Brookfield Corporation (BN) Earnings Call Transcript & Summary

[Audio gap] may make forward-looking statements, which are predictions about future events and trends and are subject to risks and uncertainties, and actual results may differ materially. For further details, please refer to our filings with the security regulators and the cautionary statement in our presentation, all available on our website. And with that, please join me in welcoming to the stage, our CEO, Bruce Flatt.

Hello, hello. So you get me back. So the presentation that we -- or I have is really about what we're intending to do with the next chapter of Brookfield. And I just go back, the last 5 years, we've spent significant effort to reposition BN as a leading global investor in wealth for institutions and individuals. And that took many steps along the road, both creating the insurance company that exists today in fashion, we'll talk about repositioning the balance sheet, spinning off the asset management business and directing a number of our efforts across the board. On top of that, we've had decades of work creating the businesses that we have between infrastructure, renewables, asset management and turning them into powerful compounding annuities. And even the carry that we now have in BN is a royalty on the performance of the asset management business, which 25 years from now will be incredibly valuable asset. Over that period of time, over the last 30 years, we've compounded from $200 million of earnings to $6.2 billion of distributed earnings, which is a 13% compound rate of earnings growth that enabled us to compound at in the stock markets against 3 -- 11% S&P 500, which amazing compound earnings over time, is a 10x what you would have done within the S&P 500. It's also enabled us to now have a very large discretionary pool of capital that we can invest with our clients and otherwise into opportunities for Brookfield Corporation. The balance sheet combined is about $345 billion today, and the total assets within the franchise are about $1.3 trillion. Despite all of that change over the 5 years, and thank you for enduring with us while we did it because when we started, many of you said that seems confusing what are you doing, but what you did is trusted us that we get here. So what I can report to you is that we are here, but the objective we have is really simple and is still unchanged. We want to build long-term returns and wealth for institutions and individuals. And by doing that, we want to compound at 15% over a very long period of time. And if you do that, the same miracle will happen that happened over the last 30 years. If you reflect on the environment today and the conditions we have versus the last period, there's no doubt the world is evolving faster today than it's ever evolved before. But I'd say -- as a personal statement, I'd say, it's always been evolving. And it is faster, but 1 just has to pay attention and change with what's going on. We are, though, and hopefully this came through for those that were in the Brookfield Asset Management presentation, we are, though, in the very early innings. Many of you think what -- where are we? There's all this money going out, and there's going to be a problem. But we are in the very early innings of an investment cycle in technology, energy, industrials and real assets, which I think is -- has 15 years of run as we really rewire the economy and in every single country for the future that is going to be different than what it was before. It's like building the railways and the roads and the infrastructure of yesteryear. What's going to go on with now, what's going on now is the rewiring of the -- really the whole economy as we look out. This opportunity is -- it's tens of trillions, I know that sounds really large. And I don't make light of the fact that it is really large, but it is tens of trillions of dollars. On AI build-out, it's $3, $4, $5 trillion. It's being led by the largest, most sophisticated, highest credit quality companies on the planet and countries, which are as high-quality credit as them, those companies. But it's led by companies that are like countries and countries. And that's the difference. It's led by countries and companies that are like countries. That's really, really important. The power needed to do all this, both for electrification of I won't say everything, but many, many things. And the computing power stacked on top of that is what's going on is an unprecedented build-out of power that we're starting to see and will -- should and will last probably for 10 to 15 years. And it's hard to build this stuff. You need skills to do it. but it's very large. And this is reinforcing grids. It's putting batteries in to stabilize. It's building more power, and it's a whole enormous buildout of the electricity grid, which contributes to very significant rewiring also of all of the things around AI and power. Lowell Baron, at the BAM presentation talked about industrial warehouses. Those are being reutilized but also reformed where they are, what they do, what you do in them. And that all takes enormous amounts of capital and new investment into the future. This is creating on top of the equity investments very significant credit opportunities because the banks don't have the capacity to be able to deal with this size of credit, and that's what private credit is. And remember, what private credit really is, is outside of the banking system, we access sovereign funds and pension funds. And on bacon buy bonds on a public basis or they can put money on a direct basis into private credit into these opportunities. And to do that, many of them need sponsors like us to create products for them so that they can invest into them. And as simple as it is, that's what private credit is. And this the situation that is developing needs an enormous amount of that because the banking system does not have enough capital to be able to deal with this. The good news is that at the same time, we need an unprecedented amount of capital in the world to deliver these investments. The opportunity is expanding because the savings in the world in sovereign plans, pension funds and individuals is growing. The aging populations with retirement savings are growing dramatically. They're $7 trillion. There are new pathways opening in -- specifically in the United States and then it will go elsewhere for a lot of these products to fit into U.S. defined contribution market. And that $14 trillion that's there is zero penetration in these type of products. And as these -- the products that we have are ideally suited to be able to fit into those and earn return over long periods of time. So this market is opening up and will become very significant investor into these products over time, and it will go all over the world and this money continues to compound. But capital alone does not get the job done. Capital combined with the skills of execution are required, to make the -- to emphasize the point, it is not easy to run electricity grids, install batteries, build nuclear plants, operate to industrial facilities. These take sophisticated large-scale individuals and people to be able to do them. So it's a combination of capital and operating skills, which will win in this environment. In addition to that, the relationships that we have with many of the very large institutional investors in the world allow us to source the capital and the relationships we have with many of the great corporations in the world that are leading this next chapter in investment are very valuable for us to be involved in this. Over the last 5 years, we've accelerated the depth and scale of our competitive advantages, our access to capital, our operating capabilities and the relationships. Each one of those is incredibly important to the value. We expanded our excess capital. We spun out, as you know, Brookfield Asset Management. We scaled the institutional capital business. We built a long-duration insurance float that's heading towards $200 billion. And we enhanced our access to retail capital in a very methodical basis, we're raising $8 billion a year today. It could be more if we so choose, but we go slow because we want to get it right. And we've created a very diversified, flexible and growing capital base, which almost no other sponsor between all the things that I showed you has what we have [Audio gap] some are better, but not many have the scale that we have. This has enabled us to pursue a much broader set of opportunities, equity strategies, preferred structure, mezzanine, senior debt across all the different sectors across the world and with clients where we have extremely broad relationships between some of the sovereign funds, helping them deploy infrastructure within their countries, running mandates across all of our strategies, helping their people grow, and these are [Audio gap] very long-term multifactor. We've tried to get better. We've tried to evolve. And three things we've done. AI infrastructure didn't exist four years ago. And we've tried to be at the leading edge of that and understand everything that's going on. On energy, we're dominant. And we -- but we continue to, as I mentioned earlier, when some of you would have heard this. We continue to [Audio gap] I think we're only getting started but are [Audio gap] just of you probably don't use, but Naver is the Google and Google maps of Korea. And it's the local mapping and the local search in Korea. It's a $24 billion company. It's an amazing [Audio gap] The company has no debt say rated [Audio gap] we provided -- we bought [Audio gap] chips from NVIDIA. time. I don't -- we try to make small mistakes, not big ones. We grow methodically. We've never compromised our financial performance to do anything, and we do not plan on ever starting now. We never compromise our credit checks, and we do not plan on starting now. So [Audio gap] facilitate exactly what I've been talking about [Audio gap] So we did what we did over the last 5 years to set ourselves up. The last step was creating the flexibility [Audio gap] we've taken over the past 5 years. The combination of the two businesses which you approved [Audio gap] thank you. [Audio gap] With the insurance float of $170 billion and create new BN, which will have a balance sheet of about $345 billion of capital to invest. That will allow us, if we chose -- we may not choose, but if we [Audio gap] choose to grow [Audio gap] trying to do is continue to grow at 15% with [Audio gap] that's the whole goal of the organization. And we continue to grow. Nick will come up in a minute and talk about our plan. Our plan shows -- years ago, our plan shows this business should compound without too much effort at 16% from the current $67 that you own today to $140 a share in 2031. Therefore, the opportunity is large. The compounding engine we have is very strong. And we remain very, very laser focused on returns. [Audio gap] Now as Bruce touched on, over the last 5 years, we have grown the scale of our business. We've added [Audio gap] We've done it with a strong focus on profitability and returns which means that as the business has grown, the earnings power has grown in lockstep. And we think about that in the next 5 years, it leaves us well positioned to double our core earnings again over the next 5 years. Taking our DE before realizations to just north of $11.5 billion, a compound annual growth rate of 17%. Now when we add on the benefits of carried interest, and capital allocation, it takes the total DE in the plan at the end of the 5-year period to $16.8 billion. That's an annualized growth rate of 24% over the planned period. Now if we put that in the context of our current share price, that is a 6x multiple on 5-year forward earnings, 6x multiple on 5-year forward earnings. If we are successful in executing the plan, our planned value at the end of the plan period will grow to $140 a share from $67 today, exceeding our long-term targets of 15% plus total returns. Now taking a look back at past performance. Our growth over the last 5 years, as we've stated, has accelerated. And it's been supported by several powerful tailwinds, electrification, digital infrastructure. In real estate, we started to see the early stages of a recovery. We moved from an oversupply and lack of demand into a phase where we started to see supply really fall off and demand really starts to pick up over the last 5-year period, significantly improving fundamentals across the sector and capital formation continued to accelerate with alternatives continuing to capture a growing share of institutional, high net worth and individual and especially retirement savings over the last 5 years. At the same time, we had a macroeconomic environment that continued to evolve. What was consistent was economic growth was resilient, but we saw inflation come back, moderate, starting [indiscernible] and being sticky above central bank targets. We saw interest rates increase, decline. They stabilized somewhat, never seen the back end of the yield curve moving up with inflation and rates moving almost in lockstep it's been a very constructive environment for our business. We saw financing markets that really tightened for some sectors 5 years ago. Liquidity dried up, spreads move out. But over the last 5 years, again, we've seen the markets turn incredibly constructive for our assets. But what is very evident in the last 5 years is that the long-term tailwinds in our business are significantly more powerful than any short-term macroeconomic environment. And we saw that in our earnings, and we've seen it in how we've been able to scale our business over this period. We just look at this page. Over the last 5 years, we have doubled our asset management business. We've doubled in the size over 5 years. In our wealth solutions business, effectively a business that did not exist 5 years ago, we've scaled it to almost $200 billion in assets. And our operating businesses, high-quality assets backed by regulated and contracted cash flows, essential service nature of our private equity businesses and the improving fundamentals of real estate have allowed us to continue to grow these resilient cash flows. And you can see that here in this chart, where our earnings on a consistent basis have scaled over the 5-year period underscoring the fact that the long-term tailwinds are more powerful than the short-term macroeconomic environment, and it also highlights the real return nature of the cash flows that are underlying our business. Now 5 years ago, when I would have stood up and laid out our plan for you for our core earnings growth over the 5 years. I would have said our plans sometimes appear aspirational. We don't view them that way. We look at the scale of our operating capabilities and all of our platforms. We almost view the growth as somewhat predictable and consistent based on what we have. It's about execution. As I said, we have the businesses, we have the platforms. We have the capability. It's just about executing the plan. And so when we lay out these plans, we view them as very realistic and achievable over the 5-year period. We plan for $5.6 billion of cumulative DE before realizations over this 5-year period, and we marginally exceeded it over that 5 years. This is really important context, I think, as we start to move forward to the next 5 years and give context to why we have conviction in our new plan. Now very importantly, and Bruce touched on this, we scaled the business without changing our risk profile. We continue to operate with a conservative capitalization with strong liquidity and proven access to capital, very active risk management, meaning that we are managing other -- managing risks to try and limit and protect downside in our investments and we're maintaining a very diversified exposure across the business, meaning we have no significant counterparty exposure. If we zoom in on the last 12 months, again, we've delivered very strong financial performance. Our Asset Management business had its largest fundraising year ever, $163 billion of capital raised and group's fee-related earnings by 19%. Our Wealth Solutions business increased its asset base by 40% and Group's annualized distributable earnings to $2 billion, an 18% increase. And in our operating businesses, we continue to see strong FFO growth and in our real estate business, achieved record rents in markets around the world, driving strong growth in NOI and importantly, embedding future growth into the earnings profile of that business. Now on top of that, we also returned $1.3 billion to shareholders, $700 million in opportunistic share repurchases and $600 million in dividends. The timing of this is done June to June. If you actually look back at the last two calendar years, we've repurchased $1 billion of shares in each of those calendar years, and we're on pace to achieve the same this year. Now we continue to value our business as the sum of its parts. We take our public holdings, and we add to that our private holdings our direct investments. These are the investments that we have directly into funds managed by Brookfield Asset Management. Our carried interest, our share of the profits generated by the funds managed by BAM, our Wealth Solutions business and our Commercial Real Estate business. When you net off that, our debt and preferred capital, it's $158 billion plan value or $67 a share, which if you look at the share price today, offers a very attractive opportunity or entry point for investors and a very, very large margin of safety. That's the past. What now? What is next for the business? Well, let me provide you with the updated 5-year plan. The tailwinds that we talked about that supported the growth over the last 5 years are only accelerating. You've heard it today in the BAM session, and you heard it from Bruce across energy and AI and digitalization, the capital needs are unprecedented. The quality of the investment opportunities is there and the opportunity to drive growth and deliver excellent returns is in front of us. In real estate, what we're now seeing is those improving fundamentals that I talked about means that different to 5 years ago, today, we have pricing power in our real estate business. We are now in a market where there is a chronic shortage of supply of the highest quality real estate. There is an excess of demand and the movement in rents that we're able to achieve significantly is significantly greater than any impact that interest rates would have. So the real estate business is now moving from improving fundamentals to converting that into improving cash flows. And capital formation continues to accelerate. We're seeing the institutional man grow, high net worth individual and potential new pools of capital opening up, supporting the growth in alternative investments. At the same time, I would say that the interest rate and inflation backdrop continues to be supportive for our business. I think if you look at the energy and infrastructure business that we have with rates and inflation move together, that's a very constructive environment for those two businesses. In real estate, I touched on the pricing power that we have today. And a piece we often don't talk about, and we should is in BWS, we have a natural hedge against the rest of the business, and Sachin will touch on this more, but it means as a business, the backdrop today is incredibly supportive of our future growth. And that leaves us well positioned to continue to scale the earnings of the business, planning for that 24% compound annual growth rate, as I said, over the next 5 years, with the large bulk of that coming from our core businesses from our existing platforms, where it's just about execution. So let's start with the core businesses. Our three core businesses span both our public and private holdings across Asset Management, Wealth Solutions and our Operating businesses. We will focus our comments today on our private holdings. I will go through the totality of our earnings growth I will spend specific time on carried interest. We have a real estate panel to talk about our real estate portfolio, and then Sachin will talk in greater detail about Wealth Solutions. So with Asset Management, the earnings growth comes from two sources. It comes from Brookfield Asset Management, as you heard earlier, there are plans to scale fee-bearing capital to $1.3 trillion, an 18% annual growth rate in DE. And direct investments our investments into funds with a proven track record of delivering strong returns. We expect over the planned period to earn and resurface up to $6 billion of capital that will be available for reinvestment. Now within Wealth Solutions, we expect to grow insurance assets to $375 billion over the plan period. The business has the benefit of a tailwind from demographics from significant growth in the need for retirement savings products. At the same time, we have scaled a platform in North America that is now focused on broadening and deepening its distribution capabilities, providing organic engine for growth in assets. Our global expansion, we've invested into a new business in the U.K. and recently started in Asia, focusing on Japan and plans to grow more broadly in the region. When you pair that with our investment capabilities, our ability to source long-duration investment opportunities to match long-duration liabilities. And importantly, as was just discussed on the panel, it's an ability to invest larger amounts of capital into larger deals but without sacrificing returns. That's a huge advantage for our business as we continue to grow. And then when you pair that with the permanent capital of BN, it gives us the confidence that we can grow earnings in this business at a 23% compound annual growth rate over the plan period, but with a focus on returns, i.e., we will maintain our focus on maintaining a 15%-plus return on our equity. And our operating businesses, as we said, they continue to benefit from the tailwinds across infrastructure, energy, private equity and real estate. We expect these businesses to continue to deliver strong FFO and earnings growth over the plan period. So if we put all that together, it provides a strong base of growth in our core earnings. The 17% compound annual growth rate I touched on at the start, again, a doubling of our earnings over the plan period with growth from BAM, our direct investments, asset management in totality than wealth solutions and our operating business is continuing to drive cash flow growth being slightly offset by the capital recycling that we have planned over the period. So touching on carried interest. As we know, it provides a significant source of additional growth for BN. Last year, we said that we felt carried interest was approaching an inflection point, and we absolutely believe that to be the case. Over the last 10 years, we have realized $4 billion of carried interest into income. Over the next 10 years, we expect that number to be $25 billion, of which we expect $5 billion to be realized into income over the next three years on a net basis. Now I think it's important to do a quick refresher of how we earn and recognize carried interest into income. We are carried interest from two sources. The first is from the funds that were raised before Brookfield Asset Management was separately listed. Against those funds, we earn 100% of the carry. We also incur 100% of the costs. We are in a roughly 65% margin on net income stream. The second is what we call the royalty. We earn a 33% share of gross carry and we incurred no costs. So it's effectively a royalty at a 100% margin. Now when it comes to recognition of carried interest, we adopt a conservative approach that effectively back ends the realization of carry towards the end of a fund life. We wait for all of the original capital to be returned to clients to work our way through the preferred return. And when there's a very remote risk of clawback, we realized carry on incremental dollars realized. It does create a delay in the realization of carry. It creates greater alignment on the other hand, with our clients, and it also creates greater visibility as to when we expect that carried interest to be realized. Let's look at the life cycle of carry. The first step is to raise capital against which we have the opportunity to earn carried interest. This is a signal of future earnings potential. The more capital we raise, the more carry we have the potential to raise in the future. The next step is to take that capital and deploy it for value. We then drive value creation. We implement our operating and business improvement plans, roll-up strategies and create value in our investments. Then when we've executed our growth plans, value creation plans and the markets are constructive, we look to monetize investments. Once we've returned to capital, earned a preferred return, then we realized carried interest into income. So if I take each of those in turn, first, the earnings potential coming from carry. Well, we've doubled our carry eligible capital over the last 5 years. Today, it sits at $273 billion, so we continue to scale the earnings potential of carried interest. Second is deployment. And again, we've doubled our capital deployment over the last 5 years. Last 12 months, we deployed $160 billion of capital into new investments. Then let's think about how do we create value once that capital is invested. A good measure of this is the carry that we're generating in the background. That reflects the value that's being created in the capital that's at work. We've had $7 billion of generated unrealized carried interest today. That means in those investments, the value has been created. It's now just awaiting realization, which means as we monetize assets, that carry will be coming into income. And as you've heard today, and you heard on the panel, and you've heard it bigly monetization activity is strong and it's picking up. It's 3x what it was 5 years ago. There's $90 billion of monetizations over the last 12 months. And the pipeline continues to grow. And it's this pipeline that gives us the conviction that we will be seeing that inflection point in carried interest. $5 billion of net carried interest expected to be realized into income over the next three years. 60% of that comes from funds where 100% of the invested capital has already been returned to clients. That gives us that strong visibility into the recognition of carried interest. And so my key point on carry to you is the foundations are in place as we now enter a meaningful period of realizations and monetization carry will be at that inflection point, and we should expect to see a significant pickup into income over the next 3, 5 and 10 years. And the carried interest potential, which talks to how we think about valuing carried interest. If we run forward the plan that BAM outlaid earlier, carry eligible capital scales to $600 billion 5 years now, a 17% annualized growth rate. It will triple the net generated carry that we expect BN to be benefiting from an annual basis. You can see the scaling potential and value of carried interest to us. And we value that the same way we've always valued it, a 10x multiple on the annualized target number, plus that $7 billion of carry that's been realized and now is just waiting to be recognized gives you a total value of $34 billion. So when we add carry to the earnings that we're projecting from our core businesses, it's a 20% growth rate from those two sources. And it will create significant excess cash flow for reinvestment back into the business or to be returned to shareholders. If we are successful in executing the plan, we will generate $54 billion of free cash flow over the next 5 years. And here, you can see the different sources contributing to that $54 billion. At the risk of stating the obvious here, the value that we can create with that cash depends entirely on what we do with it. Now our approach to capital allocation, as we've talked about in the past, is centralized. It's a disciplined institutionalized approach to how we think about reinvesting our capital. We distribute all of our cash flow up from our companies to the corporation to centralize reinvestment decisions where we have a unique lens on the investment opportunities at any point in time across the entire organization. Once we identify the highest and best use of the capital, we then allocate it and reinvest it back into the business. The checklist, the focus areas for that capital is to support the growth and invest alongside our existing businesses. It's to invest in new businesses that offer attractive returns and afford us the ability to build and learn, build knowledge that will benefit the entire franchise is to pursue strategic transactions. We always focus on retaining ample liquidity to defend against downside risk and to afford financial flexibility to the entire organization. And after that, there will be return of capital to shareholders. Now if we look at the potential uses of the cash over the plan period with the $54 billion, we net off against that dividend that we expect to pay over the plan period. And then we have the reinvestment that is built into the plant. Importantly, this is not reinvestment that is committed to today. That will be entirely subject to us being able to earn and achieve our desired returns for that capital and assumed in the plan that we can, and there's nothing to suggest we won't be able to that we have $26 billion of excess cash flow available for reinvestment. Now absent attractive reinvestment and the bar is high, the entirety of that capital will be available to be returned to shareholders. Now one example of our capital allocation that we've profiled recently that we thought would be worth touching on is investing in new businesses, shaping the real economy. We've made some targeted allocations of capital over the last few years to new businesses, again, that we think are for strategic benefit to us, and where we think we can assist them to build scale. We've put some of them up on the page here. It is not significant dollars in the context of BN's balance sheet, about $2.8 billion today. Now the way we think about these investments is we have large relationships and partnerships around the world. And we're always talking our potential to partner and invest with -- through our relationships. And I'm going to focus specifically on technology companies, as I showed on the page before. If you think about our relationship with technology companies today, we are bringing capital. We're bringing operating and execution capabilities and energy to them today. And through every one of these avenues, we are developing deeper and deeper relationships. And that is affording us the opportunity to look at investments at the intersection of technology and real assets. And I think about these in a couple of ways. First, is the opportunity to earn attractive returns on our capital. But two, it brings strategic benefits to our firm. First, it makes us better operators. I think Anuj touched on it in his panel, but being at the forefront of the understanding of how technology can be applied to our businesses and to our operations to ensure that we can maximize returns and operational efficiency is a huge advantage. And two, it makes us better investors. So we think about these as having many benefits to the organization. It's not significant amounts of capital, but they are proving to be more and more strategic. If we look at SpaceX, it's just one example of those investments, we invested $325 million. It's about $1.5 billion of total value at $1 billion of value created for the organization nearly 5x multiple on our capital and a 55% IRR. Again, these are attractive investments, they in no way cannibalize in a material way, the other uses of capital that I've talked about, but they are attractive, and they're in front of us today. So bringing it all together, we are set up to deliver a 17% growth in our DE annually, our DE before realizations and carried interest -- sorry, DE, before carry and reinvestment over the next 5 years. That's a double of our core earnings again over the next 5 years. When you factor in the benefits of carried interest and capital allocation, it takes it to a 24% compound annual return over the plan period. And if we're successful in executing the plan, we should be able to grow plan value in excess of our long-term targets, growing at 16% annualized to $140 a share at the end of the plan period. Now before I go to the key takeaways and hand over, I'll just touch briefly on new BN. New BN has restated is a simpler structure that expands the set of growth opportunities available to us. The pairing of our permanent capital with our insurance float, we believe, gives us the capacity to sustain the returns on equity that we've achieved in the past, not just for the next 2, 3, 4, 5 years, but for the next 20, 30, 40, 50 years. It is very powerful structure. It gives us flexible capital to pursue growth, to participate in the generational investment opportunities that we see in front of us and the ability to preserve greater balance sheet flexibility. And ultimately, as Bruce touched on, we believe, over time, it could open up a path to broader index inclusion. Now in connection with the transaction, as we've said, we will be transitioning our financial reporting to U.S. GAAP, starting in Q1 of 2027. We believe that moving to U.S. GAAP will simplify our financial reporting, effectively our financial reporting will be more reflective of our underlying business, and it will enhance comparability with U.S. peers. We will provide a lot more detail on how to think about the transition and the key changes, but two key ones that we just wanted to touch on. We made significant investments directly or through the list affiliates into our private funds. Under U.S. GAAP, we will be able to present this at NAV, again, more accurately reflecting how we invest and earn earnings and cash flow from these investments rather than having to consolidate them line by line. Unrealized carried interest that today does not appear on our financial statements is recognized under U.S. GAAP and will start to be included in our audited financial statements. Two key advantages, we think, in helping the comparability and the understanding of our financial statements moving forward, and we'll provide more details. So key takeaways. Our business is larger more diversified and more cash generative than it was 5 years ago. Our core businesses are positioned to deliver very strong growth in earnings. As we've said, we have the platforms, we have the operational capability, we have the depth, now it's about execution. Carried interest is becoming a larger and more recurring source of earnings and cash flow, and we expect it to scale significantly over the plan period. That will afford us significant free cash flow with substantial capital to substantial capacity to invest that back into the business. And our global scale gives us access to a vast range of investment opportunities. When we package that all together with the power of new BN, we believe it will expand our capacity to grow beyond the plan period and deliver 15% plus annualized returns to our shareholders over the long term. Thank you. That concludes my comments, and we'll now have the real estate panel.

Please welcome our real estate panel moderated by Brian Kingston with panelists Ben Brown and Kevin McCrain.

Good afternoon, everyone. I think you -- everyone would know, Kevin and Ben, but just in case you don't. Ben is the Co-President of our real estate business, and Kevin runs our retail shopping business. And we thought for a discussion today about real estate rather than then walking through a number of slides in the presentation, we try to set it up as a bit more of a conversation, but this is a Brookfield event, so there will be slides. So I thought I would maybe just start out before we get to the guys and their views on the markets, just a bit of a refresher on the real estate business. And this -- most of you will remember, our real estate business really is in two pools of capital. Lo talked a little bit earlier about our various real estate fund strategies where we invest alongside our institutional partners. That's a broad-based multiple asset class business. In addition to that, we own a number of assets directly on the balance sheet. Both of these businesses are important. But for the conversation this afternoon, we're going to focus on the balance sheet investments because Lo covered it off earlier. It's about $38 billion of equity of Brookfield's equity that is tied out in [ Nick's ] plan value that is invested in real estate. 2/3 of it is what we describe as our core our super core portfolio. These are the best of the best assets, and we're going to spend a little time talking about those. But in addition to that, it's about $9 billion of core plus, some value added about a $3 billion residential land business. The Supercore business is roughly split 50-50 between office and retail. And as I say, this is sort of the core of the business. It's about 46% leverage. So very low levered business. And importantly, it's concentrated in a relatively small number of assets. So our super core office portfolio is really just 10 complexes in major cities like New York, London, Toronto, Dubai and Berlin. These assets are 95% occupied, very long-term lease profile. Similarly, we own 100 shopping centers in the business. Only 18 of them are what we define as Supercore. And this is where the bulk of our capital is invested. And just like the office business, these are fortress-like irreplaceable assets with very high productivity retail tenants in them and conservative leverage on them. The balance of that super core portfolio is made up of some residential and urban retail that really complements the large complexes and shopping centers in sort of a mixed-use environment. So really, I think our strategy with these has been pretty straightforward, which is to work the assets hard and continue to drive value out of them. Our -- the last 5 years, I suppose, have been a little eventful for real estate. We've certainly seen a lot of disruption from higher interest rates from from disrupted capital markets from disrupted leasing markets, et cetera. But we're now in a place where Nick touched on this a little bit earlier, fundamentals are very strong. And that's really as a result of stabilizing stabilizing interest rates to some extent, certainly stabilizing tenancy changes, and we're really in a position now where the portfolio is set up.

So Ben, maybe why don't we start there? And before we get into office or retail specifically, let me just start out more broadly on real estate. Where are we in the cycle right now? And what are you seeing?

Yes. So I'd say across global real estate markets, like we've entered a new cycle real estate markets are in recovery now. And it starts with how you framed it up, which is the operating fundamentals. I think we've seen across our business, and we've been pretty consistent. And I think if you say something long enough, you are proven right at some point. But the fundamentals across pretty much every sector in our business for the past handful of years, even through turbulent times and some volatility in markets, have been really good and really strong. The debt capital markets have recognized that, and they've been really supportive. They've been wide open to finance real estate assets. And now I'd say much more broadly and deeply across sectors and geographies. And when the financing markets start to open up, that really facilitates a lot more transaction volume. And that's really what we've seen over the last 12 to 18 months, this transaction volume has picked up. And all of those things are contributing to a much healthier framework, a much more active framework, but frankly, improving markets. And that's really what is going to drive the performance that I think we'll see out of markets broadly, but more specifically out of our real estate business over the next couple of years.

Yes. And so that's sort of true. But obviously, office has had plenty of headlines over the last 5 years. So maybe let's turn off this directly. What are you seeing in that market now? And we talk a lot about the importance of quality. But how is that actually sort of flowing through?

Yes. So this is very specific -- specifically true office. It's true to retail. But frankly, it's true to most real estate sectors today. The most important thing I think, to realize on real estate sectors, and Lo mentioned this in one of the earlier panels is demand has been robust. Supply is really constrained. And supply is really constrained across the board. We want to talk about office specifically. That's probably where it's most acute. We've seen office construction really fall off of a cliff. And future supply is really nonexistent. And when you think about all the contributing factors of both the economics around new office development, the inflation and cost, the cost of labor. And now obviously, with financing costs increasing more and more, the likelihood that you'll see new supply come on even as the occupier fundamentals are strong, rents continue to grow. I still think it's multiyears off of seeing any real meaningful amount of supply come to the market. So that does mean, and Nick said it a couple of times, that means we start to have pricing power again. And I think you're starting to see that show up in markets. For sure, we've seen it show up in occupancy and net absorption we've had going on 9 quarters now, at least in the U.S., of positive net absorption. That's a great signal, but what we're really starting to see it is the growth in the rents where that demand is obviously outpacing no new supply, but in many places, supply is actually coming down because we're actually taking existing static office supply out of the market, and that is starting to be a flywheel of growth.

But what -- like how does that translate specifically into [ Alacarte ] portfolio?

Yes. So as you said, our strategy for decades now has had us focus on the best global gateway markets and the best assets in those respective markets. And so as we've seen performance in operating fundamentals, that means we have been able to ramp occupancy. So we're now any stabilized occupancy really across our -- the entirety of our office portfolio. And then when you look across the globe, what we're really seeing is not only is their performance in rent growth, but we're actually starting to see that flow through into our leasing activity and our future revenues and earnings, where the existing embedded mark-to-market is pretty meaningful. We show it on the slide here where you see averages. But I would tell you in many cases, while those mark-to-markets look pretty healthy and we'd be really happy with those, many individual deals are multiples of that. So the last -- to give you an example, the last three deals that we signed at our Manhattan West project would have been 100% to 120% mark-to-market over those initial leases that were... .

And those are like 10-year-old leases.

Yes, 10 years old. I would tell you probably 75% of that rental growth has happened in the last 5 years. I think the next 5 years, you will still continue to see a lot of that performance. We're seeing it in London. We see it in Toronto. And that has everything to do with the demand still focusing on a finite amount of the supply in the market, which is the higher quality buildings that are amenitized, that have institutional landlords that have been investing in those assets, and that's really what makes up the bulk of our portfolio. So I think the backdrop of an improving market is helpful. I think when you own the right assets, you get disproportionately rewarded.

And like Kevin, you were in the papers for a while, then Ben was in the papers. And now you're back in the papers, but for a good reason, like there was an article this week Wall Street Journal on how retail has been performing. But how -- like contrast that with what we're talking about in an office here, what's happening with the higher-quality retail centers.

Well, it's a very similar story, right? It's about consolidation. It's about limited supply, right? It's about the customer and tenants all wanting to go to the same place. But if you really look at the twofold. There is no new supply coming online, but that's a broad metric that you see on all types of retail. The centers that we own, it is virtually impossible to recreate a center mall, a big shopping center, where 20 million people -- 30 million people are going to walk through that singular center every day. and the tenants want that kind of concentration that scale because they feed off of each other. They want that environment. The flip side is the customer. The customer continues to shop. These aren't malls of the past where it's here's 30, 40 apparel places. These are shopping, dining, entertainment hubs that people congregate at. Customers want to go, people want to go and and the retail sales continue to perform, and that compounds to us, and we're able to continue to grow NOI. So it's really the pricing power that we have through the customer and tenant demand with an inability for new supply to come online.

But would like give us an example in the portfolio of where you're seeing that, like how does that translate when you look at our portfolio?

I've got 1 million examples. Look, on the stats here, we are virtually fully occupied in Supercore and Core Plus, and we create vacancy in these assets to upscale our tenants, right? And that leads to significant leasing and positive re-leasing spreads. But let's talk specifically, which is where I think you want me to go. So if any of you guys have teenage daughters or teenage girls in your life that shop, they likely shop at a brand called Edikted. Edikted is a digitally native brand that's rolling out a store strategy. We see this everywhere. Whenever we open an addicted store, 3,000, 4,000, 5,000 foot store. We have to -- our operating team has to set up queues because it's a 2-hour wait every weekend because the women and girls are lining up to shop there. But it's not just Edikted. The demand from the tenancy, we've got Uniqlo out of Japan doing massive store expansion, Korean beauty brands doing massive store expansion. Aritzia, who's probably the most prominent retail brand today, maybe the most powerful retail brand today, expanding both in place and growing in store size as well as growing stores. This demand creates pricing power for us and ability to drive rents and continue to drive leasing spreads. So we stand in a great position. We're able to consolidate because there's virtually no competition in our markets, and we're well positioned for growth.

Okay. So the markets for both of them are getting better. Tenant demand is there. So it's pretty easy. But the boss said we have to work on Saturday mornings. So like talk a little bit about -- we always talk about the importance of operational advantages that we have. Like how do you take some of that and then actually compound on it?

Yes. I think we've heard this example throughout the day because I think it's pretty universe across all of our businesses. But it's -- again, that roll your sleeves up approach of active asset management. We are not passive owners of real estate. It's the fact that we run a global business where we have tenant relationships that we are that go to landlord around the world, whether it's for large corporations for their office space or it's for multinational retailers that rely on us to provide them the storefronts for those experiences and that growing customer cohort that they have. But then I think it's all the other things that we've really situated our business around for the past two decades to be able to execute on, which is the experience. And I think today in real estate, we see this across our broader real estate business, experience is everything. That's true if you're talking about a housing asset or a hospitality asset in those B2B businesses or B2C businesses, your customer is expecting and wanting and desiring a great experience. And I think we've built an entire organization around delivering just that. And then it's actually being able to execute on that, having the teams in market speaking to a local customer base. And frankly, I think providing a differentiated experience and relationship, which means it's great if we own great buildings people want to be in. It's really great if we're a trusted provider of those services and those experiences to those tenants, and I think that's what's driving and has driven a lot of our outperformance. I want to give you a couple of examples of where we've done that in our office business. Kevin, you can touch on a couple of the retail. But a perfect example. We obviously own 8 million square foot mixed-use complex next door, but we are one of the largest landlords of office space in Lower Manhattan. We own an office building, One Liberty Plaza, which is just on the other side of the World Trade Center. And I would tell you, three years ago, we started to see a real momentum around tenant's interest back in Lower Manhattan, but for a really high-quality mixed-use amenitized destination for their office space. And so we captured a lot of that in Brookfield Place. We're virtually full at Brookfield Place. Where we didn't see it was in assets like One Liberty Plaza, unbelievably well-located assets sits on the cross-section of pretty much every subway line in transit hub that goes through Lower Manhattan. But it was an asset that needed to be repositioned. It needed to be reenergized. It needed to be reimagined. And we embarked on that a couple of years ago. We've now seen the fruits of our labor. We're doing a meaningful amount of leasing there, but we're finally starting to see a real ability to push rents. And it's a great example of if you invest capital and you invest it accretively, but you're providing the sort of environment that tenants want, you just -- you'll get paid for it today. And I think that's part of the calculus around how you have to think about investing in an office, take Canary Wharf, for example. What we've done there is probably a little bit more around place making, not a singular asset where we really need to reimagine that asset for a specific tenant, but a place that has a living, it has retail, it has office. And we needed to bring all of those things together and making it the best example of itself, which really has been what we've been doing for the last decade there, it's finally come to maturity. And this has been, I don't know, probably the best leasing year on record for Canary, for us. And we've seen diversity of tenants. We've seen increase in rents, but it's a flywheel where the retail benefits the office, the office benefits the housing, and we're seeing performance across all of those things. But that takes vision, it takes capital. It takes time. It takes hard work, but I think that's exactly what we set our business up to be able to execute on.

So retail on the asset management and leasing side is very similar. It it does start with the customer and knowing what that customer in any geography or area wants and then truly understanding your tenant. The tenants expect us to understand who they think their customers and where they want to go so that when we present them opportunities, they can move quickly on it. One anecdote and then I'll get into a couple of these examples. I went down to Little Rock a few months ago to see a tenant, and we have an asset called Pinnacle Hills in Bentonville, Rogers, Arkansas, about 3- or 4-hour drive north of there. That's where Walmart's executives are hunt. It's actually a very high net worth demographic market, high household incomes. The asset is fantastic. So drove up with one of our senior leasing guys toward the asset, went through the plan and I said to our team, if you could have one tenant because it's a virtually full asset. You have one tenant come here, who would it be? And they said, "Everybody wants Cheesecake Factory." I said, "Great. We'll call it Cheesecake Factory." It's a great tenant. It does really well. I went out to dinner that night with 1 of our -- with our senior leasing guy. I'm standing in line, waiting for dinner, and I'm talking to people in line, getting to know who the people are and told them we own Pinnacle Hills, and we're asked them if you got to have 1 tenant a Pinnacle Hills, who would it be? Cheesecake Factory. But that connectivity to what your customer wants, allows us to pick up the phone and call a Cheesecake Factory, who we have 50 or 60 stores with and say to them, you need to get here because you're going to do really, really well. And that anecdotal is how our operating team runs and thinks about our assets. and how our local leasing rep who is grinding every day on the ground in Northwest Arkansas is calling our Head of F&B to say, let's get those guys down here. Two more practical real-world examples of how we reinvest and reposition our assets are Plaza Frontec and Stonebriar. So plasma Frontec is probably the best retail asset in St. Louis, more boutique, luxury driven, had 2 department stores, Sakon and Neimans, we got one of the Saks boxes back out of the bankruptcy. And 3, 4, 5 years ago, people probably thought that was a challenge. Empty boxes are opportunities. The tenant demand is there. This created a massive opportunity for us to get rid of a tenant who is probably paying a few hundred thousand dollars a year for 50 or 60 years. And allow us to invest into this asset, take advantage of the massive tenant demand that we have there, and we're projecting a 15% unlevered yield on cost on that repositioning and having it fully occupied before we've even committed to cost. The other is Stone brier Center, which is in North Dallas, Frisco Plano. It's a fortress asset for us. We had an empty Sears box at the asset and DICK'S Sporting Goods, DICK is rolling out their house of sport concept. They're moving from 80,000 foot stores to these 150,000-foot experiences where they have tracks and turf fields and climbing walls, and they wanted to move. So we secured a move for them to move to the empty Sears box. And now we had the MDE DICK's Box on the other side of the asset. And our team said, we really have a dearth of quality restaurants, let's create a whole note here. We've created a complete restaurant cluster on the other side of the asset. We've pre-leased the second floor only entrance from the mall to an international restaurant chain that will do $30 million to $35 million a year in sales. That anchor is letting us re-lease the balance of the space. It's projected to do 9% unlevered yield on cost. But what that doesn't include is the effect that, that $30 million restaurant is going to have on the second floor of that wing and that traffic. We're going to be able to continue to push rents and re-curate that space over that time, and it's going to be significantly accretive. We want to be intellectually honest when we do our yield on cost. So we just focused on that. But the benefit to the entire center when you do things like that and you move tenants around is huge. So those are a few examples of how...

We just need more Cheesecake Factory.

Cheesecake Factory is the answer here. So look, all of that -- everything so far, we've talked about sounds really good. All my way up here. Nick wanted me to ask you, when does that actually start to translate into earnings?

Yes. Yes. It's coming. Look, leasing today is tomorrow's earnings. And so specifically, when you think about the office side and sort of the customer acquisition life cycle. These are large tend to be, especially in our business, large companies moving large premises and they make those decisions with plenty of advanced notice and out in time, which which is a really good thing, and Nick should be really happy because we've got really predictable earnings, and we have a great visibility into earnings, but it does take some time to sort of yield into earnings. But I think there's a couple of other levers. Kevin, you could probably touch on in terms of not just when we sign leases, but where we also find value.

Yes, sort of two things. One, retail leases are generally a little bit faster because we have simple build-out to white box space. It's usually about 6 months between when a tenant leaves that you've sort of kicked out because you want to improve it to when the next one opens, it's really all about permits. But how we bridge this 4% CAGR on NOI growth particularly in the retail business is our leases have embedded growth rates in them on average about 3%. So that's sort of one in just regular embedded growth. When our retailers outperform expected sales, we get a percentage of the overage in -- of those sales. It's negotiated in every lease, but there's always a breakpoint where we get top-ups there. So on the expected sales, we get extra rent there. Then there's general leasing and repositioning. As I said, we're we're constantly moving tenants in and out in order to increase our overall sales, increase our rents, increase our overages over time. And then look, there's operational placemaking is it right that we should be doing events. Is it right that we should be bringing in entertainment concepts or more restaurants and ultimately, that will drive sales up over time and our rents, and that will be accretive to our 4% compounded annual growth.

Okay. So in addition to running the assets hard. One of the other key parts of our strategy is recycling capital. And once you get these assets leased up and mature selling out of them. So let's maybe talk about transaction markets for a second. What are you seeing there in terms of volumes? What are buyers looking for? What's trading?

Yes. Look, I think across the board, as we showed earlier, transaction volumes up, both across office and retail, we're seeing a renewed focus from the investor environment of returning to think about these assets that have proven to have very resilient, robust and pretty attractive growth profile. So I'd say liquidity is returning. The debt capital markets have probably returned faster and more robust, specifically in office, they were -- actually were pretty supportive for quite some time across retail. And my expectation is when we have the benefit of sitting with our clients all around the world. And obviously, in many ways, we're telling them what we think we should be investing in. But we're listening to and we're taking all those inputs. And I would tell you that the anecdotal conversations that we're having. The renewed interest in office specifically is much greater. And I would say, the lack of office investment desire had less to do with it, looking like an attractive asset class for new capital deployment and frankly, a lot of legacy challenges, many of the investor environment had with existing assets that they hold that they haven't been able to get liquidity on. I would tell you bid pools are up. There's a much broader depth of liquidity for office, but it's nuanced. It's not monolithic. People have recognized like the assets that perform really well with the assets they want to buy. And so I'd say there is a lot of liquidity and appetite for really good assets with really good credits, all the obvious stuff that you would assume, financing markets are there to support these transactions. But I think as the broader recovery sets in off of a larger swath of the office market, you'll start to see those buyer pools broaden out their appetite, both by market and quality. And I think you'll just see a much bigger return of investment dollars going back into the space.

Yes. On the retail side, there's real depth in the market on the transaction side. I think the investor market was hesitant for a while, but the belief and the durability of the cash flows, the stickiness of the tenant and the stickiness of the customer are really being believed in now. A few years ago, there was probably a bit of an implied cap on transactions at about $100 million, setting apart some one-off transactions that happened. Now there isn't really a cap. It's really just about price. There are a number of bidders that are in there, looking for these types of assets because there's huge desirability and huge value in what is the growth profile, right? And it is underpinned by a much better CMBS market. We're up only 2x and has been noted. It's been supportive, the debt markets of retail assets. But what we've seen over the last year is credit spreads really tightening for retail assets, specifically the best ones. We just refied one of our super core malls a couple of months ago, and our credit spread was 109 basis points. That's approaching historically tight credit spreads, base rates or base rates, and there isn't much you can do about that. But that shows you where the CMBS and SASB bond buyers are in where they think the creditworthiness of the underlying tenants and cash flows are. So we're being really supported by the debt markets, and that's only going to benefit ultimately the acquisition and disposition markets. ;

Yes. Look, I think most people have the impression that the market for malls and office buildings, frankly, has been very quiet. It's actually been pretty active. Do you want to maybe touch on a couple of deals we've done, but we've sold 37 assets throughout the year...

We we've gotten plenty done, I think, in a pretty challenging environment. And our pace over the last 12 months is up 40-ish percent on sort of a run rate in terms of assets sold. But I'd say we're finding the spots in the pockets where there is for an idiosyncratic reason, really aggressive and keen Capital. So 1 Churchill Place is the perfect example of this, an office building leased to Barclays. They were about to embark on a refurbishment of their space. They had a lease with some term left, but not a tremendous amount of term relative to the investment that they were going to make into that asset. And notwithstanding, when their lease was going to be up, they knew that their rent was going to go up pretty tremendously. And so we were able to actually sell that asset on to them at a really great price, a large asset, GBP 750 million is not where I would tell you, traditional liquidity is for office today. But it was a spot where we had the right asset in the right market with the right user or the right buyer. I think we're starting to see that in plenty of markets around the globe that we operate in, where there are reasons people want exposure to certain types of assets or certain quality of assets in certain locations, and they're scarce. But we're starting to see scarcity premium on pricing, it's selective. And I think that's the point I'd make on our pace. We will take advantage of that when it's there. but we won't rush into a market if we think that the market is not properly valuing assets just for the sake of monetize it.

Yes. Look, that's a great example. Like that asset, that GBP 750 million price is $100 million above we're carrying it on the books as well. So I think when you find opportunities like that, you got to...

Yes, you have to be opportunistic about it.

And so look, if the fundamentals are good and the markets are still relatively quiet, where are we putting any money to work in office or retail right now? Like where are you investing these days?

Yes. Look, as you know, and all of you can imagine, our teams are always looking for the right opportunity to invest capital. Capital is not is not a constraint on investing for us. It's finding the right opportunities. And frankly, the opportunities that make sense and that are accretive to what we have. you saw on Nick's slide, we have the optionality when we recycle capital, what we can do with it. So the bar is pretty high because the bar is it, "Hey, Ben, go find the best office deal." The bar is if we have capital at BN, let's figure out the best risk-adjusted return for that. So the aperture is pretty wide, which means when we are looking at potential retail investments or potential office investments. They've got to be highly strategic. They've got to be highly accretive. I think the market is still got enough dislocation in it that we will always find interesting opportunities. Sometimes that's where we can add a tremendous amount of value and those things come to us because of the platform we have, where sometimes it's because of the information asymmetry we have with some of our occupiers where we can go find assets where we know we can add value. There's something that we'll announce shortly in New York, which is highly strategic to what we have exactly that sort of opportunity where the existing incumbents probably felt like it was under managed, one of a partner that could add a lot of value. a partner that could invest alongside with them and be aligned and a partner that could actually bring some tenants and sign demand and reposition it and place make. And that's -- those are the kinds of opportunities that I think we can earn a lot of upside and a lot of alpha on when we find the right one. So I'd say we're selective, we're patient, and we're looking at everything on a relative basis across all the investment opportunities in the business.

And on the retail side, it's similar. We are looking at opportunities to deploy capital into our business for growth and externally. Inside our business, we saw two examples earlier like Plaza Front and Stonebrier. We think we're going to be able to surface a lot more opportunities like that. In the near to medium term, just with where tenant demand is and where customer demand is. But as Ben said, look, we're going to deploy when we do those sorts of redevelopments in our best assets at compelling risk-adjusted returns with with a really clear business plan and strategy over what we want to do. Another avenue where we've been successful very recently this year about deploying capital into our assets, one of our JV partners at one of our core plus assets was looking for liquidity, and we were able to buy their interest out at a compelling cap rate, we had clear line of sight to what our business plan was, real conviction around it. It was the dominant center in its market, and we were able to put capital out at double-digit cash yields and approaching 20% returns. And that's what we're really looking for. When we look to buy assets new assets. It's not a dissimilar approach, right? We're looking at everything that comes out so that we have perfect information, but we want to make sure we're buying the best assets in their markets, in growing demographic areas, high household incomes, but really a clear business plan and strategy where our platform can come in and create value at the right risk-adjusted returns. We don't just want to put capital out there, but we're going to do things that are complementary to our business, where we can leverage our expertise and get outsized returns. Those opportunities are there, but as Ben noted across our business, we're going to be pretty selective about how we deploy capital in those ways.

Okay. So I think we're running towards the end of our time here, but I'll maybe just try and bring it together. But look, I think, obviously, in terms of objectives for the portfolio, a lot of the focus today is on the operational improvements and taking advantage of of this tremendous embedded mark-to-market opportunity as leases are rolling over to really drive that NOI and FFO growth, Nick, the earnings are coming. But also at the same time, being thoughtful about how we're allocating capital, both to the existing assets, the ones that we're choosing to invest in versus the ones that we're choosing to sell versus things we may be acquiring down the road. So I think that has always been the focus. I think that continues to be. I think as we look at how the plan rolls out, and what's built into Nick's numbers, if we're successful in doing all that, renewing those leases and marking them to market, it drives a 4% same-store NOI growth across the business over the next 5 years. That's going to allow us to pay $3 billion of distributions up to be in out of the real estate business, just from regular operating cash flows. And if the transaction markets continue to be supportive, we're able to execute on some of these asset sales and recycling programs is another $10 billion net of new investments. That is potentially available for either redistribution up to BN or investing into new larger opportunities out there. So that really is pretty consistent with how we've run the business for a long period of time. I think, hopefully, the impression or the sense you're all getting from this is the market has turned, fundamentals are good. And we feel pretty confident about this plan. So I think we're having questions at the end. So I will thank, Ben and Kevin, and turn it over to the next speaker.

Great. Please welcome from Brookfield Corporation, Sachin Shah, Chief Executive Officer, Brookfield Wealth Solutions.