Q4 2024 Brookfield Corp Earnings Call - Post-Earnings
In 2024 with record financial results and the completion of a number of strategic transactions.
Bruce Flatt: 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 CAD 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 2 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 CAD 40 billion of assets at strong returns. This led to the realization of approximately CAD 400 million of net carried interest during the year.
Our asset management business had over $135 billion of inflows and further expanded its credit platform through our partnership with Castle Lake 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.
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.
This led to the realization of approximately $400 million of net carried interest during the year.
More importantly, as we advance our investment plans and continue to monetize assets. We expect this number to increase meaningfully in the years ahead.
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.
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 on one 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.
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.
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.
Markets were constructive despite volatility.
Markets for 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 U S. But inflation temporary short term interest rates are stabilizing at levels consistent with more normalized economic conditions.
The 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 in 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, our intrinsic value in 2024 increased 19% our share price, 55% our stock price.
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 CAD 15 in 2024. At our best estimate, the intrinsic value now backing each one of your shares is approximately CAD 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.
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.
Intrinsic value of each share increased by $15 in 2024 at.
At our best estimate intrinsic value no backing each one of your shares is approximately $100, which was a 19% total return in 2024.
This underpins the conservative investment you on 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 our our stock market returns on a compound return basis over the past 30 years.
For reference $1 million invested 30 years ago, and Brookfield Corporation is worth $185 million today, representing an annualized return of 19%.
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.
Over the longer term, our stock price and intrinsic value per share has tracked each other.
To review the referenced charts and Endnotes. Please find the Q4 2024 shareholder letter on our website at B N Dot Brookfield Dotcom, our operating results were also strong.
We generated strong results in 2020 for each of our businesses leverage their operating platforms to generate growing cash flows monetization continued to accelerate on our balance sheet is robust financial results.
<unk> earnings day 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 fund raising momentum in our asset management business continued growth in our wealth solutions business and stable cash flows across our operating businesses.
<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.
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.
Asset management, our asset management business generated distributable earnings of $694 million or <unk> 44 per share in the quarter and $2 $6 billion or $1 67 per share for the year.
Earnings were supported by strong fund raising 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 on our flagship opportunistic credit fund strategy.
The closing of the mandate with American equity life, a L and the contribution from strategic partnerships also added significantly to inflows during the year.
<unk> 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.
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.
Notably margins continued to expand due to the operating leverage inherent in our asset management business.
Looking ahead to 2025, we expect to hold final causes for our latest flagship funds and continued to actively deploy capital, which should contribute to further strong earnings growth.
Well solutions.
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 100 per cent compared to the prior year. The business is scaling rapidly amidst a very attractive market backdrop follow.
At the close of E. L. 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 of our credit franchise is supporting the growth of the business and the performance of our investment portfolio is allowing us to maintain attractive.
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.
Spreads and generate very strong earnings.
During the year over year originated approximately $19 billion of retail and institutional annuity sales.
This includes $1.3 billion of UK pension liabilities that we reinsured in the fourth quarter.
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.
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 to earnings for the business from approximately $1 $6 billion today to $2 billion in the near term.
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 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.
Term 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.
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.
<unk> and private equity businesses were underpinned by the strong operating earnings our core real estate portfolio continues to grow at 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. 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.
<unk> for high quality properties as real estate markets continued to recover in the coming years, we expect earnings and valuation of the business to strengthen.
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.
Monetization, we continue to see strong demand for the globally diversified portfolio of high quality cash generating assets and businesses we owned during.
During the year, we monetized nearly $40 billion of assets across the business.
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.
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 3.4 times 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 a Spanish renewables business 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 2.5 times multiple of capital and an approximately 25% IRR.
In 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.
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 a 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 asset.
Monetization, we're turning a 2.5 times multiple of capital and an approximately 25% IRR.
And 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.
Bruce Flatt: 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 non-core asset within our North American hyperscale data center platform for approximately $1 billion, and we closed the 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, and 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.
All 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, and 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 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.
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 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.
<unk> a T sense 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 a few highlights include in.
In the fourth quarter, we accessed the hybrid debt markets, emphasizing our ability to raise capital from multiple sources.
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. We 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.
We issued $700 million of 30 year subordinated notes of the corporation for.
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.
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 subs.
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.
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.
Bruce Flatt: The successful financing further de-risked 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 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.
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 U S stock markets have evolved today much of the investing for regular investors is through passive index investing.
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.
This trend has continued to increase year over year and today represents a large share of global financial markets.
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.
While on balance indexing has probably been good for the average investor there are ramifications for list businesses.
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.
This creates a significant opportunity to take public companies private as the value of the assets are far greater than the price of the assets trade in the market often for no. Other reason than they have been left behind by indexes.
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, a good premium could be paid while still acquiring excellent value. We expect that adds indexing continues to grow.
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.
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 in others. We're 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.
The first is that it takes skill and resources to take companies private we.
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.
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 and third it takes great knowledge of the underlying businesses and one must be able to value assets engaged their value against the price that one must pay we have refined the 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.
One has to pay attention to the indexes and whether the business is included in them or not.
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.
Our efforts to streamline the shares outstanding of Brookfield asset management and establish their eligibility for all the relevant major U S. 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. Today's however of immense value and is our hidden gem sitting in plain sight we.
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, which should generate approximately $20 billion of cash flow from carried interest to Brookfield Corporation in the form of our share of the cash generated.
Given the scale, we thought it worthwhile to layout for you how carried interest works and how it contributes to our cash flows and in turn the value of our business.
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.
Alignment is critical to our business, our asset management business raises capital from pension plans sovereign <unk> 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 the share of the profits as co carried interest put 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.
If we meet fund expectations, we get 20% of the profits.
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. 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.
If we earn nothing for our investors, we get nothing investing is our lifeblood of asset management.
The lifecycle of carried interest starts with the raising of client capital for a dedicate the strategy with the growth of our asset management franchise over the years, we know managed $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.
Much 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.
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.
The longer we have the capital working for us the more the returns compound and in turn so does the carried interest potential <unk>.
The last step is monetization selling and investment is what crystallizes a large component of the profit of an investment.
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.
Impact on carried interest period.
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.
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 5 years.
This conservative approach, which creates further alignment with our clients delays the recognition towards the end of our funds lifecycle that 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 and the fund is 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 earnings over the next five years.
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 Fortunately.
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. 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.
Fortunately demand for our assets and businesses remains 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.
The breadth of our fund offerings has enabled us to continue to transact through economic cycles. In 2024, we monetize close to $40 billion of assets managed transaction activity picks up we expect to be actively monetizing investments.
Carried interest generate substantial real cash.
The outlook for carried interest is significant.
If 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 cash flows will come predominantly from funds to already exists today.
Bruce Flatt: These cash flows will come predominantly from funds that already exist today. Further, the growth and 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.
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 there.
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. 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.
Clarey else recapitalization is another important milestone for our private equity franchise.
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.
This approach has led towards owning naturally strong compounding assets and the execution of our operational value creation plans, usually makes them even better.
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 quarry dose exemplifies this as a reminder, claudius 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.
<unk> ability increased by more than $500 million.
So 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 six years combined Macquarie doses, increasing cash flow generation, we decided to refinance the business.
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 <unk> shareholders.
This allowed us to generate cash to owners of one five times, our original equity while continuing to hold our entire equity interest in the business.
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.
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 1 in 3 cars on the road. It is an exceptionally high-quality business with 80% of its volumes coming from recurring aftermarket demand. 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. As the global leader in advanced battery production, Clarios is ideally positioned to lead this evolution from its technology and manufacturing hubs in the US.
Abilities.
Today <unk> Power's one in three cars on the road it doesn't exceptionally high quality business with 80% of its volumes coming from recurring aftermarket demand.
Furthermore, it's technology scale unrelated ships with nearly all major global automakers are unmatched, providing it was an incredibly resilient competitive advantage.
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 chlorosis ideally positioned to lead this evolution from a technology and manufacturing hubs in the United States the business, it's in an <unk>.
<unk> financial position today, and is investing major capital and its U S manufacturing capabilities.
Bruce Flatt: 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. As such, Clarios is an incredibly valuable business, which will continue to differentiate itself through our hands-on investment approach. Owner or renter?
Corio: Over the last decade, Corio says invested over $1 billion and its U S manufacturing operations unexpected 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.
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 what 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 can vastly rental cars are driven with much less care and their depreciation is dramatically higher than owned cars.
Bruce Flatt: 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. 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.
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 then owned it is our observation that people, sometimes act like owners with their house, but actually renters with there.
Investments.
Speaker Change: This is one of the great arrows in 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.
Bruce Flatt: 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, but 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. 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.
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.
Speaker Change: 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 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.
Bruce Flatt: 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. 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.
Speaker Change: Of course decision, making comes in because sometimes management teams go astray, our business prospects declined there.
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 cash flow. It is extremely important that you maintain your house and that management and our company makes good cash reinvestment decisions for.
Speaker Change: You many shareholders act by renters, rather than that owners and trade simply because they think that the stock prices up.
Speaker Change: 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 and investing then you will watch out to ensure that your management is working hard and doing the right things.
Bruce Flatt: If, on the other hand, one acts like an owner in investing, 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. 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.
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 and a business through fractional ownership of a listed entity are two of the great tax freeways to compound wealth over the long 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 to.
Bruce Flatt: 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. 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: 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.
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.
Speaker Change: Bruce Flatt, Chief Executive Officer February 13th 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.
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.
[Company Representative] (Brookfield Corporation): 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. 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.
Speaker Change: And in any applicable Canadian Securities regulations collectively forward looking statements.
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 opportunities.
Speaker Change: <unk> 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 <unk>.
Speaker Change: 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.
[Company Representative] (Brookfield Corporation): 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. 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.
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 Impac.
Speaker Change: 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 intra.
Speaker Change: <unk>.
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.
[Company Representative] (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. Two, the impact 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. Four, global equity and capital markets and the availability of equity and debt financing and refinancing within these markets. 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.
Speaker Change: 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.
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.
[Company Representative] (Brookfield Corporation): 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 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. 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 cyber terrorism. 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.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Withdraw 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 'twenty to the maintenance of adequate insurance coverage twenty-three the existence of information barriers between certain businesses.
[Company Representative] (Brookfield Corporation): 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. 25, factors detailed from time to time in our documents filed with the securities regulators in Canada and the US. 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.
Speaker Change: Within our asset management operations.
Speaker Change: For 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.
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 dates specified herein, except as required by law Brookfield Corporation undertakes no.
[Company Representative] (Brookfield Corporation): 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. 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.
Speaker Change: <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.
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.
Speaker Change: 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): There can be no assurance that targeted returns or growth objectives will be achieved. 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.
Speaker Change: 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.
Speaker Change: Since 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.
Speaker Change: Cautionary statement regarding the use of non ifr's measures.
Speaker Change: 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 it 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): This letter to shareholders contains references to financial measures that are calculated and presented using methodologies other than in accordance with IFRS. 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.
Speaker Change: For similar financial measures calculated in accordance with I F. R. S.
Speaker Change: 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.
Speaker Change: 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 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. 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.
Speaker Change: 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.
[Company Representative] (Brookfield Corporation): 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. 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.
Speaker Change: 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.
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 O.
Speaker Change: Rs.
Speaker Change: Yeah.
Speaker Change: Brookfield Corporation letter to shareholders Q3 2024.
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.
Speaker Change: 'twenty 'twenty four has been good 2025 should be better.
Speaker Change: We delivered strong financial results in the third quarter and both the outlook for the balance of the year in 2025 look even more positive a.
Speaker Change: A reduction in short interest rates across the globe combined with solid growth in Brazilian employment numbers is increasing the market's confidence in pricing risk.
Speaker Change: 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 monetization at attractive returns.
Speaker Change: 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.
Speaker Change: We continued to capture an increasing share of global flows of capital centered around our deep relationships with institutional private wealth and retail investors.
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.
Speaker Change: 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.
Speaker Change: We are actively investing large scale capital across the business and have committed to approximately $20 billion of investments in recent months.
Speaker Change: 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.
Speaker Change: Our operating results continued to get stronger.
Speaker Change: Financial results disc.
Speaker Change: Distributable earnings or de before realizations were a record $1 $3 billion R. A T cents per share in the quarter and $4.6 billion or $2 19 per share for the last 12 months. These.
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.
Speaker Change: These quarterly earnings represent an increase of 19% over the prior year quarter.
Speaker Change: Hey in total, 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.
Speaker Change: Asset management is benefiting from consolidation.
Speaker Change: Our asset management business generated distributable earnings of $694 million in the quarter and $2 $6 billion over the last 12 months.
Speaker Change: We benefited from recent fundraising momentum across our diversified strategies.
Speaker Change: Notably from our credit funds and insurance force.
Speaker Change: 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.
Speaker Change: Importantly, as the business grows so too should our margins as we benefit from the operating leverage in the platform.
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.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: We also held an initial course 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 transitioned assets.
Speaker Change: 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.
Bruce Flatt: Our Brookfield 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.
Speaker Change: During the quarter, we generated approximately $4.5 billion of organic inflows, primarily driven by retail and institutional annuity sales.
Speaker Change: Our insurance assets ended the quarter at over $115 billion.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: 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.
Bruce Flatt: Through our combined wealth solutions platforms, we are raising $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 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.
Speaker Change: Operating businesses were very resilient.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: 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.
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 2.2 times multiple of capital. We advanced the sale of the PGA National Resort, a luxury resort in Palm Beach, Florida, for over $400 million.
Speaker Change: Monetization or picking up with.
Speaker Change: 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.
Speaker Change: A few notable deals during and subsequent to the quarter include the following.
Speaker Change: In our real estate business, we closed on the sale of nine retail parks in the UK for approximately $800 million.
Speaker Change: Over the three year hold period, we enhanced cash flows by increasing occupancy rates through expanding key tenant relationships.
Speaker Change: The sale of this portfolio generates an approximately 30% IRR and 2.2 times multiple of capital.
Speaker Change: We advanced the sale of the PGA National resort, a luxury resort in Palm Beach, Florida for over $400 million.
Speaker Change: 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.
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 4 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.
Speaker Change: 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 $350 million.
Speaker Change: As well as our portfolio of manufactured housing assets in the U S for approximately $517 million.
Speaker Change: Property transaction markets are recovering.
Speaker Change: 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.
Speaker Change: Since 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.
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 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. 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.
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.
In addition, we agreed to sell a portfolio of wind and solar assets in India, Realizing our first full cycle investment in the country.
Speaker Change: To date this year, our renewable power and transition business has generated over $2 $3 billion of proceeds from asset monetization.
Speaker Change: Levering, an IRR of approximately 25% and a multiple of capital of two five times.
Speaker Change: 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.
Speaker Change: And our infrastructure business, we agreed to sell our Mexican regulated natural gas transmission business for approximately $500 million.
Bruce Flatt: 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 2.2x 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. 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. 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.
Speaker Change: This generated a 22% IRR and a 2.2 times multiple of capital as a result of value enhancement initiatives achieved earlier than planned.
Speaker Change: At the end of the quarter accumulated unrealized carried interest was $11.5 billion, representing a 17% increase over the last 12 months.
Speaker Change: 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.
Speaker Change: Our balance sheet and liquidity are robust.
Speaker Change: 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.
Speaker Change: 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.
Bruce Flatt: 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 GBP 465 million in the UK and over $400 million in India. Financing for high-quality office property is also coming back.
Speaker Change: A few highlights include the C. M. P S markets for retail and industrial assets remain very active we recently refinanced and $850 million loan on 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.
Speaker Change: We also executed on an approximately $600 million alone for the acquisition of an industrial portfolio at a spread of 210 basis points.
Speaker Change: 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 we.
Speaker Change: 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.
Bruce Flatt: 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 five-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. 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.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: 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 a value to each remaining share based on our planned value as at <unk>.
Bruce Flatt: 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 planned value as at quarter end, and 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. 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.
Speaker Change: Quarter end.
Speaker Change: And we expect to continue to allocate capital to share repurchases.
Speaker Change: Thank you for attending our annual Investor day.
Speaker Change: For those who are unable to attend the webcast and materials are available on our website.
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 gains 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.
Bruce Flatt: Despite market volatility, we have grown earnings from our base businesses over the past five 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, 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. 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.
Speaker Change: Today, we are one of the largest pools of capital in the world to our perpetual capital base, our wealth solutions business on 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.
Speaker Change: Our core principles regarding the compounding of wealth over the long term are very simple.
Speaker Change: First in good businesses run them well allocate.
Speaker Change: Allocate excess free cash flow wisely align everyone with long term objectives and evolve with the world around us. These.
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.
Bruce Flatt: 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. 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.
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.
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: All solutions.
Speaker Change: As our wealth solutions business continues to grow.
Bruce Flatt: As our Brookfield 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 Brookfield 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 Brookfield Corporation's value over the long term. Real estate. 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.
Speaker Change: Our primary focus remains still over 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. This business will continue to deliver high quality earnings and contribute significantly to the growth in the corporation's value over the long term.
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 during.
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.
Bruce Flatt: 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 5 years. 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.
Speaker Change: Core portfolio has generated strong inflation protected risk adjusted returns for decades, and we expect it will continue to do so.
Speaker Change: Carried interest.
Speaker Change: Interest is expected to contribute meaningfully to the cash flows of the corporation over the next five years. The corporation directly owns all of the carried interest earned on funds raised prior to the spinoff of our asset management business and our gross 33% of newest raised after the spinoff.
Speaker Change: Balance is owned by Bob.
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.
Bruce Flatt: 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. 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.
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 are 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.
Speaker Change: But the size of the alternatives market set to more than double over the next decade demand from institutional investors continues to accelerate.
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 at 2% or less of individual investment portfolios are allocated to alternatives and it is expected that this number will increase significantly over time.
Bruce Flatt: 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. We are still only in the early stages. 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 US with capabilities to originate over $20 billion of policies annually.
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 compound.
Speaker Change: And the last four years, we've expanded our service capabilities and product offerings to capture demand from private wealth and retail channels.
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 pop from 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 a predictable number of years through our established brands of American equity life American National and Eagle life.
Bruce Flatt: We are primarily focused on long-duration, low-risk annuity products, guaranteeing a fixed rate of return to policyholders for a predictable number of years through our established brands of American Equity Life, American National, and Eagle Life. 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. Through this platform, we average 7 to 10-year duration on our annuity policies, which have an average value of approximately $150,000. We also continue 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. This platform has a dedicated team of 150 professionals in 10 global markets with over 160 wealth management relationships. With our leading position in the fastest-growing sectors of the alternatives market, demand for our retail products continues to increase.
Speaker Change: Each has strong brand recognition and diversified distribution capabilities with longstanding 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 with.
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.
Bruce Flatt: Our investment capabilities in renewable power and transition, infrastructure, private equity, real estate, and credit give us an advantage with private wealth investors worldwide. As an example, Brookfield Infrastructure Income Fund, an open-ended semi-liquid private infrastructure product, has launched in Asia, Europe, and the US and is currently raising over $200 million a month. 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 US and significant under-allocation to alternatives by individuals, we anticipate tremendous growth in our retail platforms and broader fundraising capabilities catered to high-net-worth investors. Given this, we expect to scale our private wealth and retail fundraising to nearly $40 billion a year in the next 5 years.
Speaker Change: As an example, Brookfield infrastructure income fund and open ended semi liquid private infrastructure product has launched in Asia Europe and the U S is currently raising over $200 million 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 our 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 <unk>.
Speaker Change: Raising capabilities cater to high net worth investors.
Brookfield: Given this we expect to scale, our private wealth and retail fundraising to nearly $40 billion a year in the next five years 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.
Bruce Flatt: As the corporation sits at the center of everything we do at Brookfield, we capture 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 broader distribution capabilities across the franchise. 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. The secret to long-term wealth is compound returns. Long-term wealth is created by investing in good businesses, running them well, and building them over decades or more. The value of long-term investing is often underappreciated by investors. As it is often exhilarating to buy and sell things, a short-term gain always feels like one has been successful.
Brookfield: Most of the capital raised from our broker distribution capabilities across the franchise.
Brookfield: This allows our manager to grow its established product offerings and strategies for our private wealth and retail investors, which should drive significant earnings and cash flow generation for years to come.
Brookfield: The secret to long term wealth is compound returns.
Brookfield: Long term wealth is created by investing in good businesses running them, well and building them over decades or more the value of 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.
Brookfield: 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.
Bruce Flatt: 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. Of course, the 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. With respect to Brookfield Corporation, our long-term compound annualized return has been 19% for 30 years. That is a 16,400% return over the past 30 years. The key has been to make sound strategic investment and business decisions over long periods of time, resulting in strong long-term wealth creation.
Brookfield: 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.
Brookfield: With respect to Brookfield Corporation, our long term compound annualized return has been 19% for 30 years.
Brookfield: That is a 16400% return over the past 30 years.
Brookfield: The key has been to make sound strategic investment and business decisions over long periods of time, resulting in strong long term wealth creation.
Brookfield: 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 biz.
Bruce Flatt: 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 US equity indices. This should enable it the freedom to grow and further drive value creation as the business continues to utilize its competitive advantages. To date, this has surfaced significant value for our shareholders with a market capitalization of approximately $85 billion. It takes time for investors to absorb that scale of value enhancement in a company, but it is clear now to investors that we own one of the preeminent alternative asset management franchises globally.
Brookfield: <unk> continues to utilize its competitive advantages to.
Brookfield: To date this is surface significant value for our shareholders with a market capitalization of approximately $85 billion. It.
Brookfield: 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.
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.
Bruce Flatt: 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. That is over, and those headwinds are now turning to tailwinds. This should be helpful in a number of ways, including increased transaction activity, lower borrowing costs, and lower capitalization rates, leading to higher asset values. The third is that amidst the chaos of the last four years, we made a strategic decision to build a Wealth Solutions business focused on low-risk annuities and pension risk transfer when interest rates were zero and the risk of not being able to out earn the cost of the liabilities was being questioned, understanding that the odds were that interest rates would not stay at zero forever.
Brookfield: That is over and those headwinds are now turning to tier ones there.
Brookfield: 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.
Brookfield: 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 were zero and the risk of not being able to out earn the cost of the liabilities was being questions understanding that the odds are that interest rates would not stay at zero forever.
Brookfield: Yeah.
Brookfield: This led us to acquire three insurance companies and 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 now a top tier underwriter of annuities in the U S market.
Bruce Flatt: This led us to acquire 3 insurance companies and reallocate a large portion of our excess cash for the last 4 years to back our wealth 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 now a top-tier underwriter of annuities in the US market. Next up is the UK pension risk transfer market, followed by Asia, armed with the knowledge and skills that we have built in the US. All told, these few strategic decisions have added over $50 billion of value to shareholders in the last 4 years, which is an approximately 60% return over that period on net asset value.
Brookfield: Next up is the U K pension risk transfer market, followed by Asia armed with the knowledge and skills that we have built in the U S.
Brookfield: 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.
Brookfield: 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.
Bruce Flatt: 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 CAD 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 spin-offs. These have diversified some owners' interests and created liquidity for others. Of course, all remaining shareholders benefit from all of the above, and rest assured that management has your interests in mind every day. That is because we care a lot and also because we own close to 20% of the overall shares in the company. We are very strongly aligned with you in every decision we make. With that in mind, we often consider how to grow and evolve the business, including spinning off parts.
Brookfield: These have diversified some owners interests and created liquidity for others.
Brookfield: Of course, all remaining shareholders benefit from all of the above and rest assured that management has your interest in mind everyday that's because we care a lot and also because we own close to 20% of the overall shares in the company.
Brookfield: We are very strongly aligned with you in every decision we make.
Brookfield: With that in mind, we often consider hard 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.
Bruce Flatt: 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. Take comfort that for the time being, as our various components work extremely well together, we think that the highest value continue to be created with our structure the way it is. Rest assured that we are always open, though, to suggestions and welcome any that are value-enhancing in the long term. 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 long term.
Brookfield: Continued to be created with our structure. The way. It is rest assured that we're always open to suggestions and welcome any of the our value enhancing and the long term.
Brookfield: 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.
Brookfield: 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.
Brookfield: 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: 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, 14 November 2024.
Brookfield: Sincerely Bruce Flatt, Chief Executive Officer November 14th 2024.
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 Securities Act of 1933, the Securities Exchange Act of 1934, safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and in any applicable Canadian securities regulations, collectively forward-looking statements.
Brookfield: 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.
Brookfield: And in any applicable Canadian Securities regulations collectively forward looking statements.
Brookfield: 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.
[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.
Brookfield: <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.
Brookfield: 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.
Brookfield: We're 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.
[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.
Brookfield: 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.
Brookfield: <unk>.
Brookfield: 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.
[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: 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.
Brookfield: 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.
Brookfield: 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 operated 13 governmental investigations.
[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, epidemics, and 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: Sanctions, 14th 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.
Brookfield: Withdrawal success and timing of business initiatives and strategies 'twenty.
Brookfield: Alea 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 operations.
Brookfield: For 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.
[Company Representative] (Brookfield Corporation): 25, factors detailed from time to time in our documents filed with the securities regulators in Canada and the US. 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.
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: 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 dates specified herein, except as required by law Brookfield Corporation undertakes no.
Brookfield: <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: 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 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: The availability of appropriate opportunities or otherwise.
Brookfield: 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.
Brookfield: 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.
[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: <unk> 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: Cautionary statement regarding the use of non <unk> measures.
Brookfield: 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.
[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: For similar financial measures calculated in accordance with I F. R. S.
Brookfield: 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: 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.
Since two 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.
[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: 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.
Brookfield: 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 <unk>.
[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: Rs.
Brookfield: [music] Brookfield asset management letters to shareholders fourth quarter 2025.
Connor Teskey: Brookfield Asset Management Letter to Shareholders, Q4 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.
Brookfield: Yes.
Brookfield: We had a strong 2024 as both earnings and capital raising continued to gain momentum throughout the year.
Brookfield: Fighting the strong growth profile of our business and the increasing positive sentiment among market participants.
Brookfield: <unk> $29 billion during the quarter, our highest level of organic capital raising bringing total capital raising for the year to over $135 billion.
Brookfield: <unk> with robust deploy net during the same period fee Bank capital R. F. B C credits of $539 billion, an increase of 18% or $82 billion over the past year.
Brookfield: The growth in our capital base is strong earnings and margin improvement.
Brookfield: We generated a record $677 million or 42 cents per share our fee related earnings or FRE and $649 million or 40 cents per share of distributable earnings our day in the fourth quarter, representing increases of 17% and 11% respectively.
Brookfield: One of the prior year period.
Brookfield: This brought FRE and de for the full year to $2 $5 billion or $1.51 per share and key point $4 billion or $1 45 per share respectively are.
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.
Brookfield: Our growing revenue base and stable costs also enabled margins to expand to 59% in the fourth quarter.
Brookfield: We continued to benefit from our leadership in MS sought after alternative asset classes fueled by significant increases in artificial intelligence or AI and bathroom surging corporate clean energy demand and the continued growth of private credit in the capital markets.
Brookfield: As a result, we expect the momentum in our operating and financial performance to continue throughout 2025 <unk>.
Brookfield: 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 requirement, 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.
Brookfield: Largely be at clean energy sources as they represent the lowest cost source of power with the fastest speed to delivery clean.
Speaker Change: Clean energy continues to be preferred by the world's largest technology companies, whether its schedule infrastructure renewable power and nuclear Brookfield is unique and maintaining a global leadership position in every core technology required for the AI revelation.
Speaker Change: 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.
Speaker Change: In private credit the opportunity continues to be driven by growing recognition from borrowers of the benefits of having a flexible capital partner.
Speaker Change: Many of our credit partners have long standing 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 app.
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.
Speaker Change: Assets under management.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Fund raising we raised $4.2 billion of capital, including $3 $5 billion for the second advantage 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 Origin 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 Shepherds 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.
Speaker Change: We expect to hold a final close of this flagship in the first half of 2025.
Speaker Change: Deployment, we deployed $4 $5 billion of capital, including $3 $2 billion into our acquisition of Neil 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.
Speaker Change: Hey.
Speaker Change: Subsequent to the end of the quarter, we announced an 850 million dollar investment into origin energy and use renewable energy developers from our infrastructure structure installations done.
Speaker Change: Monetization, we monetize $1.4 billion of capital, including the sale of <unk> and a partial sale of a separate slot.
Speaker Change: Infrastructure fund, raising we raised $2 $5 billion of capital, including $700 million of our Super core infrastructure strategy, our strongest quarter in over two years.
Speaker Change: We also raised nearly $700 million for our private wealth infrastructure fund and over $500 million for infrastructure structured solutions.
Connor Teskey: We also raised nearly $700 million for our private wealth infrastructure fund and over $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 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 H1 2025. Deployment.
Speaker Change: Monetization, we monetize a total of $300 million of capital, including the sale of our fiber platform in France.
Speaker Change: Private equity fund raising.
Speaker Change: We raised $1.8 billion of capital, including $1 billion for Middle East fun and $500 million for the second vintage of our special investment fan monetization.
Speaker Change: Nation subsequent to the end of the quarter Clariant, the world's leading provider of advanced low voltage batteries completed and up financing, which funded a 4.5 billion dollar distribution.
Speaker Change: Real estate fund raising.
Speaker Change: 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 class for the flagship in the first half of 2025.
Speaker Change: 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 no.
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.
Speaker Change: 9000 beds and pretax a publicly listed Pan European logistics right.
Speaker Change: Monetization.
Speaker Change: We monetized $1 $8 billion of capital, including the sale of a portfolio of shopping centers in the U K.
Speaker Change: Credit Fannie.
Speaker Change: Fund raising.
Speaker Change: 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 six $6 billion from insurance claim.
Speaker Change: Approximately $1 $3 billion of capital related to a UK reinsurance transaction.
Speaker Change: Deployment, we deployed $7 $7 billion of capital, including $2 $4 billion out of our opportunistic credit flagship fund theories 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.
Speaker Change: Getting on our momentum and laying the foundation for future growth.
Speaker Change: In 2024, we delivered strong performance across our franchise strategically expanded our capabilities and product offerings and surpassed one trillion dollars of assets under management.
Speaker Change: 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.
Speaker Change: 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 package.
Speaker Change: Lights include our investments in kneeling, a leading global renewables developer Kim's education, a prominent private education provider in the middle East and first energy a large scale U S electrical distribution company.
Speaker Change: 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 died at nearly $40 billion, representing $30 billion of equity capital, notably we filled 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 Seoul, a 49% stake in ICD Brookfield Place, and our stake in Greenergy, a leading distributor of renewable road fuel in the UK. 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. 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 are actively developing the core infrastructure needed to support digitalization, which is being accelerated by AI growth.
Speaker Change: That hotel and saw a 49% stake in ICD Brookfield place in Dubai, and our stake in Green energy, a leading distributor of renewable red seal in the U K.
Speaker Change: 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.
Speaker Change: 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 eyeglass. 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. One year in, and we are realizing the significant benefits of this effort.
Speaker Change: Play a central role in the ongoing transformation of the digital economy.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Excluding the one time mandate associated with al 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 book for the ecosystem to <unk>.
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 this 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, this also opened up the opportunity to provide similar services to other third-party insurers, a very large market.
Speaker Change: 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.
Speaker Change: 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 solution. It's also opened up the opportunity to provide similar services to other third party insurers and very large market.
Speaker Change: 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 feature capitalizing. We also strengthened our platform. There is 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.
Speaker Change: <unk> leadership position in aviation and asset based credit continues to bond our credit platform SBB capital with a leading venture franchise will join our technology manager Pine Grove capital to further expand our technology and growth footprint.
Speaker Change: Additionally, we increased our ownership of Oaktree from 68% to 73% who had wanted to top fund raising year on the back of strong demand for credit.
Speaker Change: These investments are expected to contribute an incremental $70 million of FRE on an annualized basis, adding further scale and diversification to our platform.
Speaker Change: 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 as 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.
Speaker Change: Management as we've previously noted we also expect the board's composition will increasingly reflect our U S focus.
Speaker Change: Recently, we completed the acquisition of 100% of our asset management business. After shareholders widely endorsed our initiatives exchange Brookfield corporations, 73% private ownership and our asset management business for an equivalent interest and the public shares of Bam.
Speaker Change: 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 bond market capitalization, beginning with our 2024 annual report to be released in the coming weeks, we will file our financial points in line with those filed.
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.
Speaker Change: The other U S domestic srs 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.
Speaker Change: All signs point to a strong 2025.
Speaker Change: Our success over the past year positions us well for an even better 2025.
Speaker Change: 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.
Speaker Change: Quarter to quarter acceleration, we saw throughout 2020 far, 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 fund raising 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. Next year's fundraising in these complementary offerings should reach an all-time high for our business.
Speaker Change: Fund raising.
Speaker Change: <unk> 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.
Speaker Change: The 12th vintage of our opportunistic credit flagship fund held its final close in January at a strategy size of $16 billion.
Speaker Change: This latest round of flagship fundraising has already collectively outweighs the prior round by over 15% and we expect to launch additional flagship strategies in 2025.
Speaker Change: Our strong flagship franchises form the bedrock upon which we have built additional complementary strategies and next year's fund raising in these complementary offerings should reach an all time high for our business.
Speaker Change: Lastly, the conversations we're having with clients to customize broad offerings for them enable us to increasingly set ourselves apart from missed others within credit we are actively fund raising for the fourth vintage of our infrastructure debt fund and Devon vintage of our real estate debt fund the continued build out of our other credit strategies, including <unk>.
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 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 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 Catalytic Transition Fund, our financial infrastructure fund, and our Middle East private equity strategy.
With our partner managers Oaktree Catholic LCM, 17 capital and Prime a wave will bring additional capital directed into more diversified credit products and with our insurance fundraising channel Brookstone wealth solutions is now at scale and on track to originate in excess of $25 billion of retail annuities and pension risk.
Speaker Change: <unk> transactions annually.
Speaker Change: Across our complementary strategies, we are fundraising for a number of new equity products.
Speaker Change: 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 structure installations fund, which focuses on structured equity and minority control investments and partnership with sponsors developers and corporate in the middle market. We're also funding.
Connor Teskey: We expect to close shortly our first Brookfield 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 are 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.
Speaker Change: Raising for our complementary franchises that have established foundations such as the second vintage of our private equity special investment fund.
Speaker Change: Finally, our private wealth channel, which has had steady progress over the past few years should continue to scale in 2025.
Speaker Change: 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.
Speaker Change: Capital deployment and monetization.
Speaker Change: Historically, an environment that offers compelling valuations for buying assets is not ideal for selling.
Speaker Change: 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 mature investments in our infrastructure renewable power and transition platforms, there's vast demand for investment trillions of dollars over the coming years to.
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.
Speaker Change: Deliver data centers telecom towers fiber semiconductor manufacturing automation and renewable power.
Speaker Change: Our global reach and operational expertise in these areas you have a healthy pipeline of investment opportunities.
Speaker Change: In parallel many investors remain eager for exposure to high quality long lived assets with dependable cashless filling demand for de risked assets from our earlier vintage funds.
Speaker Change: In 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.
Speaker Change: 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 2025, and 2026, creating opportunities to lend to our 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.
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.
Speaker Change: 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 of financing a clear, yes, or U S based car battery maker, which supported a 4.5 billion dollar distributions.
Speaker Change: Brookfield and our partners, we initially invested $3 billion of equity to acquire the business.
Connor Teskey: We initially invested $3 billion of equity to acquire the business. 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.
Speaker Change: The scale of such a transaction is significant pricing was broadly in line with previously issued debt and offering with multiple times oversubscribed.
Speaker Change: Similarly, we recently executed a $6 1 billion dollar refinancing of our Intel investment terming out the maturity is 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 demonstrate.
Speaker Change: And by the more than $130 billion of financings, we completed in 2024.
Speaker Change: 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.
Connor Teskey: 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. 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, Connor Teskey, President, 12 February 2025.
Speaker Change: Our 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.
Speaker Change: Sincerely Bruce Flatt, Chief Executive Officer, Conor Cascade, President February 12, 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 Securities Act of 1933, the Securities Exchange Act of 1934, safe harbor provisions of the 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 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.
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 opportunities.
[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.
<unk> 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 <unk>.
Speaker Change: 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.
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.
[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: 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.
Speaker Change: <unk>.
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.
[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: 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.
Brookfield Corporation: 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.
Brookfield Corporation: 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 operate 13 governmental investigations and sanctions 14.
[Company Representative] (Brookfield Corporation): 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. 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: 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.
Brookfield Corporation: 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 operate.
Brookfield Corporation: <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.
[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 dates 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 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.
[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 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.
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 assured.
[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: <unk> 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 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.
[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.
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 reference.
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.
[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> 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.
Brookfield Corporation: 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.
[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: Rs.
Brookfield Corporation: Yeah.
Brookfield Corporation: Brookfield Corporation letter to shareholders 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 2 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 inflows and further expanded its credit platform through our partnership with Castle Lake 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: It's led to the realization of approximately $400 million of net carried interest during the year.
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.
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.
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.
Brookfield Corporation: 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.
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: Markets were constructive despite volatility.
Brookfield Corporation: Markets were constructive for most of 2024 supported by easing of short term interest rates by central banks.
Brookfield Corporation: Growth has been solid and labor markets remain robust, particularly in the U S. But inflation temporary short term interest rates are stabilizing at levels consistent with more normalized economic conditions.
Brookfield Corporation: The 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.
Speaker Change: 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% our stock price.
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 CAD 15 in 2024. At our best estimate, the intrinsic value now backing each one of your shares is approximately CAD 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.
Speaker Change: Performance was very strong in 2024, increasing by 55%.
Speaker Change: 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.
Speaker Change: Intrinsic value of each share increased by $15 in 2024 at.
Speaker Change: At our best estimate intrinsic value no backing each one of your shares is approximately $100, which was a 19% total return in 2024.
Speaker Change: This underpins the conservative investment you on and all else being equal should allow you to earn a greater return than the underlying performance of our business.
Speaker Change: As an indication of the returns that can be generated for investors over the longer term.
Speaker Change: <unk> below our our stock market returns on a compound return basis over the past 30 years.
Speaker Change: For reference $1 million invested 30 years ago, and Brookfield Corporation is worth $185 million today, representing an annualized return of 19%.
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.
Speaker Change: Over the longer term, our stock price and intrinsic value per share has tracked each other.
Speaker Change: A review of the referenced charts and end nodes. Please find the Q4 2024 shareholder letter on our website at B N Dot Brookfield Dotcom, our operating results were also strong.
Speaker Change: We generated strong results in 2020 for each of our businesses leverage their operating platforms to generate growing cash flows monetization continued to accelerate on our balance sheet is robust financial results.
Speaker Change: 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.
Speaker Change: Earnings benefited from strong fund raising momentum in our asset management business continued growth in our wealth solutions business and stable cash flows across our operating businesses as.
Speaker Change: <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.
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.
Speaker Change: Asset management, our asset management business generated distributable earnings of $694 million or <unk> 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.
Speaker Change: Our latest trying to flagship funds have raised approximately $40 billion across our second global transition funds strategy, our fifth opportunistic real estate fund strategy on our flagship opportunistic credit fund strategy. The closing of the mandate with American equity life E O and the contribution from strategic partnerships also added significantly.
Speaker Change: Inflows during the year.
Speaker Change: The Baron 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.
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.
Speaker Change: Notably margins continued to expand due to the operating leverage inherent in our asset management business.
Speaker Change: Looking ahead to 2025, we expect to hold final causes for our latest flagship funds and continued to actively deploy capital, which should contribute to further strong earnings growth.
Speaker Change: Well solutions.
Speaker Change: 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 100% compared to the prior year. The business is scaling rapidly amidst a very attractive market backdrop follow.
Speaker Change: At the close 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 of our credit franchise is supporting the growth of the business and the performance of our investment portfolio is allowing us to maintain attractive.
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.
Speaker Change: Fred's and generate very strong earnings.
Speaker Change: During the year over year originated approximately $19 billion of retail and institutional annuity sales.
Speaker Change: This includes $1 $3 billion of UK pension liabilities that we reinsured in the fourth quarter.
Speaker Change: This is our first transaction outside of North America, as we expand into new markets and further diversify the business.
Speaker Change: These inflows contributed to the increase in our insurance assets to over $120 billion at the end of the year.
Speaker Change: 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 continued 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 NIM.
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 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.
Speaker Change: Term 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.
Speaker Change: 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.
Speaker Change: And private equity businesses were underpinned by the strong operating earnings our core real estate portfolio continues to grow at 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.
Speaker Change: For high quality properties as real estate markets continued to recover in the coming years, we expect earnings and valuation of the business to strengthen.
Speaker Change: In our transmission business, we closed the investment in new N 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.
Speaker Change: Monetization, we continued to see strong demand for the globally diversified portfolio of high quality cash generating assets and businesses we own.
Speaker Change: During the year, we monetized nearly $40 billion of assets across the business with.
Speaker Change: 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.
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 3.4 times 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 a Spanish renewables business 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 2.5 times multiple of capital and an approximately 25% IRR.
Speaker Change: 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.
Speaker Change: 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 a Spanish renewables business and a 50% interest in the U S wind portfolio.
2020 for our renewables business generated record proceeds of $2 $8 billion from asset monetization, we're turning a 2.5 times multiple of capital and an approximately 25% IRR.
Speaker Change: And 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 noncore asset within our North American Hyperscale data center platform for approximately $1 billion and we closed the previously announced sale.
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, and we closed the 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, and 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.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Balance sheet and liquidity.
Speaker Change: Our balance sheet is robust and remains very conservatively capitalized.
Speaker Change: 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 ongoing growth in.
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.
Speaker Change: 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.
Speaker Change: <unk> a T sense of value to each remaining share based on our planned value at the end of the year.
Speaker Change: We had an active year in the capital markets as we proactively refinanced maturities and took advantage of favorable market conditions.
Speaker Change: During the year, we executed on approximately $135 billion of financings across the franchise a few highlights include in.
Speaker Change: In the fourth quarter, we accessed the hybrid debt markets, emphasizing our ability to raise capital from multiple sources.
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. We 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.
Speaker Change: We issued $700 million of 30 year subordinated notes of the corporation for.
Speaker Change: <unk> $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.
Speaker Change: 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 subs.
Speaker Change: 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.
Speaker Change: 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.
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 a AU$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.
Speaker Change: Both of these financings were oversubscribed showcasing the depth of liquidity available for high quality infrastructure assets.
Speaker Change: Active investing continues to go passive offering us great opportunity.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: This trend has continued to increase year over year and today represents a large share of global financial markets.
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.
Speaker Change: While on balance indexing has probably been good for the average investor there are ramifications for listed businesses.
Speaker Change: 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.
Speaker Change: This creates a significant opportunity to take public companies private as the value of the assets are far greater than the price of the assets trade in the market often for no. Other reason than they have been left behind by indexes.
Speaker Change: 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, a good premium could be paid while still acquiring excellent value. We expect that as indexing continues to grow.
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.
Speaker Change: More companies will become lost in the public markets as a result, it is possible that we will see even more opportunities.
Speaker Change: In the past one third of our acquisitions have been from public market take privates.
Speaker Change: 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 has access to the same information.
Speaker Change: The answer comes down to a few very simple points.
Speaker Change: The first is that it takes skill and resources to take companies private.
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.
Speaker Change: We have now completed many of these and have therefore had a great deal of practice.
Speaker Change: Second public companies are often large and size eliminates competition from the process.
Speaker Change: 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 and expertise we have in the areas of businesses in which we operate.
Speaker Change: 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.
Speaker Change: One has to pay attention to the indexes and whether the business is included in them or not.
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 in 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.
Speaker Change: 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.
Speaker Change: Interest is our hidden gem.
Speaker Change: Our carried interest is a large asset and is not well understood by most investors.
Speaker Change: There is however of immense value and is our hidden gem sitting in plain sight.
Speaker Change: We estimate the value of our carried interest at approximately $30 billion.
Speaker Change: To emphasize how solid this estimate is over the next 10 years alone as we sell businesses for our clients, which should generate approximately $20 billion of cash flow from carried interest to Brookfield Corporation in the form of our share of the cash generated.
Speaker Change: Given the scale, we thought it worthwhile to layout for you how carried interest works and how it contributes to our cash flows and in turn the value of our business.
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.
Speaker Change: 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 <unk>.
Speaker Change: Further alignment is also created by us sharing in the returns or profits generated for clients above a prescribed level. The share of the profit is co carried interest puts.
Speaker Change: Put 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.
Speaker Change: If we meet fund expectations, we get 20% of the profits.
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 5 years. 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.
If we are nothing for our investors, we get nothing investing is our lifeblood of asset management.
Speaker Change: 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 know managed $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: Significantly going forward.
Speaker Change: 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.
Speaker Change: Much of our outsized returns are generated from our deep operating capabilities and as we implement our business plans are carried interest of cruising compounds alongside the cash flow generation and value creation.
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: The longer we have the capital working for us the more the returns compound and in turn so does the carried interest potential <unk>.
Speaker Change: The last step is monetization selling and investment is what crystallizes a large component of the profit of an investment.
Speaker Change: 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 devaluations used prior to sale have.
Speaker Change: No impact on carried interest period, 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.
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. Therefore, 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.
Speaker Change: 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 that leads to a larger contribution when recognized therefore much of the value accretion 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: 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. 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. 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.
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: The breadth of our fund offerings has enabled us to continue to transact through economic cycles. In 2024, we monetize close to $40 billion of assets minus transaction activity picks up we expect to be actively monetizing investments.
Speaker Change: Carried interest generate substantial real cash.
The outlook for carried interest is significant.
Speaker Change: If 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.
Bruce Flatt: 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. 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.
Speaker Change: These cash flows will come predominantly from funds to already exists 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: The 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: 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. 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.
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.
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 her six years of ownership, which included some very volatile economic periods trough.
Bruce Flatt: 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. 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 4x our original equity investment, which supported the funding of a $4.5 billion special distribution to Clarios' shareholders.
Speaker Change: Stability 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 the 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 <unk> shareholders This'll.
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: 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. 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.
Speaker Change: Since acquisition, we've 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.
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, edge technology scale unrelated ships with nearly all major global automakers are unmatched, providing it was an incredibly resilient competitive advantage.
Speaker Change: But 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 chlorosis ideally positioned to lead this evolution from a technology and manufacturing hubs in the United States the business it's in an.
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.
<unk> financial position today, and is investing major capital and its U S manufacturing capabilities.
Speaker Change: Over the last decade, Corio says invested over $1 billion and its U S manufacturing operations unexpected to more than double its U S investment over the next 10 years.
Speaker Change: 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.
Speaker Change: As such Claris is an incredibly valuable business, which will continue to differentiate itself through a hands on investment approach.
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: Owner or renter.
Speaker Change: There is a psychological phenomenon and most humans, which results in caring a lot about what 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, Conversely rental cars are driven with the 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 then owned it is our observation that people, sometimes act like owners with their house, but actually renters with there.
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: 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.
Speaker Change: 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 business 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.
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: Of course decision, making comes in because sometimes management teams go astray, our business prospects declined 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 cash flow.
Speaker Change: It is extremely important that you maintain your house and management and our company makes good cash reinvestment decisions for you. Many shareholders act by renters, rather that owners and trade simply because they think that the stock prices up.
Speaker Change: 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.
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: 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 and a business through fractional ownership of a listed entity are two of the great tax freeways to compound wealth over the long 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 our residents are 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.
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. 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.
Speaker Change: Being an owner.
Speaker Change: Closing.
Speaker Change: We remain committed to investing capital for you in high quality assets. They earn 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.
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.
Speaker Change: Bruce Flatt, Chief Executive Officer February 13th 2025.
Bruce Flatt: Sincerely, Bruce Flatt, Chief Executive Officer, 13 February 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 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.
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 opportunities.
[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: <unk> 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: 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.
Speaker Change: We're 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.
[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: 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.
Speaker Change: <unk>.
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.
[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: 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.
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.
Speaker Change: 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 operated 13 governmental investigations.
[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 cyber terrorism. 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: 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.
Speaker Change: 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 'twenty to the maintenance of adequate insurance coverage 'twenty three the existence of information barriers between certain businesses.
Speaker Change: 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 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.
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.
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.
[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: The availability of appropriate opportunities or otherwise.
Speaker Change: 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.
Speaker Change: 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 issue.
[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.
Speaker Change: <unk> 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.
Speaker Change: Cautionary statement regarding the use of non ifr's measures.
Speaker Change: 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 it 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.
Speaker Change: For similar financial measures calculated in accordance with I F. R. S.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Since two 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 relate.
[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.
Speaker Change: 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.
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 <unk>.
[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.
Speaker Change: Rs.
[Analyst]: Let's say you're overwhelmed, or maybe you feel like things are completely hopeless. What can you do when things get this bad? You can talk to somebody who knows how to help you. Our phone number is 988. If you call 988, you'll talk one-on-one with a real human being.
Speaker Change: So, let's say you are overwhelmed.
Speaker Change: Or maybe you feel like things are completely helpless what can you do when things get this bad.
Speaker Change: You can talk to somebody who knows how to help you. Our phone number is 988, if you call 988, Youll talk one on one with a real human being.