Brookfield Asset Management (BAM) 9 May 242024 Q1 Earnings call transcript

Hello, and welcome to the Brookfield Corporation First Quarter 2024 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. First Conference Corporation's Brookfield to Quarter Call. XXXX Welcome

Wealth Bruce Chief comments, Brookfield for well provide analyst will the update turn off business. to Executive the After over an of and asking call formal to questions. Nick, Nick accommodate take by our Sachin finally, results our all want outlook will are the today our our ask we more Officer those update, refrain Executive and of questions, that On giving Officer; we'll a will followed order and from operating Flatt, call Goodman, X And discuss the Shah, our than Chief who for the business. and operator ask you to business In questions. quarter. Solutions Bruce Sachin by start Corporation; who President financial

you These future reflect like may make within materially to discussing securities of and in subject responding to today's law. operating applicable the I'd we in and events. and remind comments, forward-looking from including known statements. Canadian are statements and risks, relate questions statements. to financial including statements do results U.S. predictions historic They events of to unknown and trends events performance, and initiatives that and new and meaning in our and future forward-looking may not such differ

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

XX realizations in financial XX%. This with earnings represented quarter, of increase distributable first call. to Angela, $X.X for the and you, compared an welcome Thank billion $X quarter the last year everyone for on billion the of last and the months. We strong generated results to before

milestone growth, organic business their or American The Life businesses underlying acquisition supplemented business Of note, continuing outlook through execute significant driving each with strong acquisitions. plans, to by our of Solutions earnings its remains respective strategic a recent AEL. Wealth of our Equity reached

announced to strong Castle Lake lending continued earnings investment Our further deliver backed Asset businesses capabilities. important enhancing for asset-backed resilient our And their operating high-quality by Management business our demand assets. in an

the Shah, our is CEO with in his today, the business transaction more of we'll us time Sachin spend Solutions Wealth AEL remarks. and on

of Since share capital And year, the prices. allocate we million over our to the we the of repurchased repurchases, $XXX to of shares shares. at your continue remaining of each enhancing start value excellent

in conditions it particular, past With years. markets. the backdrop, own. the we of The most are that expected performing markets. normalize. in macro we to appears has assets high-quality peaked continues With up, more less that environment interest returned of couple stable market type a inflation the transaction and better and in the back to appetite anticipated, capital than world has to are With economies come briefly risk Most constructive rates liquidity and restrictive, is picking and to markets. in Shifting volume beginning to businesses major for this than to cool have

should investment to us -- This touch monetization for period At $XXX time, though, same remarks. initiatives, advance enabled a anticipate in more deploy, we billion on this Nick which rate his of we will of be and excellent the an seeing us normalized with capital from number sheets this see companies opportunities to environment. a that structures to invest. also With cannot withstand balance capital record

business our of performance the today. to Turning

changes, and has The more these stable franchise long-term than all to scale achieve enables market Our ecosystem, resilient factors always advantage for way our and and our found compounding it safest Brookfield been. ever us platform, wealth. of this throughout as of across our we've the stronger operating capabilities, combined with strong global our synergies the and financial make returns of

In generating ways we to the offer returns, for make comments many a a on few and stakeholders. earning terms of good return

As generally X us. performance investors of the drivers there global are and of for private we economy, main the build own like backbone

business. is words, first margin The earning business running and expansion a growing by In a other well. more

second expansion. multiple is The

earned for smaller of For amplifies lastly, you of a stream. benefits instance, leverage, equity. amount which multiple more excess the the convincing higher some And returns and having one having the than adding built long-term business financial getting on income return a paid by an

flows. investments of returns managing from Most well the our the our as cash come on growing underlying business and

finding to cost safest disciplined earn In way through have continuously margins. grow operate way, fashion, that their we operations deploy a more also a is good expanding that therefore, productive returns found businesses in addition, the and in capital

As of businesses through to and free running from better operating to drives capabilities underlying be becoming assisting growing reasonable increasingly money is our improve. to the era better relevant businesses This approach and our operating excellent diminishes, teams our returns returns. differentiating continuously

operating execute on business and initiatives, of differentiating significant mentioned. through scale deep to global continue we our just I and summary, In plans expertise capital, the ourselves amount our growth deployable

and to As those long support the for the interest And Brookfield. your remain Thank call term I'll wealth on always, in over focused Nick. shareholders. we you, comments, and as for with continued generating compounding strong returns always, over turn

adjusting distribution over December year $X.X our manager And share of for and growing or in the DE the our everyone. or per strong increase businesses billion XX% as months. Thank quarter per stable represents to the Results quarter, $X Distributable you, realizations flows. XXXX. last XX good $X.XX this an $X.XX before for of prior and per share XX% of morning, the generate the were for over earnings were cash Bruce, and billion continue after first share or

$X.XX of XX billion months, same share $X.X billion or period. $X.X was quarter, last per and the $X.XX DE net share billion for Total per over over income $X.X with the the or

in over last per quarter, months. $X.X with starting $X.XX share $X.XX generated Management business billion performance, operating and million share And the our $XXX XX of the or earnings or Asset our distributable per

We see [ as ] demand our to months for earnings aviation, premier inflows asset-backed quarter. in of lender the announced a growth private and Fee-bearing with And X% the March stake the total we real estate a strategies line fundraising XX, lending. specialty $XX fund XX in build on billion acquisition continue to focused in of prior of broadening asset-backed billion presence leading $XXX ago strong Castlelake, We majority higher recently to year, fee-related in capital than first quarter. in with year earnings. finance, with was strong expect throughout the our

the were Distributable to $X.XX quarter, strong cash share Wealth XX business today million Our over a on generate annuity-like operating growing $X.XX and average the per $XXX [ or per share $XXX had earnings continuing months. is our ] yield XX%. quarter, and long-dated in stable last cash Solutions capital flows. the And or

the at average. investment As higher duration our portfolio approximately the than yield of on X.X%, end the the cost capital, average was years a which X% quarter, has of average cash on XX of

Wealth speak in will to Sachin detail. business more our Solutions

it grow cash $X emphasizing close are flow now in of that growth the the to corporation. with we to billion, our billion, earnings on worth is AEL track approximately driving approximately are and annual significant However, May, $X.X at annualized earnings

retail to platform, from of billion or and products million solutions And wealth flows over a continue net monthly in worth high $XX retail close approximately for reach on we month clients. $X.X combined we to our to billion annually. mid-market aggregate track Through raise $XXX remain

Cash our Our share months. per continued million the $X.X distributable cash XX operating per by distributions last resilient over businesses and stable to billion earnings businesses. and $XXX $X.XX generating across earnings the or the supported flows, share deliver of high-quality quarter $X.XX in or are

our business, In we continue real market. high-quality of bifurcated an to see our in the increasingly assets estate outperformance

income X% In the months our the office and retail occupancy XX remain in at of over million last Specifically, quarter, square grew portfolio, levels net and core same-store leases. XX%. signed we feet over X by operating

in office York Berlin. our our in portfolio, quarter, XXX,XXX and by A few leasing feet increased our spreads foot New on XXX,XXX square leasing square square activity in XX% XXX remains feet Toronto, lease between and robust. London include activity examples leasing and of Focusing the

announced roughly office million long-term feet. at leasing be tenant office a extending they'll In addition, Wharf. Canary that X ahead, large our square pipeline at recently strong And looking lease its remains

up. trend the expected continues our we with valuations with in operating cash core see portfolio, flows and for rates activity transaction grow, down, estate tightening to While XX%. leasing earnings activity Overall, many financing of to tailwinds peaking continuing positively, spreads to and interest leasing picking in inflation business spreads retail and our real and come

through XXXX agreement to over support the power development to new growth. digitalization. renewable we to transition for a clean U.S. Microsoft XX.X and capacity our the XXXX signed between to renewable and continue trend of with with quarter, of energy projects accelerated of robust see center Microsoft global energy business, we data In and Subsequent deliver gigawatts in landmark demand the Europe

to businesses, Now a to a in complex a with above-hurdle substantially with we at announced stake very a premier fuels we're sales a hotel an volume assets. active sale line turning operation recently seeing buyers our sales of France number flight transaction up, in expected importantly, to sales the Korea, mixed-use XX% on a businesses generating return. We values. in also or our processes. all were and in Dubai, are in focused and picking platform our highest carrying Europe. premier progressing quality at fiber agreed prices Most With of monetizations. We're Across road quality the our the Seoul, all of completed on be office in asset

attractive of advancing renewable are proceeds billion of targeting we $X pipeline significant addition, at this asset returns. a in aggregate In year sales,

we net XX into of months, $XXX Over carried last income. the interest recognized million realized

interest, into directly generated the accumulated through interest year. of the asset by carried total expect with to $X.X unrealized carried $X.X interest income which the our billion remainder And billion sales billion, $XX.X pipeline also we active, of is of to additional our carried We realize corporation. unrealized owned increasing

and liquidity. to our balance Shifting sheet

liquidity. maintain opportunistically to at We balance sheet of $XXX conservatively a and us continue capitalized enabling capital, high Today, scale. billion levels have we a deployable invest record and of to

of we've quality speaks to XX-year million the and of The investors Notable ever demand approximately bonds market markets the corporation, Liquidity, the would highlights the liquidity. group appetite issued the offerings seen enhance include, today. in we few for highest saw coming to financings over back at $XXX capital $XX executed in across months. we duration last significant to the the on billion for

In our estate S&P A- business, billion $XX the close addition, with in reaffirmed completed billion $X including our financings, rating portfolio. to was AX of we respectively. and our corporate credit real In office

As billion mixed-use our we complex executed in premier an of at Seoul, debt Korea. on example, $X

of spreads renewable our power duration lastly, average. our approximately and their financings part portfolio including by repriced with executed as And and financings, Arizona, XX billion issuance basis in businesses and reducing extending X heavily across the the transition We've of Intel companies, facility on investment-grade key points with on infrastructure for partnership being $X.XX billion of of issuance bonds oversubscribed. semiconductor $XX

demand lenders These financings the digitalization opportunities. for continued transition and emphasize from

capital We corporate the into to over value of the shares $XXX in to for and returned reinvested we market, our of in quarter. to repurchases and dividends Moving our open share share date year, will on continue shareholders $X.XX million share. each prices allocation. for approximately buybacks us. back cash excess repurchased further per through allocate To remain [indiscernible] remaining attractive this capital should we businesses adding $XXX And share million to flow

an the well on strategic plans. delivering strong had have we Overall, and executing financial to results our year, start active

continued and of the beyond, earnings As up further. record combined in over level sets even we value our momentum deployable expect us financial capital, we look XXXX of and that ahead grow to our enhance performance, course with the

of at confirm close payable Directors dividend on June per business Board I'm our June of that, quarterly of to the share has XX, $X.XX to at the declared shareholders that XXXX. With end pleased record of of a

you Sachin. the thank time, to now your pass and I for over I'll call

you, and good morning, Nick, everyone. Thank

the to forward. of of the thought close was our update Solutions going recent on we provide and With its Wealth outlook worthwhile an AEL, acquisition it business

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operating rise. on income deep scale Our well strong to build and the for as demand a positioned capital experience retirement us position, decades of was investment business capabilities

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than less qualify Furthermore, benefits entitlements. employer, of putting their XX% pressure on for through U.S. significant workers retirement government

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of pension products, we to for years. individuals These provide rate plan is protect source a us, outcomes. and and predictable rather future. than products for ensure today fixed on stable into products also individuals where us Our their insurance investment to manage profile These on focused allowing retirement, they business predictable a wealth number have long-duration, help focus of fixed stable well return annuity a and for and a income returns very the have primarily

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are invested our realizing prospects growth is XX% returns investment and our tremendous. on equity over Today,

the and capabilities, American acquisition our Life. Equity we recently of completed further To diversify scale

we running have business seamlessly last the we into week, our the integrate hit only closed Although operations. to ground broader

We highest financial have positioned and XX the the the next improved strength, are over our AEL's we credit in sales company's rating record months. history given annuity to

and built growth, over over of the the the our pensions have near originate over of We we With of and annuity the in sales the organic term. in $XXX of X capability now the the billion have annuities insurance leading U.S. diversified made billion acquisitions have last $XX to and few assets years, annually providers business into we

$X new today invested on Our generates of earnings business capital. annualized approximately billion $X.X billion of

As $XX grow months, earnings the we as portfolio, asset we over track optimize is to from today billion And expect XX surpass XX of our the assets on to business reinvest duration as here existing to earnings and these and of billion we reinvest the $X has shorter annually. significantly next portfolio cash over cash financial assets.

cash excess to business like multiple that annuity a in is conservative and we long-dated franchise $XX built a the Applying have flows, billion. believe we these of worth

operational M&A returns compounding X to a credible to significant embedded years scaled capabilities, equity and the we over target over as on to next again path we long once XX% doubling our our capabilities business term. with growth, Given continue combined XX% this our the see

With will that, turn operator to the over call I questions. for back the

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

The to and first about to QX for consistent the million with language of is on maybe being carried on the maybe transaction last surprisingly 'XX, X in improve. off markets fairly talked interest to shy $XXX range million a just carry solid for start, you should continue was $XXX realized call, Nick, just Nick, 'XX. $XXX with the suggesting utilization. million

Or million [indiscernible] So I see guess $XXX it's that million we still the a level? is, question to range? reasonable can $XXX

Yes, I think range. it's still a reasonable

monetizations little and this bit given funds. coming and a be where from year front-loaded to they're it expected just which We in

you. that work previous we gave level I So still would off

And real Okay. estate just on second my debt. question, then

both seen the you've types in that market refinance talk you are of think unsecured well terms of as kind assets billion of refinancing what lender to terms $XX looking of Can appetite LTVs as mentioned I for in secured you're of where on spreads and going? highlighted. the was you quarter-over-quarter about

the liquidity start highlighted the I people year. are backed very across sure. to you're a a cash day. I We bid and business as high-quality -- flows. general continuing very has to capital think Yes, market, number strong And looking would long the that the by duration financings very duration every financings say, assets when been when in we the comment, strong for to markets are bringing is strong especially execute of

more we're market in in There's and to starting in see start of it's and year, specifically, strong retail year estate real across demand start well. real debt to highest to quality than industrial, for some I appreciation totality and the of In this a see improve strong assets in demand the the the strong, high-quality see really seen come of for CMBS logistics bifurcation the the improve. U.S. and office We estate, kind bid issued last year. as into we're conduit. liquidity We've to assets office multifamily, starting office the estate very the on the already been think, spectrum, all those CMBS real for

the spreads the and across is not spreads, the So helps are LTV drifting demand sure flow overall the AAA down board. the see cost. higher, but for I that stronger definitely capital the have much stack, but I'm is driving across tightened demand of that

we're Korea, to financing the which are I in being seeing $XXX spreads generally, financing very which So U.S., transaction office the predominantly U.S. $X in supporting is we of volume in say, We more start the would did demand Australia. support Perth, tighten. the to office, continue is billion million will there, strong. Outside markets debt the and see refinancings importantly, But

estate the be appetite continues that globally. depth So demand office, across robust would say including to of spectrum, very I real for and

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

to this the Bruce and the the monetize say, X-year plan estate noncore out to morning and Nick, conditions. a of be the holdings, game like Brookfield of real was could X- part over, thought been done this period. Part has called the improving you

investment how called the How in those for you mix? monetize the given what it called versus the Brookfield You executing monetization developing the you're as you're you'd funds out on. sheet noncore previously monetizations the difference see balance do investments seeing picture that

a guess going monetization is picture I the AEL follow-up be factor would the in be, of going terms And to forward?

Yes.

parts me different let start I'll ken, address that, So the and of insurance maybe with first.

to I we some world core for top assets in office the portion of a flows, are long we've and own the look are very XX perfect the the we of estate that of identified own. best that own, long-duration to high-quality to estate real that assets with all a real time, want truly companies cash assets. think retail Those which insurance

So next play the ownership the make a as insurance will that we part long-term think and on XX solutions wealth to just and of core, platform wouldn't we in in broad that, I but the months. say AEL, about the expect progress

and in As We sold to Brazil. yes, monetizations, liquidity office pick started it speaks transactions to building has an up.

we're it's So liquidity outside improve, that supports office, assets specifically not improves transactions. capital and of seeing markets but

has bit hasn't supported our time more be little strategy and hasn't the our transaction So Office changed in same. the capital a outlook up, in T&D but activity and plan that markets, that maybe is will by on changed. the U.S. the for our liquidity picks really improved go before to

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

and Solutions, start pension international letter, through transfer morning. Wealth Sachin. mentioned wanted expansion. In further risk the I for on question Good so probably with a you, growth you to

the complexities So of opportunities deals on risk and comment touch expansion? the I international hoping could you on environment transfer current with was associated for and some pension

no Sure, problem.

there's probably X-decade balance now pensions sheets the sheets large about hands. for U.K. years of pension But U.K. of private close some pensions pension balance it off come in as next the trillion the And probably the in into and So to been X set or U.K. strong. a both the the growth still years, corporation has in over and XX get a corporation $X have that very the year, seen result, to where we've alone meaningful in The you at very U.S. markets aggregators X period. every coming of very U.K. off are

a what's there, where origination we given successful. adjustment could the U.K., be market asset So highly it's matching our in and called we and we see growth tremendous think,

much is in U.S. The corporate transition sheets. balance sitting their from earlier pension on

think but have U.S. the only scale not volume will come that a of larger given so we And even companies, a of pensions I off. longer runway,

said, pension of year. billion of the All U.S. still that last have the our just months, We, pensions early business that U.S. building days. we being terms we've transactions won. in in $X And out last XX started very done we're in

I think comfortably the should that's of U.K., business we'll that of be larger billion a us. actually licensed. the similar strategy, can year in U.S. a on in $XX year $X position and by We billion to the in And we're for into getting eventually scale bidding U.S. transactions. a to transactions. we're in small the to And where the end our migrate start the process

great that quarter, allocation towards? capital there what we reinvested give color. back color to then us just the in into you over during $XXX that of million And some went just that operating terms was noticed as businesses. was That's Can the

Yes.

Cherilyn. For sure,

talked we flow as deleveraging corporate capital up when we other cash was, capital we used can BPY, sheet So allocation, in we I that a that said, you the the we've taking that within think retire so allocation have, corporate bonds decision past, which as against that weigh about to balance things consolidated that do.

the quarter. where the cash that's So in went

Kwan Geoffrey from comes the with Markets. Capital of next RBC line Our question

is for for the buybacks remains to capital where that deployment, the quarters. how past changed wide, meaningfully your couple in discount has given outlook today? And your but narrowed appetite given share Discount has NAV it just of

Geoff, it I the think remains same.

remarks that in we still you if We the value to across here the conviction potential the tremendous have the the only see complete we of from have franchise, business. not date. today, growth and all listen to intrinsic But the tailwinds growth

being are the still been that they've have as which now just going very on lots attractive the that against highly as all organization, but strategic see franchise, in executed last a they're to of attractive the we weigh initiatives up have, over other months. our we couple additive few a buybacks of we and we use capital, So opportunities recently,

if at call just we've Okay. material on market, if of something over bit some I up next expanding opens maybe as on T&D could you T&D out that years, the at this of the it, thinking And Ken's it see don't my that looking profile? that call monetization point mean, the may seen back-end X know, be question, second monetization. the monetization question more we're year, gate? loaded do kind monetized you've of I about Or portfolio little of a get amount the portfolio a, call a got that the is it, it

think Brookfield, and makes of this it you but business in when to to we'll about are good real Listen, this. when context clear, assets. the is comes, look about are of business time, our strategic it if comfortable be not do just attractive, we'll material transactions it is that estate. rightsizing a still like do driver pressure the are we're the as over is Geoff, levels market achieving sense. I next the think T&D And to there, improves, us transaction under them. it will This good These be the take when objectives. market We we'll We're monetize. at running no think that market And the to X overall over years,

I how the that's So summarize approach.

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

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

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