.

Brookfield Corporation: During the year over year originated approximately $19 billion of retail and institutional annuity sales.

Brookfield Corporation: This includes $1 $3 billion of UK pension liabilities that we reinsured in the fourth quarter.

Brookfield Corporation: This is our first transaction outside of North America, as we expand into new markets and further diversify the business.

Brookfield Corporation: Inflows contributed to the increase in our insurance assets to over $120 billion at the end of the year.

Bruce Flatt: Through our investment origination platform, we were able to generate an average investment portfolio yield of 5.4%, 1.8% higher than the average cost of capital. As we continue to gradually rotate the investment portfolio, we are positioned to grow annualized earnings for the business from approximately $1.6 billion today to $2 billion in the near term. Through our combined Brookfield Wealth Solutions platforms, we are raising close to $2 billion of retail capital per month, which includes over $450 million a month from our private wealth channel. Operating businesses. Our operating businesses delivered resilient and growing cash flows, generating distributable earnings of $562 million, or $0.35 per share in the quarter, and $1.6 billion, or $1.03 per share for the year. Cash distributions from our Renewable Power and Transition, Infrastructure, and Private Equity businesses were underpinned by their strong operating earnings.

Brookfield Corporation: Through our investment origination platform, we were able to generate an average investment portfolio yield of five 4%, one 8% higher than the average cost of capital as we continue to gradually rotate the investment portfolio. We are positioned to grow annualized earnings for the business from approximately $1 $6 billion today to $2 billion in the near term.

Brookfield Corporation: Through our combined wealth solutions platforms, we're raising close to $2 billion of retail capital per month, which includes over $450 million a month from our private wealth channel opt.

Brookfield Corporation: Operating businesses, our operating businesses delivered resilient and growing cash flows generating distributable earnings of $562 million or 35 per share in the quarter and $1 $6 billion or $1 30 per share for the year cash distributions from our renewable power and transmission infrastructure.

Brookfield Corporation: And private equity businesses were underpinned by the strong operating earnings our core real estate portfolio continues to grow same store net operating income delivering a 4% increase over the prior year quarter. In addition, we signed close to 27 million square feet of office and retail leases during the year demonstrating strong tenant demand.

Bruce Flatt: Our core real estate portfolio continues to grow its same store net operating income, delivering a 4% increase over the prior year quarter. In addition, we signed close to 27 million square feet of office and retail leases during the year, demonstrating strong tenant demand for our high-quality properties. As real estate markets continue to recover in the coming years, we expect earnings and valuations of the business to strengthen. In our transition business, we closed the investment in Neoen, and with our Microsoft agreement, we are on track to not only meet but exceed our delivery targets. These deals underscore our deep operating and development capabilities to power the AI transformation. Monetizations. We continue to see strong demand for the globally diversified portfolio of high-quality, cash-generating assets and businesses we own. During the year, we monetized nearly $40 billion of assets across the business.

Brookfield Corporation: <unk> for high quality properties as real estate markets continued to recover in the coming years, we expect earnings and valuations of the business to strengthen.

Brookfield Corporation: In our transmission business, we closed the investment in new N and with our Microsoft agreement, we're on track to not only meet but exceed our delivery targets. These deals underscore our deep operating and development capabilities to power the AI transformation.

Brookfield Corporation: Monetization, we continued to see strong demand for the globally diversified portfolio of high quality cash generating assets and businesses we owned during.

Brookfield Corporation: During the year, we monetized nearly $40 billion of assets across the business.

Bruce Flatt: With a considerable increase in transaction activity, we expect this momentum to accelerate in 2025 as we advance our robust pipeline of asset sales at attractive returns. In our real estate business, we closed the sale of a portfolio of US manufactured housing assets for approximately $570 million, crystallizing an approximately 29% IRR and 3.4x multiple of capital. We also agreed to sell a group of logistics assets in Europe for approximately $500 million. In addition, our renewable power and transition business closed the sale of Saeta and a 50% interest in a US wind portfolio. In 2024, our renewables business generated record proceeds of $2.8 billion from asset monetizations, returning a 2.5x multiple of capital and an approximately 25% IRR.

Brookfield Corporation: With a considerable increase in transaction activity. We expect this momentum to accelerate in 2025, as we advance our robust pipeline of asset sales at attractive returns.

Brookfield Corporation: And our real estate business, we closed the sale of a portfolio of U S manufactured housing assets for approximately $570 million crystallizing and approximately 29% IRR and three four times multiple of capital.

Brookfield Corporation: We also agreed to sell a group of logistics assets in Europe for approximately $500 million. In addition, our renewable power and transition business closed the sale of the Spanish renewables business and a 50% interest in the U S wind portfolio in 2020 for our renewables business generated record proceeds of $2 $8 billion from us.

Brookfield Corporation: That monetization, we're turning a 2.5 times multiple of capital and an approximately 25% IRR.

Bruce Flatt: In our infrastructure business, we agreed to sell a minority stake in a portfolio within our global intermodal logistics operation at an implied equity value of $1.3 billion. We also agreed to sell a non-core asset within our North American hyperscale data center platform for approximately $1 billion. We closed a previously announced sale of our fiber platform in France, generating an IRR of 17%. At year-end, accumulated unrealized carried interest was $11.5 billion, representing a 13% increase over the prior year. We recognized approximately $400 million of net realized carried interest into income in 2024. We expect to realize significant carried interest as we actively monetize assets in the coming years. Balance sheet and liquidity. Our balance sheet is robust and remains very conservatively capitalized. This, combined with our high levels of liquidity and access to capital, continues to differentiate our business.

Brookfield Corporation: In our infrastructure business, we agreed to sell a minority stake in a portfolio within our global intermodal logistics operation and an implied equity value of $1 $3 billion. We also agreed to sell a noncore asset within our North American Hyperscale data center platform for approximately $1 billion and we closed the previously announced sale.

Brookfield Corporation: Of our fiber platform in France, generating an IRR of 17% at year end accumulated unrealized carried interest was $11 $5 billion, representing a 13% increase over the prior year.

Brookfield Corporation: We recognized approximately $400 million of net realized carried interest into income in 2024, and we expect to realize significant carried interest as we actively monetize assets in the coming years.

Brookfield Corporation: Balance sheet and liquidity.

Brookfield Corporation: Our balance sheet is robust and remains very conservatively capitalized.

Brookfield Corporation: This combined with our high levels of liquidity and access to capital continues to differentiate our business today, we have approximately $175 billion of perpetual capital base and record deployable capital of approximately 160 billion, enabling us to transact on investment opportunities support our ongoing growth.

Bruce Flatt: Today, we have approximately $175 billion of perpetual capital base and record deployable capital of approximately $160 billion, enabling us to transact on investment opportunities, support ongoing growth initiatives, and protect against downside risks. Our financial strength enabled us to continue to opportunistically repurchase our shares at significantly lower prices compared to our view of intrinsic value. In 2024, we accelerated our share buybacks and completed approximately $1 billion in the open market, which added approximately $0.80 of value to each remaining share based on our planned value at the end of the year. We had an active year in the capital markets as we proactively refinanced maturities and took advantage of favorable market conditions. During the year, we executed on approximately $135 billion of financings across the franchise.

Initiatives and protect against downside risks, our financial strength enabled us to continue to opportunistically repurchase our shares as significantly lower prices compared to our view of intrinsic value in 2024, we accelerated our share buybacks and completed approximately $1 billion in the open market, which added approximately.

Finally, a T sense of value to each remaining share based on our planned value at the end of the year.

Brookfield Corporation: We had an active year in the capital markets as we proactively refinanced maturities and took advantage of favorable market conditions.

Brookfield Corporation: During the year, we executed on approximately $135 billion of financings across the franchise a few highlights include in.

Bruce Flatt: A few highlights include: In the fourth quarter, we accessed the hybrid debt markets, emphasizing our ability to raise capital from multiple sources. Issued $700 million of 30-year subordinated notes at the corporation, raised $300 million from an inaugural subordinated note offering at Brookfield Infrastructure Partners, and issued a CAD 200 million green subordinated note at Brookfield Renewable Partners. We saw high demand for all our issuances at relatively low spreads. During the year, our real estate business financed approximately $40 billion of debt across 182 individual investments globally, of which over $12 billion relates to our office portfolio. Liquidity is coming back to real estate markets around the world, particularly for the high-quality portfolio of assets that we own. Subsequent to year-end, our infrastructure business completed two large financings. We issued a $6.1 billion investment-grade financing at our semiconductor facility joint venture in Arizona.

Brookfield Corporation: In the fourth quarter, we accessed the hybrid debt markets, emphasizing our ability to raise capital from multiple sources.

Brookfield Corporation: We issued $700 million of 30 year subordinated notes at the Corporation <unk>.

Brookfield Corporation: For a $300 million from an inaugural subordinated note offering at Brookfield infrastructure partners and issued a 200 million Canadian dollar Green subordinated note at Brookfield renewable partners, we saw high demand for all our issuances at relatively low spreads during.

Brookfield Corporation: During the year, our real estate business financed approximately $40 billion of debt across 182 individual investments globally of which over $12 billion relates to our office portfolio liquidity is coming back to real estate markets around the world, particularly for the high quality portfolio of assets that we own.

Brookfield Corporation: Subsequent to year end, our infrastructure business completed two large financings, we issued a $6 1 billion dollar investment grade financing at our semiconductor facility joint venture in Arizona.

Bruce Flatt: The successful financing further de-risked the investment, with the original debt facility now fully termed out in the capital markets 2 years ahead of plan and at a lower cost. We also executed an AUD 950 million subordinated financing at our regulated utility operations in Australia to support growth. Both of these financings were oversubscribed, showcasing the depth of liquidity available for high-quality infrastructure assets. Active investing continues to go passive, offering us great opportunity. Over the past 20 years, global stock markets, and in particular, US stock markets, have evolved. Today, much of the investing for regular investors is through passive index investing. For non-professional investors, this has proven to be a method of accessing equities without needing to possess the investment skills which are otherwise required to understand businesses and therefore select specific businesses to own.

Brookfield Corporation: The successful financing further derisked the investment with the original debt facility now fully termed out in the capital markets. Two years ahead of plan and at a lower cost. We also executed a 950 million Australian dollar subordinated financing at our regulated utility operations in Australia to support growth.

Both of these financings were oversubscribed showcasing the depth of liquidity available for high quality infrastructure assets.

Brookfield Corporation: Active investing continues to go passive offering us great opportunity.

Brookfield Corporation: Over the past 20 years global stock markets and in particular U S stock markets have evolved today much of the investing for regular investors is through passive index investing.

Brookfield Corporation: For nonprofessional investors. This has proven to be a method of accessing equities without needing to possess the investment skills, which are otherwise required to understand businesses and therefore select specific businesses to own.

Bruce Flatt: This trend has continued to increase year over year and today represents a large share of global financial markets. While on balance, indexing has probably been good for the average investor, there are ramifications for listed businesses. This indexing affects us in a couple of ways. The first is that there are increasingly a group of companies that do not fit neatly into indexes and as a result, trade poorly relative to value. This creates a significant opportunity to take public companies private, as the value of the assets are far greater than the price that the assets trade in the market, often for no other reason than they have been left behind by indexes.

Brookfield Corporation: This trend has continued to increase year over year and today represents a large share of global financial markets while.

Brookfield Corporation: While unbalanced indexing has probably been good for the average investor there are ramifications for list of businesses.

Brookfield Corporation: This indexing affects us in a couple of ways. The first is that they are increasingly a group of companies that do not fit neatly into indexes and as a result trade poorly relative to value.

Brookfield Corporation: This creates a significant opportunity to take public companies private.

Brookfield Corporation: The value of the assets are far greater than the price of the assets trade in the market.

Brookfield Corporation: Often for no other reason than they have been left behind by indexes.

Bruce Flatt: Our recent take-privates of container company Triton, industrial property company Tritax EuroBox, financial payments operator Network International, and many others are all examples of companies which were lost in the public market and therefore a good premium could be paid while still acquiring excellent value. We expect that as indexing continues to grow, more companies will become lost in the public markets. As a result, it is possible that we will see even more opportunities. In the past, one-third of our acquisitions have been from public market take-privates. We suspect that in the future, this could be much higher. Of course, we often get asked how is it that we, rather than others, were able to acquire a company if it was public and everyone had access to the same information. The answer comes down to a few very simple points.

Brookfield Corporation: Our recent take privates of container company Triton Industrial property company try tag Heuer, Bulks financial payments, Operator network International and many others are all examples of companies, which were lost in the public market and therefore, our premium could be paid while still acquiring excellent value. We expect that as indexing continues to <unk>.

Brookfield Corporation: So more companies will become lost in the public markets. As a result, it is possible that we will see even more opportunities in.

Brookfield Corporation: In the past one third of our acquisitions have been from public market take privates.

Brookfield Corporation: Suspect that in the future this could be much higher of course, we often get asked how is it that we rather than in others. We're able to acquire a company. If it was public and everyone had access to the same information.

Brookfield Corporation: The answer comes down to a few very simple points.

Bruce Flatt: The first is that it takes skill and resources to take companies private. We have now completed many of these and have therefore had a great deal of practice. Second, public companies are often large, and size eliminates competition from the process. This works in our favor. Third, it takes great knowledge of the underlying businesses, and one must be able to value assets and gauge their value against the price that one must pay. We have refined these skills over many decades, and few others have the collective knowledge and expertise we have in the areas of businesses in which we operate. The other way that indexing affects us is that while our main job is to make money in our business for our owners, increasingly to ensure that the value of the business is appropriately reflected over time in the price of the shares.

Brookfield Corporation: The first is that it takes skill and resources to take companies private.

Brookfield Corporation: We have now completed many of these and therefore had a great deal of practice.

Brookfield Corporation: Second public companies are often large and size eliminates competition from the process. This works in our favor and third it takes great knowledge of the underlying businesses and one must be able to value assets engage their value against the price that one must pay we have refined the skills over many decades and few others have the collective knowledge.

Brookfield Corporation: Origin expertise, we have in the areas of businesses in which we operate.

Brookfield Corporation: The other way that indexing affects us is that while our main job is to make money in our business for our owners increasingly to ensure that the value of the business is appropriately reflected over time in the price of the shares.

Bruce Flatt: One has to pay attention to the indexes and whether the business is included in them or not. Our efforts to streamline the shares outstanding of Brookfield Asset Management and establish their eligibility for all the relevant major US indices is the outcome of this reality. Carried interest is our hidden gem. Our carried interest is a large asset and is not well understood by most investors. It is, however, of immense value and is our hidden gem sitting in plain sight. We estimate the value of our carried interest at approximately $30 billion. To emphasize how solid this estimate is, over the next 10 years alone, as we sell businesses for our clients, we should generate approximately $20 billion of cash flow from carried interest to Brookfield Corporation in the form of our share of the cash generated.

Brookfield Corporation: One has to pay attention to the indexes and whether the business is included in them or not.

Brookfield Corporation: Our efforts to streamline the shares outstanding and Brookfield asset management and establish their eligibility for all of the relevant major U S. Indices is the outcome of this reality.

Brookfield Corporation: Interest is our hidden gem.

Brookfield Corporation: Our carried interest is a large asset and is not well understood by most investors.

Brookfield Corporation: Today's however of immense value and is our hidden gem sitting in plain sight.

Brookfield Corporation: We estimate the value of our carried interest at approximately $30 billion.

Brookfield Corporation: To emphasize how solid this estimate is over the next 10 years alone as we sell businesses for our clients, we should generate approximately $20 billion of cash flow from carried interest to Brookfield Corporation in the form of our share of the cash generated.

Bruce Flatt: Given this scale, we thought it worthwhile to lay out for you how carried interest works and how it contributes to our cash flows and in turn, the value of our business. Alignment is critical to our business. Our asset management business raises capital from pension plans, sovereigns, financial institutions, and private retail investors around the world, with the objective of investing that capital in great assets and businesses in order to generate attractive risk-adjusted returns for them. To align our interests, we are a significant investor alongside our clients as a side-by-side partner. Further alignment is also created by us sharing in the returns or profits generated for clients above a prescribed level. This share of the profits is called carried interest. Put simply, carried interest is our share of the profits realized on an entire fund, subject to that fund exceeding a minimum target return for clients.

Brookfield Corporation: Given the scale, we thought it worthwhile to lay out for you how carried interest works and how it contributes to our cash flows and in turn the value of our business.

Brookfield Corporation: Alignment is critical to our business, our asset management business raises capital from pension plans sovereigns financial institutions and private retail investors around the world with the objective of investing that capital in great assets and businesses in order to generate attractive risk adjusted returns for them.

Brookfield Corporation: To align our interests, we are a significant investor alongside our clients as a side by side partner.

Brookfield Corporation: Further alignment is also created by us sharing in the returns or profits generated for clients above a prescribed level the share of the profits as co carried interest puts.

Brookfield Corporation: Simply carried interest is our share of the profits realized on an entire fund subject to that fund exceeding our minimum target return for clients.

Bruce Flatt: If we meet fund expectations, we get 20% of the profits. If we are nothing for our investors, we get nothing. Investing is the lifeblood of asset management. The life cycle of carried interest starts with the raising of client capital for a dedicated strategy. With the growth of our asset management franchise over the years, we now manage $240 billion of capital that is eligible to earn carried interest. This figure has increased at an annual rate of 15% over the past five years, and we expect that to continue to scale significantly going forward. The second step is the deployment of the capital. We have established an investment track record of delivering strong returns over a long period of time, with almost all our funds meeting or exceeding their target returns.

Brookfield Corporation: If we meet fund expectations, we get 20% of the profits.

Brookfield Corporation: If we earn nothing for our investors, we get nothing investing is our lifeblood of asset management.

Brookfield Corporation: The lifecycle of carried interest starts with the raising of client capital for a dedicated to strategy with the growth of our asset management franchise over the years, we now manage $240 billion of capital that is eligible to earn carried interest. This figure has increased at an annual rate of 15% over the past five years, and we expect that to continue to scale.

Speaker Change: <unk> going forward.

Brookfield Corporation: The second step is the deployment of the catheter.

Speaker Change: We have established an investment track record of delivering strong returns over a long period of time with almost all our funds meeting or exceeding their target returns.

Bruce Flatt: Much of our outsized returns are generated from our deep operating capabilities, and as we implement our business plans, our carried interest accrues and compounds alongside the cash flow generation and value creation. The longer we have the capital working for us, the more the returns compound, and in turn, so does the carried interest potential. The last step is monetization. Selling an investment is what crystallizes a large component of the profit of an investment. As assets and businesses are sold, capital is returned to clients. Once all the original invested capital, plus a minimum compound return on drawn capital, has been returned to clients, we start to share in the entirety of the profits. To be clear, carried interest is only triggered with realized cash transactions. The valuations used prior to sale have no impact on carried interest, period.

Speaker Change: Each of our outsized returns are generated from our deep operating capabilities and as we implement our business plans are carried interest to cruising compounds alongside the cash flow generation and value creation.

Speaker Change: The longer we have the capital working for us the more the returns compound and in turn so does the carried interest potential.

Speaker Change: Last step is monetization selling and investment is what crystallizes, a large component of the profit of an investment.

Speaker Change: Assets and businesses are sold capital is returned to clients. Once all the original invested capital plus a minimum compound return on drawn capital has been returned to clients we start to share in the entirety of the profits to be clear carried interest is only triggered with realized cash transactions devaluations used prior to sale have no.

Bruce Flatt: We adopt a conservative approach to the recognition of carried interest in our financial statements. We wait for the invested capital of the entire fund, as opposed to individual deals, to be returned to clients. The passing of the minimum compound return and the comfort that there is remote risk of clawback before recording carried interest in our earnings. This conservative approach, which creates further alignment with our clients, delays the recognition towards the end of a fund's life cycle but leads to a larger contribution when recognized. Much of the value creation in our investments, reflected through carrying value increases or from early monetizations in a fund, has yet to be recognized in our earnings. Today, we have accumulated $11.5 billion of carried interest or $7 billion net of costs, most of which we expect to recognize into our earnings over the next five years.

Speaker Change: Impact on carried interest period.

Speaker Change: We adopt a conservative approach to the recognition of carried interest in our financial statements. We wait for the invested capital of the entire fund as opposed to individual deals to be returned to clients. The passing of the minimum compound return and the comfort that there is remote risk of callback before recording carried interest and our earnings.

Speaker Change: This conservative approach, which creates further alignment with our clients delays the recognition towards the end of our funds lifecycle, but leads to a larger contribution when recognized therefore much of the value creation in our investments reflected through carrying value increases or from early monetization in a fund is yet to be recognized in our earnings today.

Speaker Change: We have accumulated $11.5 billion of carried interest or $7 billion net of costs, most of which we expect to recognize into earnings over the next five years.

Bruce Flatt: The key to the value of carried interest is creating value in businesses and selling assets opportunistically at attractive values to deliver good returns to our clients. Fortunately, demand for our assets and businesses remains strong as we own assets and businesses that form the backbone of the global economy, underpinned by stable, long-dated, largely contracted or regulated cash flows. The breadth of our fund offerings has enabled us to continue to transact through economic cycles. In 2024, we monetized close to $40 billion of assets, and as transaction activity picks up, we expect to be actively monetizing investments. Carried interest generates substantial real cash. The outlook for carried interest is significant. If we successfully execute our plans in our asset management business, we expect to receive approximately $20 billion in cash directly paid to the corporation over the next 10 years.

Speaker Change: The key to the value of carried interest is creating value and businesses and selling assets opportunistically at attractive values to deliver good returns to our clients.

Speaker Change: Fortunately demand for assets and businesses remained strong as we own assets and businesses to form the backbone of the global economy underpinned by stable long dated largely contracted our regulated cash flows.

Speaker Change: Breath of our fund offerings has enabled us to continue to transact through economic cycles. In 2024, we monetize close to $40 billion of assets Venice transaction activity picks up we expect to be actively monetizing investments.

Speaker Change: Carried interest generate substantial real cash.

Speaker Change: The outlook for carried interest is significant.

Speaker Change: We successfully execute our plans and our asset management business, we expect to receive approximately $20 billion in cash directly paid to the corporation over the next 10 years. These.

Bruce Flatt: These cash flows will come predominantly from funds that already exist today. Further, the growth in size of each progressive vintage of funds, combined with the scale of our monetizations, should lead to even greater and more recurring carried interest over the long term, well above our historical levels. This significant amount of incremental cash flow will allow us to deliver further value for you by either reinvesting back into the business or returning capital via opportunistically repurchasing our shares. We believe that the value of our carried interest is approximately $30 billion, which amounts to $21 per share. This reflects what we would earn in cash today by selling assets in our funds at fair value, plus the value of the carried interest potential valued using a conservative market multiple. Notwithstanding the numbers being very large, the carried interest often remains underappreciated.

These casuals will come predominantly from funds to already exist today.

Speaker Change: Further the growth in size of each progressive vintage of funds combined with the scale of our monetization should lead to even greater and more recurring carried interest over the long term well above our historical levels.

Speaker Change: This significant amount of incremental cash flow will allow us to deliver further value for you by either reinvesting back into the business or returning capital via Opportunistically repurchasing our shares.

Speaker Change: We believe that the value of our carried interest is approximately $30 billion, which amounts to $21 per share.

Speaker Change: This reflects what we would earn in cash today by selling assets in our funds at fair value plus the value of the carried interest potential valued using a conservative market multiple notwithstanding the numbers being very large the carried interest often remains underappreciated. Nevertheless, it is our hidden gem in plain sight.

Bruce Flatt: Nevertheless, it is our hidden gem in plain sight. Clarios recapitalization is another important milestone for our private equity franchise. Over the years, our operations-oriented approach to investment management and our focus on high-quality, cash-generative, and mission-critical businesses has differentiated our franchise across market cycles. This approach has led to us owning naturally strong compounding assets, and the execution of our operational value creation plans usually makes them even better. In our private equity business, this has driven significant value creation for our stakeholders, which on a combined flagship fund basis has generated 27% gross and 20% net returns. Quite exceptional. The recent dividend distribution and recapitalization of Clarios exemplifies this. As a reminder, Clarios is the world's leading provider of advanced low-voltage batteries. We acquired it via a corporate carve-out for $13.2 billion in 2019.

Speaker Change: <unk> recapitalization is another important milestone for our private equity franchise.

Speaker Change: Over the years, our operations oriented approach to investment management on our focus on high quality cash generative and mission critical businesses has differentiated our franchise across market cycles.

Speaker Change: This approach has led towards owning naturally strong compounding assets and the execution of our operational value creation plans, usually makes them even better.

Speaker Change: And our private equity business. This has driven significant value creation for our stakeholders, which on a combined flagship fund basis has generated 27% gross and 20% net returns quite exceptional.

Speaker Change: The recent dividend distribution and recapitalization of quarry or exemplifies this as a reminder, quarry us as the world's leading provider of advanced low voltage batteries, we acquired it by a corporate carve out for $13 $2 billion in 2019, and our six years of ownership, which included some very volatile economic periods.

Bruce Flatt: In our 6 years of ownership, which included some very volatile economic periods, profitability increased by more than $500 million to over $2 billion of annual EBITDA, and we reduced debt by $2 billion. We also solidified the business into a leader in batteries for virtually all types of automobiles globally. With a significant deleveraging from excess cash flow achieved over the past 6 years, combined with Clarios' increasing cash flow generation, we decided to refinance the business. For perspective, we now value the business at 4 times our original equity investment, which supported the funding of a $4.5 billion special distribution to Clarios' shareholders. This allowed us to generate cash to owners of 1.5 times our original equity while continuing to hold our entire equity interest in the business.

Speaker Change: Debility increased by more than $500 million to over $2 billion of annual EBITDA and we reduced debt by $2 billion. We also solidified the business into a leader in batteries for virtually all types of automobiles globally.

Speaker Change: With a significant deleveraging from excess cash flow achieved over the past six years combined required doses, increasing cash flow generation, we decided to refinance the business.

Speaker Change: For perspective, we know value of the business at four times, our original equity investment, which supported the funding of a $4 5 billion dollar special distributions to carry us as shareholders.

Speaker Change: This allowed us to generate cash to owners of 1.5 times, our original equity while continuing to hold our entire equity interest in the business.

Bruce Flatt: We are now considering whether to sell an interest in the business or just continue to generate excellent cash-on-cash returns as it continues to grow. Since acquisition, we have completed a significant operational transformation, focusing on investing in new product development, improving customer service levels, optimizing production, and expanding the advanced battery manufacturing capabilities. Today, Clarios powers one in three cars on the road. It is an exceptionally high-quality business with 80% of its volumes coming from recurring aftermarket demand. Furthermore, its technology scale and relationships with nearly all major global automakers are unmatched, providing it with an incredibly resilient competitive advantage. With the performance requirements from low-voltage batteries increasing as cars become more electrically complicated, the demand for technologically advanced batteries is growing rapidly.

Speaker Change: We are now considering whether to sell an interest in the business or just continue to generate excellent cash on cash returns as it continues to grow since acquisition. We have completed a significant operational transformation focusing on investing in new product development, improving customer service levels, optimizing production and expanding the advanced battery manufacturing.

Speaker Change: Abilities.

Speaker Change: Today <unk> Power's one in three cars on the road. It is an exceptionally high quality business with 80% of its volumes coming from recurring aftermarket demand.

Speaker Change: Furthermore, as technology scale unrelated and ships with nearly all major global automakers are unmatched, providing it with an incredibly resilient competitive advantage.

Speaker Change: With the performance requirements for low voltage batteries, increasing as cars become more electrically complicated the demand for technologically advanced batteries is growing rapidly as the global leader in advanced battery production <unk> is ideally positioned to lead this evolution from a technology and manufacturing hubs in the United States. The business is in an <unk>.

Bruce Flatt: As the global leader in advanced battery production, Clarios is ideally positioned to lead this evolution from its technology and manufacturing hubs in the United States. The business is in an exceptional financial position today and is investing major capital in its US manufacturing capabilities. Over the last decade, Clarios has invested over $1 billion in its US manufacturing operations and expects to more than double its US investment over the next 10 years. This will include new capacity, state-of-the-art manufacturing technology, and important innovations to accelerate growth and strengthen its global leadership position in producing the most advanced recyclable batteries in the world. The business has a strong growth profile for years to come. It is rare to find a business as exceptional as Clarios that has significant growth tailwinds supporting a visible trajectory of increasing earnings and cash flows.

Speaker Change: <unk> financial position today, and is investing major capital and its U S manufacturing capabilities.

Corio: Over the last decade, Corio says invested over $1 billion and its U S manufacturing operations and expect to more than double its U S investment over the next 10 years.

Corio: This will include new capacity state of the art manufacturing technology and important innovations to accelerate growth and strengthen its global leadership position in producing the most advanced recyclable batteries in the world. The business has a strong growth profile for years to come.

Speaker Change: It is rare to find a business as exceptional as cargoes that has significant growth tailwind supporting a visible trajectory of increasing earnings and cash flows.

Bruce Flatt: As such, Clarios is an incredibly valuable business, which will continue to differentiate itself through our hands-on investment approach. Owner or renter? There is a psychological phenomenon in most humans which results in caring a lot about what they own but caring less about something they rent. Consider the car you own and the care you take not to go too fast over speed bumps, for example. Conversely, rental cars are driven with much less care, and their depreciation is dramatically higher than owned cars. In housing, this is even more pronounced. Wear and tear on rental apartments is dramatically higher than those that are owned. In fact, buildings built at the same time in the same area with the same demographics find that rentals have 50% more wear and tear than owned.

Speaker Change: As such Claris is an incredibly valuable business, which will continue to differentiate itself through a hands on investment approach.

Speaker Change: Owner or renter.

Speaker Change: There is a psychological phenomenon and most humans, which results in caring a lot about the owned by carrying less up as something they rent consider the car you own and the care you take not to go too fast over speed bumps. For example, conventionally rental cars are driven with much less care and their depreciation is dramatically higher than owned cars.

Speaker Change: And housing this is even more pronounced wear and tear on rental apartments is dramatically higher than those that are owned in fact buildings built at the same time in the same area with the same demographics find that rentals have 50% more wear and tear and owned it is our observation that people, sometimes act like owners with their house, but actually renters with.

Bruce Flatt: It is our observation that people sometimes act like owners with their house but act like renters with their investments. This is one of the great errors in investing. Those who own shares in a listed business have just a fractional ownership. An owner of an entire business sticks with the investment, and he or she believes that reinvestment into the business creates value and over time the cash flows will grow. If that same business happens to be traded in the market and the stock goes up, this is acknowledgment that others see what a great business you have. It really does not matter because as a stockholder, you're just a fractional long-term owner. By comparison, if you own the apartment or house you live in, you likely would not sell it because someone told you it moved up or down in price.

Speaker Change: Our investments.

Speaker Change: This is one of the great errors and investing those who own shares in a listed business have just a fractional ownership and owner of an entire business sticks with the investment and he or she believes that reinvestment into the business creates value and over time. The cash flows will grow if that same business happens to be traded in the market and the stock goes up.

Speaker Change: This is the acknowledgment that others see what a great business you have but it really does not matter because as a stockholder you were just a fractional long term owner by comparison, if you own the apartment or house you live in you likely would not sell it because someone told you it moved up or down in price. When you have fractional ownership of a business you only small piece of that.

Bruce Flatt: When you have fractional ownership of a business, you own a small piece of that business, and so unless you lose faith in the business, there should be no reason to do anything. Just act like an owner and watch the business grow. Of course, decision-making comes in because sometimes management teams go astray or business prospects decline. The above is based on the assumption that your management team is hardworking and competent. This is important from the outset with an investment as the future of a business is about not just what you own, but also the investment of the generated cash flow. It is extremely important that you maintain your house and that management in a company makes good cash reinvestment decisions for you. Many shareholders act like renters rather than owners and trade simply because they think that the stock price is up.

Speaker Change: And so unless you lose faith in the business there should be no reason to do anything just like an owner and watch the business grow.

Speaker Change: Of course decision, making comes in because sometimes management teams go astray, our business prospects declined.

Speaker Change: The above is based on the assumption that your management team is hard working and competent. This is important from the outset with an investment as the future of our business is about not just what you own but also the investment of the generated free cash flow. It is extremely important that you maintain your house and that management and our company makes good cash reinvestment decisions.

Speaker Change: For you many shareholders actually renters, rather that owners and trade simply because we think that the stock prices up.

Bruce Flatt: This is not relevant to the long-term value of your business, and after taxes, trading makes the frictional costs even more damaging to longer-term returns. If, on the other hand, one acts like an owner in investing, then you will watch out to ensure that your management is working hard and doing the right things. However, in the absence of bad decisions being made, you should act like you own the business and just put the shares away in your account. Of course, that is hard with daily quotations everywhere. We realize also that the problem is only getting worse, not better, due to the growth of social media. Owning a house and a business through fractional ownership of a listed entity are two of the great tax-free ways to compound wealth over the long term.

Speaker Change: This is not relevant to the long term view of your business and after taxes trading makes the frictional cost even more damaging to longer term returns if on the other hand, one acts like an owner and investing then you will watch out to ensure that your management is working hard and doing the right things.

Speaker Change: However, in the absence of bad decisions being made you should act like you own the business and just put the shares away in your account of course that is hard with daily quotations everywhere. We realize also that the problem is only getting worse not better due to the growth of social media.

Speaker Change: Owning a house in our business through fractional ownership of a listed entity are two of the beat tax free ways to compound wealth over the long term.

Bruce Flatt: If one can compound owner returns constantly over long periods of time at greater than 10%, the wealth created by being an owner is astonishing. The alternative is renting a residence or renting businesses. Our view is that unless you're one of the very few extremely talented and knowledgeable stock traders, you will surely underperform as a renter as opposed to being an owner. Closing. We remain committed to investing capital for you in high-quality assets that earn solid cash returns on equity while emphasizing downside protection for the capital employed. The primary objective of the company continues to be generating increased cash flows on a per share basis and as a result, higher intrinsic value per share over the longer term.

Speaker Change: If one can compound owner returns constantly over long periods of time are greater than 10%. The wealth created by being an owner is astonishing. The alternative is renting a residence or renting businesses. Our view is that unless you're one of the very few extremely talented and knowledgeable stock traders you will surely underperform as a renter as opposed.

Speaker Change: Being an owner.

Speaker Change: Closing.

Speaker Change: We remain committed to investing capital for you in high quality assets, there and solid cash returns on equity, while emphasizing downside protection for the capital employed.

Speaker Change: The primary objective of the company continues to be generating increased cash flows on a per share basis, and as a result higher intrinsic value per share over the longer term.

Bruce Flatt: Thank you for your interest in Brookfield, and please do not hesitate to contact any of us should you have suggestions, questions, comments, or ideas you wish to share. Sincerely, Bruce Flatt, Chief Executive Officer. 13 February 2025.

Speaker Change: Thank you for your interest in Brookfield, I'm pleased to not hesitate to contact any of US should you have suggestions questions comments or ideas you wish to share sincerely Bruce Flatt, Chief Executive Officer February 13th 2025.

[Company Representative] (Brookfield Corporation): Cautionary statement regarding forward-looking statements and information. All references to dollars are to US dollars. This letter to shareholders contains forward-looking information within the meaning of Canadian provincial securities laws and forward-looking statements within the meaning of the US Securities Act of 1933, the US Securities Exchange Act of 1934, safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, and in any applicable Canadian securities regulations, collectively forward-looking statements.

Speaker Change: Cautionary statement regarding forward looking statements and information.

Speaker Change: All references to dollars are to U S. Dollars. This letter to shareholders contains forward looking information within the meaning of Canadian provincial securities laws and forward looking statements within the meaning of the U S. Securities Act of 1933. The U S Securities Exchange Act of 1930 for Safe Harbor provisions of the United States Private Securities Litigation Reform Act of 1995.

Speaker Change: And in any applicable Canadian Securities regulations collectively forward looking statements.

[Company Representative] (Brookfield Corporation): Forward-looking statements include statements that are predictive in nature, depend upon or refer to future results, events, or conditions, and include, but are not limited to, statements which reflect management's current estimates, beliefs, and assumptions regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies, capital management, and outlook of Brookfield Corporation and its subsidiaries, as well as the outlook for North American and international economies for the current fiscal year and subsequent periods, and which in turn are based on our experience and perception of historical trends, current conditions, and expected future developments, as well as other factors management believes are appropriate in the circumstances. The estimates, beliefs, and assumptions of Brookfield Corporation are inherently subject to significant business, economic, competitive, and other uncertainties and contingencies regarding future events and as such, are subject to change.

Speaker Change: Forward looking statements include statements that are predictive in nature depend upon or refer to future results events or conditions and include but are not limited to statements, which reflect management's current estimates beliefs and assumptions regarding the operations business financial condition expected financial results performance prospects opportunity.

Speaker Change: These priorities targets goals ongoing objectives strategies capital management, an outlook of Brookfield Corporation, and its subsidiaries as well as the outlook for North American and international economies for the current fiscal year and subsequent periods and which in turn are based on our experience and perception of historical trends current conditions and expected future.

Speaker Change: Developments as well as other factors management believes are appropriate in the circumstances, the estimates beliefs and assumptions of Brookfield Corporation are inherently subject to significant business economic competitive and other uncertainties and contingencies regarding future events and as such are subject to change.

[Company Representative] (Brookfield Corporation): Forward-looking statements are typically identified by words such as expect, anticipate, believe, foresee, could, estimate, goal, intend, plan, seek, strive, will, may, and should, and similar expressions. In particular, the forward-looking statements contained in this letter include statements referring to the impact of current market or economic conditions on our business, the future state of the economy or the securities market, the Castlelake acquisition, including its expected impact on our business, the anticipated allocation and deployment of our capital, our liquidity, and ability to access and raise capital, our fundraising targets, our target growth objectives, and our target carried interest. Although Brookfield Corporation believes that such forward-looking statements are based upon reasonable estimates, beliefs, and assumptions, actual results may differ materially from the forward-looking statements.

Speaker Change: Forward looking statements are typically identified by words, such as expect anticipate believe foresee could estimate goal intend plan seek strive will may and should and similar expressions in particular the forward looking statements contained in this letter include statements referring to the <unk>.

Speaker Change: Impact of current market or economic conditions on our business the future state of the economy or the securities market. The Castle Lake acquisition, including its expected impact on our business the anticipated allocation and deployment of our capital our liquidity and ability to access and raise capital or fund raising targets, our target growth objectives and our target.

Speaker Change: <unk> interest.

Speaker Change: Although Brookfield Corporation believes that such forward looking statements are based upon reasonable estimates beliefs and assumptions actual results may differ materially from the forward looking statements factors that could cause actual results to differ materially from those contemplated or implied by forward. Looking statements include but are not limited to one returns that are lower than target to be in.

[Company Representative] (Brookfield Corporation): Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to: 1, returns that are lower than target; 2, the impact or unanticipated impact of general economic, political, and market factors in the countries in which we do business; 3, the behavior of financial markets, including fluctuations in interest and foreign exchange rates and heightened inflationary pressures; 4, global equity and capital markets and the availability of equity and debt financing and refinancing within these markets; 5, strategic actions including acquisitions and dispositions, the ability to complete and effectively integrate acquisitions into existing operations, and the ability to attain expected benefits; 6, changes in accounting policies and methods used to report financial condition, including uncertainties associated with critical accounting assumptions and estimates; 7, the ability to appropriately manage human capital; 8, the effect of applying future accounting changes.

Speaker Change: Packed or unanticipated impact of general economic political and market factors in the countries in which we do business three the behavior of financial markets, including fluctuations in interest and foreign exchange rates, a heightened inflationary pressures for global equity and capital markets and the availability of equity and debt financing and refinancing within these markets five strategic.

Speaker Change: Actions, including acquisitions and dispositions the ability to complete and effectively integrate acquisitions into existing operations and the ability to attain expected benefits six changes in accounting policies and methods used to report financial condition, including uncertainties associated with critical accounting assumptions and estimates seven the ability to.

[Company Representative] (Brookfield Corporation): 9, business competition. 10, operational and reputational risks. 11, technological change. 12, changes in government regulation and legislation within the countries in which we operate. 13, governmental investigations and sanctions. 14, litigation. 15, changes in tax laws. 16, ability to collect amounts owed. 17, catastrophic events such as earthquakes, hurricanes, and epidemics, pandemics. 18, the possible impact of international conflicts and other developments, including terrorist acts and cyberterrorism. 19, the introduction, withdrawal, success, and timing of business initiatives and strategies. 20, the failure of effective disclosure controls and procedures and internal controls over financial reporting and other risks. 21, health, safety, and environmental risks. 22, the maintenance of adequate insurance coverage. 23, the existence of information barriers between certain businesses within our Asset Management operations. 24, risks specific to our business segments, including Asset Management, Wealth Solutions, Renewable Power and Transition, Infrastructure, Private Equity, Real Estate, and Corporate Activities.

Speaker Change: Opiate Lee manage human capital eight the effect of applying future accounting changes nine business competition 10, operational and Reputational risks 11 technological change.

Speaker Change: <unk> changes in government regulation and legislation within the countries in which we operated 13 governmental investigations and sanctions 14 litigation 15 changes in tax laws 16 ability to collect amounts owed 17 catastrophic events, such as earthquakes hurricanes and epidemics pandemics.

Speaker Change: <unk> the possible impact of international conflicts and other developments, including terrorist acts and cyberterrorism 19, the introduction withdrawal success and timing of business initiatives and strategies 'twenty. The failure of effective disclosure controls and procedures and internal controls over financial reporting and other risks 21 health safety and environmental risks.

Speaker Change: 22, the maintenance of adequate insurance coverage twenty-three the existence of information barriers between certain businesses within our asset managed operations 24 risks specific to our business segments, including asset management wealth solutions renewable power and transition infrastructure private equity real estate and corporate activities.

[Company Representative] (Brookfield Corporation): 25, factors detailed from time to time in our documents filed with the securities regulators in Canada and the United States. We caution that the foregoing list of important factors that may affect future results is not exhaustive, and other factors could also adversely affect future results. Readers are urged to consider these risks, as well as other uncertainties, factors, and assumptions carefully in evaluating the forward-looking statements, and are cautioned not to place undue reliance on such forward-looking statements, which are based only on information available to us as of the date of this letter or such other date specified herein. Except as required by law, Brookfield Corporation undertakes no obligation to publicly update or revise any forward-looking statements, whether written or oral, that may be as a result of new information, future events, or otherwise. Past performance is not indicative nor a guarantee of future results.

Speaker Change: And twenty-five factors detailed from time to time in our documents filed with the securities regulators in Canada, and the United States.

Speaker Change: We caution that the foregoing list of important factors that may affect future results is not exhaustive and other factors could also adversely affect future results.

Speaker Change: Readers are urged to consider these risks as well as other uncertainties factors and assumptions carefully in evaluating the forward looking statements and are cautioned not to place undue reliance on such forward looking statements, which are based only on information available to us as of the date of this letter or such other date specified herein, except as required by law Brookfield Corporation undertakes no.

Speaker Change: To publicly update or revise any forward looking statements, whether written or oral that may be as a result of new information future events or otherwise.

[Company Representative] (Brookfield Corporation): There can be no assurance that comparable results will be achieved in the future, that future investments will be similar to historic investments discussed herein, that targeted returns, growth objectives, diversification, or asset allocations will be met, or that an investment strategy or investment objectives will be achieved because of economic conditions, the availability of appropriate opportunities, or otherwise. Target returns and growth objectives set forth in this letter are for illustrative and informational purposes only and have been presented based on various assumptions made by Brookfield Corporation in relation to the investment strategies being pursued, any of which may prove to be incorrect. There can be no assurance that targeted returns or growth objectives will be achieved.

Speaker Change: Past performance is not indicative nor a guarantee of future results. There can be no assurance that comparable results will be achieved in the future that future investments will be similar to historic investments discussed herein that targeted returns growth objectives diversification or asset allocations will be met or that in investment strategy or investment objectives will be achieved because of economic conditions.

Speaker Change: The availability of appropriate opportunities or otherwise.

Brookfield Corporation: Target returns and growth objectives set forth in this letter offer illustrative and informational purposes, only and have been presented based on various assumptions made by Brookfield Corporation in relation to the investment strategies being pursued any of which may prove to be incorrect. There can be no assurance that targeted returns or growth objectives will be achieved.

[Company Representative] (Brookfield Corporation): Due to various risks, uncertainties, and changes, including changes in economic, operational, political, or other circumstances beyond Brookfield Corporation's control, the actual performance of the business could differ materially from the target returns and growth objectives set forth herein. In addition, industry experts may disagree with the assumptions used in presenting the target returns and growth objectives. No assurance, representation, or warranty is made by any person that the target returns or growth objectives will be achieved, and undue reliance should not be put on them. Cautionary statement regarding the use of non-IFRS measures. This letter to shareholders contains references to financial measures that are calculated and presented using methodologies other than in accordance with IFRS.

Brookfield Corporation: Due to various risks uncertainties and changes, including changes in economic operational political or other circumstances beyond Brookfield Corporation's control. The actual performance of the business could differ materially from the target returns and growth objectives set forth herein. In addition industry experts may disagree with the assumptions used in presenting the target returns and growth objectives no assurance.

Brookfield Corporation: Representation or warranty is made by any person that the target returns or growth objectives will be achieved and undue reliance should not be put on them.

Brookfield Corporation: Cautionary statement regarding the use of non ifr's measures.

Brookfield Corporation: This letter to shareholders contains references to financial measures that are calculated and presented using methodologies other than in accordance with I FRS. These financial measures, which include distributable earnings as defined below its components and its per share equivalent should not be considered as the sole measure of our performance and should not be considered in isolation from or as a substitute.

[Company Representative] (Brookfield Corporation): These financial measures, which include distributable earnings, as defined below, its components and its per share equivalent, should not be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, similar financial measures calculated in accordance with IFRS. We caution readers that these non-IFRS financial measures or other financial metrics are not standardized under IFRS and may differ from the financial measures or other financial metrics disclosed by other businesses and, as a result, may not be comparable to similar measures presented by other issuers and entities. We make reference to distributable earnings, which refers to the sum of distributable earnings from our Asset Management business, distributable operating earnings from our Insurance Solutions business, distributions received from our ownership of investments, realized carried interest and disposition gains from principal investments, net of preferred share dividends and equity-based compensation costs.

Brookfield Corporation: For similar financial measures calculated in accordance with I F. R. S.

Brookfield Corporation: We caution readers that these non <unk> financial measures or other financial metrics are not standardized under ifr us and may differ from the financial measures or other financial metrics disclosed by other businesses and as a result may not be comparable to similar measures presented by other issuers and entities.

Brookfield Corporation: We make reference to distributable earnings which refers to the sum of distributable earnings from our asset management business distributable operating earnings from our insurance solutions business distributions received from our ownership of investments realized carried interest in disposition gains from principal investments net of preferred share dividends and equity based compensation costs. We also make <unk>.

[Company Representative] (Brookfield Corporation): We also make reference to distributable earnings before realizations, which refers to distributable earnings before realized carried interest and disposition gains from principal investments, and net operating income, which refers to the revenues from our operations less direct expenses before the impact of depreciation and amortization within our real estate business. Our outlook for growth in distributable earnings assumes growth in fee-related earnings and realized carried interest in line with our business plans, which assume growth in our fee-bearing capital consistent with our fundraising plans, capital deployment expectations, maintaining the fee rates we earn on fee-bearing capital and earning margins consistent with our current margin. Actual results may vary materially and are subject to market conditions and other factors and risks set out above.

Brookfield Corporation: <unk> to distributable earnings before realizations, which refers to distributable earnings before realized carried interest in disposition gains from principal investments and net operating income which refers to the revenues from our operations less direct expenses before the impact of depreciation and amortization within our real estate business our outlook for growth in distributable earnings assumes growth in fee.

Brookfield Corporation: <unk> earnings and realized carried interest in line with our business plans, which assume growth in our fee bearing capital consistent with our fundraising plans capital deployment expectations, maintaining the fee rates, we earn on fee bearing capital and earning margins consistent with our current margin actual results may vary materially and are subject to market conditions and other factors and risks set out above.

[Company Representative] (Brookfield Corporation): For more information on non-IFRS measures and other financial metrics, see Brookfield Corporation's Q1 2024 press release, which includes reconciliations of these non-IFRS financial measures to their most directly comparable financial measures calculated and presented in accordance with IFRS.

Brookfield Corporation: For more information on non <unk> measures and other financial metrics see Brookfield Corporation's Q1, 2024 press release, which includes reconciliations of these non <unk> financial measures to their most directly comparable financial measures calculated and presented in accordance with I F Rs.

Bruce Flatt: Brookfield Corporation Letter to Shareholders Q3 2024. 2024 has been good. 2025 should be better. We delivered strong financial results in Q3, and both the outlook for the balance of the year and 2025 look even more positive. A reduction in short interest rates across the globe, combined with solid growth and resilient employment numbers, is increasing the market's confidence in pricing risk. This is leading to continued improvements in capital markets and a considerable pickup in transaction activity. In the past few months, we executed on over $30 billion of financings across the business and advanced over $17 billion of monetizations at attractive returns. We expect this momentum to continue across the franchise as high-quality cash flowing businesses with compelling growth profiles are proving to be highly attractive to buyers and lenders alike.

Brookfield Corporation: Yeah.

Brookfield Corporation: [music] Brookfield.

Brookfield Corporation: Brookfield Corporation letter to shareholders Q3 2024.

Brookfield Corporation: 2024 has been good 2025 should be better.

Brookfield Corporation: We delivered strong financial results in the third quarter and both the outlook for the balance of the year in 2025 with even more positive.

Brookfield Corporation: A reduction in short interest rates across the globe combined with solid growth in Brazilian unemployment numbers is increasing the market's confidence in pricing risk.

This is leading to continued improvements in capital markets and a considerable pickup in transaction activity.

Brookfield Corporation: In the past few months, we executed on over $30 billion of financings across the business and advanced over $17 billion of monetization at attractive returns.

Brookfield Corporation: We expect this momentum to continue across the franchise as high quality cash flowing businesses with compelling growth profiles are proving to be highly attractive to buyers and lenders alike.

Bruce Flatt: We continue to capture an increasing share of global flows of capital, centered around our deep relationships with institutional, private wealth, and retail investors. Having access to the largest pools of capital remains a strong competitive advantage as we continue to invest in the backbone of the global economy. We are actively investing large-scale capital across the business and have committed to approximately $20 billion of investments in recent months. As the economic tailwinds turn in our favor and with the foundations we have in place across the business, we are in a strong position to achieve our stated goal of delivering 15% plus total returns on a per share basis to our shareholders over the long term. Our operating results continue to get stronger. Financial results.

Brookfield Corporation: We continued to capture an increasing share of global flows of capital centered around our deep relationships with institutional private wealth and retail investors.

Brookfield Corporation: Having access to the largest pools of capital remains a strong competitive advantage as we continue to invest in the backbone of the global economy.

Brookfield Corporation: We are actively investing large scale capital across the business and have committed to approximately $20 billion of investments in recent months.

Brookfield Corporation: As the economic tailwind turn in our favor and with the foundations we have in place across the business. We are in a strong position to achieve our stated goal of delivering 15% plus total returns on a per share basis to our shareholders over the long term.

Bruce Flatt: Distributable earnings, or DE, before realizations were a record $1.3 billion, or $0.80 per share in the quarter, and $4.6 billion, or $2.90 per share for the last 12 months. These quarterly earnings represent an increase of 19% over the prior year quarter. DE in total, including realizations, was $1.3 billion, or $0.84 per share for the quarter, and $6 billion, or $3.78 per share for the last 12 months. Asset management is benefiting from consolidation. Our asset management business generated distributable earnings of $694 million in the quarter and $2.6 billion over the last 12 months. We benefited from recent fundraising momentum across our diversified strategies, notably from our credit funds and insurance flows. Fee-bearing capital at quarter end was $539 billion, an increase of 23% over the last 12 months, and as a result, fee-related earnings grew by 14% compared to the prior year quarter.

Brookfield Corporation: Our operating results continued to get stronger.

Brookfield Corporation: Financial results.

Brookfield Corporation: Distributable earnings our D E before realizations were a record $1.3 billion or 80 cents per share in the quarter and $4 $6 billion or $2 90 per share for the last 12 months. These.

Brookfield Corporation: These quarterly earnings represent an increase of 19% over the prior year quarter.

Brookfield Corporation: D E and Portugal, including realizations was $1.3 billion or 84 cents per share for the quarter and $6 billion or $3 78 per share for the last 12 months.

Brookfield Corporation: Asset management is benefiting from consolidation.

Brookfield Corporation: Our asset management business generated distributable earnings of $694 million in the quarter and $2 $6 billion over the last 12 months.

Brookfield Corporation: We benefited from recent fundraising momentum across our diversified strategies.

Brookfield Corporation: Notably from our credit funds and insurance force.

Brookfield Corporation: Fee bearing capital at quarter end was $539 billion, an increase of 23% over the last 12 months and as a result fee related earnings grew by 14% compared to the prior year quarter.

Bruce Flatt: Importantly, as the business grows, so too should our margins as we benefit from the operating leverage in the platform. With the anticipated closes on our latest flagship funds, we expect strong fundraising through the end of the year and into 2025, driving further earnings growth. During the quarter, BAM closed on its previously announced strategic partnership with Castlelake, a global alternative investment manager specializing in asset-based private credit, including aviation and specialty finance, with approximately $24 billion of assets under management. We also held an initial close of our catalytic transition fund for $2.4 billion, marking a significant milestone towards the target of raising up to $5 billion to invest in emerging market clean energy and transition assets. Wealth Solutions is growing fast.

Brookfield Corporation: Fortunately as the business grows so too should our margins as we benefit from the operating leverage in the platform.

Brookfield Corporation: With the anticipated clauses on our latest flagship funds, we expect strong fundraising through the end of the year and into 2025 driving further earnings growth.

Brookfield Corporation: During the quarter <unk> closed on its previously announced strategic partnership with Castle Lake a global alternative investment manager specializing in asset based private credit, including aviation and specialty finance with approximately $24 billion of assets under management.

Brookfield Corporation: We also held an initial course of our catalytic transition front for $2 4 billion, marking a significant milestone towards the target of raising up to $5 billion to invest in emerging market clean energy and transitioned assets.

Bruce Flatt: Our Wealth Solutions business generated distributable operating earnings of $364 million in the quarter and $1.2 billion over the last 12 months due to continued growth in our annuity platform and the strength of our investment performance. During the quarter, we generated approximately $4.5 billion of organic inflows, primarily driven by retail and institutional annuity sales. Our insurance assets ended the quarter at over $115 billion. By leveraging our investment origination capabilities, we were able to generate an average investment portfolio yield of 5.4%, 1.8% higher than our average cost of capital. Annualized earnings for the business are approximately $1.5 billion today and are poised to grow to $2 billion in the near term as we continue to reposition the investment portfolio.

Brookfield Corporation: Well solutions is growing fast our wealth solutions business generated distributable operating earnings of $364 million in the quarter and $1 $2 billion over the last 12 months due to continued growth in our annuity platform and the strength of our investment performance.

Brookfield Corporation: During the quarter, we generated approximately $4 $5 billion of organic enforce primarily driven by retail and institutional annuity sales.

Brookfield Corporation: Our insurance assets ended the quarter at over $115 billion.

Brookfield Corporation: By leveraging our investment origination capabilities, we were able to generate an average investment portfolio yield of five 4%, one 8% higher than the average cost of capital.

Brookfield Corporation: Annualized earnings for the business are approximately $1.5 billion today and are poised to grow to $2 billion in the near term as we continue to reposition the investment portfolio.

Bruce Flatt: Through our combined Wealth Solutions platforms, we are raising close to $2 billion of retail capital per month, which includes approximately $450 million a month from our private wealth channel. Operating businesses were very resilient. Our operating businesses continued to deliver resilient and growing cash flows, generating distributable earnings of $356 million in the quarter and $1.5 billion over the last 12 months. Cash distributions from our renewable power and transition infrastructure and private equity businesses are supported by their strong underlying fundamentals and growth in their operating earnings. Our core real estate portfolio continues to deliver growth in same-store net operating income, or NOI, with a 4% increase over the prior year quarter. During the quarter, we signed close to 6 million square feet of office and retail leases, and rents on the newly signed leases were approximately 10% higher compared to those leases expiring.

Brookfield Corporation: Through our combined wealth solutions platforms, we're raising close to $2 billion of retail capital per month, which includes approximately $450 million a month from our private wealth channel.

Brookfield Corporation: Operating businesses were very resilient.

Brookfield Corporation: Our operating businesses continued to deliver resilient and growing cash flows generating distributable earnings of $356 million in the quarter and $1.5 billion over the last 12 months.

Brookfield Corporation: Cash distributions from our renewable power and transmission infrastructure and private equity businesses are supported by their strong underlying fundamentals and growth in their operating earnings.

Brookfield Corporation: Our core real estate portfolio continues to deliver growth in same store net operating income or NOI with a 4% increase over the prior year quarter. During the quarter, we signed close to 6 million square feet of office and retail leases and rents on the newly signed leases were approximately 10% higher compared to those leases.

Bruce Flatt: With interest rates having peaked and capital markets opening up, we expect a strong recovery across real estate markets over the next couple of years. Monetizations are picking up. With the level of transaction activity picking up, we were able to close or advance over $17 billion of asset sales across the business in recent months. A few notable deals during and subsequent to the quarter include the following. In our real estate business, we closed on the sale of 9 retail parks in the UK for approximately $800 million. Over the 3-year hold period, we enhanced cash flows by increasing occupancy rates through expanding key tenant relationships. The sale of this portfolio generates an approximately 30% IRR and 2.2x multiple of capital. We advanced the sale of the PGA National Resort, a luxury resort in Palm Beach, Florida, for over $400 million.

Brookfield Corporation: Fearing.

Brookfield Corporation: With interest rates, having peaked in capital markets opening up we expect a strong recovery across real estate markets over the next couple of years.

Brookfield Corporation: Monetization picking up.

Brookfield Corporation: With the level of transaction activity picking up we were able to close where advance over $17 billion of asset sales across the business in recent months.

Brookfield Corporation: A few notable deals during and subsequent to the quarter include the following.

Brookfield Corporation: In our real estate business, we closed on the sale of nine retail parks in the UK for approximately $800 million.

Brookfield Corporation: Over the three year whole period, we enhanced cash flows by increasing occupancy rates through expanding key tenant relationships.

Brookfield Corporation: The sale of this portfolio generates an approximately 30% IRR and 2.2 times multiple of capital.

Bruce Flatt: During our ownership, we successfully executed the comprehensive renovation plan and increased average daily rates, doubling NOI over the hold period. This transaction is a testament to the strong demand for high-quality hospitality assets in good markets. We closed on the sale of a retail property in Brazil, a group of logistics assets in the US, our luxury hotel in South Korea, an office asset and a multi-family asset in Washington, DC, and a portfolio of US manufactured housing assets. We also signed agreements to sell an office asset in Sydney, Australia for approximately $315 million, as well as a portfolio of manufactured housing assets in the US for approximately $570 million. Property transaction markets are recovering. Our renewable power and transition group recently signed four transactions with excellent outcomes. We agreed to sell Saeta, a portfolio of predominantly wind assets in Spain, for an enterprise value of $1.4 billion.

Brookfield Corporation: We advanced the sale of the PGA National resort, a luxury resort in Palm Beach, Florida for over $400 million.

Brookfield Corporation: During our ownership we successfully executed the comprehensive renovation plan and increased average daily rates doubling NOI over the whole period. This transaction is a testament to the strong demand for high quality hospitality assets in good markets.

Brookfield Corporation: We closed on the sale of a retail property in Brazil, a group of logistics assets in the U S. Our luxury hotel in South Korea, and office asset and a multifamily asset in Washington D C and a portfolio of U S. Manufactured housing assets. We also signed agreements to sell an office asset in Sydney, Australia for approximately $315 million.

Brookfield Corporation: As well as our portfolio of manufactured housing assets in the U S for approximately $517 million.

Brookfield Corporation: Property transaction markets are recovering.

Brookfield Corporation: Our renewable power and transition group recently signed four transactions with excellent outcomes, we agreed to sell say at our portfolio of predominantly wind assets in Spain for an enterprise value of $1 $4 billion.

Bruce Flatt: Since acquiring the business in 2018, we successfully executed a business plan focused on divesting non-core assets, optimizing capital structure, and positioning the company for sustainable long-term growth. We announced the sale of our stake in a critical electricity generation and storage facility in the UK and a 50% interest in a portfolio of wind assets in the US. In addition, we agreed to sell a portfolio of wind and solar assets in India, realizing our first full-cycle investment in the country. To date this year, our renewable power and transition business has generated over $2.3 billion of proceeds from asset monetizations, delivering an IRR of approximately 25% and a multiple of capital of 2.5 times.

Brookfield Corporation: Acquiring the business in 2018, we successfully executed our business plan focused on divesting noncore assets optimizing capital structure and positioning the company for sustainable long term growth.

Brookfield Corporation: We announced the sale of our stake in a critical electricity generation and storage facility in the U K and a 50% interest in a portfolio of wind assets in the U S and.

Brookfield Corporation: In addition, we agreed to sell a portfolio of wind and solar assets in India, Realizing our first full cycle investment in the country.

Brookfield Corporation: To date this year, our renewable power and transition business has generated over $2 $3 billion of proceeds from asset monetization.

Bruce Flatt: Our private equity business closed a previously announced sale of our North American and European road fuels operation, and we agreed to sell a business unit within our offshore oil services operation for $1.9 billion. In our infrastructure business, we agreed to sell our Mexican regulated natural gas transmission business for approximately $500 million. This generated a 22% IRR and a 2.2 times multiple of capital as a result of value enhancement initiatives achieved earlier than planned. At the end of the quarter, accumulated unrealized carried interest was $11.5 billion, representing a 17% increase over the last 12 months. We recognized $295 million of net realized carried interest into income to date this year, and we expect to realize additional carried interest through the end of the year. Our balance sheet and liquidity are robust. We continue to differentiate our business through our access to large-scale capital.

Brookfield Corporation: Levering, an IRR of approximately 25% and a multiple of capital of two five times.

Brookfield Corporation: Our private equity business closed the previously announced sale of our North American and European Road fuels operation and we agreed to sell a business unit within our offshore oil services operation for $1.9 billion.

Brookfield Corporation: And our infrastructure business, where we agreed to sell our Mexican regulated natural gas transmission business for approximately $500 million.

Brookfield Corporation: This generated a 22% IRR and a 2.2 times multiple of capital as a result of value enhancement initiatives achieved earlier than planned.

Brookfield Corporation: At the end of the quarter accumulated unrealized carried interest was $11.5 billion, representing a 17% increase over the last 12 months.

Brookfield Corporation: We recognized $295 million of net realized carried interest into income to date. This year and we expect to realize additional carried interest through the end of the year.

Bruce Flatt: The combination of our perpetual capital base and over $150 billion of deployable capital sets us up well to capitalize on investment opportunities through market cycles and protect against downside risks. With interest rates now coming down, liquidity continues to return to the capital markets. In the past few months, we have closed or executed on over $30 billion of financings. A few highlights include. The CMBS markets for retail and industrial assets remain very active. We recently refinanced an $850 million loan on a high-quality mall in Las Vegas with a new 5-year term at a fixed rate, which is substantially more favorable than a year ago. We also executed on an approximately $600 million loan for the acquisition of an industrial portfolio at a spread of 210 basis points. We financed office properties for approximately £465 million in the UK and over $400 million in India.

Brookfield Corporation: Our balance sheet and liquidity are robust.

Brookfield Corporation: We continue to differentiate our business through our access to large scale capital the combination of our perpetual capital base and over $150 billion of deployable capital sets us up well to capitalize on investment opportunities through market cycles and protect against downside risks.

Brookfield Corporation: With interest rates coming down liquidity continues to return to the capital markets in the past few months, we have closed or executed on over $30 billion of financings.

Brookfield Corporation: A few highlights include the C M B S markets for retail and industrial assets from being very active we recently refinanced in the $150 million loan when a high quality mall in Las Vegas with a new five year term at a fixed rate, which is substantially more favorable than a year ago.

We also executed on approximately 600 million dollar loan for the acquisition of an industrial portfolio at a spread of 210 basis points.

Bruce Flatt: Financing for high-quality office property is also coming back. We completed an inaugural $900 million asset-backed security issuance at our US retail colocation data center operation, extending the maturity of the debt and closed a $1.25 billion term loan for our North American gas storage platform. We issued $600 million of investment-grade 5-year bonds at a subsidiary of Brookfield Wealth Solutions, which was our inaugural financing for this entity. We executed on over $2.5 billion of financings for two recent acquisitions in our infrastructure and private equity businesses, and we repriced over $5 billion of financings across four portfolio companies, reducing the credit spreads by 45 basis points on average.

Brookfield Corporation: Refinanced office properties for approximately 465 million pounds in the U K and over $400 million in India financing for high quality office property is also coming back.

Brookfield Corporation: We completed an inaugural <unk> $900 million asset backed security issuance at our U S retail Colocation data center operation extending the maturity of the debt and close to a $1.25 billion term loan for our North American gas storage platform.

Brookfield Corporation: We issued $600 million of investment grade five year bonds at a subsidiary of Brookfield wealth solutions, which was our inaugural financing for this entity.

Brookfield Corporation: We executed on over $2 $5 billion of financings for two recent acquisitions in our infrastructure and private equity businesses, and we repriced over $5 billion of financings across four portfolio companies, reducing the credit spreads by 45 basis points on average.

Bruce Flatt: During the quarter, we reinvested our excess cash flow back into our business and returned $203 million to shareholders through regular dividends and share repurchases. Over the last 12 months, we repurchased approximately $1 billion of shares in the open market, adding approximately $0.80 of value to each remaining share based on our plan value as at quarter end. We expect to continue to allocate capital to share repurchases. Thank you for attending our annual Investor Day. For those who were unable to attend, the webcast and materials are available on our website. Our day started with a description of how we are continuing to scale a leading global investment firm focused on building long-term wealth.

Brookfield Corporation: During the quarter, we reinvested our excess cash flow back into our business and returned $203 million to shareholders through regular dividends and share repurchases over the last 12 months, we repurchased approximately $1 billion of shares in the open market, adding approximately 80 cents of value to each remaining share based on our planned value as a core.

Brookfield Corporation: Brent.

Brookfield Corporation: And we expect to continue to allocate capital to share repurchases.

Speaker Change: Thank you for attending our annual Investor day for.

Speaker Change: For those who are unable to attend the webcast and materials are available on our website.

Bruce Flatt: While the past is no guarantee of the future, over the past 30 years, we have generated approximately $225 billion of gains for investors and clients, and the shares of Brookfield Corporation have delivered 19% compound annualized returns to owners. Highlights include the following. Despite market volatility, we have grown earnings from our base businesses over the past 5 years by almost 20% annualized. Today, we have one of the largest pools of capital in the world through our perpetual capital base, our wealth solutions business, and our manager, and this, combined with our investing and operating capabilities, sets us up well to compound our capital at an annual rate of 15% plus per share over the long term. Our core principles regarding the compounding of wealth over the long term are very simple.

Speaker Change: Are they started with a description of why we are continuing to scale, a leading global investment firm focused on building long term wealth.

Speaker Change: While the past is no guarantee of the future over the past 30 years, we have generated approximately $225 billion of games for investors and clients and the shares of Brookfield Corporation have delivered 19% compound annualized returns to owners.

Speaker Change: Highlights include the following.

Speaker Change: Despite market volatility we have grown earnings from our base businesses over the past five years by almost 20% annualized.

Speaker Change: Today, we are one of the largest pools of capital in the world to our perpetual capital base, our wealth solutions business and our manager and this combined with our investing and operating capabilities sets us up well to compound our capital on an annual rate of 15% plus per share over the long term.

Bruce Flatt: Invest in good businesses, run them well, allocate excess free cash flow wisely, align everyone with long-term objectives, and evolve with the world around us. These principles have been foundational to our success and will continue to be going forward. In addition, tailwinds are turning in our favor as interest rates come down, liquidity is returning to the capital markets, and transaction activity is picking up. We are well-positioned to drive further earnings growth and value creation. Over the next 5 years, our plan is to grow distributable earnings by 20%+ annually and deliver 15%+ total returns, both on a per share basis. We also expect to generate $47 billion of cash earnings on a cumulative basis over the next 5 years. Our focus at the corporation is to allocate and deploy these cash flows to maximize the net asset value of the company.

Speaker Change: Our core principles regarding the compounding of wealth over the long term are very simple.

Speaker Change: Invest in good businesses run them well.

Speaker Change: Allocate excess free cash flow wisely align everyone with long term objectives and evolve with the world around us. These.

Speaker Change: These principles have been foundational to our success and will continue to be going forward.

Speaker Change: In addition, tailwind are turning in our favor as interest rates come down liquidity is returning to the capital markets and transaction activity is picking up.

Speaker Change: We are well positioned to drive further earnings growth and value creation over the next five years. Our plan is to grow distributable earnings by 20% plus annually and deliver 15% plus total returns both on a per share basis.

Speaker Change: We also expect to generate $47 billion of cash earnings on accumulative basis over the next five years, our focus at the corporation is to allocate and deploy these cash flows to maximize the net asset value of the company.

Bruce Flatt: The wise investment of this cash should add meaningfully to our earnings over time. We focused much of our time at Investor Day on the earnings profile and intrinsic value of our private holdings, which are comprised of our wealth solutions business, real estate, and carried interest. Wealth Solutions. As our wealth solutions business continues to grow, our primary focus remains to deliver 15%+ returns on our equity while taking modest risk with predictable and long-dated liabilities. Our origination capabilities, combined with the sourcing advantage of our asset management franchise, set us up well to increase our insurance assets to approximately $300 billion and triple the earnings over the next 5 years. This business will continue to deliver high-quality earnings and contribute significantly to the growth in the corporation's value over the long term. Real estate.

Speaker Change: The wise investment of this cash should add meaningfully to our earnings overtime, we focused much of our time at Investor day on the earnings profile and intrinsic value of our private holdings, which are comprised of our wealth solutions business real estate and carried interest.

Speaker Change: Solutions.

Speaker Change: As our wealth solutions business continues to grow our.

Speaker Change: Our primary focus remains to deliver 15% plus returns on our equity, while taking modest risk with predictable and long dated liabilities.

Speaker Change: Our origination capabilities combined with the sourcing advantage of our asset management franchise status up well to increase our insurance assets to approximately $300 billion and triple the earnings over the next five years.

Speaker Change: This business will continue to deliver high quality earnings and contribute significantly to the growth in the corporation's value over the long term.

Bruce Flatt: On our balance sheet, we own a world-class real estate portfolio backed by our perpetual equity capital. It includes some of the highest quality office, retail, and residential properties globally. During a volatile period in the markets, the business proved resilient, benefiting from the flight to quality of the broader market, which has led to strong tenant demand and resilient operating results. Our business plan focuses on growing the cash flows of our core portfolio and implementing the value creation strategies within our traditional and development portfolio. Once we complete plans for our development portfolio, we will monetize those assets and recycle the capital within the broader organization. The core portfolio has generated strong inflation-protected, risk-adjusted returns for decades, and we expect it will continue to do so. Carried interest. Carried interest is expected to contribute meaningfully to the cash flows of the corporation over the next five years.

Speaker Change: Real estate.

Speaker Change: On our balance sheet, we only world class real estate portfolio backed by our perpetual equity capital that includes some of the highest quality office retail and residential properties globally.

Speaker Change: During a volatile period in the markets the business proved resilient benefiting from the flight to quality of the broader market, which has led to strong tenant demand and resilient operating results.

Speaker Change: Our business plan focuses on growing the cash flows of our core portfolio and implementing our value creation strategies within our traditional and development portfolio. Once we complete plans for our development portfolio, we will monetize those assets and recycle the capital within the broader organization.

Speaker Change: Core portfolio has generated strong inflation protected risk adjusted returns for decades, and we expect it will continue to do so.

Bruce Flatt: The corporation directly owns all the carried interests earned on funds raised prior to the spin-off of our asset management business and a gross 33% of those raised after the spin-off. The balance is owned by BAM. As monetization activity picks up, we expect to realize significant carried interest that is diversified across asset classes, risk profiles, and strategies, reducing the volatility of carry realizations and stabilizing the amount over the long term. Over the next 10 years, we expect to realize $25 billion of net carried interest direct to the corporation. This will be invested into our businesses or returned to owners. Private wealth is growing fast, yet still in the early stages. Over the past couple of decades, we have built one of the largest pools of discretionary capital globally. This is underpinned by our strong balance sheet and access to multiple layers of scale capital.

Speaker Change: Carried interest.

Speaker Change: Interest is expected to contribute meaningfully to the cash flows of the corporation over the next five years.

Speaker Change: The Corporation directly owns all the carried interest earned on funds raised prior to the spinoff of our asset management business and a growth 33% of thoughts raced after the spinoff.

Speaker Change: The balance is owned by Bob as.

Speaker Change: As monetization activity picks up we expect to realize significant carried interest is diversified across asset classes risk profiles and strategies, reducing the volatility of carry realizations and stabilizing that mine over the long term.

Speaker Change: Over the next 10 years, we expect to realize $25 billion of net carried interest direct to the corporation.

Speaker Change: This will be invested into our businesses or returned to owners.

Speaker Change: Wealth is growing fast yet still in the early stages over.

Speaker Change: Over the past couple of decades, we have built one of the largest pools of discretionary capital globally. This is underpinned by our strong balance sheet and access to multiple layers of scale capital.

Bruce Flatt: With the size of the alternatives market set to more than double over the next decade, demand from institutional investors continues to accelerate. At the same time, we are seeing a similar trend from high net worth and retail investors. Today, it is estimated that 2% or less of individual investment portfolios are allocated to alternatives, and it is expected that this number will increase significantly over time. In addition, there is a $7 trillion shortfall in retirement savings in the US, and as the population gets older, the retirement deficit will only compound. In the last 4 years, we have expanded our service capabilities and product offerings to capture demand from private wealth and retail channels. Our success in designing bespoke retail products, which include private funds and annuities, is now resulting in close to $2 billion of retail inflows per month.

Speaker Change: With the size of the alternatives market set to more than double over the next decade.

Speaker Change: <unk> from institutional investors continues to accelerate at.

Speaker Change: At the same time, we are seeing a similar trend from high net worth and retail investors.

Speaker Change: Today, It is estimated that 2% or less of individual investment portfolios are allocated to alternatives and it is expected that this number will increase significantly over time.

Speaker Change: In addition, there was a seven trillion dollar shortfall in retirement savings in the U S and as the population gets older. The retirement deficit will only component.

Speaker Change: In the last four years, we have expanded our service capabilities and product offerings to capture demand from private wealth and retail channels.

Bruce Flatt: We are still only in the early stages. Through Brookfield Wealth Solutions, we are building.

Speaker Change: Our success in designing bespoke retail products, which include private funds and annuities is now resulting in close to $2 billion of retail inflows per month, but we are still only in the early stages.

Speaker Change: Through Brookfield wealth solutions, we are building a differentiated retail distribution network to date, we have established a top tier annuity writing platform in the U S with capabilities to originate over $20 billion of policies annually.

Speaker Change: We are primarily focused on long duration low risk annuity products guaranteeing a fixed rate of return to policyholders for predictable number of years through our established brands of American equity life American National and Eagle life.

Speaker Change: Each has strong brand recognition and diversified distribution capabilities with long standing relationships across our in house agents independent insurance agents bank channels and broker dealers.

Speaker Change: Through this platform, we average seven to 10 year duration on our annuity policies, which have an average value of approximately $150000.

Speaker Change: We also continued to develop new products and grow our fundraising capabilities through our private wealth platform, which partners with financial advisors to bring institutional caliber alternative solutions to individual investors.

Speaker Change: This platform has a dedicated team of 150 professionals and tank global markets with over 160 wealth management relationships.

Speaker Change: With our leading position in the fastest growing sectors of the alternatives market demand for our retail products continues to increase.

Speaker Change: Our investment capabilities in renewable power and transmission infrastructure private equity real estate and credit gives us an advantage with private wealth investors worldwide. As an example, Brookfield infrastructure income funds and open ended semi liquid private infrastructure product has launched in Asia Europe and the U S is currently raising over 200 <unk>.

Speaker Change: <unk> dollars a month.

Speaker Change: Looking ahead, we continue to focus on deepening our distribution capabilities expanding into new markets and evolving our product offerings to meet the needs of our clients and policyholders given the large and growing retirement deficit in the U S and significant under allocation to alternatives by individuals we anticipate tremendous growth in our retail platforms and broader fundraise.

Speaker Change: <unk> capabilities cater to high net worth investors.

Speaker Change: Given this we expect to scale, our private wealth and retail fundraising to nearly $40 billion a year in the next five years.

Speaker Change: As a corporation sits at the center of everything we do at Brookfield recapture all the inflows across the business further adding to our pool of discretionary capital at the same time bank continues to benefit as it manages most of the capital raised from our broker distribution capabilities across the franchise.

Speaker Change: This allows our manager to grow its established product offerings and strategies for private wealth and retail investors, which should drive significant earnings and cash flow generation for years to come.

Speaker Change: The secret to long term wealth is compound returns.

Speaker Change: Long term wealth is created by investing in good businesses running them, well and building them over decades or more.

Speaker Change: You have long term investing is often underappreciated by investors as it is often accelerating to buy and sell things are short term gain always fuels like one has been successful.

Speaker Change: However, the constant churn of assets causes tax friction and can sometimes result in an investment in a business that is in fact inferior to the one you had.

Speaker Change: Of course that proviso on the above is that the management team allocating your capital is making smart capital allocation decisions. This is one of the most important elements in business as what you own today will likely be something very different 20 years from now as the cash flow reinvestment is usually equally or in some instances more valuable than the actual assets you own today.

Speaker Change: <unk>.

Speaker Change: With respect to Brookfield Corporation, our long term compound annualized return has been 19% for 30 years.

Speaker Change: That is a 16400% return over the past 30 years.

Speaker Change: The key has been to make some strategic investments and business decisions over long periods of time, resulting in strong long term wealth creation.

Speaker Change: Several unique factors today set us up for similar or possibly even better returns in the next 10 years. The first is that we recently spun off our asset management business to shareholders and are in the midst of positioning it for inclusion in U S equity indices. This should enable at the freedom to grow and further drive value accretion as the <unk>.

Speaker Change: <unk> continues to utilize its competitive advantages.

Speaker Change: To date this is surface significant value for our shareholders with a market capitalization of approximately $85 billion. It.

Speaker Change: It takes time for investors to absorb that scale of value enhancement in our company, but it is clear now to investors that we own one of the preeminent alternative asset management franchises globally.

Speaker Change: The second is that many of our assets are interest rate sensitive and the rate increases over the past few years resulted in negative sentiment towards assets such as ours in general.

Speaker Change: That is over and those headwinds are now turning to tier ones there.

Speaker Change: That should be helpful. In a number of ways, including increased transaction activity lower borrowing costs and lower capitalization rates, leading to higher asset values.

Speaker Change: The third is that amidst the chaos of the last four years, we made a strategic position to build a wealth solutions business focused on low risk annuities and pension risk transfer when interest rates for zero and the risk of not being able to out earn the cost of the liabilities was being questions understanding that the yards, where the interest rates would not stay at zero forever.

Speaker Change: Yeah.

Speaker Change: This led us to acquire three insurance companies are reallocate a large portion of our excess cash for the last four years to back Carwell solutions platform. It turns out this was well timed and today our wealth solutions business is heading towards $2 billion of annual cash profits as important we are never talk to your underwriter of annuities in the U S market.

Speaker Change: Next up is the UK pension risk transfer market, followed by Asia armed with the knowledge and skills that we have built in the U S.

Speaker Change: All told these few strategic decisions have added over $50 billion of value to shareholders in the last four years, which is an approximately 60% return over that period on net asset value.

Speaker Change: The easy part should now be to have the share price of Brookfield Corporation reflect that for you in the market or return it to you as with the nearly $40 per share in cash or securities. We have returned to you over the past 30 years in the form of cash dividends and tax deferred spinoffs.

Speaker Change: These are diversified some owners interests and created liquidity for others.

Speaker Change: Of course, all remaining shareholders benefit from all of the above and rest assured that management has your interest in mind every day, that's because we care a lot and also because we own close to 20% of the overall shares in the company.

Speaker Change: We are very strongly aligned with you and every decision we make.

Speaker Change: With that in mind, we often consider how to grow and evolve the business, including spending off parts. We do acknowledge however that we have heard from some of you that we maybe do that a little too often and all the value surfacing steps that a company should consider but take comfort that for the time being as our various components work extremely well together, we think that the highest value.

Continued to be created with our structure. The way. It is rest assured that we're always open to suggestions and welcome any of our value enhancing and the long term.

Speaker Change: Closing, we remain committed to investing capital for you in high quality assets, there and solid cash returns on equity, while emphasizing downside protection for the capital employed.

Speaker Change: The primary objective of the company continues to be generating increased cash flows on a per share basis, and as a result higher intrinsic value per share over the long term.

Speaker Change: Thank you for your interest in Brookfield, and please do not hesitate to contact any of US should you have suggestions questions comments or ideas you wish to share.

Bruce Flatt: Sincerely Bruce Flatt, Chief Executive Officer November 14th 2024.

Bruce Flatt: Cautionary statement regarding forward looking statements and information.

Bruce Flatt: All references to dollars are to U S. Dollars. This letter to shareholders contains forward looking information within the meaning of Canadian provincial securities laws and forward looking statements within the meaning of the U S. Securities Act of 1933. The U S Securities Exchange Act of 1930 for Safe Harbor provisions of the United States Private Securities Litigation Reform Act of 1995.

Bruce Flatt: And in any applicable Canadian Securities regulations collectively forward looking statements.

Bruce Flatt: Forward looking statements include statements that are predictive in nature depend upon or refer to future results events or conditions and include but are not limited to statements, which reflect management's current estimates beliefs and assumptions regarding the operations business financial condition expected financial results performance prospects opportunities.

Bruce Flatt: <unk> priority targets goals ongoing objectives strategies capital management, an outlook of Brookfield Corporation, and its subsidiaries as well as the outlook for North American and international economies for the current fiscal year and subsequent periods and which in turn are based on our experience and perception of historical trends current conditions and expected future.

Bruce Flatt: Elements as well as other factors management believes are appropriate in the circumstances, the estimates beliefs and assumptions of Brookfield Corporation are inherently subject to significant business economic competitive and other uncertainties and contingencies regarding future events and as such are subject to change.

Bruce Flatt: Looking statements are typically identified by words, such as expect anticipate believe foresee could estimate goal intend plan seek strive will may and should and similar expressions in particular the forward looking statements contained in this letter include statements referring to the Impac.

Bruce Flatt: A current market or economic conditions on our business the future state of the economy or the securities market. The Castle Lake acquisition, including its expected impact on our business the anticipated allocation and deployment of our capital our liquidity and ability to access and raise capital or fund raising targets, our target growth objectives and our target carried.

Bruce Flatt: <unk>.

Bruce Flatt: Although Brookfield Corporation believes that such forward looking statements are based upon reasonable estimates beliefs and assumptions actual results may differ materially from the forward looking statements factors that could cause actual results to differ materially from those contemplated or implied by forward. Looking statements include but are not limited to one returns that are lower than target to be.

Bruce Flatt: Pact or unanticipated impact of general economic political and market factors in the countries in which we do business three the behavior of financial markets, including fluctuations in interest and foreign exchange rates and heightened inflationary pressures for global equity and capital markets and the availability of equity and debt financing and refinancing within these markets five strategic.

Bruce Flatt: Actions, including acquisitions and dispositions the ability to complete and effectively integrate acquisitions into existing operations and the ability to attain expected benefits six changes in accounting policies and methods used to report financial condition, including uncertainties associated with critical accounting assumptions and estimates seven the ability to approach.

Bruce Flatt: Brigit Lee manage human capital eight the effect of applying future accounting changes nine business competition 10 operational and Reputational risks 11 technological change 12 changes in government regulation and legislation within the countries in which we operated 13 governmental investigations and sanctions 14.

Bruce Flatt: Litigation 15 changes in tax laws 16 ability to collect amounts owed 17 catastrophic events, such as earthquakes Hurricanes and epidemics Pandemics 18, the possible impact of international conflicts and other developments, including terrorist acts and cyberterrorism 19, the introduction withdrawal success in time.

Bruce Flatt: A business initiatives and strategies 'twenty, the failure of effective disclosure controls and procedures and internal controls over financial reporting and other risks 21 health safety and environmental risks 'twenty to the maintenance of adequate insurance coverage 'twenty three the existence of information barriers between certain businesses within our asset management.

Bruce Flatt: <unk> 24 risks specific to our business segments, including asset management wealth solutions renewable power and transition infrastructure private equity real estate and corporate activities and twenty-five factors detailed from time to time in our documents filed with the securities regulators in Canada, and the United States.

Bruce Flatt: We caution that the foregoing list of important factors that may affect future results is not exhaustive and other factors could also adversely affect future results.

Bruce Flatt: Readers are urged to consider these risks as well as other uncertainties factors and assumptions carefully in evaluating the forward looking statements and are cautioned not to place undue reliance on such forward looking statements, which are based only on information available to us as of the date of this letter or such other date specified herein, except as required by law Brookfield Corporation undertakes no.

Bruce Flatt: <unk> to publicly update or revise any forward looking statements, whether written or oral that may be as a result of new information future events or otherwise.

Bruce Flatt: Past performance is not indicative nor a guarantee of future results. There can be no assurance that comparable results will be achieved in the future that future investments will be similar to historic investments discussed herein that targeted returns growth objectives diversification or asset allocations will be met or that in investment strategy or investment objectives will be achieved because of economic conditions.

Bruce Flatt: The availability of appropriate opportunities or otherwise.

Bruce Flatt: Target returns and growth objectives set forth in this letter offer illustrative and informational purposes, only and have been presented based on various assumptions made by Brookfield Corporation in relation to the investment strategies being pursued any of which may prove to be incorrect. There can be no assurance that targeted returns or growth objectives will be achieved.

Bruce Flatt: Due to various risks uncertainties and changes, including changes in economic operational political or other circumstances beyond Brookfield Corporation's control. The actual performance of the business could differ materially from the target returns and growth objectives set forth herein. In addition industry experts may disagree with the assumptions used in presenting the target returns and growth objectives no.

Bruce Flatt: Representation or warranty is made by any person that the target returns or growth objectives will be achieved and undue reliance should not be put on them.

Bruce Flatt: Cautionary statement regarding the use of non ifr's measures.

Bruce Flatt: This letter to shareholders contains references to financial measures that are calculated and presented using methodologies other than in accordance with I F. R. S. These financial measures, which include distributable earnings as defined below its components and its per share equivalent should not be considered as the sole measure of our performance and should not be considered in isolation from or as a substitute.

Bruce Flatt: For similar financial measures calculated in accordance with I F. R. S.

Bruce Flatt: We caution readers that these non <unk> financial measures or other financial metrics are not standardized under <unk> and may differ from the financial measures or other financial metrics disclosed by other businesses and as a result may not be comparable to similar measures presented by other issuers and entities.

Bruce Flatt: We make reference to distributable earnings which refers to the sum of distributable earnings from our asset management business distributable operating earnings from our insurance solutions business distributions received from our ownership of investments realized carried interest in disposition gains from principal investments net of preferred share dividends and equity based compensation costs. We also make reference.

Bruce Flatt: To distributable earnings before realizations, which refers to distributable earnings before realized carried interest in disposition gains from principal investments and net operating income which refers to the revenues from our operations less direct expenses before the impact of depreciation and amortization within our real estate business our outlook for growth in distributable earnings assumes growth in fee related.

Bruce Flatt: <unk> and realized carried interest in line with our business plans, which assume growth in our fee bearing capital consistent with our fundraising plans capital deployment expectations, maintaining the fee rates, we earn on fee bearing capital and earning margins consistent with our current margin.

Speaker Change: Actual results may vary materially and are subject to market conditions and other factors and risks set out above for more information on non I FRS measures and other financial metrics see Brookfield Corporation's Q1, 2024 press release, which includes reconciliations of these non <unk> financial measures to their most directly comparable financial measures calculated and presented in accordance with I F.

Bruce Flatt: Rs.

Bruce Flatt: Yeah.

Speaker Change: Welcome to Brookfield perspective, a podcast from Brookfield that explores how the firm invests in the backbone of the global economy.

Lauren: Im Lauren stuffing. Your guide is would meet the business leaders at one of the world's largest alternative asset managers.

Speaker Change: In today's episode, we're bringing you a timely conversation between Brookfield, CEO, Bruce Flatt, and Mark Carney, the chair of Brookfield asset management and head of transition investing.

Speaker Change: The global economy poised for big shifts over the next 10 to 15 years, Bruce a mark will unpack how Brookfield built its business pallets approach has evolved over time and where it's headed.

Speaker Change: I'll also touch on the impacts of AI, the green energy transition and other developments that affect the evolving backbone of the global economy.

Speaker Change: Hi, Bruce longtime Duffy good morning, it's great to sit down with you always great to see Mark Thanks for taking the time good heavy in town.

I'd like to have a general conversation, but really divide it into Brookfield past present, and future and in the process of doing that really bring out what's happening in investing what's happening in the global economy and all the exciting opportunities that are to come okay. Super excited about that good and of course.

Speaker Change: Probably the most seminal moment in Brookfield past was when you and I first met you may not realize that I think it was late nineties right now that's right you got in one it was late nineties that I have no recollection actually [laughter].

Speaker Change: If you remember in.

Speaker Change: In New York, but I have no recollection of the day, Okay. They might have just been into the 2000 and you were becoming the CEO and the C O not a brookfield, but a brass can a company with almost a 100 year history. I mean this is 25 years ago, you were outlining for myself and a few other people from investment bankers working at Goldman Sachs at the time the potential path.

Ways forward for breast cancer, and there were a few paths you could take and I just wonder if you can cast your mind back you wouldn't be remembered meeting. So you remember that guy, Denmark I P. C. C said that amazing new covered us at the time and we still have a relationship today and it took me 25 years for you to come and work with Us and just forever.

Speaker Change: One's benefit brass can became Brookfield, but we had a very successful investment business and it was our own investment business.

Speaker Change: And I guess I was trying to convince Jack and the others and the board at that time of the future really lay in the investment management of the products that we invested for ourselves. So we invested in infrastructure and renewables in real estate and all the alternative products will be Tuesday, we just did them for ourselves the comments.

Speaker Change: I read at the time was well if youre going to do deals theres only a few of them around and at the time the private equity industry was starting and real estate started raising some institutional money and we thought that that could be the future of what we did and so we sold a lot of our businesses, we had and use the capital to expand the businesses of real estate and infrastructure and renewables and then eventually.

Speaker Change: Building out the investment management business in or around the time, when we were talking to you. We probably really had no idea what that meant because when we started nobody knew how to do it starting off or those first funds nobody would take them. So it was a 100% of our money, but we had enough capital to be able to do that and I think that was really the difference of why we were successful.

Speaker Change: <unk> and others may be didn't have the ability to get at is we had the capital from the investment business, we had to be able to drive the success of our investing and of course, the teams were disciplined and we did well and that helped.

Speaker Change: But having the capital support was really really important if we go over the period roughly of 25 years of the periods since you've been CEO. If I had been smart enough not just to cover you, but Dubai brass can at the time, Brascan, becoming Brookfield share and reinvested all the proceeds how would I have done.

Speaker Change: Well look this is a miracle of compound returns you can do it in many different ways, but one way to be successful is to not make too many big mistakes earn moderately good returns and keep compounding for long periods of time.

Speaker Change: So our 30 year compounded return record is 18% so that doesn't sound like very much because the 18% doesn't sound like so much.

Speaker Change: But that's I think 13500% over 30 years, that's a lot of compounding I think of the 145 times or something like that and I guess that that track record from a top allowed us to build out the business and gave us confidence to do things I think the total amount of money we've made for public market in Harlow P investor.

Speaker Change: Yours is $225 billion over the period of time look we're an investment organization and we need to take care of our partners, we need to create structures for them that help them do their business, we need to bring them co investments, we need to help them and all of the things we do but at the base of it we need to earn them. Good returns for the capital. So we've been fortunate enough to do that.

And it's been a fun ride to actually brings a issue up which I wanted to get your perspective on over the course of your career of my career from different perspective, we have crises, we have market events markets all of a sudden shock and financing doesn't happen for various reasons and we have big disconnects that.

Speaker Change: <unk> been up between price that you can get in the market are not yet in the market and the underlying value of the business and I just maybe ask you to unpack both managing through market cycles. How you think through time on realizing value in those environments yeah.

Speaker Change: Yeah, So I would say for our overall business, what we need to do is in anyone's overall business in anyone's individual portfolio of investments. However, you want to characterize it one needs to be in a position where they can at least hold everything they have through any one of those moments in time and what's really special is if you have some extra cash around to be able to do so.

Speaker Change: Thing additive at that point in time and that really makes a difference our returns over 30 years have been 18% and they probably would have been 15, except for at some moments in time, we were liquid enough to be able to do some special things when the price is something was in the markets far down compared to what the real value was over the longer term. So if you.

Speaker Change: And by the right times, it's really additive to the overall long term returns. So that's our overall business and then our investment strategy has a number of facets to it you know this but I'll say it for everybody is we're global in nature, we have large scales with large scale money not many people can compete with us. Therefore, we differentiate on transactions, we ever operating skills that allow us to earn more out of ASP.

Speaker Change: And other people might.

Speaker Change: If you take the most basic investment premise of what we try to do across all of our businesses and this is across private equity real estate infrastructure renewables credit everything well.

Speaker Change: We're trying to do is we're trying to capitalize on the inefficiencies of the capital market.

Speaker Change: The price of things is often higher or lower and very seldom is it equal to the value and therefore, we're trying to be buying when the prices less than value. So when they say buying we're taking companies private off the public market because somebody's willing to give them to us at 50 cents on the dollar they have given to you because they perceive their dress skirt.

Speaker Change: That isn't the value, which is why those first things are important to have operating skills understand the business know what youre doing all those kind of things, but we're trying to capitalize on the inefficiencies of the capital market and then when values are higher we're selling them that really is the success of private equity if you want to call. It that yeah, well, absolutely and if you avoid bad things life is more fun.

Speaker Change: You mentioned earlier one of the strengths of the strategy was we had our own capital and that capital is compounded and has grown and that certainly has been a differentiator, but as you know as well you took something else from nickel brisket, which is operating expertise and I think that's outside looking in and one of the many reasons I valued when I was at.

Speaker Change: Policymaker talking to you a good feel for what's going on in the world not just where it is but where it's going but also an on the ground says.

Speaker Change: What's happening in public markets, but what's happening in companies and countries and where they're going so that operating expertise has been I think distinguishing year methodically. There's a few people in the world I always would go and see I still do this today people I respect and you can get a different sense of information out of them and you were one of them you would know this.

Speaker Change: In hindsight when you went to your Goldman you've covered US we saw your advice you went to department of Finance. We saw your advice you went to the bank of Canada, We sought your advice.

Speaker Change: Bank of England, I visit you once a year. So it was probably 25 years of listening to your advice and you always had unbelievable thoughtful comments for us on what was going on in the world. So I'd say, that's why we're here today and.

Speaker Change: And look.

Speaker Change: The difference, we have and it's a better or worse, it's just different than most investment organizations. Our business is different because it started as we wanted to buy hydro plants and renewable plants and we wanted to build infrastructure and we wanted to own and build and buy real estate and we did it ourselves and we do with some of our money. When we ran out we raised either money and then we raised funds.

Speaker Change: And it was to facilitate the operating and billing of our businesses to do that we had best operating groups and we think of it as we're running a business and how do we source of capital to run the business as opposed to we're just in a fund management business and I think that's always changed the tone of how we deal with our clients how we deal with the businesses, how we run them how we build.

Speaker Change: Businesses and that DNA in the organization is still here today of course, we're a large investment management organization today that we've built but I think that DNA of having the operating skills and people and just as an example is our renewables business. We have one of the largest trading desks for power in North America sits down here in this.

Speaker Change: Office building and we trade enormous amounts of power and what that means is that we're close to the markets and we probably have more information to inform our decisions than almost anyone else that invests in the power business. There's a few but most of those are single industry businesses that just do renewables.

Speaker Change: We have enormous amounts of capital, we're very global and we have those operating skills and I think that allows us to be different and makes us better investors look businesses top life's not easy, but you get into problems and he gets tough, sometimes and having that extra information or legs or people to help you make.

Speaker Change: Decisions and get out of tough situations is always really really helpful. Yeah go out it's crucial to have solutions that aren't limited by just financial engineering or access to capital, let me stay with immuno and bring us to more or less the present after I finish my career in public service and I had in my head was that transition was.

Speaker Change: Going to be a major opportunity because the world was starting to get really serious about moving towards net zero. So this is the time in the run up to the Glasgow climate Mi.

Speaker Change: And I'll be blunt in talking to a number of major financial institutions, including some in this industry nobody else saw that or saw that to that same scale, you and Conor and the rest of the team. We're way ahead of it and absolutely saw the scale of the opportunity to build it out so I came and joined and we helped too.

Speaker Change: Almost create transition as an asset class so not just the end state, but the process of solving the issue of getting carbon out of the atmosphere and creating a lot of value as a consequence.

Speaker Change: Affords them today, where it be low carbon is becoming a big driver of value.

Speaker Change: And I think that will go forward, but the point I wanted to just put on the table.

Speaker Change: This was about four years ago that came as a.

Speaker Change: In the heart of Covid, Yeah, I remember many phone calls from my bedroom [laughter].

Speaker Change: Exactly where you are hermetically sealed in the basement, yeah that was crazy times. It was a it was crazy, but yes, we did two things in the middle of Covid, which will have changed the face of our business you helped us form the strategy for transition, which I think we are the leading business in it today and I think it'll change the face of.

Speaker Change: Our company for a long long time, and secondly, we decided to start our insurance business. Those two things I think when you look back 10 years 20 years from today at this business though.

Speaker Change: Two things will be a strategic decisions as getting into asset management 25 years ago. So I think you don't have to make that many big decisions in our company, but if you make a few successful ones and then you execute really well and don't stray it can be highly highly strategic and I think our insurance business is kind of back growth a very significant amounts over the next 20.

Speaker Change: Five years is really just the amount of money in defined benefit plans and savings plans.

Speaker Change: That needs to earn a decent return into it can't take too much risk and we can invest it for them is very significant and the complexion of portfolios changing to be net zero as we all decarbonize being a leader and has been instrumental for our institutional investors and also taking a terminal value risk I think the biggest thing you brought us too with first.

Speaker Change: I'd say, forming this strategy of what we're gonna do in transition because we had an idea because we had a renewables business and we were ahead because we are thinking about it but you have a big way to form the strategy of what we were going to do but it also helped US you opened our eyes, probably earlier than everybody else to the terminal value issues, if you weren't going to be.

Speaker Change: And that was significant for us.

Speaker Change: This is an enormous shift of capital investment shift in the backbone of the global economy, which is a core strategy of Brookfield. So maybe just ask you to reflect a bit on that because theres transition, there's broader infrastructure with what's happening in AI and digitalization, just how you see those trends come out you know market.

So sometimes you get lucky sometimes you work hard at it sometimes both we're lucky we're in the heart of infrastructure. We were there very early we're the biggest in the world.

Speaker Change: We're leading in de carbonization. So we're at the intersection of an enormous number of trends today, which are going to change the world. The backbone of the global economy is shifting changing it's all the time is shifting but it's shifting even more over the next 10 or 15 years, it's going to be dramatic in the amount of investment that's going into those trends de carbonization digitalization.

Speaker Change: And third I'd add that the globalization of the reindustrialization of western economies to bring back because labor costs are low and different things like that but the amount of money that's going to be invested is tens and tens if not hundreds and hundreds of trillions of dollars I don't even know how those are really big number here big numbers, yes. The most interesting thing is is that the investment of <unk>.

Speaker Change: That money.

Speaker Change: Is going into the advancement of artificial intelligence robotics, and many other things, which are going to change the productivity of businesses to pay for it all I think what's most interesting is we may be on the cost of you know this better than anyone is a sophisticated financial economist, but where on the <unk>.

Speaker Change: As both an investment boom for 25 years, because if you spend money and you don't get any returns out of it. It's a terrible thing for the economy, but this investment is possibly highly highly productive and is going to lead to productivity advances in virtually every business in the world and therefore, it's going to be highly productive and lead to growth in GDP.

Speaker Change: And I don't know with you I'm not a macro economist Guy I'm just to work in guide.

Speaker Change: Grass roots.

Speaker Change: Does that make it happen I am just a bummer you make it happen and then we macro economist take credit for.

Speaker Change: That's the way it works the U S is at an even greater scale and is happening in China and it's happening in every country of the world, where I'm at cost or is something highly highly meaningful and productive for the world I think that's exactly right and the benefit to economies that get this right is multiple one year of building infrastructures. So someone actually has to put the shoe.

Speaker Change: Doubles in the ground and build out whether it's a solar array or it's a datacenter for AI because the AI data centers all of the Hyperscale, there's going to be powered by clean power. So you have the benefit of the actual physical investment, but then as you're saying you get the benefit of the productivity is.

Speaker Change: Mark that's the thing people think about AI and they think about CECI P. T. What hasn't been done well is that people don't understand the next step. The next step is utilizing that information and that data in a data center and what's there and the algorithms to then make businesses more productive and better. So for an example, we may.

Speaker Change: Car batteries, we have 25 plants in the world, we make a third of all car batteries in the world, which is an amazing business, but the application of artificial intelligence to some of the manufacturing capacity will make us better faster cheaper and we will take a task that people don't want to do the health risks are high and different things like that so you can make.

Speaker Change: Your workforce much more productive and then you can make it healthier for them to do their jobs, which is really really important and so we're changing people's lives in many different waves and you're getting productivity advances with it and you take that in all of the different businesses that we have and it should lead to enormous productivity advances maybe as much as what the internet is done.

Speaker Change: Over the past 25 years.

Speaker Change: I think that's entirely plausible and better companies better run companies will see that those gains earlier and then others will imitate.

Speaker Change: It's realistic that we see another let's go back to the Miracle compound. It's realistic that we see another 75 basis for three quarters of a percentage point additional growth, let's say in the U S year in euro because of the application of AI.

Speaker Change: Within a broader universe of allocation to alternatives. The most sophisticated institutional investors in the world. Some are sovereign summer pension funds have steadily increase their allocation to alternatives from very low single digit percentages up toward.

Speaker Change: Wards in some cases half of their portfolio. These are long duration liabilities, they have and there's a great match and the returns are very strong that hasn't been the case in general for insurance companies, who have the same challenge.

Speaker Change: And we'll come to this.

Speaker Change: As has been the case only to a very limited extent to retail and high net worth individuals as well so starting with insurance just get your perspective, Bruce on where are we in that journey as you referenced one of the big strategic initiatives that Brookfield has taken in the last few years is to build an insurance business and its early day.

Speaker Change: As its early innings and a much bigger trend do you think Mark I think maybe the way to put this in the winter think about it from a big picture is it's now been unequivocally proven with 25 years of track record that investing into alternatives with good people and with investors that know what they're doing is both a <unk>.

Speaker Change: First fire in our portfolio takes down the volatility and you can earn very good returns over the longer term well in excess of what you earn in the public markets or in public credit.

Speaker Change: And because of that that's why institutional investors as you note are pushing money towards these products insurance companies or the next one is looking at it because they're having a hard time our view of the reason why we went into insurances. When we do things ourselves. We always are better for our clients. We know exactly what their issues are we can create products and you never ever.

Speaker Change: However, no it fully until you do it yourself. So we want to have an insurance business that we create a product for ourselves than we could offer our clients. In addition to that our expertise is in investing and therefore, having the ownership of an insurance company is kind of like as long as we can manage the liability and we're trying to do low risk insurance, we can use the older than anybody else and therefore, if we can buy cars.

Speaker Change: <unk> and then out earn on the asset side, you can make a very high returns to the bottom line and most insurance companies them fast have struggled with the investment side of the balance sheet. That's our core business. So it just sort of in addition to.

Speaker Change: To our overall business and it gives us some money to put to work into the strategies. We have in asset management, Yeah. Let me pick up on just a couple of things there one is that.

Speaker Change: When I was at the bank of England, Yes, we were the new regulator and supervisor of the insurance sector. So fourth largest insurance sector in the world based in the U K a big responsibility.

Speaker Change: We inherited a regulatory system that had been heavily negotiated as part of the European Union process and as part of that.

Speaker Change: It has a structural flaw, which you alluded to which is very much limiting what these companies could invest on in longer term, so called duration matching their longer term liabilities not exclusively but largely to guilt government bonds.

Speaker Change: Which is boy you've got a set aside a lot. If you are trying to meet 25 30 year liabilities, earning at the time, one or 2% on the 30 year Gil that problem is now recognized Europe. It's recognized in the U K and it's recognized by other regulators to varying degrees. The U S. As you say is out in front on understand.

Speaker Change: That that some of the best assets are long duration infrastructure type assets that are housed in alternatives better return and well manage credit those are the two asset classes that look too and I think the industry as a whole will be moving in that direction.

Speaker Change: So it's a trend that's early stage and it will move in my judgment is going to move naturally and there'll be some step change improvements in it over time, because the regulators are going to catch up is one of the biggest policy issues in the U K right now the last point on it is that Theres two beneficiaries of this one is the <unk>.

Speaker Change: <unk> of the country, because you get more investment on the ground for example in the United Kingdom in the type of infrastructure assets, we're talking about de carbonization Digitization et cetera.

Speaker Change: And then ultimately the policyholders as well because they're more likely to get a better return, they're going to get a better price product and theyre going to get paid because these are high quality assets that are going to be there 30 years from now to pay them off so it's a huge development huge structural development and hugely excited and Mark I think the next phase of that is you asked earlier about private wealth <unk>.

Speaker Change: Phase of it is that we havent scratched the surface of delivering these products to private wealth investors, we formed our wealth solutions team to deliver those we've got a big team that now and essentially really what it is is we need to be able to create structures, which are just a little different to be able to deliver them too.

Speaker Change: Individual investors, who are investing in the same things, it's just a wrapper around them and the structure. We have it's just different for an institutional investor. It can be this way for private wealth Investor then you need to have it this way, but we're in the early early stages of very significant amounts of alternatives being brought to individual.

Speaker Change: <unk> and that's going to grow over the next 25 years. So it's gonna be a big growth area for alternative investors and a huge benefit for those individuals and their families and down through generations I'm going to ask you question ear of macro economists.

Speaker Change: The efficient market hypothesis says that everything's fishing and the market knows all information is out there and I think the worst it's been disproven, hundreds and hundreds and hundreds of everyday it's just proven and there is no efficient market as a macroeconomist.

Speaker Change: I think theres a couple of things. One is you have and you alluded to one of the most important ones, which is not everybody is managing their portfolios and businesses with the liquidity and the ability to ride out cycle Theres leverage people get margin calls and all centers and they have to react to that and then others Rian.

Speaker Change: Back to the in anticipation of that happening and when we get into Poland macro economics Keynes famously said your opinion is not what the average opinion is going to be but what the average opinion thinks the average opinion is going to be right. So it's a it's so you get those cascades that work their way through the market, but you also get and we saw.

Speaker Change: See this periods of euphoria in despair and that that actually brings me to a point that I wanted to pull things together, because I think it might be helpful. And this is a little window into the investment process that you oversee with investment committees and I think as core to the ethos of Brookfield is it need to combine optimism.

Speaker Change: About where the world's going and what's possible and what can be created with disciplined pessimism about what can go wrong and one of the things that I always had a bit of a sense of this from our discussions over the years, but absolutely have seen day in day out investment Committee is the focus on floor in the downside understanding what.

Speaker Change: Can go wrong.

Speaker Change: Not investing when those risks are two great, but not being incapacitated by at all.

Speaker Change: Obviously, we're not in capacity to be a trillion dollars under management invest invest <unk> billion exactly so how do you see that there's a fine balance and the real big Big decisions, we try to keep it with a small group of people that we can stay in touch with and understand the markets. We train our people to not try to shoot the lights out and to show us what.

Speaker Change: The downside risk is look once in a while we make a mistake, but in addition don't be diversified don't make those mistakes ever that one of them is going to cause any fun to be irreparably harmed any business to be irreparably harmed. The overall business, obviously to be irreparably harmed. So focus on downside protection and very seldom do ever not get our money back for example.

Speaker Change: Even in a bad investment we get all our money back that's not our business our business is about and the worst case scenario not worse, because theres always a few bad ones, but in the worst case scenario, you're getting 8% return and it didn't work out that was your downside and so we try to stress the downside, which you see in our models. So we're focused on the downside protection like what can go wrong and how do we ensure that we're.

Speaker Change: At least okay in the downside and if we can't make it will find another investment, but I think the six asks of our businesses. It's diversified we're in 30 countries. We can actually with people on the ground and knowledge, we can put money to work in 30 countries and in 25 different types of businesses. Therefore, we don't have to do anything we'd like to do lots of things.

Speaker Change: But we don't have to do anything youre, not forced where troubles come in and investing is when money is trapped and needs to be invested in a certain thing. So I think that the diversification and having many places to put money and investments to make and allowing yourself that flexibility has been a great look it cost us a lot of money for <unk>.

Speaker Change: 25 years to be able to build the resources to be able to do that and that's the moat. We have them. All we have is we have an enormous organization. That's been trained to do what I. Just described it's on a global basis in 30 countries. This is not easily built you see US now every day the relationships we have the people we deal with the business issues that come along the things that.

Speaker Change: We can do for our clients those arent things that come to somebody overnight, yes, there will be one or two other maybe businesses like ours that are built in the next 20 years Theres 10 that are midsized and one or two might might get as big as the five of US there. This large but theres a big mode that a number of us have and.

In the process.

Speaker Change: Our investors are realizing those compounded returns means that pensioners get paid their pensions life insurance policies payout people can sleep at night and in economies more broadly they're building the future. That's what is so energizing, but I actually see it tangibly what strain.

Speaker Change: Mark I'm glad you hit on that because it's private investing I don't know why people came up with this some people don't like it but what we do for the constituents. Our partners is that we allow them to earn higher returns and not take so much risk.

Speaker Change: And therefore, they can pay greater pensions, they can save for the country. They can save for future generations with people.

Speaker Change: And yeah. It's game changing you know this when you compound at 5% in compounded 10.

Speaker Change: It is dramatic over 50 years and in many of these investors that were investing for or families. This is for 50 101000 years for sovereign plans and if you can just add a few hundred basis points of return it'll change the lives of many and therefore, it's a pretty special thing at the end of the day. When you can do that well great way to end it and.

Speaker Change: For the time, Bruce always a pleasure mark Thank you.

Speaker Change: That's all for today's episode, Thanks to Bruce and Mark for sharing their perspectives.

Speaker Change: To hear more from business leaders at Brookfield and beyond checkout, our other episodes on de carbonization, the globalization and Digitization wherever you listen.

Speaker Change: Be sure to follow this podcast, so youll get updates on new episodes of Brookfield perspectives as soon as they're released.

Speaker Change: Yeah.

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