Brookfield Asset Management (BAM) 8 Feb 242023 Q4 Earnings call transcript

Hello, and welcome to the Brookfield Corporation Fourth 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.

good and operator, you, morning. Thank Corporation's Welcome XXXX and Year Quarter Call. to Brookfield Conference Full Fourth

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

our please available U.S. on information with the on see company, further these securities For filings website. our regulators potential risks our their information Canada on the and the and and in impacts

turn over I'll Bruce. call that, with the And to

businesses $X.X an distributable each excellent on of a everyone, results. on welcome, with call. year-over-year and realizations delivered delivering XX% basis, share year our billion. $X.X per earnings were This before strong we XXXX in total, billion. was financial increase Angela, had comparable We income In of net you, and a Thank the

had one years ever. fundraising manager Our strongest of its

over their through be year annualized over with $XXX economic operating demonstrate a of $X.X earnings shortly period assets our insurance billion, set resilience to business transformational a had to and billion solutions Our uncertainty. with continue businesses

years to we in This market. strong to briefly franchise $XXX backdrop, reduced to resulted year. broadly. during very these with that differentiated the active our approximately benefits of the We This, Turning the expect capital. the was for reap We for many over liquidity also we investment on us less maintaining transaction our businesses come. strong $XX billion, of enabled XXXX of position, activity in Despite to combined access invested billion and front. by assets to financed investments many. Capital more significantly available contrary and remain

macro Short-term have the environment feels are down. crested expected globally to rates interest Today, go better. and

anticipate As activity to capital markets transaction regain strength, pick we up.

place We lead is global in decades, to owning has form access this over of maintaining that for have become new business. As for safe always and sources looks thing good has economy, and XXXX changed. our recognize to remember most like of the combined is a to be. important backbone many result, it assets years but will the businesses volatility, does normal. shareholders the that this that multiple view, our geopolitics heightened not can to be and XXXX seem to a capital, with The This proven

value prices share add we dividend our come. also of for a Accordingly, XXx open presents with company at to of over value an has over excellent continue $XXX to the share of The a number to years, at through an holder is discount grown us X that the years, price market months, adjusted opportunity to to on this the return our We think, or yet back XX today total business started trading over of best share split to value XX%. is additional in reinvestment, if capital. the just time. though, Looking shares And the plan value the $X.XX assuming reasonable. next our our illustrate, last the compound over XX of and To repurchase the $X of year accelerate return a stay the billion buy buybacks. value annualized

though, Going of same, forward, economy. our operate investment global philosophy, to remains build and the the backbone

returns meaningful proven to Our earn it experience that decades compound so has the demonstrated moderate very risk, has results is with for wealth. possible very doing and can good a

The investment as asset look assets types class capital of build continuously the this to inflation historically, assets very the are similar, evolved and we evolve. than years We as line out but incremental needed dedicate did in contractual a assets is the ago. long have these manage, our today time. that also billion over of Of for with in different that strategy with those capacity nature we the of XX has protected sectors that an not time from changed capital to have continuously how but half $XXX more exist stuck world nearly

demand are With example, world. aligned the our we data the and largest in with in very to for growing in global much uptick expand sector, continue companies no this fastest down, slowing signs of the investments, showing and we

global and we largest to As this And of and own data one our example, have grow. platforms. center we significantly now an data increased hyperscale center looks operate only the operations,

we're meet a companies platform largest the and leading world. for the step fastest-growing needs, accelerating is renewable AI from growing estate in exponentially of By to and a centers, the energy for amplifying renewable already power needs change global building nature was in the driving digitalization but global combined large our of power data development the sources. addition, with business, and demand In real power center global intensive data trend electricity positioned

digitalization, have note I the decarbonization, markets, well will capital trends, would needs. X around the be still future tilted as emerging towards which centered voracious deglobalization as and

different. always for to very we place constantly we will focus, be and believe time. the little global invest As a It economy our evolve an backbone a looks to continue long excellent the just

focus largest backbone and economy access we expanding assets As with ourselves strengthening with to of these growing well significantly to value business our term. high-quality intrinsic global we us on the continue continue and companies. capital, to global franchise, that look over aligning position to All and of owning our our the form growing businesses increase and trends the ahead, the fastest long

As always, thank Brookfield. you continued take interest and results. support in And you for that, your will Nick through with our

by DE resilient our year delivered an per of fundraising or XX% strong XX% or Total our you, our distribution businesses. for and before of for manager adjusting the December for share good income $X.XX earnings, or performance results $X.X per in Distributable represents prior year. billion of over everyone. earnings business, share XXXX. morning, XXXX. Thank We $X.XX increase $X.X The billion in very management asset were DE, billion realizations $X.X growth in were This per Bruce, and financial operating net the after our of supported was share year. the insurance in business momentum strong the solutions with the

of these turn. in businesses taking And each

incremental Equity $XX in approximately quarterly to of at into billion driving in growth. Our $XXX interest of Fee-bearing over X% to And distributable of our ended to that our soon with outlook business. for million the earnings raised, Life, continue billion. capital year. their of heading a American $X.X which, dividend to anticipated remains billion $XXX billion, brings $X.XX environment, the announced to capital billion, our $XX manager us $XXX earnings to the be upon earnings is increase strong total billion share, per which the should last combined our to asset to momentum, XX% more with growth when And business strategies contribute from annually fundraising leading context, despite management closing cash year of fee-related distributed which, fundraising for clients, compared year. nearly a or strong generated $XXX this fundraising And $X.XX attract challenging from XXXX, per share meaningful

solutions business insurance $XXX had strong earnings of year, Our million per generating distributable $X.XX operating share. or a

base earnings We investment drive growth. our to and capabilities our asset to continue leverage scale

November approximately close $X the Argo Our billion year-end and billion year. to insurance average of which the our In approximately deployed on the assets is $X X.X%, is average in of of assets investment the yield origination of roughly billion sales our increased $XX assets we cost with Today, the average Group approximately during than of in insurance XXXX, higher excess at and yield annuity X% an portfolio investment of X%. capital.

anticipated $XXX insurance closing increase a $XXX At of end to compared were shortly billion. earnings our the of And grow XXXX, earnings annualized and this million. in over business million AEL, That's $XXX is to the of with $X.X to billion assets will year poised approximately business solutions ago. annualized up to

time over operating This flows. as will increasing to available distributed this was is annualized see is $X We X only to of the as portfolio billion us approximately line be cash ago run continue path know, $X earnings rate the our bolstering business tracking you to to with and plans. started to optimized. a years all billion in be And investment credible

our solutions from million to $X.X or annually. is in is increase We and platform net to business. of products billion from platforms, a raised source now solutions to million for solutions and approximately month $XXX on insurance a of close billion our through remain our approximately capital retail origination approximately the track we within insurance this million annuities wealth which wealth mid-market and XXXX $XXX $XX retail worth Through month high $XXX clients,

deliver was private in businesses. X% Our $X.X compared continued in supported infrastructure funds total prior earnings the underlying nearly share our Operating by year. cash businesses flows, growth distributable and distributions our business within share $X earnings our transition year. $X.XX of to and from last for Cash the higher billion billion, operating EBITDA the year, equity strong were adjusted increased our of power operations to and businesses over resilient by XX% per renewable, generating in or

net with estate real and our outperform portfolio occupancy XX% operating broader continues to the levels In year. growth the compared to same-store at of market prior core in X% business, income our

performing with XXXX. and above Washington, continue tenant net completed demand those York, at average of core over to XX% in over exceeding square XXXX million in leases we per tenant rents In in capture Calgary D.C... million office square feet leased million our square and Toronto XX sales square levels $X,XXX XXXX Our square New with feet portfolio in portfolio, nearly retail feet foot, higher X higher than This than expiring. XX% feet X is XXX,XXX includes

owning tenants of over enables and flight proving market we seen lenders. capital Our track have the record In cycles. to for a pronounced best compounding on the the part allows and quality tougher that both assets the a environment, term through long of is resiliency

activity For leasing Manhattan than XX% new instance, in occurred in in of more assets. New A Midtown Class York,

foot square per remains we X the New are activity all past years, premium The leasing in and for in portfolio. our robust, same with our transactions globally across the rents $XXX market of combined. estate seeing real Over years York the number exceeded above previous very

portfolio. the confident tailwind XXXX. earnings. maintain our start real Also our see reputation and underlying business material down estate we and XXXX, estate responsible borrower important debt as impact real successfully to access flows business in we're its grow we and we and our our interest compound, And no all as rates our is to for cash a In same and expect in strong that maturities our maintain refinanced as liquidity, strong of continue We our with to come a has will capital. enabled conviction us to to relationships in

activity. monetization to now Shifting

continue We we see cash-generative strong own. the assets businesses demand to for high-quality, and

approximately cap During billion than investments. enterprise capital A an monetizations approximately values an of for values of local our asset IFRS of few assets all of returning carrying multiple of office IRR an of million X.Xx currency. a at at XX% the multiple we X.X% of and importantly, sales the billion, approximately and of a closed XX%. a at strong rate, carrying of examples recently We capital over substantially values. generating implied of sale $XXX Xx monetized in values, sold Brazil in value Most $X transacted IRR an were our $XX higher Westinghouse the in year, these include validating

landmark monetized a also in manufactured a Paris very in returns. the U.S., We both housing mixed-use asset and at portfolio strong

generated XXXX. income strong in year completed of million sales into realized the over carried interest recognized resulted $XXX net which in being returns, The

going by also we of billion carried total $X.X unrealized billion, And $XX.X interest, with which our carry expect is capital year, the accumulated unrealized significant of pool generated the billion to flows During eligible of owned interest directly corporation. increasing cash carried carried growing forward. every interest larger contribute year, to $X.X we the

Turning liquidity. and our balance sheet to

our our capitalized position capital on deployable by in excellent us strong underpinned access cycles growth opportunities. balance put liquidity conservatively to Our These markets. periods a over $XXX sheet, during continued of and business market with of attributes to is and focus high levels capital withstand billion investment of to strong

base, Specifically, strength growth from of perpetual DBRS large a received of we A, credit our debt continued December, senior rating credit supported we have by strong our in a capital the rating the our And in on a and reflecting unsecured upgrade earnings. franchise corporation. to

our We have significant us debt to to paper. the current headroom markets, ratings, term which time in credit do from access we enabling to issue time

to on capital allocation. Moving

to This each to few will mentioned, $X as pace billion repurchases, share regular aside $XXX approximately Over added company add excess the into cash next million remaining Bruce shareholders value reinvested we to of another the $X.XX million the of buybacks And the this shares in If of $X.X intend to fully roughly value, each billion remaining value share. and business with back we of roughly repurchased year, $X.XX the billion market. returned of the over through flow and setting share. $X $XXX increase open value or dividends over completed, share to months. of

Bringing combined our of to sources XX, a pleased together, of XX% has well the the to to into the to heading of it deliver embedded position I'm business, multiple at our and achieve per $X.XX returns capital, to shareholders growth significant per dividend, share at Board results us XXXX confirm Directors the lastly, levers plus on that close access of XX% quarterly and our the declared end our March liquidity for vast all shareholders And it in term. targeted XXXX. increase financial share payable taking of long the strong to over March record to business with

hand the Thank your the questions. for time. now I'll operator to call you over for back

comes [Operator Instructions] Our first question TD line Cowen. of Cherilyn the from Radbourne with

with on question carried interest. start a to Wanted

what in million the context $XXX share very direct us whether on of of you to close over expect to be still intention Can low to of realize you in XXXX comment realized a give to realized You velocity transaction repurchases XXXX it's to in time? indication carried in your lot general. able and some interest

pick Cherilyn, selling output of is We mean assets up which were year, year. yes, and of year, do monetization which will you're activity successful product this during we this monetizations funds. and in interest right. a transaction we're the from The expect to where carried

highlighted, $XX the our So billion $XXX a with interest basis. it's to for over we X would back $XX the continue allocate in the plans, expect free those XX share a highlighted, million over continue on disconnect dependent corporation, think decent if we And years, this between amount the on and of few in year price really just next monetizations to see up we over building then maybe value, to to flow And maintain $XXX timing carried will Bruce next meaningful about we and range, and I consistent and, I to share a if yes, years themselves. meaningful repurchases. the price cash million our year next we achieve conviction to numbers. the next million that is again actual And net

of AEL. to the is to rate the insurance from of And to to XXXX billion $X.X scale the on forma line billion what $XX run think run billion billion? time pro it going-in rate annuities what then I business business, of $XX originated a got And $X targeted curious you've in is I'm the

Cherilyn. Yes,

and can it in really of earn be the the year, and the it's So seeing be We're market demand the this the of going a to the depth being we strong. the will we through I returns product think market. up, for product course scaling of still

run those we end be next and and return. numbers year. still the the rate through at year ramp conviction think And see maintain this have So hopefully we course to it into you'll towards year get can our up the and I of of

line comes with question the of next Mario Our Scotiabank. from Saric

one allocation. capital is first My just on

share did -- at XX%-plus come quarter-over-quarter. $X discount or On how planned discount target value BN's XX% looks that the per to of share. was That about figure? you It trading just your a XX% up billion repurchases, like the to on

how billion $X repurchases of how uses about So Can capital the deploy billion? context 'XX, expect within 'XX and the $XXX your tied like you the for for talk for dividend in payments? the just $X million you and where capital you rightsize to

$X of billion earnings just time capital to the a think growth to really is And we the the repurchases. of product we view over have our the the Yes, and now allocate and Mario, the available significant performance is right year. liquidity

So it's capital. continue therefore, with a power think year. that. growing, business, reinvest consistent earnings than available liquidity We'll support larger. the and good our to is we nothing the is our getting growth is more of use But in this And this

Got credit also of think And repurchases of I debt. Nick, you a issue through rating of there's I you year? stays it. Would room share's -- follow-up, in $X your it to doing is the incremental mentioned price just in as think, fund you sort excess if billion kind additional the where the consider

we -- sources cash in. have coming lots Listen, like of of

think as of ratings. Mario, credit maintaining in a got the the we record the debt a more are business we've consistent issuing And With with that's just then getting is resources where be scaling, there's that's And available. our the bigger. so it'll if still allocated. as investment, have grow, obviously, good debt, cash focus. amount But about business our grows, so available the we'll of track way we the increasing And business, we growth have, the

The in past level relative disclosure price the I Brookfield appreciate years, I and second Okay. over share over versus more more very share XX the have past performance growth just the question relative per the value growth. XX intrinsic relative the S&P to really returns share and BN of on And theoretical guess, question. been my higher line S&P. price and value a, is the intrinsic to a share the and then good per S&P but outperforming XX both despite continuous

So value asked over need levers but and think as kind And and how and period what about biggest between can time. you an quarter, about every question a you value extended curious price capability this disconnect ways time? of gets just essentially widening gap do I over the the that in you I'm different do think extended of you that going narrow of price between Why so? Internally, that. disconnect period Brookfield's see assess how an forward to implies

just the that if So continue is much company too for add I'll unbelievably the and to business to the a without say start good at you value discount, opportunity trade it work. off -- an to

business So continue And and to it's every job run to our money biggest if of repurchase to -- I it's excellent to an bottom internally make and day. the our the doesn't the shares line focus add trade at the for business, is, price guess, is value money opportunity shareholders. the

biggest we So have. say, that's, focus I'd the

be and in [indiscernible] can the of numbers. The think but narrows this the time, observe sometimes as years, value doesn't. observation it some the just And growing, sometimes is only point the observation favor been discount -- And and other it widens favor, and XX I'd over in have trades that and in time. last stocks for will has I you out over our in go keeps one from company you

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

X recognized the insurance your year. X, being I flow the satisfied I last compared seeding In continues asset of How about in grow slide 'XX? does in outlook look Page cash we of even insurance think, XX think lot billion and terms if the invested in that for and at year But a on, of, So requirements uses were management look last the cash $X to I talks business this with I liquidity. flow guess, year. as

in that look does X 'XX? those uses areas how So for

it's Nick. Ken,

I think broadly consistent.

assuming and the that that we business maintain it's distributable realistic to investing business the strategies for with to it potential back then growth, for ROEs. back into insurance its that similar the last kind it assume of it be it the earn, amount reinvest growth think invested into retains were those returns asset manager. various by and into And year can has can things managed the I earnings operating the a will

year. it'll So last consistent I think broadly with be

And estate, portfolio the insurance just real the was then think some estate time. I in plan terms the of estate, to hold sell of and estate some real some over longer-term real migrate real

As the the real greater what about thoughts think more for estate monetizations your estate in XXXX, the real potential activity for potential deal are we and portfolio? on your --

commercial stress what markets. estate does I seeing, don't or pick pace health I the real this U.S. you or in don't the let's over pockets know, we're markets? know, more the of see a of impact then as so? see do stress And the frame, you deployment year How of say, And how U.S. -- time your

up just maybe balance give real comment can Bruce. our Nick strategy on just and a It's estate follow sheet. to I'll you related general on our then

because real going going revenues interest the major in are assets -- coming secondly, spun dramatically. have costs estate, and net occurs, are would there both say estate I coming realistic basis soon real that fundamental flat up to flows is the major will good and as what particular, will fundamentals that real will come are The back. just and United to story that story down going because under and are in behind transaction States real income are are are down tailwinds therefore, cap And The become tailwinds of you rates, XXX cash past new that points. the And activity by still the stress. was rates But to and estate mentioned. interest not was story today

are comment XX the XX ago, -- than next months estate. I'd in not going the much XX next a you're on That's out that to what talking months stories real months. I real story stories still see make general play of imagined. those you from people So different estate, about the think are And

add tailwind real improving financing the most of only the the as thing estate, transaction is really transaction for activity well. CMBS this seen the activity Ken, should across we've very in of sectors And the that year, Yes. real I'd step liquidity And and of is liquidity estate. about supportive other start be markets up for

of comes question the from next line Dean with Wilkinson Our CIBC.

Nick, the to just the And in basis cost like you of to point number, expect environment cost in in, of and has go, X.X% AEL of so do rate transaction? over talk spread or that terms capital, a business. say, closing reinsurance on months? with capital, the that bit come That XXX the X both the last of where the the

are as outlook see started listen, that obviously, for rates. to yes, come consistent the But last few the in securing we rate that has have annuitants have up, rates interest the Dean, back the months, up. gone with gone

our return say we disciplined capital broadly cost stayed ROE. think I'd even as of that and of with earn we moves broader our cost we've that comes So our it liabilities. market expectations as we moves, what rates of can to all it think back offering, earn in hurdle do or we interest this can on the and And we're rates. And

significantly with the roughly down, on AEL. be suspect broad we market, as down come that closing focused the to of change write spread I rate expect it will that achieving see And business. we I you'll as still new come So in rates crediting X% don't but

would rate back into of around same-property strength coming NOI better, then just or the Great. you kind fold that estate to there. the -- sort assets Ken's cap And the would of around transactions interpret a dovetails come X% or need be of question, that see that something continue? And that into I Could assets from I given number? coming guess required that across real

with doing portfolio we've as where think the and day that worth I this term that can XXXX, insurance balanced know we We way, cap current building are high-quality that we insurance, they're are for level don't insurance side, profile valuations over market Dean. that have I'd is assets exactly the are about real expect return we income-generating assets the on Well, think And generating. successful opposed in to it the in generate to valuations. a X think been the are the transactions returns some or say estate of balance the rate the just with But that that the if works the sheet. we I attractive that the on long

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

redeploy into broader do you your from allocation manager, lower buyback something have Brookfield, the question. stake capital maybe A to to XX% and ownership see reduce What asset in to maybe that corporation's activity?

Sohrab, Nick. it's business. Listen, own that XX% -- of I obviously we think

when that know, you American will transaction. the XX% As go down complete to we Equity

a success been really so it's And transaction. this strong

up If the you BN. just look next is BAM of the over last to XX months, $XX billion value of our ownership

really company a us. and the and and growth and that's cash been exceptional, us. valuable fantastic flow, our currency to performance valuable is generating business is for our that returns So a and But for very has a investment our growth it's contributing it's

thinking So how grow. have just another that about intention really was available right just can help came business AEL, we're something and something we would to be of have spin. strategic. or along if to But like now, tool the And it's currency the it us, we strategic, that

well. So it's worked really

you relative maybe a on and to crystal back BN? to so Okay. little clarity, And BAM Corporation load the value any bit Nick, buy for see lighten just don't Brookfield benefits then

we I there, want BAM relative to currency a perform think the is Sohrab, there but Listen, well. value

And makes than definitely currency more that, to a that acquire. so see -- I'm market. just we sure BN it's shares sense on look relative not doing a basis, would we a anything valuable may for secondary But into the makes using

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

dive a insurance in I the to on the there. little maybe I appreciate all bit just commentary business. deeper wanted

the kind environment today, AEL, it that easing X next interested a I forma that hear we I'd is over what have globally, could be the with from of to exposure? floating As where pro central approach go banks you where if is months. rate mean,

XXXX, that that And And have What's then even you been a environment tailwinds for positioned a in believe your record, how in very feel the XQ, you you're given the competitive? strong, annuity do And record. to for you're how the market very continues on do take environment? that? flows continue well rate declining clearly, a positioned just be this to

questions. rate for risk have thanks proactively don't the Mike, the floating of portfolio. but we manage I specific the within portfolio, interest do the rate component

caution to portfolio at managing same nice balance a it acts income So as but profile. also our the hedge and against equity that hedge. I business, is insurance would time, we BN about also way the it very the return sheet the within think broader But do on the we

business returns were short basis higher has specific thought we So but to over maybe that rates as up XX business come we've generated We been investment on maybe than other for in played definitely by broader out make in and running in the With FFO assets. of portfolio. impacted way the in our more it insurance out you in months side a in down, missed the made more almost were parts points mind, few rates. the you last little than a for the the up it bit insurance the that on

broader the So for it's hedge nice a really business.

-- achieve to disciplined. competition write on our On hurdle We're our right us impact gives now focus to in to the we ROEs, our going not date, to stay our there going about nothing everything have to There's policy. seen do. targets. concern But policies. ability write are new new that ability We're we but ability competition. to Listen, that there's obviously,

just business. real clarification maybe then And Great. one question on the Okay. estate

real know piece at pretty up FFO and, continues to I the core to like challenge. there. of meaningfully rate a environment, in It it estate rose XXX that the the quarter. this in was the looks quarter-over-quarter looking be Just

So about maybe of there? on curious some just would've near driven and thoughts your that what change term the

Yes.

XX%. onetime and our a at look extension back FFO there was revenue amendment So of you item quarter, a that the year-over-year, associated performance actually this was and of out And assets. it's up lease with one which about if

and better, the performance growth, the that's driven which we by so And of quarter. getting focus FFO every on is the NOI business

the continues FFO the forward. And feels climbing will FFO from that be as NOI tailwind a way back NOI It's the now grow. a rates like going down, with come impact. its impact. trough to for rate So

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

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

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