Brookfield Asset Management (BAM) 9 Nov 232023 Q3 Earnings call transcript

Hello, and welcome to the Brookfield Corporation Third Quarter 2023 Conference Call and Webcast.[Operator Instructions]I would now like to hand the conference call over to our first speaker, Ms. Angela Yulo, Vice President. Please go ahead.

Thank you, operator, and good morning. Welcome to Brookfield Corporation's Third Quarter 2023 Conference Call.

are President our of today and Executive call Goodman, Nick Brookfield the Bruce Chief Flatt, Officer; On Corporation. operating discuss Bruce a will financial will business giving the and our update, followed start by Nick, off results for by quarter. who the we'll and questions. After to analyst over turn formal the call our comments, operator take refrain those than more X accommodate In to questions, asking order all to we from take want who ask that you questions. discussing to new you that and in comments, questions like and operating would responding in forward-looking statements and make to remind financial of within I may the U.S. forward-looking initiatives and including including our today's we meaning in performance, Canadian applicable statements, securities law. reflect relate statements and of events. trends and do to These not future predictions events historic future differ from events and They to are subject results such materially and known statements. risks, and may unknown

these And that, on securities with filings and and the on risks see Bruce. to impacts information and U.S. their the the please company, on the with information available further I'll website. For turn our call our over regulators Canada in potential our

realizations the Angela, strong billion months, Thank were comparable Results $X.X the the earnings. call. on for everyone, and generate an earnings the representing in $X.X of last cash a on basis. quarter resilient Distributable before welcome, share increase continues billion year-over-year flows our third growing quarter business as per and and to XX were for you, XX%

plans, is wealth a channels, a month the are approximately and which distribution retail our from million by only. management grow And individuals growing classes franchise and from today. real to continue sovereign pension retail with alternatives our position the solutions wealth increasing billion benefit in coinciding We private and in insurance towards increasing is $XXX year business, from asset our $X.X both next and mid allocations allocation assets fastest-growing distribution management should scaling our the today institutions, Across capturing raising of and to month alternatives asset credit. business leading and

further on Our Asset of $XX quarter flagship expected closes funds of active has Management early year the year-to-date through remainder total 'XX. now overall business and our had an raised with and billion capital the

fundraising the $XX of private fund shortly include ever in ever infrastructure largest at and at billion the fund the after efforts Our quarter largest $X successful debt our end. private quarter closing billion equity

expect our have We raising put large the raising And next target. track fund the ever in capital vintages coming quarters. infrastructure to on of and estate finishing $XXX for largest billion credit opportunistic on closes we touches transition, opportunistic remain to achieve closed-end real the achieving and market's

growth annualized business Insurance is to to of experiencing Group over closings Our of $XXX to than also its earnings billion, strong Life. Equity American and Solutions more announced with billion increasing the Argo anticipated $X.X and double the previously over is acquisition set assets

and deliver Lastly, underlying operating stable lowering Central the businesses of our earnings fundamentals to supported banks flows, growing businesses.Turning markets. in made good cash by have solid inflation. headline headway resilient continue and to

global before a as economy this going of sums tight, we in stable and We do in capital that medium sitting in expect capital we in rates the While lower labor has case interest us expect through we resilient markets 'XX. rates has on and sideline with economic particularly to to that for around recognize the is been Stability the of improved the has however, market end the the the significant will impact term. wildcard. the do, is world, transaction U.S., long-term that, often expect or Despite led specifically. significantly remained up geopolitics liquidity activity remain the outlook activity pick will that not

scale XX perpetual strong expect levels better. the well of is business the with that in all is underpinning capital. operating over high to past of the that is next results, $XX should significant have billion business having we access the global that continued across performed backdrop, safe the base form monetization. assets capital and that the We be backbone It of over even months capital worth economy, XX of reemphasizing of deployment our a our a we liquidity has $XX months, maintaining that markets, and have billion success found be. businesses and liquidity levels place our owning But With to and

grow nearly over end at the record should a Our billion the next $XXX billion liquidity of year today around year. $XXX to is into significant and and

many ability continues time capital to to liquidity businesses fresh XXXX partner for a remarks.Our we grows for it ever. also more capital, speak will strong capital further, finance successfully now investment than to and that when Nick to remains is even At significant access harder our find and to year. strong. and across raised his scale the capital at in real expect growth. execute range finding picture be economic of buyouts, Our to existing clearer and becomes are lend us differentiating franchise our a our wide assets assets another as And

One and impact of having into The world us exciting of us about generation. economy that which renewables, trillions global win partnership and backbone of next to this requires the is by it's change powered to more on tens or the AI Less is to who Much on that the today significant dollars. capital is areas launch important digitalization going investment, of will substantial AI the broader of the the required where artificial all and and is how of intelligence amount AI. discussed AIs who the lose. opportunities we're surrounds discussion seeing very will

with vital is more to emerge a turnkey corporates we flexible the large provide basis Brookfield execute for global large ecosystem, green Brookfield's few a solutions the leveraging growing scale can providers for becomes that and are options data on today for By increasingly as like around centers data that many valuable world, portfolio solution expect ability customers. for AI winners. becoming a and we green And will segment critical. As unique solutions more global global providing a centers

their leaders sectors. real in center, businesses data estate respective Our renewables are and

the wanted big can that we solutions businesses However, in having opportunity We integrated work uniquely is some global unique believe we believe lies together AI. in these of here as players a what the achieve businesses. partner to the to by provide about Brookfield of pass that tremendous AI largest ahead and positioned briefly choice expect our to highly our opportunities to for come.Before infrastructure Nick, years to and to for capture talk additive the many I be I renewables to call business

prices dividend yield rates want in time. challenges all BEP reiterate securities renewable sector interest very continue that broader the security late, that we on I have for long invested our earn of our impact and the returns Given and the trading BIP a have expect to capital attractive security. infrastructure to had we very on of to

trends businesses over for today proprietary they've different. capital, global broader positioned ecosystem, the for with have these our than strong years growth. well secular and shape global ever Today, deep positioned access Each makes to of flow are excellent expertise XX being businesses benefit better We part are in are foundation a and and them scale been. investment from with deal around Brookfield operating them providing

along defensive looking franchises. are and strengthen on So beside our positioned to sectors the businesses while inward, their in to many utility them and the institutional well with are renewables continue capital significant

that the provide more for opportunity expect recent and markets emerge they than amounts to of deploy to the even significant business will the We are in to value these capital volatility each dominant today.

Thank to investing doing reputation strong over operating With that, alongside footprint as Nick of prices to continue. that Renewable expertise use against franchise advantages businesses, it capital stock, and of close buying interest Brookfield noting market, months the we our Partners a where which in back trading great are our be conviction invested in further $XXX Partners, and XX buy BIP superior Brookfield our weighed Infrastructure over significant for today Business important global support also course, to open Partners current by allocating and similar this the the partner value to for what capital scale continued year. well we've of been shares opportunities, in our differentiate This we've the seeing. capital, approximately begun BEP and and Brookfield you of will the intrinsic Given deep some as will, than with past of the million of I'll competitive investment and turn I are to in our Brookfield. you we've as earlier and ever. continue more your investment own

distribution of $X.X quarter, the everyone. December. XX with or income performance. $X.X total XX% last quarter million share before our billion DE, Thank and were XX last for for was months. of Financial quarter Distributable months. $XXX quarter. the share in manager and $X.X the the increase for over XX last over for in our Total the an million Starting morning, or operating billion earnings per billion good you, the billion our after months, $XX adjusting third billion DE $X net the XX% over results $X the of strong Bruce, realizations last That's with and of were

be positioning key performance. demand driver our alternatives around continues our to of mentioned, for a the As global

of of $XXX so months. to the past Our the capital compared quarter has Asset over distributable Management and Fee-bearing fee-related Strong results last $XXX delivered million momentum growth $X.X billion, XX over year. strong end billion the fundraising in in inflows earnings $XX to of and was XX excluding the year of business with billion last the months. earnings at this performance quarter billion fees far led $XX XX%, driving

year the We momentum XXXX, providing this through end expect and further acceleration a fundraising of heading for of earnings. strong into

generating and XX business an of investment earnings in to representing $XXX growth, by XX% the over earnings million Solutions base strong million performance. to compared the of and the continues prior quarter Insurance driven year, last our operating insurance deliver asset Our growing increase $XXX months, distributable

American track grow through quarter, optimized.As business initially of increase originated investment earn portfolio billion and to our on Bruce $X.X as XXX to insurance mentioned, will premiums distribution investment Life by the year. the and are our through should $XXX than higher is average an Group month will X.X% annually redeployed about average XX take end retail rate Solutions billion $X currently cost over billion During yield run should expanding Insurance the yield various continue billion month and we Equity of of $XXX over by of X%, acquisitions business wealth of to Insurance $XX million approximately now and annualized within annuity earnings the roughly grow origination platform excess increase to approximately of to basis the time $XXX of $X Argo coming approximately to $XXX assets points investment the in and average further earnings $XXX and to Wealth the towards about XXXX. annualized the a from over is of the billion over annuities basis anticipated Annualized million for This points. channels, continue that assets, coming portfolio and in the The approximately earnings million, capital. $X.X of of we our and with Solutions business. approximately The which $XXX billion assets we million million our $X a Solutions billion. raising Today,

XX% Our operating The continued a quarter distributions transition months. renewable our businesses operations XX resilient cash in over and billion months. infrastructure deliver were last the from from of $XXX over last earnings, their and $X.X the distributions and increase million and operating high-quality supporting power funds businesses XX supported to by in cash the

by net to foot office markets.Shifting square the net XXX,XXX expiring, feet in Houston rent completed feet of the spreads prior In business which Toronto, and portfolio, core remains been an resilient Washington, comparative to square our continues versus across to its business portfolio, quarter. is in XX% are at at XXX,XXX as XXX,XXX EBITDA contributed are many periods portfolio, leasing XX% we across Calgary, our XX% approximately in compared over period include robust because earnings It's our And activity. In with with prior XXX,XXX as D.C. to and feet those prior increased important to feet activity large same-store in and growth core performance X% real occupancy has adjusted operating outperforming limited and New our year-to-date. Dubai. Our X% the space with York lease also growth London higher very higher in almost than year achieve year. the market retail private X% have overall strong average which estate equity and XXX,XXX quarter square our square numbers over the leasing levels income in in feet not leasing monetization some in traffic buildings square and know

Our transaction robust. activity remains

higher figures. the manufactured of U.S. billion, representing include implied a a A X.Xx balance in $XXX a year-to-date, total sheet And approximately values enterprise that's portfolio XX monetizations sales have most than $XX IFRS, $XX months. at to an partial of and multiple transacted the over all our higher and/or been on services of than to sales bringing sales sale reiterate billion And asset these last more recent over We at business of values. in than substantially stake original supporting for an signed sale million values and $X the of value completed of current examples investment. point housing our our important have our the technology were the completed approximately billion couple our IFRS importantly,

$X.X the interest billion year. the Over to our of carried over accumulated unrealized interest, track net carried owned of billion increasing on interest we this billion generated with XX remain we $X.X income that by to realized million of unrealized corporation. have carried And last well into $XXX total realize directly $X.X months,

we back was since approximately to the with the free the total last of $XXX shares business. and dividends of million the shareholders through the market, the to over capital allocation, $XXX generation million. taking in repurchased on returned flow regular of buybacks over million balance to have Moving share end $XXX buybacks The past year our into reinvested cash open over quarter,

These our repurchase strong simple of principles financial forward, financing we liquidity, Over significant financing core cycles, the and a have which us we I principles weighed opportunistically to today. BP investment our set also today. our and serving to very we are implemented against to reiterate developed through opportunities potentially reinvestment of sheet still as principles, business. are and of those and continue BBU many guide shares various and and well will see follows, Moving balance decades how want substantial us our ahead.Outside results,

liquidity maintain always sources of we at First, the significant multiple and corporation.

cash support create of $XXX to nearly assets, specifically, investments cross billion assets but businesses ensure very financed the our of using on financial to And $X $XX assets, a liquid a value. of we can having At be billion, basis, the quarter, have we is and total in At financed the will liquid capital position. us strong Second, them stand-alone approximately securities $XXX of corporation we debt nonrecourse billion no sheet, in our addition end in lastly, and in invested putting as most on to billion with long-term and collateralization. cash of we which had seem assets. asset-level deployable balance be needed over insurance

a flows generate the strong also have very enabling have cash year. a we We in level in headroom of of ratings, this current position to excellent we significant when emerge focus are liquidity, cycle should to growth access see should us credit to to on time withstand and when With opportunities. us debt place choose, this we ability market we better our than we a expect $X markets significant see it. billion approximately the entered This cycles at a investment in and from we'll

with billion at few reputation to record alternatives, the recourse our liquidity cycles, increase our spreads and just duration questions. significant call months, capital up Within similar and time, financings deliver support and in we have expect or to wealth our sure to maintained that us. those diversity business you Directors cost others sustainable the to billion confirm and debt long to increasing $X.XX operations time payable on tightening of and the private or alone, finding the individual growth. positioning this, These importantly, a the impact renewable year, $XX of infrastructure year-to-date we over access raise highlights our demonstrate in our strengths, to borrower of company November XXXX of markets stakeholders cases, all business, to to and portfolio. past close the vast to core our broadly But I'll ourselves basis. business, of To the to office have along of being beginning an success. financings around successfully across to have uncertainty, lenders level, with who and approximately loans, capital balance at In our maturities a create refinanced across liquidity real we our in transition fastest-growing our many end pride refinanced pleased debt. the approximately our global portfolio hand geographies BN, no asset it perpetual now a portfolio across the With to our when business, through benefiting relationships, over proven debt, our financing our financings finance we for Thank approach ending Overall, few power many upcoming of $X the at XXXX. at have estate us am are and the back returns we, access the no allowing market of along term. the with the to continue highlight business, operator to a has effectively businesses, closed hard for during the for time, We approach their the financings. that, strong well raising executed approximately coupons $X.X at on our thereby positions the portfolio aggregate to the us per asset-by-asset companies. we disciplined to maturities counterparty capital since our to lend and affiliate the continued the have A notable our billion done close same our be our strong X debt sectors access equity refinance on debt BAM sheets.We approach sizing and support no our and include existing previous of debt with raising consistent In to segments and to enabling $XX examples and have financing. billion business, responsible financing This us markets XXX strong with around the and to to with a with share I shareholders business, dividend overall material December XX, from of has Board on to your quarterly our of declared of the across making

line Instructions] the Our from Saric [Operator with question first Scotiabank. of Mario comes

internal So view the U.S. has all? just probability of into more of lot about broader and on one internal kind XXXX, U.S. one is how if asset soft allocation in I'm general view about versus the or be continues economy. that first in shape landing the at of may relating a classes heading how to geographies a hard the evolved the curious There of discussion of of terms capital to terms each the in

opportunities on then through view Mario, gain transaction a should it's think outlook They'll stabilizes, think broad activity. deploying risk hindrances that And more confidence activity. tend And we one again, we've more think And to value, that resilient deployment more outlined, people at the a I businesses economic looking for high-quality for acquire liquidity for capital. I Nick. And deploy form in markets, as less as been liquid think situation, to people we look pricing I has And we support capital think more rates. if from the recently will to cycles. them on capital and over I certainty the as try short-term forming to look when perspective, or cash We the of capital. very we focus be to view our flow. to there's returns economic

say being year. see to have we of coming selective patient, and So in but I the expect we we're would lots significant capital, opportunities investment that

estate I just then the transaction expected an peak to back this. associated and to And Okay. activity focus for coming acceleration. specifically just question cycle on want real maybe rate

acceleration more do that noting A you expect based when early would activity perhaps the value-add bifurcation up been the on for market or Like the to Class the trophy discounted assets a vocal underlying you transaction own significant would assets. out and you the You've I how exists Class question of there's between fairly type that is, GFC in guess presumably coming characterize more it's in kind BC between the properties in you expected whether the and the pick your of values. that trophy activity assets experience, with asset which provide confidence of own, 'XXs.

one future. quality activity be assume very and Mario, it's hard the assets you'll very pick the trans predict to flows when capital know, be, transaction next long-term when I does will activity very -- liquidity, own tends but we hard cash support it's attractive Yes. But as to from the that with will up, that assets mean, you stronger maybe more fair And to focus to returns. start into activity year so as and offer predict that attractive yes, state, of you highest the returns, very return. it's high-quality on see markets, with transaction

start hard say, into but to So see to of the expect that hopefully year. we next should start

line comes the Ken of from next JPMorgan. question Our Worthington with

development dispositions market today to In and and And years plans the more next reiterated towards meaningful portion for with real insurance. actions ready development over Investor redirected next you conditions, were down X focus transition of significant portfolio is the What sell portion geopolitical you would year. transition estate conditions portfolio to market the Day, a of if expect of if derail sale accommodative. don't have sort

Nick. it's Ken,

and -- capital. perpetual own backed the balance are that sheet reiterated that we our is make it in on would past, assets we've the I comment first The by

value. long We're can in of -- to to looking in our term. board our needing are the we to create in of view So -- or be we not sell short term We're patient. these desire assets going and

market right conditions to the transact. for wait will we So

business stages at they're With their these all of assets, plans. various

to that an number world. hard the can but a put conditions market exact assets to percentage, around there it's look when of return that is we sell So

when So said, diversified one to as to we then year, conditions by market, market strong execute. But dishes to patient. we look And any look improve, can so we're we market. transact. not If specifically can exposed be next I

on this of bit. Okay. was to year. a and generate generated carry track year million It quite $XXX more environment is And then challenging still this Brookfield a you

As we you seem sort I sort XXXX, look realize predict to of And of this carry seasoning know businesses various future. expect can't year Would you portfolios. realized which grow? carry the said to you the the of best positioned to given

question. good to performed a all do because and that's funds larger larger way we're our grow we now carry Yes, expect they've investments, really and Listen, for sure well. into working

investment-grade with So and expect is of the see in in We're carry, close assets and what's about the second are to debt, and in. same that private proven vintage getting -- growth. a flows them resilient vintage transactable. which fund rated to fund said their way very to as the working cash we've be to They've infrastructure be very unique our they as equity portable now into the And the tend second these past, realize come their outlook. real to we should makes estate of

continue and to them we to so when them carry should to expect attractive be bring And we market, see grow. very they

of question TD with from Our next Cherilyn the Cowen. Radbourne comes line

what could versus hoping strong basis? demand think on you can you're context inflows of you managing the consumer was you Just the starting wealth deploy inflows I quarterly about with how manageably talk a annual or the in channel. fundraising those from retail

to they're into tremendous the opportunity, Cherilyn, to They're predominantly yes, I sure right we flows and be match product. so moderate see those single not are make yields fairly credit think products. we opportunities. careful products. deployment diversified far, can infrastructure. now flowing investments we of against across that and will match flowing But through -- investment so the inflows can with into and They're inflows that match one a those And we return criteria

AEL to to as core the separately, potential relates transfer the to it business? portfolio And insurance to sufficient Will Great. liabilities. real your acquisition you estate nicely then partial its duration a scale insurance give the and contemplate of match the

Yes.

in assets portfolio. having the more price larger base scale a I to right core over portfolio, the look transfers will at execute allow us think to of to the asset insurance

Our comes Capital Sohrab BMO line the from question next of with Markets. Movahedi

Okay.

-- off for in, left you. I I a to pick me spot is think, a think good it that's good where up you

to talk of I insurance the you of give X transition EUR business core the and value estate. a real acquiring Can guess, estate, was bit retail interest office you between I supplemental, about think and in indication that and economic for circa mix maybe that the real versus billion little solutions like, transfer? as of of suppose, -- established I how the us

Sure. Yes.

Sohrab.

retail, for estate fair at insurance own but and this fair were core across added core value office, long quarter I transacted actually in this the ownership to way term as So was one were assets, interest they those that million assets we reviewed in I before think interest in are done at independent What all approved BN's interest we in which quarterly prior by to assets business, transferred quarter, we were base real $XXX those an think a valuations, transacted. to value regulators transferred capital auditors. more or of valued obviously equity efficient with of were opportunistic value the predominantly and those by and moved

be with transacting fair put market much would those. IFRS it's over there's that of Is wasn't because it? kind that at there fair to consistent to of observed prices your valuations obviously, necessarily So say it

Yes. But independently verified valuations.

last guess, quarter $XXX you in said some  Okay. And then about -- million, portfolios. you so I did

this to going opportunity? state guess, think been over rate more the in about You billion, sort I is a some you've could a quarterly be there here? transition bit a did couple we that just of -- I this Like quarter. Or is that of

as business to Sohrab, latter, make The sense, execute. grows and then assets the the we'll look

Our next question Brown comes with of from KBW. Mike the line

Great. Okay.

here into fourth continued So your and share quarter. in the increased third that's the you quarter, repurchases

like $X looks quarter-over-quarter. I my about guess here liquidity focusing here. here your I think, declined, It is It you're about cash the levels profile. So question billion sheet on and the balance

And cash I is cash actually a certainly quarter. you've exclude should of this guess cash, it in here BAMS -- decline uses the it level, to take If through proportion and possible of bit far grow done in why quarter? so the buyback the start down various that fourth of which would think can fourth the actually if sources here? seems Or I back your high, the quarter? actually it be the negative. you kind cash keep like for more so to if do I from And little

Mike, But that I of at we've beyond, $X.X billion lot timing. in level. we good use remember, of was corporate the in DE the monetizations cash. think other got pipeline. as lines. cash is got we of liquidity have of of undrawn sources of We've a significant And just said, coming carried year interest This a billion very some the $X

at So cash in attractive buybacks time. a capital position use yes, see strong point an and you in of but can this liquidity build very up, as we're

shares given of the of there think quarter, out I tough harder here valuation of weighed confident of you those element rate you're is, some impacted we've of macro impacting Okay. guess drag And group that I that discount? to element there And And the -- way I are help reverse the is this the stocks some consider that guess, know when read-acrosses quarter what kind are kind would hit. And management clearly is maybe prices those fees of calculated of this kind question activity and played some on will the kind mark-to-market kind back band kind some from those be on is get then just of backdrop the then stocks you BIP, also there's ever quarter. backdrop? the will back. some of changing that of this first, seen two, the some start buyback kind about share in and it noise assets on market the kind here. other that BEP side, to was this come

like look versus fee And kind market so, a a like practice? a what So on of that process would calculation transition rate ever calculation in calculation? shift you to doing if NAV-based would

first. one second the taking Maybe

I no. think is the answer

market. fee We time, understood for a disclosed, well They've structure public these businesses. have a the been well-established well for by long

share period cash drive BIP has the market So macro time higher into own think people's environment will but flow deliver and that is BIP higher stocks I able And buy time that time. in operating short of assets, the growth, can that real not about BEP and themselves of which be I fully of has period outperforms they But earnings generate term. contemplating translate proven assets, price differentiate views impacted high-quality I investments, of BIP, rates over then they broader their returns terms value think they're changes and the over we to their impacted proven sector, on of BEP grow and different growth assets. their long over yield to expect whilst the the in and of not and and performance long very, businesses. a the just BEP what a course, they in continue they owners with rate have the will very both what's any discount in they in and really And are the to they've think

to us persists. deploy value, buybacks do seeing in capital to necessarily their continue good our that opportunity are and for short a the to Now to we'll not price, term intended enhance if look it it's

for remarks. call would Ms. I turn to over closing like now back Yulo to the Angela

that, today. joining with for end call. And everybody, you, we'll Thank us the

disconnect. today's Thank concludes call. for you you This now may and conference participating,