Brookfield Corporation Stock

[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.

Okay. We're almost at the end. I know it's been a long day. Thank you, everyone. I hope you explain the business. I hope I leave you with something that you can look forward to that's exciting for the future, which is what we're building here. Sadly, no Cheesecake Factory stories on my part of the presentation. But what I want to lay out is what we've achieved and where this business is going, and there's been a lot of questions about it. So hopefully, I can answer most of them through this presentation.

I'll start with where we are today. We have built Brookfield Wealth Solutions into a global leader in retirement. And that's a meaningful step change from where we started. And I'm going to explain a little bit about how we got here. The easy story is that we bought a bunch of companies, stitched them together and built a large platform. Maybe the more important piece of it is we acquired companies for value that were highly scalable in the markets we want to be with a demographic backdrop that is super important that we can service. And each of the companies that we acquired has the operational foundation, the risk management culture, the technological backbone the regulatory moat and the distribution capabilities that position us to scale for many years to come. And so it leaves us in this tremendous position where we are not reliant on M&A for further growth in this business. We have geographic diversification in all the Western markets. We're going to grow in the U.K. We have ambitions to grow meaningfully in Asia. We're in Japan, but Hong Kong, Singapore are important markets for us, and I can explain why. And all of this is facilitated because we invest in all of the strengths of Brookfield. I won't belabor each of these. You've heard every one of the groups come up and talk about it. But the skill sets we have at Brookfield are uniquely complementary to the business that we have. And so what that's meant is 5 years of work, building out the business, acquiring companies repositioning, growing and what do we have to show for it today. First, every one of our insurance companies is rated A by S&P by A.M. Best, by a number of the rating agencies.

Number two, we scaled up to almost $200 billion of insurance assets. Size is important, but it's not the most important thing. We generate $2 billion of distributable earnings annually in this business. We generate over $3.5 billion of capital in the business per year. We have stayed true to our compounding objectives that we set out 5 years ago. Year-over-year, we've been able to deliver mid-teens compounded returns on all of our equity capital. And we've done it by using our own capital at Brookfield rather than relying on clients or third-party investors. And it's meant that we could be highly flexible. We could be nimble, we can move quickly. And most importantly, that were aligned with policyholders, which in today's environment is very, very important.

You've heard all the themes today. They're all exciting. AI is super exciting. Compute is going to solve many problems that have been a mystery to people for many decades. Health innovation is happening at a rapid pace. There's cancer treatments, there's longevity treatments, GLP-1s, all the things you read about. Private credit has been -- to a degree, highly innovative. It's a new source of capital that is flown into the markets and provided capital for all the growth that you're seeing. But the one piece of -- or the one theme that maybe doesn't get talked about as much but may have the most profound implications over the next 40 years is longevity and demographics. All of the topics of the day are interesting and exciting, but in the Western world, people are getting older and living longer and the implications of that at the exact same time as global migration patterns are changing and people are putting up walls and barriers will have dramatic implications to the way we service people in older age.

Let's start with the Western world, the U.S., Europe, Japan, parts of Asia. Today, 1 in 6 Americans is 65 and older, that's going to go to 1 in 4 in 25 years. If you go to Europe, in 25 years at the same time, you're going to have a population in Europe where everybody who's over 20 years old, so like, let's say, everybody over 20 is working age. 2/3 of that population will be over 65. 1/3 will be under 65. That has a dramatic implication on productivity, on fiscal responsibility, on social safety nets, and there's no government program that can solve for that. And what we're building here today directly addresses that problem. And therefore, retirement [ differences ] are large. They're going to keep growing and the need for wealth products is growing every day.

Maybe the most amazing thing and why we've been successful is that what Brookfield does has been solving for that problem for 30 years. And the business we have built is uniquely at the intersection of that phenomenon. We invest in the global economy in backbone assets that allow people to increase their productivity. And when you have less and less in the labor force, there's going to be more pressure on technology improving productivity, and then we -- those returns accrue back to our investors who are solving for a problem far down the road. Think of a pension plan who would have been a traditional investor in Brookfield Asset Management. No different. That problem exists for individuals. And so with that backdrop with our scaled platform, without the reliance on M&A, we have a growth plan that we think is highly credible. It's ambitious, but it will change the face of Brookfield.

First, let's stick to what's not going to change our approach to investing. We maintain a very flexible approach on the insurance balance sheet. We've talked about it last year, it's called the barbell approach. Half of our assets are liquid assets, bonds, equities, cash, on an even day, we're sitting on $10 billion to $15 billion of treasuries and cash in the business. We operate with very strong ratings. This is a trust business, in a trust business, you need a fortress-like balance sheet. And A ratings helps validate that and a lot of liquidity. And then we plug in the other half of the balance sheet into Brookfield Asset Management. And all of the expertise that you've heard about today really help drive, maybe the most important differentiator, excess returns. We can generate excess returns by virtue of having expertise in private real assets relative to just investing in the public markets and being a price taker on value. And if you look at an illustrative portfolio, and this moves around, but in general, this is our portfolio. You can see it's well diversified between the things we do, real estate, infrastructure, energy, industrials, corporates and it cuts across the capital stack from senior lending all the way down to equity. And that half of the pie generates very, very meaningful excess returns for us, underpinned by a strong capital base and allows us to build this business out very thoughtfully. Maybe more importantly, and the thing that never gets seen is in the middle of consistent results as our results are stable year-over-year and growing. That strategy insulates us from volatility, inflation and rates. You hear it all the time from my colleagues who talk about our assets -- real assets have inflation pass-throughs, appreciate and value over time. And that ability to be insulated from the volatility of the short-term market allows us to grow with confidence and to deliver consistent results.

On top of that, we obviously have to be thoughtful. We can't just plug and play and drive on. And by being thoughtful, it means understanding where you are in the economic cycle. Early part of the decade, private credit spreads were very wide. Access to capital was scarce. Of course, we were going to inflect more into private credit, pick up all of that value. As we saw spreads come in, we moved more into our traditional equity strategies because we saw that real estate and infrastructure and other pockets of what we do well presented better relative value. Today, we see elevated rates. We kept our asset portfolio pretty short for this entire period, and we kept our liability profile very long. Our average cost of funds and the liabilities we have on $200 billion of liabilities is 4%.

So in effect, we have a 4% pool of liabilities that we need to out earn, and we have kept our asset position short, why? Because we wanted to be ready if the back end of the curve steepened, and we're seeing that today, and we're starting to term out. I think this week, the tenure hit 5%. So think about we can buy a 10-year treasury at 5%. We wrote a pension at [ 375 ] 3 years ago for 15 years, call it. Zero capital charge. It's infinite leverage and you can earn 125 basis points. So that's an example of the types of things we can do in this business.

And where you do see it, you don't see all the day-to-day decisions, you don't see us allocating to our different strategies. But where you see it in a very simplified way is credit spreads tightened 300 basis points over the last several years. Everyone's seen it, the drive to credit. At the same time, annuity rates went up in excess of 200 basis points. So what happened is for most of our peers, margins compressed and margins we call spreads here. Our spreads have stayed largely the same. That is one data point which demonstrates the power of the Brookfield Asset Management platform to source Grace Investments, our ability to then pivot as the markets evolve and the ability to generate consistent results over a long period of time. And this investment strength allows us to confidently scale this business. In the early days, we were learning, and we were figuring it out. And once we saw the power of our platform in practice and our ability to actually allocate these inflows that were coming in, it gave us that conviction. I think Connor touched on it earlier. We start small, we start small, and then we have conviction and scale. And that's effectively what we did here.

And what that means is we are now in stage 2 of this business, organic growth. The M&A is behind us. The seeds have been planted. We have all the platforms we want to have. Of course, things come up from time to time. And if we see a value opportunity, we'll execute. But we are now in a position where we can scale every one of our platforms around the world, based on what we have in place, and this is an example, but in the U.S. today, there's $350 billion of fixed annuities that get sold annually. 2/3 of that gets sold through banks and broker-dealers. We bring in $25 billion of inflow a year. Only 1/3 of our product gets sold through banks or broker-dealers. And in the U.S., it's only 20%. So you can see how much opportunity we have just to grab market share as we start to look like everybody else in terms of the wealth channels. And it's early days, we're getting on to -- we're on 5 bank channels today. We expect to be on a dozen or so in the next couple of years. And as we increase our penetration with the banks and because of our franchise, we have excellent relationships with the large financial wealth houses, you will see natural growth in our distribution and our sales.

We acquired Just in the U.K. and a number of people today at lunch were asking about Just. Just to level set, $45 billion of assets a platform that specialized in small pensions in the U.K. They have a technology backbone that allows them to aggregate small pensions much more efficiently than most. And they also have a retail annuity business. And again, with the same demographic dynamics, we think both of those will be very important. And GBP 40 billion to GBP 60 billion of pension schemes sterling -- GBP 40 million, GBP 60 billion sterling of pension schemes in the U.K. come to market every year. So it's enormous opportunity. That's just one of our markets that we think we can grow. And what that means is in this next stage as we look at the next 5 years, without heroic assumptions, our annuity business, which is largely in the U.S. can grow from $17 billion a year to $25 million. Our pensions in the U.K., the U.S. and the United States can double. Our funding agreements, our property casualty business, modest increases in that, and you can start to see a path where we're generating between $40 billion and $50 billion a year of inflows. And again, these are modest increases to everything that we've built out. None of it relies on M&A, and you can see a dramatic increase in the size of this business. What would it do if we execute on this path, our assets will grow to almost $400 billion in the next 5 years, net of outflows.

Our assets will grow to almost $400 billion net of outflows in the current environment we're in with the business we have. And our distributable earnings will grow to almost $5 billion a year from over $2 billion today. And if we get there, the value of this business, just this business is almost $40 a share. Brookfield Corporation today trades at almost $40 a share. Forget what its value is much higher. But this business will be worth $40 a share. So we have planted the seeds. We have the platforms in place. We have all the distribution capabilities. We have an incredible demographic backdrop. We have the investment capabilities through Brookfield Asset Management. And in this environment, in the next 5 years, we can recreate the value that's in the share price of Brookfield today.

So where does that leave us? As I said, there's an enormous retirement deficit. This is not going away. This is not a short-term phenomenon. This is a 50-year phenomenon that will have profound implications. Our business can serve in all these markets, BAM is truly a unique differentiator, given its diversity and what it does. We are focused on compounding our capital.

And in conclusion, I'll leave you with these three things. When we were up here 5 years ago and we said we would do this, we did what we said we would do. Number two, we have a tremendous platform with very meaningful upside from here. Combining back into Brookfield, the integration into Brookfield Asset Management, the synergies that this business has with the entire ecosystem across Brookfield, there's nothing like it. It's entirely unique, and it will deliver tremendous value to our shareholders. I'll leave it at that.

Please welcome back, James Flatt.

Hello, hello. Okay, Sachin. I'm keeping my shares. He's given us back the share price in 5 years. So I'm excited about that. Are there any -- we're after a long day, so we don't have to have any questions, but because there's drinks outside, but I'll take any that are here.

Do we have mics?

Right here. I saw first in front of...

So Bart Dziarski from RBC Capital Markets. You highlighted the 40% margin of safety in today's share price. And I wanted to ask, how are you thinking about ramping up buybacks above the $1 billion historically? And then maybe more broadly, what levers are you looking at with the management team to try and help close that valuation gap?

So first, we have no control over the markets. And we have so many amazing things to invest into the company. And yes, we should buy more stock back and we will buy more stock back as prices go lower. It's an amazing investment, and that offers a phenomenal investment portfolio investment with very, very little risk. But there's two things that are super, super important in every business, but in particular, in this business. We need to have excess fortress capital at all times because the great things that come about in this business are because we have an enormous amount of capital flexibility to achieve things that most other people can't, especially when markets are tougher. There will be days when it gets tough and having excess capital is super, super important at those times. The easiest thing always, if I look back, like if you want to achieve, tomorrow morning, we could give the 67, probably at 75 or 80 or 90 back to everyone, meaning split the business up and distribute it all the stuff. Like we have $65 billion worth of BAM shares we can distribute in the shareholders tax-free tomorrow morning, should we want to do it? Like all that can come back to you. It can all come back so the discount is gone tomorrow morning. In the longer term, and it's been true for 30 years, and I didn't know this for the first 10, I didn't get it, but for the last 20 years, I get it. Having it together is unbelievably powerful. Like what Sachin was just talking about, it's unbelievably powerful. So that doesn't exactly answer your question, but what I would say is, we need to have -- we always try to have a balance between taking the easy money, which is just buying stock back, take the easy money. So do some of it. And -- but always have capital to be able to do things which are exceptional. And in the insurance business, if we didn't have $20 billion that we invested in the insurance business over the past 5 years. We wouldn't have a business that generates $2 billion going to $5 billion of cash flow. So I'd just say it's a balance. The -- this is -- there is no science in share buybacks. It is an art. And it's a guesstimation as to what you need because you don't actually know how much capital you need. What I can tell you is any capital we give away at some point in time will be required and could do unbelievable things for us. I realize the easy money is buying back 37 today or whatever it trades at. Okay. Hopefully, that partly answered the question.

Alex Blostein from Goldman. This is going to piggyback a little bit on this question and your response with respect to capital. So if we go through the plan, your cash flows are going to accelerate really materially. Like carry is one example. Insurance is self-funded, Real estate is presumably going to start selling more assets. So help us maybe frame what is that buffer that you feel you really want to happen in [indiscernible]. Otherwise, capital just continues to build and investors don't always see it?

So look, I think -- yes. It looks like there's a lot of money piling up in the business plan and there is I don't know how much is enough to have. Like the things that we see today are incredible. The value we -- the deal stuff that comes to us is amazing. The accidents that can occur in the world and those which have capital at times will offer unbelievable opportunities. And it's -- again, it's just an assessment. But as the cash piles up, it's -- at some point in time, like if you would ask me this 15 years ago, I would say, if you had this much cash, we'd be giving it all back to shareholders. But the business changes all the time, and it's really exciting. And you could look at Berkshire Hathaway and say they have too much cash and what they've been able to do with excess cash sitting on the balance sheet. And arithmetically, it doesn't compute. Get it -- we get it. Arithmetically, it does not compute, but the optionality, what's not recognized in that calculation is the optionality of having capital when the world needs it. And it doesn't need it today. There's capital is freely available everywhere, not for everyone, but for those with resources. And therefore, it's just -- again, it's back to -- it's an art as to how much it is in. But look, over time, I suspect 10 years from today, we might be returning more capital to shareholders, which could be in the form of greater dividends could be initial form of share buybacks increasing or it could be in the fact we may swap things we have for shares of the company. That would be, again, an easy one to do for us. So we think of all those things. Thank you. We're doing well right here, right behind you.

Mike Cyprys, Morgan Stanley. Maybe just following up on this substantial free cash flow generation. I think on one of your earlier slides, you mentioned the possibility contemplating the idea of maybe one day the insurance balance sheet getting to $1 trillion, whereas I think your plan is maybe $400 billion, something along those lines. So I guess, what would be the environment that could take the insurance business to that sort of size and scope? How might you see that sort of potentially unfolding? And then just more broadly, with the free cash flow generation of the business. Where might there be scope for adjacency extensions across the business, maybe getting closer to the individual investor, maybe extending your footprint in Asia, where might there be some opportunities?

So we should have had Nick and Sachin up here. I don't know why I'm answering these questions. They should really be answering them. But I would say, starting with the last part. I think there is a fourth leg. Right now, we have three legs. We had two, we added a leg in the last 5 years. There's a fourth leg out there for us. And the definition of lake of another great business that we add into this company. The bar is firstly very high because we are in very high returns. You can buy our stock 37 to buy by 67, that's high bar. The things that Sachin produces opportunities are incredible. The investments are incredible. So it's a high bar. But I think there is a -- our view is there's a fourth business out there and the definition for that business is it has to earn a high return on capital. It has to be distinctly helpful to the other businesses. And when I say that, what insurance did for and hopefully, Sachin's presentation provided that information, but he earns a high return on capital. Part of the reason he earns a high return on capital is because our asset management business is very important to him driving value. And it's a circular that asset management business helps the return on capital. And therefore, he wants to put more capital with them, and it's additive in many, many ways. It adds income to Brookfield Asset Management. It allows him to earn an excellent return on capital. And that's sort of the definition of another business for the future. there is something out there, whether it's in wealth, whether it's in distribution, whether it's in another area of financial float there's something out there I'm quite sure, but we'll be patient. We'll find the right one. It will have to be highly additive. On the first question, just going back, we have a $345 billion balance sheet. We'll keep growing that because we -- the insurance business keeps growing and the capital keeps growing into the business. But the -- when we merge everything together, we have a parent holding company and then an insurance holding company. And over time, we basically have $150 billion of equity in the parent holding company. and we can freely should we require it to strengthen and help ratings for our insurance companies or expand the business, we can push capital down. And we easily can do that, meaning we either sell the assets and turn it into cash and put cash into the companies or some of the assets we have are very impactful and good for the insurance business. So we can just value them and put them into the insurance business. We own why Sachin said, why it's been very important that we own 100% of the equity, a, it's good for the insurance regulators and our policyholders. But two, we have no complex. And we can, therefore, put the capital directly down. We will do that if we want to grow. And that could be in the U.S. if there are opportunities that come about where we could be involved in more insurance. It could be -- but in addition to that, Europe possible Asia, for sure, as we grow the business. I think there were some questions over there.

It's Cherilyn from TD Cowen. You've emphasized the difference between private markets and public markets many times in your letters. I wonder if you could address the current discourse in public markets just around higher interest rates and like maybe a need to slow down AI infrastructure on the U.S. side?

So on interest rates, I would just say our general view is, when rates went up in 2021, 350 basis points. That was a lot very quick, came from zero. It was highly material to what was going on. Businesses were having trouble and that was very significant for the world. Today, this is irrelevant. It's relevant for our business, but it's almost irrelevant to business. It's not like 25 basis points, who cares. 50 basis points that matter. This is a transitory situation that we're in. Oil prices are high because we have a war inflation is higher because of those circumstances and interest rates went up because of it. The war will end, oil prices are going down. Interest rates will then go down. I don't know when that is, but it's coming at some point. And until then, you'll have a little higher interest rates, and it is not really relevant to what we do. It does matter if you buy bonds. Fixed income, it doesn't really matter if you do what we do. The second question was on artificial intelligence. I think what's really important for artificial intelligence or the most important thing to think about for our business is building power and building compute are hard to do, and everyone today says they're going to do it. And we can't -- we individually ourselves, but we, as an industry, can't build enough. We can't even build a fraction of what everyone thinks they need. So the compute of the world for artificial intelligence. So when they say they're going to slow it down, it's slowing down anyway because there is not enough compute to be able to deliver what everyone thinks they need. I don't know if they actually needed all of it, but it's not happening. It never was happening, it can't happen. And I think getting more realistic about that is good. And that just -- that will bring more discipline into the system. That's not to say that enormous amounts of money aren't getting invested. Probably all the amounts that we put on the screen will get invested. It probably will just -- it's going to take more time, and that's probably good for the industry because when you go too fast, you make mistakes. And so I think there's probably a little bit of slowing down would be good than where we've been.

My name is Denny Poland. I'm a shareholder from Pittsburgh. I think it was Page 73 of the presentation showed forecasted 5-year declines in distributable earnings before realizations for both the direct investments line and the operating businesses. Could you please just describe what the drivers are for those forecasts?

Okay. That's really killing me. Nick Goodman, I need you now. Do you actually know Page 73. If you do, you're getting it. You getting it. He's getting a bonus this year if he does.

First time for everything. It's just the direct investments or investments we have into our funds. It's just reflective of the fact that over time, as Wealth Solutions starts to do more investing into the funds, the amount coming off to be in balance sheet will come down. So it's just we're not decreasing. It's just shifting more to wealth in the plan as they take more into these funds. And -- so it's just the earnings and the capital run. Earnings is great. It's just a shift from one balance sheet...

There's less capital...

Less capital.

In that business.

Correct.

To be able to generate earnings.

And in the operating business, as I said, the earnings are growing infrastructure growing renewable, growing real estate growing, but factored into that is that there will be some capital recycling in real estate, so some capital coming out of the business. And that then reduces the return. In our model, we then put the return on that into our capital allocation. Return as opposed to the core businesses just to be conservative. So it's just a reflection of a refocusing on real estate onto our best assets and monetization of sort of value-add opportunistic and that creates a sort of lower earnings profile over time. But it's not a lower earnings on the assets, it's just less capital at work.

And capital allocation can be thought of...

Actually one of the slides, the thing I think was not as clear, as they could have been. We say...

[indiscernible] don't drinks now...

We say capital allocation. What that really means is we generate, like if you have a model, it generates a huge amount of cash. And we don't know where to put it, and it needs -- it will earn a return. It should go -- it should earn a 15% return, maybe not right away, so maybe it's -- it goes like this. That's what's called capital allocation. It will it be invested in something or shares will be purchased back. And that's just a holder for that return on all that cash that's lying there.

If you don't ask a question about Page 72, then I'm good with your question please. There's a mic right there.

I consider it, but...

Nick, where are you going?

My name is Eric. I'm in Austin, Texas. I've been a shareholder for 12 years. And obviously, the capital allocation of the company is wonderful. You talked a lot about how you think the stock is cheap, I would agree. But I guess two things is; one, why advertise that. As a shareholder, I would like you to get the most bang for your buck for buybacks. And if the stock gets cheaper, I don't want to know, I would get excited. But I don't want the world to know get excited about that. And then the second part is why even give a dividend if, let's say, in 10 years from now, the stock is very fairly valued or maybe a little overvalued, and you want to give a special dividend because there's excess capital on the balance sheet. But for now, why not suspend the dividend and then use that money for buybacks, especially at these prices?

Okay. First, thanks for coming. Thanks for being a shareholder for 12 years. Those are two excellent questions. Let me try to answer them. As many of you know, we do lots of special dividends. We've probably done 5, 6, 7 of them over the last 20 years when we spun off the BAM shares, those are all big, big, like span spin-off was, well, it's $20 billion today. It was probably at the 12 or 15 at the time. So we generally do special dividends out to people. We have a small dividend in place. I don't know, I can debate this one because index investors, some index inclusion, it throws you out if you don't have a dividend. And therefore, we have a small, modest dividend because some people like a small dividend, and we get included in indexes because you have a small dividend. It's modest. It's our only justification.

Do you think the value of being included in an index sort of outweighs the...

I don't know. You can -- again, it's an art, not a science, I don't know...

I'd say no...

Which leads me to your first question. Look, thanks, like -- no, thank you, like I get it, which leads me to your first question. We run the business for the owners of the company, like if there's -- I can't be more clear with that. We think of ourselves as co-owners with you, and we happen to run the business. We provide the information we provide to you because we think it's fair that people just understand where we're heading and what the value of the company is. I don't care, like we don't really care what the share price trades at. It's better if we buy back cheaper. It's clear nobody is listening to us or something. I don't know what it is, but it's clear that -- but I do think it's unfair for if we ran a partnership and you were my partner in private King, and I ran it, and you were an investor in it, it would be fair for us to give you the information that we like just look at it and you could think about the business, you can assess it. And it's possible that it's not helpful to some people, but it's -- I think it's held highly relevant, and it's -- I think it's fair. We think it's fair to the investors, to people, especially it's a public company and therefore. And the last thing I'd say is, if you're in a single industry business, somebody can put a multiple on it, but we have many, many businesses, and we're just trying to provide we've always just tried, and we've done it. We've been doing it for 30 years this way. I don't know, maybe we shouldn't, and we should take a poll on that. But I expect if we provided no information, then people would just be asking for the information or misinformation would be out there. So all we -- it's not to -- it's not to get the stock price "up," all its to do is to provide information in a format that people can feel like they're an owner of our business with us.

Any other questions? One right there. You're going to be last one. Because it says zero down there.

I'm Mario [indiscernible]. I'm honored, a lot of pressure. You've mentioned several times the world is constantly changing, but we also heard over and over again like the investment principles and the discipline remain the same at the organization, driving that 15% total return target. With that said, like what would you say worries you the most about Brookfield's ability to continue hitting those growth targets over the next 5 years? And how are you addressing that risk today?

These are all excellent questions. All of them are actually unanswerable. Like they're not -- they're all are not science questions, and that's why I appreciate all of them. I just say there's no certainties in life. The only thing I would say is we've been doing this a long time. The business today is stronger, better has more pricing power in almost every way than it's ever had before. And we are in those returns. We've earned those returns in hindsight without those attributes. Therefore, I think it's easier today to achieve the returns that we think we can get. Again, no guarantees, but there's -- it should be easier today just because of everything we have. We are -- we used to be a banking client before. Today, we're the largest banking client in the world out there. We used to be a counterparty to people. Today, we're one of the most favorite counterparty to corporate clients. We used to be, a investor for sovereign pension funds. And arguably, we're the group out there for investing people's money in many ways. We have the #1 franchise in almost every business we have in fundraising. We have -- we used to be we used to have size, which was like many others, their size is way, way bigger than most. So the advantages we have, it just brings advantages, and it's just -- I think it's just easier. So there's no guarantees in life, but I think we should be able to do better than we did in the past, which doesn't naturally accord to investing at scale. Usually, investing at scale gets harder as you get a bit bigger. We came upon a business actually amazingly, and we would -- didn't know this when we started. Amazingly, that gets easier as it get bigger. And that's a remarkable actually thing.

So with that, I'm going to say, am I ending this? I'm going to say thank you all for coming. We really appreciate your support. We'll all be around afterwards to talk to or answer other questions. But thanks for being here.

Good day, and welcome to the Brookfield Corporation's Second Quarter 2026 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference call over to our first speaker, Ms. Katie Battaglia, Vice President, Investor Relations. Please go ahead.

Thank you, operator, and good morning. Welcome to Brookfield Corporation's Second Quarter 2026 Conference Call. On the call today are Bruce Flatt, our Chief Executive Officer; Nick Goodman, President of Brookfield Corporation; and Sachin Shah, Chief Executive Officer of our Wealth Solutions business.

Bruce will start off by giving a business update, followed by Nick, who will discuss our financial and operating results for the quarter. And finally, Sachin will provide an update on our Wealth Solutions business. After our formal comments, we will turn the call over to the operator and take analyst questions. In order to accommodate all those who want to ask questions, we request that you refrain from asking more than 2 questions.

I would like to remind you that in today's comments, including in responding to questions and in discussing new initiatives in our financial and operating performance, we may make forward-looking statements including forward-looking statements within the meaning of applicable Canadian and U.S. security laws.

These statements reflect predictions of future events and trends and do not relate to historic events. They are subject to known and unknown risks, and future events and results may differ materially from such statements. For further information on these risks and their potential impacts on our company, please see our filings with the securities regulators in Canada and the U.S. and the information available on our website.

In addition, when we speak about our Wealth Solutions business or Brookfield Wealth Solutions, we are referring to Brookfield's investments in this business that supported the acquisition of its underlying operating subsidiaries. With that, I'll turn the call over to Bruce.

Thank you, Katie, and welcome to the call. Our business performed well in the second quarter and through the first half. Distributable earnings before realizations, increased 15% year-over-year to $1.4 billion in the quarter and $5.7 billion for the last 12 months.

In the first half of the year, we were active. We raised $98 billion of capital, deployed $100 billion into opportunities and monetized $40 billion of assets, while a further $130 billion of assets were financed.

We advanced several important strategic initiatives, we expanded our insurance business with the acquisition of Just in the U.K., our assets through that increased to $190 billion. Shareholders approved the simplification of our capital structure bringing our insurance and investment capabilities together.

This creates a stronger and more simpler Brookfield. Last, we completed the acquisition of Oaktree. Combined, our credit business is now one of the most comprehensive globally. Turning briefly to the market environment. There is no shortage of noise in the markets today, geopolitical conflict, higher energy prices and uncertainty around interest rates.

While these factors may influence markets in the near term, our focus remains on firmly building long-term value across the business. None of these factors in the short term will matter too much to our long-term business success. The market environment continues to though be constructive. Economic resilience and functioning capital markets are supporting operating performance throughout the business and transaction activity.

While uncertainty around growth and inflation is increasing demand for high-quality heavy assets, with low obsolescence risk precisely the type of assets and businesses which we own. At the same time, long-term investment themes shaping our opportunity set are accelerating. Digitalization, decarbonization and deglobalization which we have been talking about for years are now creating opportunities unlike anything we have ever seen.

The opportunities are accelerating. Across AI infrastructure, energy addition, supply chain reorganization and data sovereignty, the opportunities are larger, more multifaceted and more capital intensive. Participating in these investments requires a broad range of capabilities and our advantage sits with our ability to deliver integrated solutions at scale.

We have invested decades deliberately building and strengthening the capabilities needed to pursue opportunities of this scale. Together, they have become one of the defining advantages of our business and position us to capitalize on these transformational investment opportunities in the years ahead.

For us, this starts with relationships. Many of the opportunities we pursue are not broadly marketed. They come to us through bilateral discussions and strategic partnerships due to our scale or because certainty of execution matters. We aim to be the first call because of the relationships we have built across industries, geographies and capital markets to originate differentiated opportunities and give our partners access to transactions, they could not typically source or pursue directly.

Our global presence helps us determine where the best opportunities exist at any point in time. With teams on the ground across markets and asset classes, we see where demand is building, where capital is moving and where risks are emerging. That perspective helps us focus on the best risk-adjusted opportunities.

Our operating expertise is then what allows us to execute, many of today's most attractive opportunities spend multiple disciplines, and we can bring together teams across Brookfield to deliver integrated solutions that address the full scope of the opportunity.

Our ability to source and execute is driven by the capital we have available to deploy. Decades of strong investment performance and therefore, enabled us to build a diversified capital base that draws on public markets, institutions, private wealth, long-duration insurance and our own balance sheet.

These 5 things make us quite unique. This allows us to match the right capital to each investment and continue deploying through cycles. Nowhere is this more important of integrating the complementary capabilities more evident than in the rapid build-out of AI infrastructure.

The build-out of AI infrastructure brings together the capabilities of our real estate, energy, infrastructure and credit businesses each a leader in their field. At the same time, the rapid adoption of AI is driving tremendous demand for electricity. And while constraints across the grid are limiting how quickly new supply can come online.

The result is a widening gap between insatiable power and compute demand with constrained supply, Together, these trends are creating one of the most compelling investment opportunities we've seen in years and precisely the type of opportunities are scale enables us to pursue without taking undue risks.

We are bringing together power generation transmission land entitlement skills, financing and long-term customer relationships to deliver solutions that few organizations can provide. Our recent $100 billion announcement to build 1 of the world's most advanced AI factories in Kentucky in partnership with the U.S. government illustrates this well.

We were selected by the U.S. Department of Energy to repurpose a federally owned industrial site and deliver a major world-class AI campus. Drawing on our certainty of execution, our ability to bring together land, power, transmission and capital at scale. This is federal land that the [indiscernible] uses on it, and as a result, today, you need a few approvals to move forward.

Turning now to Westinghouse. This is another example of how these long-term trends are creating new opportunities. No business we own today is more directly positioned to benefit from the growing importance of energy addition and energy security than Westinghouse.

Governments and companies increasingly want reliable domestically available generation. Base load nuclear due to a scale is really, really important. We are supporting the next wave of nuclear deployment. Building on our strategic partnership with the U.S. Department of Commerce announced last year, the U.S. Department of Energy recently announced a further $17.5 billion financing commitment to us alongside our utility partners to acquire long lead time items to advance the production of the reactors we're going to build.

It will reduce the time periods dramatically. It will shorten development time lines and establish a repeatable model for large-scale nuclear construction. Westinghouse is in various stages of construction today on 14 reactors has line of sight on another 40 and another 100 coming.

This is part of a $6 trillion industry build-out where we hold a very dominant position. Turning to our capital base. It's also continuing to evolve. One of the most significant developments today is the role of private markets and retirement savings.

Most individual savers have had very little access to private assets with their savings invested largely in public stocks and bonds, even as the investment world has evolved over the last 20 years. Businesses today are staying private longer, meaning a growing share of the world's essential assets and value creation now sits outside the public markets.

As a result, retirement savers are increasingly missing out on a meaningful share of global value creation and only participate once meaningful value has already been created. Recent changes to U.S. federal policy are beginning to open the door to greater private market participation in retirement portfolios, savers will soon have access to diversification, resilient cash flows, inflation-protected assets and all these types of investment products.

This will become another important source of long-term duration capital for us, further growing and diversifying our capital base. I look -- I will end by saying that we look forward to seeing all of you at our Investor Day on September 17 in Manhattan. Additional details are on our website. As always, thank you for your continued support and interest in Brookfield. I'll now turn the call over to Nick.

Thank you, Bruce, and good morning, everyone. We delivered another quarter of strong financial results supported by broad-based momentum across the business. Distributable earnings or DE, before realizations were $1.4 billion or $0.61 per share for the quarter representing an increase of 15% per share over the prior year quarter.

Over the last 12 months, DE before realizations was $5.7 billion or $2.39 per share. Total DE, including realizations was $1.5 billion or $0.66 per share for the quarter and $6.2 billion or $2.61 per share over the last 12 months. And starting with our operating performance, our asset management business delivered another strong quarter, generating distributable earnings of $740 million or $0.31 per share in the quarter and $2.9 billion or $1.24 per share over the last 12 months.

Fundraising was a record $77 billion during the quarter, reflecting continued strong demand across our flagship and complementary strategies as well as growth. This included $17 billion raised across our flagship strategies of $100 billion for the 7th vintage of our private equity strategy and $9 billion for the 6th vintage of our infrastructure strategy. Both are progressing well and are on track to be the largest in the respective series.

Fee-bearing capital increased by 19% to $672 billion at quarter end, driving a 20% increase in fee-related earnings compared to the prior year quarter. With the momentum we have across the platform, we are on track for what should be another record fundraising year.

In July, we completed the acquisition of Oaktree, bringing the organizations fully together, further enhancing the scale and breadth of our global platform and strengthening our ability to serve clients with a broader range of investment solutions. Turning briefly to Wealth Solutions, which Sachin will cover in more detail in his remarks.

The business generated distributable earnings of $480 million or $0.20 per share in the quarter an increase of 23% compared to the prior year quarter and $1.8 billion or $0.75 per share over the last 12 months. Results were driven by strong organic inflows, growth in net investment income and the first full quarter contribution from Just Group.

We originated $5 billion of annuity sales during the quarter. Total insurance assets increased to over $190 billion, driven by positive net annuity flows and the closing of Just Group, which added $45 billion of insurance assets.

Our North American businesses investment performance remained strong. During the quarter, we deployed $5 billion into real asset investments contributing to an average net investment income yield of 5.7%. Disciplined underwriting in our P&C business contributed to a 99% combined ratio lowering our overall cost of funds supporting a gross spread of 2.2% for the quarter, further contributing to strong results on our invested capital.

Turning to our operating businesses. They continue to generate resilient and stable cash flows with distributable earnings of $361 million or $0.15 per share in the quarter and $1.5 billion or $0.65 per share over the last 12 months. Underlying performance across our infrastructure, energy and private equity businesses remain strong, supported by long-term secular trends, increasing demand for their essential products and services.

Our real estate business also continues to perform well. The operating fundamentals across our high-quality portfolio remain very strong. Our super core and core class portfolio finished the quarter at over 95% occupancy supported by continued tenant demand and very limited new supply.

In our retail portfolio, nearly 1 million square feet of leases commenced during the quarter at rents 12% higher than those expiring. In office, we signed 4.5 million square feet of leases globally with average net rents 19% above expiring levels. That is worth emphasizing.

Net rents on the leases we signed during the quarter were 19% higher than those expiring providing meaningful embedded cash flow growth as these tenants take occupancy. A few highlights include, in the U.S., we signed 1.3 million square feet of leases at rents 25% above expiring levels including 2 leases totaling 673,000 square feet at One Liberty Plaza, a core plus asset at net rents 44% above expiring levels.

In Canada, we signed over 700,000 square feet at rents more than 70% above expiring levels, including a 433,000 square foot lease at Bay Adelaide Centre, a super core asset at rents more than double expiring wells and our leasing pipeline remains strong with more than 2 million square feet under active discussion.

This leasing activity continues to demonstrate the strength of demand for high-quality real estate and the advantage of owning the best assets in supply-constrained markets. Turning to monetization. Transaction activity continued to build momentum through the first half of the year.

We executed approximately $40 billion of asset sales year-to-date, returning capital to our investors and crystallizing attractive returns. A few notable examples include in infrastructure, we completed the IPO of [ Sesquare, ] our U.S. colocation data center platform, generating approximately $1.2 billion of proceeds at an attractive valuation.

We retain a 64% interest in the business, and we'll continue to participate in future value creation as demand for AI infrastructure accelerates. In real estate, we sold one Churchill Place, a premier office tower on our estate at Canary Wharf for GBP 750 million, further demonstrating the recovery of high-quality real estate.

And in private equity, we completed the $650 million sale of Multiplex, our construction business. During the quarter, we realized $121 million of net carried interest into income and ended the quarter with $12.5 billion of accumulated unrealized carried interest.

Shifting now to capital allocation and liquidity. We continued to return capital to shareholders during the quarter through a combination of dividends and share repurchases totaling $270 million. We maintained a disciplined approach to capital allocation. In addition to reinvesting in our existing businesses and completing the acquisition of Oaktree, we've repurchased approximately $580 million of BN shares in the open market year-to-date at an average price of $42 per share, keeping us on pace with the repurchases of the last 2 years.

Capital markets remain constructive, and year-to-date, we have completed $130 billion of financings across the franchise. Notably, at the corporation, we issued CAD 750 million of 10- and 30-year notes, the transaction was 4x oversubscribed, underscoring strong market demand and the strength of our credit profile.

We continue to maintain a strong liquidity position and a conservatively capitalized balance sheet and with record deployable capital of $210 billion, we have substantial flexibility to invest at scale as attractive opportunities arise.

Bringing it all together, we had a very strong and active second quarter. Earnings grew 15% per share, fundraising reach record levels, transaction activity continued to build, and we completed several important strategic initiatives that will continue to support our growth.

We entered the second half with strong momentum across each of our businesses and are very well positioned to continue growing earnings and compounding intrinsic value per share. Before I hand over to Sachin, I want to briefly touch on the simplification transaction. shareholders approved the transaction at our annual meeting on July 16, marking an important step in bringing our insurance and investment capabilities together in a simpler and stronger structure.

Shareholders who are in nontaxable accounts are in all jurisdictions other than Canada and the U.K. do not need to do anything. You will receive new shares in your account once the transaction is complete. For taxable Canadian and U.K. shareholders who wish to complete their share exchange on a tax-deferred basis, the election period is now open and additional information is available on our website for you to do this.

With that, I am pleased to confirm that our Board of Directors has declared a quarterly dividend of $0.07 per share payable at the end of September to shareholders of record at the close of business on September 14, 2026, with that, I thank you for your time, and I'll pass the call over to Sachin.

Thank you, Nick, and good morning, everyone. With the recent addition of the Just Group, we thought it would be useful to start with an update on the progress we are making in the U.K. then provide an update on our existing businesses and close with how we are thinking about the broader retirement markets.

As always, our objective is to compound capital at 15% plus returns over the long term while maintaining a disciplined approach to risk and generating stable, predictable earnings. Turning first to the Just Group. We are very pleased with the progress since closing the acquisition in April.

Just is a high-quality retirement business with capabilities in both the pension risk transfer and retail annuity markets. It gives us meaningful scale in 1 of the largest and most development most developed retirement markets globally.

It adds another important source of long-duration, predictable liabilities to our business. Since closing, we have focused on several areas. First, we have sharpened the business around its core pension risk transfer and retail franchises.

We exited the early-stage direct-to-consumer initiative and have been simplifying the organization around the areas where just has an established track record and a real competitive advantage. We have also been working on reducing the cost base. There is more work to do, but the direction is clear. we want a simpler operating model, a more efficient cost structure and a business that can scale.

Second, on the investment side, we have started bringing Brookfield origination capabilities into the portfolio with a strong investment pipeline for the remainder of the year that we expect to drive further growth into our investment yields, our spreads and the returns on the overall business.

Third, on the liability side, we have adopted the same discipline we apply across the broader wealth solutions business. And since closing, all new business has been underwritten based on our targets. From an earnings perspective, just generated approximately $29 million of earnings in our first quarter of ownership, representing a going-in return on equity of approximately 12%.

We think that is a solid starting point with many near-term and medium-term levers to grow the business from here. So taken together, we feel very good about where the business is today, just has a strong market position, a large opportunity ahead of it and a clear pathway to improve performance.

Our focus from here is execution, keep the business simple, stay disciplined on capital and capture the opportunity in the U.K., which represents over $0.5 trillion of pensions coming to market over the next decade. Turning to our existing annuity platform. We continue to make good progress in expanding the business.

On product development, we have continued to broaden our retail annuity offering. Through American National, we continue to launch new products, designed to offer pension-like attributes to retirees. On distribution, we've expanded through bank and broker-dealer channels with several new relationships launched this year and additional channels expected over the balance of the year and into 2027.

These new bank channels contributed approximately $200 million of sales during the quarter, and we expect them to become a very meaningful source of growth as they scale. Importantly, despite a competitive market, our spreads remain above 200 basis points.

This reflects the discipline we continue to apply in matching the liabilities we originate with attractive investment opportunities and allocating capital only where we can achieve our target returns. Our U.S. property and casualty platform, Clearbrook, continues to make significant progress. We have derisked the liability profile and focus the business on profitable growth by exiting volatile lines, reducing catastrophe exposure and strengthening underwriting discipline.

This has led to a stable and consistent underwriting income. As the P&C market sees pockets of softening, we believe there will be meaningful opportunities to continue scaling this platform both organically and through M&A. Bringing it all together, demand for retirement products continues to grow as populations age and retirement savings shortfalls widened.

The U.S. fixed annuity market is expected to generate over $300 billion of sales in 2026, which would be the second best year on record, and we expect it will continue to grow in this interest rate environment. Across our key pension risk transfer markets in the U.K., the U.S. and Canada, we see a large pipeline of potential transactions coming to market over the next decade as corporations continue to derisk pension plans and transfer them to insurance companies, which have the capital and expertise to more appropriately manage them.

With our now scaled platform across products, distribution channels and geographies, we are well positioned to allocate capital to the most attractive opportunities while maintaining discipline on the returns we earn. Very few platforms have the depth and capabilities we have to originate attractive capital and the investment franchise to deliver strong risk-adjusted returns over a long sustained period of time.

We are excited about the future of the business and the returns it can provide to Brookfield shareholders for years to come and we continue to see a pathway to more than $300 billion of insurance assets by the end of the decade. Thank you.

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

[Operator Instructions]

Our first question comes from the line of Michael Cyprys with Morgan Stanley.

Maybe just starting off with a bigger picture question on the AI side. As you look across power data centers, increasingly compute. Curious if you could speak to where you're seeing some of the most attractive risk-adjusted returns there as there's clearly a lot of capital coming into the space. .

And then maybe more strategically, how much of the opportunity for Brookfield is not just simply owning and developing these assets but also recycling them into stabilize homes with longer -- low cost of capital, longer duration pools over time.

Mike, it's Nick. So listen, you're spot on. We are very excited about the opportunity. We see it as being significant and broad-based and that touches many different parts of our business being real estate energy and infrastructure. And the numbers are big right now, but we are, in our view, in the very early stages of what is a very significant investment cycle around AI, digital infrastructure and the whole power buildout that is needed. .

And one of the easiest ways to think about it is we are generally just scratching the surface right now of AI adoption and implementation into the world and into business. And so as that takes hold, the need and the scale and the earnings power that's going to be back in that is going to be very significant.

And you say where are we most excited, Bruce touched on a couple of the opportunities, just recent examples across data center development opportunities what we're seeing in our energy business across both renewable and nuclear, but it will be broader across infrastructure and real estate.

So I think we see a lot of opportunity. That being said, given our position in the market, our scale, our access to capital and operating expertise that affords us the ability to be disciplined and patient. So we are focusing on the highest quality investment opportunities with the highest quality counterparties looking at stable structures where we can earn attractive risk-adjusted returns.

And your second point is right, once we have developed and built these data centers into what will be very stabilized high core assets, they're very attractive for institutional owners for the long term. we have been recycling as late as you know, in both Europe and North America, and we would expect to continue that to recycle capital to generate strong returns for our clients but also to recycle capital to support the next build-out and the future build-out of these platforms. So we expect to see that as we move forward.

And then could I ask a follow-up question? Or should I get back to you?

Can ask a second.

And then just on Wealth Solutions with Just Group coming into the numbers here in the quarter. I was hoping you could maybe speak to how you were thinking about some in the near-term versus medium-term levers to expand $29 million of earnings contribution there, 12%.

I think are we on that? How do you expect that performance to ramp as you look out over the next 12 to 18 months versus where do you see that over more of the medium term?

Sure. I'll first on the short term, I alluded to it in my comments around focusing the business, exiting some areas of the business that I would say were more early-stage venture type initiatives, direct-to-consumer, other new lines of business that really just were not profitable.

We've shut those down, and we've exited them. So that in and of itself is a cost reduction exercise. To frame it, just cost structure is 2 to 3x what some of its competitors are as they bid for the same product.

And in this market, you have to be a low-cost operator so that you're competitive when you're bidding on pensions. So that's our first and foremost focus area. Then I'd say the real big opportunity is bringing in our investment capabilities through Brookfield Asset Management. We source the perfect assets for long-duration liabilities through our real estate capabilities, our infrastructure and our energy businesses.

And if you think about pensions, they are different than annuities, there's no lapse risk in a pension. So when you offer a pension to someone who's retired, you're paying them really until mortality. And to be able to back that with long duration, very high-quality assets whose cash flows grow over time and who have a real return type profile behind them.

It's a tremendous competitive advantage for us. So I think between those 2 things, that will allow us to get the returns up to similar to what you see in our U.S. business. And once you're there, you can capture a new business because you can bid more competitively than others in the marketplace.

Our next question comes from the line of Bart Dziarski with RBC Capital Markets.

I wanted to ask a follow-up on the AI. So you announced a partnership with NVIDIA to launch a compute financing platform, mobilizing about $500 billion of capital. So congrats on that. And recognizing it's early days, but it would just be great to get your early views on -- Will this be made available to retail and institutional, maybe a bit more detail on how you're underwriting the downside case and which asset classes could benefit from this partnership?

Thanks, Bart. So as you know, this is an MOU at this stage that we have signed with NVIDIA pool together large pools of capital. I'd say generally, we're very excited about the opportunity. If we take a step back, as you know, compute is the critical part of the infra stack supporting AI.

Up until now, our business historically largely focused on new build development, but now we're focused on developing partnerships to finance the chips and accelerate growth with bespoke deals.

And when you're building an AI factory, as you know, the GPUs can represent half of the required capital to complete the build. So finding efficient ways to finance the equipment is becoming increasingly important. We've been doing. We've been working with NVIDIA closely for the last 18 to 24 months, a number of partnerships, a host of initiatives, including a recent transaction in Korea.

And we're building a real solid pipeline of investment opportunities and the opportunity is very attractive and access to a large pipeline. And to your question on risk is an attractive risk profile. We maintain focus on contractual cash flows, counterparty quality, and generating attractive risk-adjusted returns that are ideal for our institutional clients and retail clients as they look to invest alongside us into strategies. But that is part of the catalyst for starting the AI fund because these types of opportunities are ideal for that capital and the return that's looking for partnering with different parts of Brookfield.

Great. Very helpful. And then on Brookfield Wealth Solutions. So Sachin, you talked about seeing meaningful opportunities for both organic and inorganic ways to scale the business, especially on P&C with the softening pricing cycle. So could you just maybe talk through the latest view on the inorganic side? How are those conversations evolving? What you're seeing out there? As you look to scale BWS further?

Sure. I touched on P&C in the prepared remarks. That market is softening pretty rapidly, both along property lines and casualty lines. And we're seeing that really across the board, in particular, in the specialty markets. .

I think what that will lead to over the next 36 months is there will be platforms that either need capital, in particular, if they have too much cat exposure or if they have extended themselves too far in terms of aggressively pursuing new business and they'll need capital. or there will be great businesses who are just unable to grow because they have to be super patient and being part of our overall apparatus of Brookfield could be very helpful to them. in particular because we can drive the investment side of that business or those businesses.

So I just think the next 36 months in the P&C side will be very interesting. Some players will get caught out. as markets soften. And for us, that could represent a meaningful opportunity to partner with somebody, bring capital, bring investment expertise and really then drive that business going forward.

On the annuity and pension side, we are focused today on several things. One is much more organic growth, both in just in the U.K., which I discussed. But in the U.S. We have a leading franchise in the IMO market.

We sell -- we're the strongest seller of retail annuities through IMOs, but we're not really advanced in the bank and broker-dealer market, which represents of U.S. sales of annuities. So our ability to get on to these platforms in this last 12 months and continue to get on to more platforms over the next 12 months, just will open up new markets for us and scale our program to be able to sell more annuities to a wider audience. So we're making tremendous progress in that regard, but I'd say it's more of an organic growth story in the U.S.

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

Thanks very much, and good morning. As you know, concerns have been raised about circularity in the deals underpinning AI investment industry-wide. So I'd love to get your perspective on how much of that is perceived versus real? And how Brookfield is staying disciplined with its counterparties and contract structures?

Cherilyn, it's Nick. Listen, I think when you look again at the cash flow is being generated by these transactions and the scale and the potential of the earnings that will be realized over time as compute is increasingly adopted into business. .

We have conviction that working with the highest quality hyperscalers, offtakers, chip providers is an attractive risk profile for our business. And I think that a lot of what is happening is integrated and there is a lot of synergies between the different counterparties working together.

But we believe we can invest around this with the right risk controls when we look at the relevance of the contracts we're signing, the revenue on an overall percentage of what we're doing, we're very diversified businesses. This is a strong driver of growth today, but we still have a broad infrastructure platform, a very broad energy platform and a very broad real estate platform.

So I think we believe that the risk is well managed. We've been very active in capital recycling, and we've been very focused on the highest quality counterparties in the highest quality projects with the right contractual protections. So I think we believe that we are not really stepping out from our historical focus on risk management and earning attractive returns while taking a moderate amount of risk, but we can do it at scale here, which is what is the most exciting part.

That's really helpful context. And then maybe this is a 1,000 feet. But as you grow the insurance business, which hedges interest rate sensitivity elsewhere in the business, how do you think about your interest rate exposure and how that evolves over time?

Cherilyn, I'd say there's 2 models out there. There's the passive model where you just match your assets and liabilities, and you don't worry about rate risk to a certain degree. I always worry about it, but you get my point.

And then there's a more active model where you -- from time to time, understand where you are in the right cycle. We got into this business 5, 6 years ago because we were at historically low levels of rates, and we understood that. And we understood that, that was an asymmetric opportunity.

At that time, we kept meaningful exposure to rising rates by shortening our asset book, lengthening our liability duration and really keeping that exposure for the benefit of Brookfield shareholders. Today, I'd say we're much more careful. We're largely matched. Our asset and liability duration is almost entirely matched and cash flows are matched because we're at a point in cycle where -- as you heard from Bruce's opening remarks, there's just a lot of noise in the market and there's some risk premium built into the rate curve.

And therefore, we'll be patient. And once all of this, what I'd call, short-term noise comes out we can see a clear picture, and we'll continue to take views. But for now, we're matched and we're not taking an aggressive position either way.

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

I wanted to touch on your commentary on the importance of scale. So really highlighted on the call as well as in the shareholder letter in terms of the relative scale in providing integrated solutions to global relationships.

So my question is, more pertaining to the incremental benefits from incremental scale from here, Brookfield already a large organization. Is it missing opportunities today because of your size and if so, where are the opportunities going forward for Brookfield to increase its big deal market share or become, as you mentioned, the first call even more frequently.

Mario, it's Nick. Listen, I think having access to scale, which Bruce said, the scale matters, it's the capital, it's the operating expertise. It's the reliability as a counterparty because what matters most is delivery of these projects when we talk about AI.

So that is giving us access to those incremental projects. And I think that we are very well positioned now to grow with the market as one of the established partners for the build-out. I would say, though, that what that's not doing, I didn't get all your -- I didn't hear all the question, but that's not eliminating the ability to do smaller transactions at the same time because we build platforms.

We have large-scale platforms and those platforms are doing tuck-ins and small acquisitions to add incremental value every day. So we're operating across the spectrum of deal transactions and all of that tuck-ins and operating platforms that we have all feed into the overall scale of the business and the ability to participate in the large build-out in the large transactions.

Got it. Okay. And then maybe my follow-up, just for Sachin. Coming back to the organic growth vis-a-vis the bank broker network expansion, I think you mentioned there was $200 million in sales this quarter. Can you help frame for us where you believe that can move to once you're at your desired number of relationships, like what is kind of what inning are we in? What is the potential upside?

The upside is that we start to see, I would say, half of our sales coming from the bank network and preservation of the sales that we have from the independent marketing organizations. So if you look at the U.S., where we're selling almost $12 billion to $13 billion through independent marketing organizations and little through the bank network, you can see us getting to an additional $10 billion to $12 billion just coming through banks over the next few years.

And that's very meaningful. That would take our current billion a year between pensions and annuities, up to $35 billion a year pretty comfortably. And so the opportunity is very meaningful. And for us, it just takes time to season those relationships and make sure that we're providing the necessary support to frontline agents who sell the product.

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

Maybe first on [ Carry. ] Ponder on the Brookfield Asset Management call talked about the pull forward of [ carry ] for funds relevant for them. which you benefit you as well. To what extent are you also seeing the pull forward of carry in funds where [ carry ] is exclusive to BN and if you are seeing it, what's sort of the magnitude of the pull forward that you're seeing?

Ken, it's Nick. I'd say the BN level, our outlook is largely consistent with what we've talked about recently. We're focusing on the next 12, 24 months when we think about the inflection point of our carry. And in that, the material drivers, as you know, for BN or earlier vintage funds -- the earlier vintage infrastructure funds, Oaktree funds being big drivers.

And I'd say on both of those, we're making good progress -- and while the second ever fund is smaller than the third, obviously, is less impactful, but has now worked its way through the preferred return and incremental sales from here will realize carry the third infrastructure fund is not far behind. We have a number of monetizations coming out of Oaktree and the monetization pipeline is very strong. So we're bullish on the outlook, but it's largely consistent with what we would have talked about recently.

I would note that there are some funds raised after the BAM spin where [indiscernible] eligible for carry that are outperforming to Conor's comment and they may realize carry ahead of schedule. But that -- I wouldn't say that's necessarily material to the short-term BN outlook.

Okay. Perfect. And then just maybe broadly on the outlook of the pension risk market in the U.K. To what extent did the announcement of the Just acquisition impact the new business pipeline? And where does that sort of pipeline for new business stand today maybe relative to prior to the announcement of the deal.

For sure, our entry through Just -- our acquisition of Just has resulted in the company. Just being invited to see and to bid on much more than they ever have. Just the fact that Brookfield is now behind them. And then people understand we have the capital and the expertise I would say, for just to largely focused on very small pensions, they're now getting invited to all of the larger schemes that are coming to market.

That's the good news. I'd say where we're being very patient is pensions in that market today continue to be bid up to rates that drive a much lower return than we're comfortable with. And so we're being patient. Again, these businesses -- we are not in this market to just grow at all costs. We're being patient in terms of the returns.

And so I would say for now, we're seeing pensions trade at values that we're just not comfortable with the returns, but that will ebb and flow. And the good news is we're being invited to all of the large options. And when the time is right, the business will scale.

Our next question comes from the line of Alex Blostein with Goldman Sachs.

Thank you for the questions. Well, first, I would love to hit on the maybe interplay of the very large AI opportunity, as you described, with the balance sheet management and curious how you guys are thinking about allocating capital at the BN level? And to what extent any of the kind of AI opportunity will require more of BN's capital being invested alongside of third-party capital or some other way.

Yes. I mean, Alex, first of all, I'd say that we highlighted our access to scale capital. And I'd say, as we think about the strategies today, it's largely being funded within the funds with co-invest from very large institutions around the world to have very large appetite for these kinds of transactions, given how attractive they are and participating alongside our listed issuers.

So I'd say that's largely how we expect to fund. But as the opportunities become attractive, as you think about the integration of BN and BWS and the scale of capital that we will have available to us we will have potentially the opportunity to participate alongside the funds. But that's not the base assumption that we have in the plan, which should be largely funded through our client business and through [indiscernible]

Okay. Got you. And then I had a couple of just more specific questions around BBS. So if possible, above to run through that. So Sachin, I heard your points around Just and the steps you guys will take to improve the spread -- from what it looks like, I think today, on that $85 million, the spread is, I think, below 80 basis points.

So just ripping out some of the operational costs, as you described, what kind of magnitude of a benefit you think the spread could get adjust over the next kind of like 12 months because rotating the portfolio probably takes a little longer. So that's kind of the best part.

And then on the existing kind of core annuities business, I think the spread is also below 180. I think you mentioned that you guys see spreads above 200. So I'm just curious, is that on new business and that's kind of still the bogey as some of the old business runs off? I'm just trying to reconcile the reported sub-1.80, to the 200 number you mentioned.

Yes. I'll start with your second first because I think it's -- that's been a very important concept that I want to make sure people understand. The $180 million is just the income spread. It excludes the fact that a large portion of our portfolio is invested in equities both our funds that are equity oriented and also public equities, which makes us very different than some of our competitors.

And therefore, so much of this business's value will be a total return over time. If you just take the unrealized marks on our funds that are invested in equity-oriented strategies that 180 spread goes to about 220 in the current quarter. And I think we've provided some disclosure in that regard.

What I would say is in that -- as we grow our equity base and we start to see equity returns come in closer to the long-term total return of that underlying position, we would assume that spreads would actually go up. We're using the word spread, but the reality is it's more of a total return concept.

And therefore, we've been able to continue to outperform the broader market where spreads are much tighter closer to 100 to 110 basis points. Moving to just I would say there's at least 50 basis points of opportunity to enhance spreads simply by taking costs out of the business. So that will take time. But from the 80, I could see us comfortably adding 50 on top of that.

And then the asset rotation program and letting our asset strategy work through the system, and you can see a path to getting close to that 200 basis point spread in that market as well.

Our next question comes from the line of Jaeme Gloyn with National Bank.

A quick one just on the DUC shift from BN to BWS. Can you just talk about the baskets to each of the companies of shifting a portion of that holding?

Jaeme, it's Nick. Yes, this was just -- as you know, we have lots of investments on the BAN balance sheet that can be attractive for pools of capital within insurance. We have moved BBU shares across in the past, [indiscernible] bit peers, and you've actually performed incredibly well for the insurance accounts. So this is just a continuation of -- we have almost a ready-made investment pipeline for insurance accounts that can be highly attractive.

And at certain times, you may choose to move them over and let the policyholders benefit from the great returns.

Okay. Great. And then in Bruce's letter, a couple of mentions of index inclusion, do you feel like you've done enough at this stage? Or are there other strategies or initiatives you could take to achieve that outcome?

Well, the first thing I would say is that we've now given ourselves optionality that did not exist before. So under our current structure, we had 0 path to U.S. index inclusion, I would say, now being a domicile of convenience and with the fat pattern around our business, we have the option.

And I think it will take time. But as rules emerge as they evolve and our footprint of our business evolves, I think there are things that could be done over time to enhance it, that we can do and the rules as they evolve, will accommodate different for our business.

So I think we have the optionality today, it will take time, but it should be a significant positive as we move forward if we can materialize it.

Our next question comes from the line of Etienne Ricard with BMO Capital Markets.

Just Group is the leader of the series of acquisitions you've made in Wealth Solutions. When you onboard a new insurance leadership team, how do you make sure the acquired assets meet Brookfield's risk tolerance and that returns are prioritized over volumes.

Look, I think the first thing for us is to make sure there's alignment throughout the system. So one, all of the capital that we provide and that goes into these insurance companies comes from Brookfield. So we have complete alignment with policyholders. Number two, we incentivized management teams to also have that long-term alignment through LTIP programs that look and feel like Brookfield where there's a long-term focus and the focus is on capital compounding.

Number three, we spend time with management teams to make sure that the culture is strong and that the people who are leading these companies align with our culture, which is very value focused. And I think if you do those things, I know it sounds soft, but if you do those things, then generally good things in the business will start to happen. And we've been fortunate that in all of the businesses that we've acquired, we've been able to execute those simple steps.

And to follow up on carried interest. We've seen quite an increase in asset sales in recent years. while the carried interest realizations have not picked up as meaningfully. So Nick, I'm wondering what are your expectations for asset sales over the next year? And why should it translate into better carry realization?

Etienne. Look, you're right, the monetizations have been very strong, a testament to the quality of the assets that we own and the value creation plans that we've executed and the breadth of the diversification of the assets we own across asset class, geography, allowing us to execute many sales at the same time to different investor pools. .

So the monetization progress is good. But as you know, the way we realized carry is on a very conservative basis. And we realize on a fund-by-fund basis not investment by investment. And that just means it takes time. These are large funds we have to return all of the original capital to investors.

We have to work our way through the preferred return. And when there is limited to no risk of callback, we start to realize carry. And that's why we've talked about an inflection point because it takes about -- it takes time to compound that return to return the capital at scale and then to start realizing carry, and we're getting closer to that point, as I mentioned earlier, in our earlier vintage infrastructure funds and our Oaktree funds.

And then it should be -- continue to scale as we then work through even larger funds as we move forward.

Thank you. As there are no more questions, I will now turn the call back to Ms. Katie Battaglia for closing remarks.

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

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

Mr. Chair, we are ready to commence the meeting.

Good morning, ladies and gentlemen. It's now 10:30 a.m. and time to begin the Annual and Special Meeting of Shareholders of Brookfield Corporation. My name is Frank McKenna, and as Chair of the Board, it's my pleasure to chair today's meeting.

On behalf of the Board and management, I'd like to extend a warm welcome to everyone joining us through our live webcast. Similar to our meeting last year, voting during the meeting will take place on our webcast platform. I will now explain this process. We will conduct the votes on the matter before us by a poll. The poll will be open for all resolutions at the same time and throughout the formal portion of the meeting. This will allow you to choose to vote on each resolution immediately or wait until the conclusion of discussion on each resolution prior to casting your vote.

For each resolution, if you voted in advance of the meeting and do not wish to revoke your previously submitted proxies, then no action is required. We will welcome questions from our shareholders. As described in our management information circular for this meeting, participants can submit questions by clicking on the messaging icon on the left side of the webcast and typing a question. Please indicate whether your question is of a general nature or if it relates to a motion being considered as part of the meeting's formal business.

Questions relating to a particular motion will be answered at the appropriate time in the meeting. Note that we recommend that you submit questions relating to motions being tabled as soon as possible because there is a 30-second delay in the webcast. Questions of a general nature will be answered during a Q&A period following the formal business of the meeting. Please click the submit button once you have finished typing your question.

Our Corporate Secretary, serving as moderator of this meeting will read out the question and either a member of management or I will respond. If we receive similar questions, we will read one of them and note it is to be one of a number of similar questions. Now if you connected to this meeting as a guest, you will not be able to submit a question.

Moving on, we wish to thank you for your participation in today's meeting. I now call the meeting to order and would ask that our transfer agent by its representatives, [ Allen Kim and Karish Maliar ] to act as scrutineers. I will also ask our Corporate Secretary, Swati Mandava, to act as Secretary of today's meeting. In the unlikely event of technology issues disconnecting my audio, I have designated Swati to step in as Chair of the meeting.

It's now my pleasure to introduce the members of management with us today. Nicholas Goodman, our President and Chief Financial Officer; Justin Beber, our Chief Operating Officer. Following the conclusion of the formal part of the meeting, there will be a presentation from management. As outlined in our management information circular, there are 9 items of business to be considered today.

First, to receive the consolidated financial statements of the corporation for the fiscal year ended December 31, 2025, including the external auditor's report; secondly, to elect directors who will serve until the next Annual General Meeting of Shareholders; third, to appoint the external auditor and authorize the director to set its remuneration; fourth, to consider an advisory resolution on the corporation's approach to executive comp; fifth, to consider a special resolution approving the transaction set out in the management information circular designed to simplify our corporate structure or the transaction resolution as it will be referred to in this meeting.

Sixth, if the transaction resolution is passed, only if it's to consider an ordinary resolution approving a stock option plan for Brookfield Corporation Limited. Brookfield Corporation Limited will be referred to as New BN at this meeting, and the resolution will be referred to as the New BN share option plan resolution in this meeting. Seventh, if the transaction resolution is passed to consider an ordinary resolution approving an escrowed stock plan for New BN or the New BN escrowed stock plan resolution as it will be referred to in this meeting.

Eighth, if the transaction resolution is passed to consider an ordinary resolution approving an escrowed stock plan for Brookfield Canada Corporation an affiliate of New BN. The affiliate of New BN will be referred to as New BNC in this meeting and the resolution will be referred to as the New BNC escrowed stock plan resolution in this meeting. And ninth, if the transaction resolution is passed to consider an ordinary resolution approving a stock option plan for the New BNC or the New BNC Share Plan Resolution as it will be referred to in this meeting.

Now the full text of each of the transaction-related resolutions to be voted on at the meeting is set out in the transaction supplement to the management information circular. The transaction-related resolutions are conditions precedent to completion of the transaction, and we will not, I repeat, not proceed with the transaction unless shareholders have approved the transaction-related resolutions to be voted on at the meeting. As mentioned in connection with the business to be dealt with today, all voting will be conducted by online ballot through the live audio webcast platform. Voting is now open on all resolutions.

In order to expedite the formal part of today's meeting, I've asked certain shareholders to move and second various resolutions. Although this procedure will assist in the handling of the formal matters, it is not intended to discourage anyone from submitting questions in reference to any resolution after it has been proposed and seconded. Now I'm advised that the notion calling this meeting and the management information circular were disseminated to voting shareholders in accordance with all applicable laws.

I've asked the Corporate Secretary to keep a copy of the notice and proof of mailing with the minutes of this meeting and the minutes of last year's meeting of shareholders held on June 6, 2025, are also available upon request should any shareholders wish to review them. Based upon the scrutineer's preliminary report on attendance, the Secretary has confirmed there is a quorum. I therefore declare the meeting is properly constituted for the transaction of the business for which it has been called.

Turning to the first item of formal business, I will now table the corporation's 2025 annual report to shareholders, which includes the corporation's consolidated financial statements for the fiscal year ended December 31, 2025, together with the external auditor's report. Our annual report has been mailed to shareholders who requested it and is available in the meeting materials for this live webcast as well as on our website.

Mr. Chair, we have not received any questions or comments submitted in connection with the financial statements.

The second item of business at our meeting today is to elect directors who will serve until our next Annual Meeting of Shareholders. To assist you in identifying our directors, their photos will be shown on the slides of the webcast platform as I read their names.

The 8 proposed nominees for election by holders of the corporation's Class A limited voting shares are: Elyse Allan, Ang Eng Seng, Janice Fukakusa, Maureen Kempston Darkes, myself, Hutham Olayan, Satish Rai and Diana Taylor. The 8 nominees for election by holders of the corporation's Class B limited voting shares are: Howard Marks, Rafael Miranda, Lord Gus O'Donnell, Jeffrey Blidner, Jack Cockwell, Bruce Flatt, Brian Lawson and Samuel Pollock.

15 of the 16 director nominees were elected at our last Annual General Meeting in June 2025 and are standing for reelection today. Mr. Ang Eng Seng is a current Director of the corporation and was appointed by the Board on Feb 11, 2026, and is standing for reelection. Now information on all 16 director nominees is set out in our management information circular, which was posted on our website for shareholder review and is available from the company upon request.

Mr. Chair, we have not received any questions or comments with respect to the nomination of directors.

The meeting is now open to receive nominations for the election of the proposed directors. We invite shareholders and proxy holders to submit their vote if they have not already done so.

Mr. Chair, I nominate for election as directors the 8 nominees for the Class A limited voting shareholders and the 8 nominees for the Class B limited voting shareholders named in the management information circular dated June 5, 2026.

Thank you, Thomas.

Mr. Chair, I second the motion.

Thank you, Oscar. Are there any further nominations? If not, I declare the nominations closed. As there are 16 directors to be elected and the same number of nominees, I now declare that those nominated have been duly elected as directors of the corporation. The third item of business today is the appointment of the corporation's external auditor and authorizing the directors to set its remuneration. As stated in our management information circular, the Audit Committee of our Board of Directors has recommended shareholders that Deloitte LLP be reappointed as the corporation's external auditor.

Mr. Chair, I move that Deloitte LLP be appointed as the external auditor of the corporation for the next annual meeting and that the directors be authorized to set its remuneration.

Thank you, Thomas.

Mr. Chair, I second the motion.

Thank you, Oscar. The resolution has been moved and seconded. The motion is now before the committee for discussion.

Mr. Chair, we have not received any questions or comments submitted in connection with the appointment of the auditors.

Now adoption of this motion requires the favorable vote of a majority of the votes cast at the meeting by the holders of each of the Class A limited voting shares and the Class B limited voting shares voting as separate classes. Management has received proxies representing approximately 76% of the corporation's Class A limited voting shares and 100% of the Class B limited voting shares.

These proxies direct me to vote over 91% of the Class A limited voting shares and all of the Class B limited voting shares in favor of the resolution. I will now call for shareholders and proxy holders to submit their vote if they have not already done so.

The fourth item of business today is the approval of the advisory resolution on the corporation's approach to executive compensation described in our management information circular. The corporation has put forth an advisory resolution at this meeting as part of its ongoing efforts to both meet its corporate governance objectives and ensure a high level of shareholder engagement. Because this is an advisory vote, the results will not be binding upon the Board.

However, the Board and the Management Resources and Compensation Committee will take into account the results of the vote as appropriate when considering future compensation policies and decisions. The Board welcomes comments and questions on the corporation's executive compensation practices.

Mr. Chair, I move that the advisory resolution accepting the approach to executive compensation described in the management information circular dated June 5, 2026, be approved.

Thank you, Thomas.

Mr. Chair, I second the motion.

And thank you, Oscar. The resolution has been moved and seconded, and the motion is now before the meeting for discussion.

Mr. Chair, we have not received any questions or comments in connection with the corporation's approach to executive compensation.

Adoption of this motion requires the favorable vote of a majority of the Class A limited voting shares. Management has received proxies representing approximately 76% of the corporation's Class A limited voting shares. These proxies direct me to vote over 95% of the Class A limited voting shares in favor of the resolution. I will now call for shareholders and proxy holders to submit their vote if they have not already done so.

The fifth item of business today is the approval of the transaction resolution as described in the management information circular. This vote is being held pursuant to an order of the Ontario Superior Court of Justice. A copy of the order can be found in Appendix J to the transaction supplement included in the management information circular dated June 5, 2026, and is also available for inspection if requested. As described in the management information circular, the transaction would result in the combination of the businesses of the corporation and Brookfield Wealth Solutions Limited under a single publicly traded company New BN.

The combination of the businesses of the corporation and Brookfield Wealth Solutions is designed to further simplify our corporate structure, create a more capital-efficient platform to support Brookfield's long-term growth and open a path to broader global index inclusion. We're excited about this transaction as it will mark the next evolution of Brookfield as a globally diversified and fully integrated insurance and investment organization. Setting us up well for our next phase of growth.

If the transaction resolution is approved by shareholders, the final hearing of the court to approve the transaction is scheduled to take place on July 21, 2026, at 10:00 a.m., and the transaction is expected to close in late Q4 2026, subject to customary closing conditions, including the approval by the shareholders of Brookfield Wealth Solutions and receipt of all other legal and regulatory approvals.

As stated in the management information circular, the Board of Directors has recommended that shareholders vote in favor of the transaction resolution. The Board welcomes comments and questions on the transaction resolution.

Mr. Chair, I move that the transaction resolution as set forth in Appendix B to the transaction supplement of the management information circular dated June 5, 2026, be approved.

Thank you, Thomas.

Mr. Chair, I second the motion.

And thank you, Oscar. The resolution has been moved and seconded. The motion is now before the meeting for discussion.

Mr. Chair, we have not received any questions or comments in connection with the transaction resolution.

Adoption of this motion requires a favorable vote of at least 66 and 2/3 of the votes cast in person or by proxy by the holders of the Class A limited voting shares at the meeting and 66 and 2/3 of the votes cast in person or by proxy by the holders of the Class B limited voting shares at this meeting. Management has received proxies representing approximately 76% of the corporation's Class A limited voting shares and 100% of the Class B limited voting shares.

These proxies direct me to vote over 79% of the Class A limited voting shares and all of the Class B limited voting shares in favor of the resolution. I will now call for shareholders and proxy holders to submit their vote if they have not already done so. The sixth item of business today is the approval of the New BN Share Option Plan Resolution. As stated in the management information circular, the Board of Directors recommended that shareholders vote in favor of the New BN Share Option Plan Resolution. The Board welcomes comments and questions on the New BN Share Option Plan Resolution.

Mr. Chair, I move that the New BN Share Option Plan Resolution set forth in Appendix D to the transaction supplement of the management information circular dated June 5, 2026, be approved.

Thank you, Thomas.

Mr. Chair, I second the motion.

Thank you, Oscar. The resolution has been moved and seconded. The motion is now before the meeting for discussion.

Mr. Chair, we have not received any questions or comments in connection with the stock option plan of New BN.

Adoption of this motion requires the approval of a majority calculated on a combined basis of the votes cast in person or by proxy by: one, the holders of the corporation's Class A limited voting shares at this meeting and the holders of Brookfield Wealth Solutions Class A limited voting shares at Brookfield Wealth Solutions shareholder meeting being held later today or the BWS meeting as it will be referred to in this meeting; and two, the holders of the corporation's Class B limited voting shares at this meeting and the holders of Brookfield Wealth Solutions Class B limited voting shares at the BWS meeting.

Now management has received proxies representing approximately 76% of the corporation's Class A limited voting shares and 100% of the corporation's Class B limited voting shares. These proxies direct me to vote over 75% of the Class A limited voting shares and 100% of the Class B limited voting shares in favor of the resolution. I will now call for shareholders and proxy holders to submit their vote if they have not already done so.

The seventh item of business today is the approval of the New BN Escrowed Stock Plan Resolution. As stated in the management information circular, the Board of Directors has recommended that shareholders vote in favor of the New BN Escrowed Stock Plan Resolution. The Board welcomes comments and questions on the New BN Escrowed Stock Plan Resolution.

Mr. Chair, I move that the New BN Escrowed Stock Plan Resolution set forth in Appendix B to the transaction supplement of the management information circular dated June 5, 2026, be approved.

Thank you, Thomas.

Mr. Chair, I second the motion.

Thank you, Oscar. The resolution has been moved and seconded. The motion is now before the meeting for discussion.

Mr. Chair, we have not received any questions or comments in connection with the escrowed stock plan of New BN.

Adoption of this motion requires the approval of a majority, which will be calculated on a combined basis of the votes cast in person or by proxy by, firstly, the holders of the corporation's Class A limited voting shares at this meeting and the holders of Brookfield Wealth Solutions Class A limited voting shares at the BWS meeting; and secondly, the holders of the corporation's Class B limited voting shares at this meeting and the holders of Brookfield Wealth Solutions Class B limited voting shares at the BWS meeting.

Now management has received proxies representing approximately 76% of the corporation's Class A limited voting shares and 100% of the Class B limited voting shares. These proxies direct me to vote over 71% of the Class A limited voting shares and 100% of the Class B limited voting shares in favor of the resolution. I will now call for shareholders and proxy holders to submit their vote if they have not already done so.

The eighth item of business today is the approval of the New BNC Escrowed Stock Plan Resolution. As stated in the management information circular, the Board of Directors has recommended that shareholders vote in favor of the New BNC Escrowed Stock Plan Resolution. The Board welcomes comments and questions on the New BNC Escrowed Stock Plan Resolution.

Mr. Chair, I move that the New BNC Escrowed Stock Plan Resolution set forth in Appendix F to the transaction supplement of the management information circular dated June 5, 2026, be approved.

Thank you, Thomas.

Mr. Chair, I second the motion.

And thank you, Oscar. The resolution has been moved and seconded. The motion is now before the meeting for discussion.

Mr. Chair, we have not received any questions or comments in connection with the escrowed stock plan of New BNC.

Adoption of this motion requires the approval of a majority, which is calculated on a combined basis of the votes cast in person or by proxy by: firstly, the holders of the corporation's Class A limited voting shares at this meeting and the holders of Brookfield Wealth Solutions Class A limited voting shares at the BWS meeting; and secondly, the holders of the corporation's Class B limited voting shares at this meeting and the holders of Brookfield Wealth Solutions Class B limited voting shares at the BWS meeting.

Management has received proxies representing about 76% of the corporation's Class A limited voting shares and 100% of the Class B limited voting shares. These proxies direct me to vote over 94% of the Class A limited voting shares and 100% of the Class B limited voting shares in favor of the resolution. I will now call for shareholders and proxy holders to submit their vote if they have not already done so.

The ninth item of business today is the approval of the New BNC Share Option Plan Resolution. As stated in the management information circular, the Board of Directors recommended the shareholders vote in favor of the New BNC Share Option Plan Resolution. The Board welcomes comments and questions on the New BNC Share Option Plan Resolution.

Mr. Chair, I move that the new BNC Share Option Plan Resolution set forth in Appendix G to the transaction supplement of the management information circular dated June 5, 2026, be approved.

Thank you, Thomas.

Mr. Chair, I second the motion.

And thank you, Oscar. The resolution has been moved and seconded. The motion is now before the meeting for discussion.

Mr. Chair, we have not received any questions or comments in connection with the stock option plan of New BNC.

Adoption of this motion requires the approval of a majority calculated on a combined basis of the votes cast in person or by proxy by, firstly, the holders of the corporation's Class A limited voting shares at this meeting, the holders of Brookfield Wealth Solutions Class A limited voting shares at the BWS meeting.

And secondly, the holders of the corporation's Class B limited voting shares at this meeting and the holders of Brookfield Wealth Solutions Class B limited voting shares at the BWS meeting. Management has received proxies representing approximately 76% of the corporation's Class A limited voting shares and 100% of the Class B limited voting shares. These proxies direct me to vote over 94% of the Class A limited voting shares and 100% of the Class B limited voting shares in favor of the resolution.

I will now call for shareholders and proxy holders to submit their vote, if they have not already done so. Voting is now closed on all resolutions. I'm advised that our Corporate Secretary has results of the vote based on the final tabulations of proxy votes received.

Thank you, Mr. Chair. I'm pleased to report as there are 16 directors to be elected and the same number of nominees, I now declare that those nominated have been duly elected as directors of the corporation. On the appointment of the corporation's external auditor and authorization of directors to set its remuneration, I declare the motion carried. On the approval of the advisory resolution on the corporation's approach to executive compensation, I declare the motion carried.

On the approval of the transaction resolution, I declare the motion carried. Regarding the New BN Share Option Plan Resolution, the New BN Escrowed Stock Plan Resolution, the New BNC Escrowed Stock Plan Resolution and the New BNC Share Option Plan Resolution, formal declaration will be made following the BWS meeting to be held later today. The final voting results will be available after the BWS meeting and will be posted to SEDAR+ at www.sedarplus.ca.

Ladies and gentlemen, that completes the formal business of today's meeting. There being no other business, I declare the meeting terminated. Now that the meeting has concluded -- that the formal meeting has concluded, Nick Goodman will be leading a presentation on behalf of our management team. At the end of the presentation, we will be available to respond to any questions or comments you may have submitted.

Now please note that in responding to questions and in talking about our new initiatives and our financial and operating performance, we may make forward-looking statements. These statements are subject to known and unknown risks, and future results may differ materially. For further information on known risk factors, you are encouraged to review the Business Environment and Risk section of management's discussion and analysis in our annual report.

Finally, we would like to ensure that all shareholders who are interested in asking a question have the opportunity to do so. We will make every effort on our part to address questions during the allotted question-and-answer period. With that, I invite Nick Goodman to commence management's presentation.

Thank you, Mr. Chairman, and good morning, everyone. I'm going to review our financial performance over the last 12 months and the progress we have made in executing our strategic priorities. I'll then turn to our outlook for the business and the steps we are taking to position Brookfield for continued long-term growth. But first, I will start with an overview of where the business stands today.

We have built a permanent capital base, which at $175 billion today is one of the largest pools of discretionary capital globally. This capital is invested across our 3 core businesses, which we have methodically scaled over time, being asset management, wealth solutions and our operating businesses. Our permanent capital base gives us significant flexibility, remains one of our greatest competitive advantages and is central to how we continue to grow and compound value for shareholders over the long term.

Brookfield Corporation captures the full value of the Brookfield franchise. And as we continue to scale our businesses and reinvest capital, the corporation is uniquely positioned to compound value for shareholders. Our Asset Management business holds a leadership position in the secular trends shaping the global economy. Digitalization, deglobalization and decarbonization are driving demand for our private fund strategies. Our Wealth Solutions business has scaled into a global investment-led insurance platform.

We have built leading origination capabilities in North America, recently completed the acquisition of Just Group, giving our business immediate scale in the U.K. and have significant runway to scale further as we grow our existing product lines, expand distribution and enter new markets. Matched with our investing capabilities, this business is well positioned to continue compounding earnings and value for shareholders over the long term.

Our operating businesses continue to generate resilient cash flows, supported by contracted and inflation-linked revenues, essential service assets and strong underlying operations. And carried interest is now reaching an inflection point. As transaction activity continues to accelerate, we expect carried interest to become a much more meaningful contributor to earnings, driving higher cash flows that can be reinvested to further compound value.

Underpinning all of this is a conservatively capitalized balance sheet and significant liquidity that gives us the flexibility to investment opportunities arise and support growth across the franchise. Bringing this all together, the strength of our franchise, the growth embedded across each of our businesses and our disciplined approach to capital allocation gives us the foundation to continue delivering 15% plus annual returns for our shareholders over the long term.

Now let's turn to the past year. We have had a very strong year with each of our businesses performing well and contributing meaningfully to the overall earnings profile of the franchise. Over this period, we generated $6 billion of distributable earnings, supported by continued growth across our core businesses. Our asset management business benefited from strong fundraising momentum, raising $108 billion of capital across strategies and increasing fee-bearing capital to $614 billion.

Our Wealth Solutions business continued to scale globally with insurance assets growing to $180 billion, inclusive of the acquisition of Just Group. We also continued to advance monetizations across the franchise, monetizing over $80 billion of assets and crystallizing significant value for our investors. Our access to capital remained very strong with $170 billion of financing completed across our businesses. And reflecting our enduring commitment to driving long-term shareholder value, we returned $1.5 billion of capital to shareholders.

Now turning to the details driving performance in each of our businesses. Our asset management business delivered strong growth. We raised $108 billion across our flagship funds and complementary strategies, reflecting the strength of our client relationships and their continued demand for our investment strategies. This fundraising drove fee-bearing capital to $614 billion and supported 18% growth in fee-related earnings, which reached $3.1 billion over the last 12 months.

On the back of this momentum, we recently launched the next vintages of our flagship infrastructure and private equity strategies. Both are expected to hold first closes later this year. And importantly, we expect each of them to be the largest funds we have ever raised in its respective strategy. Our Wealth Solutions business also continued to scale globally over the past year and delivered strong financial results. Distributable earnings increased 11% to $1.7 billion, supported by strong investment performance and the continued expansion of our insurance asset base.

We originated $20 billion of annuity sales and completed the strategic acquisition of Just Group in the U.K., which expanded our global presence and increased total insurance assets by $40 billion to $188 billion. We also deployed $14 billion of float into Brookfield managed strategies, underscoring our strategy to reposition the incumbent investment portfolio into higher-yielding real assets targeting mid-teen returns on BN's invested capital.

Our operating businesses continue to deliver stable and resilient cash flows, demonstrating the quality of the underlying operations. We generated $1.5 billion of distributable earnings, supported by strong operating fundamentals across the portfolio. And a specific call out in real estate, our high-quality assets continue to perform well with occupancy rates above 95% across our Super Core and Core Plus portfolios.

As highlighted, the strong performance across our businesses has allowed our free cash flow to scale meaningfully over time. Today, distributable earnings are $2.54 per share compared to $1.29 per share 5 years ago. That represents a 15% compound annual growth rate, meaning our earnings have nearly doubled over that period. Share buybacks remain an important part of our capital allocation framework and are focused on creating meaningful long-term value for shareholders.

Over the last year, we returned $1.5 billion of capital to shareholders, including $900 million through opportunistic share repurchases and $600 million through dividends. Underpinning all of this is a balance sheet that we manage conservatively together with our strong access to capital. As mentioned, over the last year, we maintained strong access to the capital markets and completed $170 billion of financings across our businesses. And today, we have $188 billion of deployable capital and continue to be rated A- at the corporation.

This combination of significant liquidity and scale access to capital gives us the ability to act on attractive opportunities across market cycles and to support the long-term compounding of our capital. Now that we have summarized the strength of our performance over the past year, let's look forward. We are exceptionally well positioned to continue scaling our earnings at more than 20% annually over the next 5 years. And that growth comes from 2 key areas.

The first is participating in the growth delivered by our core businesses and second is capital allocation. We generate significant free cash flow from our core businesses, and we reinvest that capital across the franchise, planting the seeds for future earnings growth. Over the next 5 years, we expect the earnings generated from capital reinvestment to incrementally add 5% annualized growth to our earnings profile. In total, that translates to 25% compound annual growth in earnings over the next 5 years.

Before the effects of capital allocation, the earnings profile of our core businesses underpins annualized DE growth of 20% through 2030. Starting from $2.54 per share today, we expect DE to grow to $5.85 per share by 2030, in line with the plans we laid out at our Investor Day last September. Now let me spend a minute walking you through what drives that growth. In Wealth Solutions, we have grown insurance assets to $180 billion in just a few years, and we see a clear path to nearly doubling that to $350 billion by 2030. That growth will come from scaling our product set, growing our distribution channels and expanding the geographies where we serve policyholders.

At BAM, we expect fee-bearing capital to grow to more than $1 trillion. That growth will come from scaling our flagship strategies and expanding our complementary strategies to meet the needs of our clients. In real estate, there are 2 important contributors to our plan. First, our super core portfolio comprises high-quality assets in supply-constrained markets that are performing well and achieving strong rent spreads on new leases, which should continue to drive NOI growth. Second, as demand for hard assets continues to gain momentum, we expect transaction activity will surface meaningful capital that can be reinvested.

And lastly, carried interest is reaching an inflection point and the outlook for realizations over the next few years is encouraging. Carried interest represents our share of the value that has been compounding in our funds over many years. And as we monetize assets across our mature funds, that value converts into cash that can be reinvested across the franchise to further drive earnings and value creation.

If we are successful in executing our plans, we expect to generate $53 billion of cumulative free cash flow from our existing businesses over the next 5 years. That cash -- that free cash flow will then be deployed through our disciplined centralized capital allocation framework. This framework has been methodically developed over many years. At BN, our role is to allocate capital across the business to the areas where we see the most attractive long-term risk-adjusted returns. And because we sit at the center of the Brookfield franchise, we have a broad perspective on the relative opportunities and capital needs across each of our businesses that allows us to invest with discipline and with purpose.

It is this centralized approach to capital allocation and the flexibility it provides that we believe is one of our greatest differentiators and strengths. As free cash flows generated by each of our core businesses are repatriated to the corporation, we centralize our capital allocation approach with a consistent focus on driving shareholder value.

Some of the key focus areas for our capital include supporting growth across our core businesses, investing in strategic initiatives such as Oaktree and the continued scaling of Wealth Solutions as well as targeted investments of our capital into smaller opportunities where we believe having exposure can provide knowledge and benefits to the franchise over time. We also retain ample liquidity to defend against downside risks and maintain flexibility. And lastly, returning capital to shareholders, primarily through opportunistic share repurchases.

To that end, capital allocation should contribute meaningfully to our growth in distributable earnings per share, adding $1.10 per share of earnings over 5 years, increasing distributable earnings to $6.95 per share by 2030. Now with the foundations in place, we are positioned to drive meaningful growth. And the combination of BN and BWS will support our continued growth and our evolution. Combining BN and BWS marks the next evolution of Brookfield.

Five years ago, we established Brookfield Wealth Solutions with a clear objective to build a world-class insurance business that protects policyholders, delivers attractive risk-adjusted returns and leverages Brookfield's differentiated real asset investing capabilities. That strategy has worked extremely well for us. In just a few years, the business has grown to nearly $200 billion of assets, generating nearly $2 billion of annual earnings.

However, as the business has scaled, it is now clear that to keep growing and to maximize our returns, while maintaining a low-risk profile, the full combination is optimal. First, it positions Brookfield as a globally diversified, fully integrated insurance and investment organization under a single public company. This simplifies our corporate structure and allows shareholders to directly own the full value of BN and BWS through a single security.

Second, the combination provides our insurance operations with direct access to the corporation's permanent capital base, an incremental $145 billion. This enables a more efficient capital structure, enhances flexibility and provides significant capacity to support long-term growth, something very few insurance organizations globally have access to.

Third, the new structure creates a path toward broader global index inclusion that is unavailable today. Over time, inclusion in broader indices will broaden our investor base, improve trading liquidity and facilitate greater ownership of our shares by passive investment vehicles. And importantly, this transaction is expected to be tax efficient for most shareholders. Taken together, the combination of BN and BWS creates a simpler, more efficient and more flexible structure that positions Brookfield exceptionally well to continue compounding value for shareholders over the long term.

In summary, we are positioned for a transformational phase of growth. We have a leading position around the secular trends shaping the global economy, and those trends are fueling the growth in our business plan. We expect the trajectory of our earnings and the capital from realizations to generate substantial free cash flow over the next 5 years that can be reinvested to drive long-term value for shareholders.

And lastly, the combination of BN and BWS will position Brookfield as a globally diversified, fully integrated insurance and investment organization, supporting continued growth and enhancing returns on equity. Thank you all for your time. That concludes our prepared remarks. If any questions have been submitted through our live webcast platform, we would be pleased to answer them now.

Mr. Chair, there are no questions to be addressed.

Ladies and gentlemen, I would like to thank you for taking the time to join us today. I hope that you found the meeting and management presentation informative. We appreciate your participation.

Good day, and welcome to the Brookfield Corporation First Quarter 2026 Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker, Ms. Katie Battaglia, Vice President, Investor Relations. Please go ahead.

Thank you, operator, and good morning. Welcome to Brookfield Corporation's First Quarter 2026 Conference Call. On the call today are Bruce Flatt, our Chief Executive Officer; Nick Goodman, President of Brookfield Corporation; and Sachin Shah, Chief Executive Officer of our Wealth Solutions business. Bruce will start it off by giving a business update, followed by Nick, who will discuss our financial and operating results for the quarter. And finally, Sachin will provide an update on our Wealth Solutions business.

After our formal comments, we will turn the call over to the operator and take analyst questions. In order to accommodate all those who want to ask questions, we request that you refrain from asking more than 2 questions.

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

For further information on these risks and their potential impact on our company, please see our filings with the securities regulators in Canada and the U.S. and the information available on our website. In addition, when we speak about our Wealth Solutions business or Brookfield Wealth Solutions, we are referring to Brookfield's investments in this business that supported the acquisition of its underlying operating subsidiaries.

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

Thank you, Katie, and welcome, everyone, on the call. We had a strong start to the year. Distributable earnings were $1.6 billion for the quarter and $6 billion over the last 12 months. More importantly, it also looks like the business will get stronger over the year. Our business has performed well, and we continue to execute against initiatives which will drive our next phase of growth.

Our Asset Management business delivered strong earnings growth supported by continued fundraising momentum across our institutional client base. Our operating businesses generated stable cash flows backed by resilient underlying fundamentals. Our Wealth Solutions business performed well as it continues to scale globally. In April, we closed the acquisition of Just Group, a leading pension risk transfer platform in the U.K. This increased total insurance assets by $40 billion, and we're now heading to $200 billion and strengthens our position in one of the world's most active, attractive retirement markets. Nick will cover our financial results in more detail, and Sachin will spend more time on Just Group and the continued growth of our Wealth Solutions business.

Before that, I would note that the current environment has had no shortage of macro developments competing for investors' attention from geopolitics to trade issues, inflation and interest rates. And while these factors are important to monitor, they often receive far, far more attention than their long-term impact warrants. Bottom line, we largely try to ignore them when building our business. This is particularly true in periods when capital flows, sentiment and prevailing market narratives influence price, which can increase the impression that the business fundamentals have changed when in most cases, they have not.

Value, on the other hand, you all know, is determined by the cash flows of a business that it generates and management's ability to reinvest that capital at attractive returns. Our role as investors is to capitalize on attractive entry points to acquire good businesses for value, operate them well and allow compounding to work over time. Equally important is ensuring that compounding is not disrupted by being forced to act in detrimental ways during periods of market stress. This discipline shapes how we allocate capital and build our businesses. We take the time to watch an industry, learn how it works, invest in a measured way, refine a business model and only then scale a platform. This allows us to make small mistakes while avoiding large ones.

In our experience, successful businesses are not built quickly. They are built deliberately with the resilience to allow one to compound cash flows and create value through economic cycles. And by adhering to these principles, our shareholders have earned excellent compound returns over long periods of time. Over that same period, we've navigated many market environments, each felt dramatic at the time, but the most important point is that each period of market disruption in hindsight had very little impact on long-term outcomes. Today, we believe many of the market distortions we are seeing are temporary and will moderate in the sectors we focus on. And while the current environment may feel volatile, it is ultimately constructive for businesses like ours.

In addition, as uncertainty around growth and inflation rises, capital tends to shift towards high-quality cash-generative assets, an environment that favors real assets, which we are specialists in. We are now seeing large flows of funds due to the halo effect. That's hard assets, low obsolescence and are seeing this across the board within our businesses. Real estate is a good example of this. Sentiment is now catching up with fundamentals. Financing markets are much, much stronger. New supply is limited across our core markets and demand for the best assets continues to grow.

In office, as an example, replacement costs have risen significantly across our core markets. As a result, the rents required to justify new construction are well above, in many markets, double current market rents. This makes new supply very difficult to deliver. And with demand remaining strong, in fact, very strong for the best buildings in the best markets, rents continue to rise substantially. To put this in perspective, at Manhattan West, one of our super core assets in our portfolio, it would cost around $2,500 a square foot to build that same building today compared to our cost of just over $1,000 a square foot. Fortunately, we started this at the depths of COVID in 2020 when few decided that they should build an office building. So we benefited in many ways due to our countercyclical investment.

Our most recent lease there was signed at rents nearly 3x higher than the first lease in the complex and the financing recently completed cash out approximately $400 million of net cash, which was due to the increase in value of the asset. This took our debt to almost the construction cost of the building, exemplifying the increase in cash flows since launching the building. And I'd note we continue to own the property. More important, despite rents where they are, they actually need to go higher to justify a new tower like this being constructed today.

And we are seeing the same dynamic play out across our global portfolio. Another example being One Leadenhall in London, a brand-new asset, which we consider as Core Plus in our portfolio was leased -- was fully leased within 6 months of completion and achieved the highest rents ever in the city of London. With very limited new supply and demand for the best buildings continuing to grow, premier assets are becoming increasingly scarce and values are set to continue to rise.

Capital markets are also beginning to recognize this as well. The aforementioned financing of Two Manhattan West was $1.9 billion for a 10-year nonrecourse mortgage, with a 5.5% coupon and was done at 107 basis point spread to treasuries. Buyers looking for solid assets are moving back from software to real assets like these. Given all the drama in the news over the last 5 years, I will repeat that comment. The cash flows of this property allows us to complete a nonrecourse investment-grade financing and generate real cash of $400 million from the property. This is the benefit of owning great real estate through cycles. As fundamentals strengthen and capital markets improve, the embedded value of portfolios that was always there become increasingly evident.

At the same time, uncertainty is increasing the urgency for companies and governments to reposition around AI, energy security, data sovereignty and supply chain resilience. These priorities sit at the intersection of the themes we have invested behind for years, namely digitalization, decarbonization and deglobalization. Of course, if you have followed us, these themes are not new, but they are more prominent today than ever and the form they take continues to evolve. Taking them in order.

Digitalization started with fiber networks and telecom towers, then hyperscale data centers. Today, artificial intelligence is driving the next wave of demand through AI factories, which require enormous amounts of computing capacity and reliable power. Second, decarbonization. The opportunity is no longer just energy transition. It is energy addition. In plain English, that means more. Electricity demand is rising at a pace not seen in decades, driven by electrification, reindustrialization and digital infrastructure. Meeting this demand will require enormous amounts of new generation capacity with solar, wind, nuclear and batteries increasingly well placed given one or all of their attributes being they are low cost, they can be deployed quickly or they have limited reliance on imported fuel.

Last, deglobalization began as reshoring, manufacturing and reorganizing supply chains. It has now evolved to include data sovereignty where governments and companies want critical data stored and processed within their own borders, leading to the build-out of domestic digital infrastructure, including large-scale data centers. We are working with major governments and enterprises around the world to help build this infrastructure.

And while digitalization, decarbonization and deglobalization will continue to evolve, each is driving significant long-term demand for new infrastructure. Our ability to provide scalable solutions across technologies and regions reinforces our position as a partner of choice. And with almost $200 billion of capital to deploy, together with what we expect to be a record fundraising year in '26, we are well positioned to scale these businesses.

Thank you all for your continued support in Brookfield. I'll now turn the call over to Nick.

Thank you, Bruce, and good morning, everyone. Financial results were strong for the first quarter, underpinned by continued momentum across all of our businesses. Distributable earnings or DE before realizations for the quarter were $1.4 billion or $0.59 per share, representing a 7% increase over the prior year quarter. Over the last 12 months, DE before realizations was $5.5 billion or $2.32 per share. Total DE, including realizations, was $1.6 billion or $0.66 per share for the quarter and $6 billion or $2.54 per share over the last 12 months.

Starting with our operating performance. Our Asset Management business started the year strong, generating $765 million of distributable earnings or $0.32 per share for the quarter and $2.8 billion or $1.20 per share over the last 12 months. We've raised $67 billion of capital so far this year, including $21 billion during the quarter, a $40 billion investment mandate from Just Group and $6 billion for our seventh vintage flagship private equity strategy.

Fee-bearing capital ended the quarter at $614 billion, up 12% over the prior year, driving an 11% increase in fee-related earnings to $772 million. And with strong momentum across our flagship and complementary strategies, we are well positioned to deliver a record year of fundraising in 2026.

This quarter, our results also benefited from a gain on the partial monetization of one of our technology investments, which generated approximately $120 million of DE. We own a focused portfolio of select investments in new businesses, technology and innovation driven that are positioned to benefit from major secular trends shaping the global economy. This includes our investment in SpaceX of approximately $1 billion at the pre-IPO mark, which is part of a $2 billion total investment.

Turning briefly to our Wealth Solutions business, which Sachin will expand on in his remarks. We delivered strong results with distributable earnings of $430 million or $0.18 per share in the quarter and $1.7 billion or $0.71 per share over the last 12 months, representing an 11% increase over the prior year period. Results were driven by continued growth in our asset base, including $4 billion of annuity inflows during the quarter and the ongoing rotation of the portfolio into higher-yielding investment strategies.

Our P&C business also performed well, achieving a combined ratio of 99%, contributing to an overall reduction in our cost of funds. Our operating businesses continue to deliver stable and resilient cash flows with distributable earnings of $360 million or $0.15 per share for the quarter and $1.5 billion or $0.65 per share over the last 12 months.

Operating funds from operations in our infrastructure, private equity and energy businesses increased by 19% over the prior year quarter, supported by continued momentum in the underlying businesses and ongoing execution of growth initiatives across each platform.

Fundamentals in our real estate business are very strong. The recovery is quality-led with tenants, lenders and capital increasingly focused on the best assets in the strongest markets. Our Super Core and Core Plus portfolios are over 95% occupied, and we continue to sign new leases at rents materially above expiring levels, supported by a strong pipeline of tenant demand and limited new supply.

In our retail portfolio, tenant consolidation into top-tier malls continues to drive demand for our well-located, high-quality assets. And during the quarter, 1.6 million square feet of leases commenced at rents 11% above prior levels.

In office, we signed 2.6 million square feet of leases globally with average net rents 15% above the expiring levels. This included 227,000 square feet of leases in the U.S. at rents more than double expiring levels and 761,000 square feet in Canada at rents 30% above expiring levels, including a 203,000 square foot lease at Exchange Tower, a Core Plus asset in downtown Toronto. The leasing activity represents meaningful embedded upside that we expect to realize in our results as tenant take occupancy and rents commence. Our Super Core portfolio generated 2% same-store NOI growth in the quarter, and our leasing pipeline gives us strong visibility into further cash flow growth ahead.

Moving to North American residential. Longer-term market fundamentals remain supportive, underpinned by the structural undersupply of housing across North America. Performance in the quarter relative to the prior year period primarily reflected the absence of a prior year gain on the sale of 5 master planned communities as well as the delayed timing of certain lot sales this quarter. Despite short-term market challenges, the business remains well positioned to generate solid earnings in 2026.

Shifting to monetizations. Transaction activity remained active across most asset classes. During the quarter, we advanced $17 billion of asset sales across the business and substantially all sales were completed at or above carrying levels. A notable highlight, which closed after quarter end was the $2.5 billion recapitalization of IFC Seoul, a landmark mixed-use complex in Seoul, Korea. The transaction crystallized the fund's investment, realizing a 17% IRR and 2.4x multiple of capital, while allowing Brookfield alongside partners to retain upside participation in the asset. Importantly, this transaction marks another step toward carried interest realization for the fund and shows the resilience and dominance of the office portfolios we own.

During the quarter, we realized $157 million of carried interest into income and ended the quarter with $11.8 billion of accumulated unrealized carried interest. We continue to maintain conviction in the carried interest we expect to realize over the next 3 years, supported by a strong pipeline of monetizations, and we continue to expect 2026 to be an inflection point with realizations ramping up in the second half of the year.

Moving to capital allocation. During the quarter, we returned $598 million of capital to shareholders through regular dividends and share buybacks. Year-to-date, together with BAM, we have repurchased over $1 billion of shares at very attractive prices. That is over $1 billion invested back into our businesses, including $470 million of BN shares and $575 million of BAM shares. And we will continue to allocate capital to buybacks, enhancing the value of each remaining share.

Moving on to our balance sheet and liquidity. Capital markets remain constructive with capital increasingly shifting towards quality assets and businesses underpinned by essential services and real assets that generate predictable cash flows. Year-to-date, we have executed $45 billion of financings across the franchise, including $15 billion in our real estate business. And we continue to maintain substantial liquidity and a conservatively capitalized balance sheet, providing significant flexibility to support the growth of our business.

Before I hand the call over to Sachin, I want to briefly touch on our corporate simplification. As part of our ongoing efforts to streamline our corporate structure, we are working toward combining the corporation and our Wealth Solutions business, creating a fully integrated insurance and investment organization. This builds on the successful conversion of our listed private equity business entity earlier this year and the progress we have made exploring similar initiatives with our listed infrastructure and energy vehicles.

When we established Wealth Solutions, we structured it similarly to our listed affiliates, which enabled it to benefit from the corporation's capital base and investing capabilities. That approach served us well. And over the past 5 years, we have grown the insurance business to $30 billion in value while scaling the asset base to $200 billion.

At this stage, to continue growing and maximizing returns while maintaining a low-risk profile, combining BN and BWS is optimal, providing our insurance operations with greater access to approximately $145 billion of incremental capital from our permanent capital base will enhance capital efficiency and flexibility in optimizing our capital structure to support the continued expansion of the business over the long term. Few other insurance businesses in the world have access to this scale of excess capital, combined with deep investment capabilities across real assets. We expect this will strengthen the certainty we provide to our policyholders and create significant long-term value for our shareholders.

We continue to work through the final details to implement the transaction and expect the Board of Directors of BN and BNT to conduct a final review in the coming weeks. Subject to their approvals, we intend to seek shareholder approvals at our respective Annual General Meetings scheduled on July 16.

Bringing it all together, we have had an active start to the year, delivering strong financial results while continuing to execute on our strategic priorities. As we look ahead to the balance of 2026, we expect the momentum in our financial performance to continue. And with that, I am pleased to confirm that our Board of Directors have declared a quarterly dividend of $0.07 per share payable at the end of June to shareholders of record at the close of business on June 15, 2026.

Thank you for your time, and I will now pass the call over to Sachin.

Thank you, Nick, and good morning, everyone. With the recent close of our acquisition of Just Group, a leading provider of retirement services in the U.K. pension risk transfer and individual annuity markets, we thought it would be worthwhile to provide an update on our Wealth Solutions business and the outlook going forward.

As we speak to you today, we have a scaled global $180 billion investment-led insurance business focused on retirement and wealth solutions and a growing protection business. Our objective is to compound our capital at 15% plus returns over the long term while maintaining a disciplined approach to risk and generating stable, predictable earnings. Today, that opportunity we set out to pursue remains very large and continues to grow. Across developed markets, populations are aging, longevity is increasing and the decline of defined benefit pension systems is driving significant demand for private sector solutions that can provide stable income in retirement. These trends are not cyclical, but rather structural, and they underpin a long runway for growth in our business.

To grow our business, we have focused on originating long-duration predictable liabilities, primarily annuities and pensions and paired those with high-quality cash flowing investments sourced through the Brookfield ecosystem, allowing us to generate consistent excess returns while maintaining low leverage and a high degree of earnings visibility. Our business today is as follows: First, in North America, our annuity platform built through American National and American Equity provides us with leading distribution capabilities across the retail and institutional annuity and pension channels and the ability to originate significant volumes of long-duration predictable liabilities longer dated than what we see across the industry today. This platform continues to be a core driver of organic growth and earnings for BWS.

In parallel, we have our U.S. property and casualty platform or protection platform, as we call it, through Clearbrook. Clearbrook adds an important element of diversification for us, allowing us to participate in specialty insurance markets with a low leverage profile while also broadening our investment flexibility. Over the past few years, we have significantly improved this business by derisking the liability profile and focusing on profitable growth. We have done this through exiting volatile lines, reducing our catastrophe exposure and strengthening underwriting discipline. As the P&C market sees pockets of softening, we believe there will be substantial opportunities for us to continue to scale this platform, both organically and through M&A.

Finally, with the recent addition of Just in the U.K., we can extend our proven annuity track record into new geographies. This transaction represents a significant step forward in scaling our business internationally. The U.K. is one of the largest and most developed pension risk transfer markets globally with substantial volumes, around GBP 50 billion annually expected to come to market over the next decade. With the addition of Just, we now have immediate scale and a strong platform to build upon.

Just has operated for over 20 years, serving approximately 700,000 U.K. pensioners across institutional and retail policies, and the transaction adds approximately $40 billion of assets into BWS. We acquired this business an attractive going-in return of approximately 10% to 12% on our $1 billion of invested capital, and we closed this transaction on April 1.

From a strategic standpoint, our priorities following the close are very clear. First, we are focused on reinforcing and growing Just's core business lines, particularly in pension risk transfer and retail annuities, where the company has an established track record and a strong market position. Second, we will apply our investment-led approach to enhance returns by optimizing the asset portfolio and leveraging Brookfield's global origination capabilities. Today, the business has the ability to write approximately GBP 5 billion of pension flows annually, and we expect that to continue and grow as capital support from our balance sheet and the redeployment into Brookfield originated investments allows Just to be more competitive on large-scale transactions in the U.K. market.

Beyond the U.K., we continue to make progress on our broader international growth initiatives. In Asia, we are in the early stages of building a presence in what we believe will become a very significant market over time. We executed our first reinsurance transaction in Japan in late 2025, and we are seeing growing interest from our counterparties who believe this channel focused on long-duration, predictable liabilities will represent an important driver of growth in the years to come.

Now turning to the quarter briefly. Our business had $20 billion of regulatory capital supporting policyholders inside the insurance companies. In that regard across -- in that regard, we had a strong quarter across our distribution channels and continue to see opportunities to write longer-dated policies at our target duration to match our real asset investment strategies.

We originated approximately $5 billion of sales across long-dated retail annuities, funding-backed agreements and pensions, capturing market share in the U.S. Furthermore, we continue to expand our distribution capabilities, particularly through bank and broker-dealer channels. We recently launched our products on 2 major bank platforms with more to come this year, which we expect will contribute incremental annual sales as these platforms scale. While the first quarter is typically seasonally slower, particularly in pensions, we expect activity to increase meaningfully as the year progresses and remain constructive on the outlook for 2026, where we expect to write circa $25 billion of new policies across all of our retail and institutional annuity channels.

That being said, our approach to growth remains consistent. We remain disciplined in writing business that meets our target returns and aligns with our investment strategy. Our priority is not maximizing volume but generating high-quality, durable earnings. We have a growing number of products and distribution channels, which gives us the unique ability to allocate capital towards the most attractive opportunities across channels, products and geographies when one market becomes more competitive.

On the investment side, we continue to leverage Brookfield's global platform to source high-quality opportunities and seeing attractive risk-adjusted investments suitable for our diversified insurance portfolios. Over the last 12 months, we have deployed nearly $15 billion into Brookfield strategies, including $4 billion in the most recent quarter at an average total return exceeding 10%, reflecting the benefits of our investment franchise and our stable long-duration liability profile.

Today, our business generates more than $2 billion of annualized earnings, and we remain confident in our ability to deliver at our mid-teens targets over the long term. We are very pleased with the progress we are making. And with the recent addition of Just, continued expansion across our core markets and a disciplined investment-led approach, we believe we are well positioned to continue to scale this business while maintaining a high-quality and resilient earnings profile. Thank you.

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

[Operator Instructions] And our first question will come from the line of Cherilyn Radbourne with TD Cowen.

So clearly, issues in private credit and software have significantly affected the public share prices of the alternative asset managers. Just curious how much fundamental damage you think has been done? And does that put us on the cusp of further industry consolidation.

Cherilyn, it's Nick. Listen, I think it's a fair question. And I think it comes back to a little bit of what Bruce talked about, which is I think there are issues that are grabbing a lot of headlines, but in the scale of the broader investment markets, their materiality is low. So for sure, it's not a systemic broad issue in any way to broader markets and valuations. And I think the degree of relevance varies based on managers and our investment strategies.

And I think that where you see price and value differentiate, they will prove out over time when people prove out their investment posture capabilities and exposure. So I think for managers that are well invested around the right sectors like us with real asset exposure, where performance is incredibly strong. I think you'll see that continue to differentiate over time and come through with the performance of the funds.

And I think for us, when you take a step back, for Brookfield, our posture was with our relevance around AI infrastructure and our presence in the space, we were able to get ahead of what was coming. It's created a tremendous investment opportunity for our real asset strategies around AI and with the Oaktree's disciplined investment strategy and capabilities, we think this could be an attractive investment opportunity for us. And maybe over time, it may create consolidation issues in the market or opportunities even for good managers. But I think this exposure will pass. There may be some that have outsized exposure to some of those sectors and there are impacts. But I think for the best managers with good investment strategies, this will go by and performance should differentiate itself over time.

But I think if you look at it as it relates to Brookfield, these are very immaterial asset classes to us based on our deliberate posture and our presence in AI is more around the backbone buildout. We have no software exposure, and our credit portfolio is performing incredibly well. So if anything, we see this as just a continuation of our strategy and our performance should differentiate itself over time.

That's good detail. The other question we've been getting is around Brookfield's posture in the Middle East and just how the war there is impacting your LPs and investment activity in that region.

Yes. I think we've reiterated this at length recently, Cherilyn. We are absolutely committed to the region. These are tremendous countries with tremendous potential and some of our best partners and the LPs. And we remain absolutely committed. We continue to have constructive conversations with them around our investment strategies and their commitment to our funds. And predating this and continuing, we also continue to have discussions with them around investment into the region. So again, we see this as a core part of our business over the long term and not impacted by the short-term volatility caused by the war.

And one moment for our next question. That will come from the line of Mario Saric with Scotiabank.

Just I wanted to circle back on the proposed BN, BNT combination. I appreciate the circular is not out yet. It sounds like the Boards are reviewing in the coming weeks. But do you have any initial sense regarding the range of potential tax implications for BN shareholders with respect to the options that you're considering?

Mario, it's Nick. I would just tell you that we are still working through the final details of the transaction. As I said, we expect Board approval shortly. But we're absolutely taking into account the tax efficiency and the impact for shareholders and are proceeding with this in a way that should minimize any impact for shareholders.

Got it. Okay. And my second one, you included a new slide in the supplemental discussing new business investments, including $1 billion of SpaceX shares. You've talked in the past in terms of BN and its kind of technology-related spend. How should we think about the progression of that investment at the BN level over time?

Yes. It's a good question, Mario. If I just take a step back, like, as you know, technology companies are increasingly moving into hard assets. And given our global presence in AI infrastructure, be it power, real estate, AI factories now through the AI fund and data centers and our broad Brookfield ecosystem, we are developing all-encompassing relationships with the major technology companies, and that is enabling us to have access to attractive investment opportunities, attractive for us and attractive for our clients.

They're also giving us access to technology potentially that can create capabilities that could benefit the broader Brookfield ecosystem. But by staying close to these technologies, they could be meaningful for our businesses over time. In terms of the size and the risk profile of what you see, we're being very disciplined. The balance sheet exposure at this point is modest relative to our permanent capital base. And we're investing selectively where we think we have differentiated access, strong partners or strategic relevance.

And to be clear, this is not SaaS exposure. It's not software exposure. It's strategic investment in technology that's highly attractive and good for the business. So I think of this as targeted allocations of capital to investments that have attractive financial returns and potential strategic value to the franchise. And just given the strong performance to date and hence, the growth in size, we felt now was just a good time to call it out and profile the investments that we have so that they are visible for you to see and understand.

One moment for our next question and that will come from the line of Bart Dziarski with RBC Capital Markets.

I wanted to ask with regards to Brookfield Wealth Solutions. So we're seeing the regulatory environment evolving, including recently the U.K. PRA looking at funded reinsurance agreements with Bermuda captive. So maybe if you guys could talk us through how you're managing regulatory capital as the environment evolves.

Sure. Bart, it's Sachin. First of all, just to level set, we have $20 billion -- in excess of $20 billion of regulatory capital that's inside the insurance business. And every one of our insurance companies that write policies is rated A or A- by the 3 major agencies, and 2 of our entities have received upgrades over the last few years. So we're in a great position from a capital position.

We generally operate about 4x the regulatory minimum requirement of capital. And that's allowed us to write policies in the U.S. in scale because we're seen as a trusted reliable partner. On top of that, as you know, we have $180 billion of permanent capital sitting in BN, which has supported our growth and which acts as an incredible, if not often talked about, layer of additional protection for our business. So we're in great shape, and we have a runway for years to come to be able to use that capital and grow the franchise.

On your point on the U.K. pushing back on Bermuda as a jurisdiction, I don't think it has a material impact to us. Just doesn't use it today, and we were not planning to use it for Just. And I would say the real answer there is the U.K. and even in Europe, migrating insurance liabilities and assets to the U.K. doesn't really provide much of a capital benefit in light of Bermuda adopting rules that were consistent with the U.K. and Europe. And so for the PRA to say, we don't want you to use it, it shouldn't have a dramatic impact on even our competitors in that marketplace, but certainly not for us because we don't use it today.

Okay. Great. Very helpful. And then maybe just sticking with insurance and on the Just Group. So you talked about it can write $5 billion of business annually today, but you're looking to scale that. Could you unpack that opportunity a little bit. I think there's a chance to move up market and maybe other areas you're looking for to tap into that growth.

Sure. So what -- Just was very -- and is very, very good at is operating in small pension schemes that are not highly competitive because of their size and generating really attractive returns on those. And they built a franchise in and around small schemes. And we intend to continue that because it's an area where there's just not a lot of competition and you can pick up great returns.

But with our capability to bring capital and investment expertise to their business, we think they can now move to the upper end of the market and write policies that are in excess of $500 million or in excess of $1 billion, where, again, there's less competition on both ends of the extreme spectrum. So in the very small policies and the very large policies, there just is less competition. And if we can play in both of those spots, we can pick up attractive returns. And in playing on the larger policies, we can bring a lot of the expertise we have from the U.S. and Canada into that market.

One moment for our next question and that will come from the line of Alex Blostein with Goldman Sachs.

This is Michael on for Alex. I wanted to ask a quick question on the P&C business. So you've mentioned that you continue to exit parts of that business. We were wondering what the run rate DE impact is after you fully rationalize those parts of the P&C business. How far along are you towards those goals? And then as a corollary, what are the capital implications of exiting those lines?

Sure. Michael, so I would say we have completed the "exiting of lines." We exited surety, our professional lines business, we exited last year. We culled a few other lines, but we're done. There's no more exiting to be done. The business we have is in really good shape. And where we are today is, I'd say, we have a very strong casualty franchise. We really are careful on the property side because of where we saw cat exposure. And we have a small and very stable admitted business.

If I was to look ahead over the next 5 years, I think what we're seeing is as the property markets continue to soften and rate comes down and as casualty markets are starting to show the first signs of that, we think our specialty business should be poised to grow for 2 reasons. One is we could be a very reliable counterparty to the broker-led market because we are in good shape. We have strong capital, and we are -- we have a track record now of profitability. And then two, we think there'll be platforms out there that will need capital in this environment, and we could be a great partner for them. So I don't see any further reduction in the business. In fact, where I see it now over the next 5 years is potential -- we have the potential to substantially grow this business as markets were to deteriorate.

Great. As a follow-up on the full year $25 billion target for origination. Obviously, there's some seasonality in the retail channel for the first quarter. But accounting for the $4 billion year-to-date, I think that implies something like $7 billion per quarter for the rest of the year. So maybe we can kind of walk through the sources there. It sounds like about $5 billion of that is expected from Just. But anything on the sources of the $25 billion cadence over the year and the confidence in hitting that target?

Sure. I'll start with -- one thing we did see in the first quarter, and this is pretty broadly published or disseminated is that demand for fixed annuities is down 9% or 10% in the U.S. this year over last year. So we are seeing, for the first time, a slight softening of annuity demand. In that environment, we actually picked up market share. We picked up 4 points of market share in a weaker market, which is a really good fact pattern. It shows that we're able to sell in this market, pick up as others sort of fall away.

And what we're seeing now is the early signs of us entering into the bank channel market. Just so you have sort of a perspective on the importance of the bank channels. Today, we sell about 1/3 of total annuities in the U.S. on the bank channel. Most of our competitors sell about 2/3 of total annuities through the bank channel. So we have a tremendous runway of growth as those channels ramp up.

We got on to 2 important bank channels in the first quarter this year, and we have a third one coming likely in the third quarter of this year. So we have a lot of runway for growth. We think we'll pick up market share. And if you take that increased market share in the U.S. plus the combination of Just, we feel pretty good if all things stay consistent where they are, that will be in line with our targets.

One moment for our next question and that will come from the line of Sohrab Movahedi with BMO Capital Markets.

Sachin, I wanted to just stay with you, if I can. What are the 2 or 3 KPIs you want BN shareholders to watch for to see how best you are capturing at BWS compounding intrinsic value for BN?

I would say total return on invested capital is number one. That's our singular focus. We're building this business to compound capital at mid-teens or high teens for a very long period without taking undue risk. So if I had to focus you on one thing, I would say that we're not a top line business. This isn't about growth at all costs. It's nice that we grow and we see a long runway of growth, and we don't think that, that's going away. But really compounding capital is very important.

To unpack that, we then look at total return over our cost of funds, which is more of a per unit measure. So what is -- I know in the market, sometimes analysts and others look at spread, but we add on top of spread unrealized gain on investments. And so we really look at total return on our invested capital, and we look at it both on a gross business basis and on a per unit basis.

Beyond that, what I would say is we're trying to build, and we are maybe the only ones who can do this is we're trying to build a business where at the top of the house, we can move our capital around to geographies and products, and we can do that without any conflicts or clients or other invested capital partners sitting in any parts of the business. So if the U.K. is a great opportunity, we can move capital there. If the U.S. presents a more compelling opportunity, we can go there. And we can be fungible in how we allocate capital with that singular goal that I described at the outset. Does that help?

Yes, that's very helpful. And so maybe just as a bit of a follow-on to that. Maybe it's a bit of a naive question to ask Brookfield, but is there a size at which or is there a scale or market position at which you would say we can put a mission accomplished kind of sign on BWS.

No. I think as long as you see a credible path to allocate capital in a business where you can continue to compound at mid-teens, you don't really put up a mission accomplished sign. For us, it's just comes down to does the next dollar of capital offer a compelling investment opportunity. And the answer...

One moment for our next question and that will come from the line of Jaeme Gloyn with National Bank.

I'll stay with the star of the show today Sachin and a question on retail flows, annuity flows, so I think you kind of addressed it a little bit a couple of questions to go, but I wanted to focus it on the outflow side of the equation, which increased materially from this quarter last year. Can you talk about the drivers of those outflows? Is there some lumpiness? Is it consistent? Maybe just help on that front.

Yes. Part of it is just quarter-over-quarter comparisons are difficult. I would say on an annualized basis, we should be at somewhere between $10 billion to $12 billion of outflows, which is consistent with our duration profile that's sort of high single digit. For the most part, we are selling products in the 5-, 7- and 10-year range. And so if you blend out on an average liability duration of 8 to 9 years, and you divide that by the total assets we have, you can very quickly come down to what our annualized outflows should be. So not a surprise. And I would say if you're -- for modeling purposes, if you're trying to plan, you should plan $10 billion to $12 billion a year as the business gets larger, naturally, you're going to have more outflows year-over-year.

Yes. Okay. Understood. And then stepping up higher level on the breakdown of distributable earnings, and just looking at cost of funds growing at a faster rate than the net investment income in this quarter, anything to pull out from that result?

Yes. So one thing that I think is cutting across us and all of our peers is that as the front end of the yield curve comes down and annuity rates continue to stay pegged to the back end of the curve, you're bringing in dollars on day 1 in cash that just earn less money. And I think what you have to then be able to look at -- so that -- therefore, your weighted average net investment yield is lower on day 1 than it would have been a year ago when the yield curve was higher and yet your cost of funds is the same and has crept up a little bit as the back end has come up.

With that steepening of the yield curve, I think what you guys have to look at is who's best positioned to capture that total return. And what we are really focused on is rotating that cash position into long-duration assets, long-duration equity and credit strategies where we can earn that high teens total return on a per unit basis. And if you look at our results, we're -- as I said, we're capturing market share. Our total return is still somewhere in the 225 basis points of spread and we're still achieving mid-teens ROEs. So I'm not worried. But if you look at a point in time, that's what's driving your lower average net investment yield vis-a-vis your cost of funds.

One moment for our next question and that will come from the line of Dean Wilkinson with CIBC.

Nick, I just want to talk on the buybacks. I mean, it's been a tremendous use of capital over the past 5 years. But when you look at that relative to the value that say, sits at the manager, has there been any thought as the gap closes at that ownership level kind of saying, would you take that back to the historical 75% or are you just trying to match those buybacks with what the manager is doing?

Hi, Dean, yes, listen, thanks for the question. Listen, I would think of BN and BAM as 2 distinct companies with their own capital. And they -- and we're doing our own buybacks based on our own -- independently almost of each other. At the BN level, as you know, we have significant cash flow coming in every year. We have very attractive investment opportunities, and we look to opportunistically buy back shares where we see that discount persists between price and our view of intrinsic value.

And as we've executed this year is about $475 million, $470 million year-to-date, that's a good pace, and we're not even halfway through the year. And so for us, this is just a permanent consideration of allocation of capital. And it's a separate and distinct allocation to what the BAM management team is focused on.

They independently of BN believe that -- and maybe it comes back to the first question that Cherilyn asked the volatility that's been created in the market by some of the negative perception around credit and software, which really was applied to every manager without distinguishing who had exposure and who didn't caused some irrational behavior in the BAM share price, and they opportunistically bought back shares in size in that period of time. That was an independent capital allocation decision. But given our significant ownership in BAM, we benefit significantly from that. But I would say they're distinct from each other, but you should expect buybacks to continue to be a significant component of our capital allocation at BN.

Back at BN. Okay. I mean it's very reminiscent of kind of everyone thought real estate was going to die a couple of years ago and well, it didn't really.

I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Ms. Katie Battaglia for any closing remarks.

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

This concludes today's program. Thank you all for participating. You may now disconnect.

Good day, and welcome to the Brookfield Corporation Fourth Quarter 2025 Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Ms. Katie Battaglia, Vice President, Investor Relations. Please go ahead.

Thank you, operator, and good morning. Welcome to Brookfield Corporation's Fourth Quarter and Full Year 2025 Conference Call. On the call today are Bruce Flatt, our Chief Executive Officer; Nick Goodman, President of Brookfield Corporation; and Sachin Shah, Chief Executive Officer of our Wealth Solutions business. Bruce will start off by giving a business update, followed by Nick, who will discuss our financial and operating results for the year. And finally, Sach will provide an update on our Wealth Solutions business.

After our formal comments, we'll turn the call over to the operator and take analyst questions. In order to accommodate all those who want to ask questions, we request that you refrain from asking more than 2 questions.

I would like to remind you that in today's comments, including in responding to questions and in discussing new initiatives in our financial and operating performance, we may make forward-looking statements. including forward-looking statements within the meaning of applicable Canadian and U.S. securities laws.

These statements reflect predictions of future events and trends and do not relate to historic events. They are subject to known and unknown risks, and future events and results may differ materially from such statements. For further information on these risks and how their potential impacts on our company, please see our filings with the securities regulators in Canada and the U.S. and the information available on our website.

In addition, when we speak about our Wealth Solutions business or Brookfield Wealth Solutions, we are referring to Brookfield's investments in this business that supported the acquisitions of its underlying operating subsidiaries. With that, I'll turn the call over to Bruce.

Thank you, Katie, and welcome to everyone on the call. 2025 was a very active year for the business. We advanced a number of strategic initiatives and delivered strong financial results. Our cash flows are now supported by our large-scale capital base, which totals $180 billion and the diversification of our platform across asset classes, geographies and capital sources, all of which provide multiple avenues for growth and position our business to remain resilient and grow across economic cycles.

In the last 12 months, we raised $112 billion of capital, financed nearly $175 billion of assets, completed $91 billion of asset sales. and deployed $126 billion of capital while growing our insurance asset base to $145 billion. That all allowed us to deliver record financial results with distributable earnings [indiscernible] realizations of $5.4 billion and total distributable earnings of $6 billion. Nick will cover financial results in more detail, and Sachin will spend some time discussing our wealth solutions business shortly.

Before they speak, I will add a few things. Looking back to 2025 in the stock market, our stock generated a 21% return for shareholders. That increased our 30-year track record to an annual compound return of 19%. That's $1 million with us over that period would be worth $285 million today. Of course, that's the miracle of compounding good results.

Turning briefly to the market environment. business fundamentals are strong. Capital markets have improved. Liquidity has returned both in debt and equity markets, interest rates have started to come down globally and transaction activity has picked up. In this environment, real assets should continue to outperform, offering investors the opportunity to earn excellent returns while taking moderate risk.

As our platform has grown, so has the scale of the work we do with our partners. Increasingly, we are partnering with the highest quality organizations on large-scale, sophisticated projects that are critical to both national and corporate priorities. Recently, that has included partnerships with NVIDIA, Microsoft, JPMorgan, the United States French Swedish and Qatar governments among others. Our ability to work with counterparties of this caliber underscores the strength, resilience and global reach of our platform. It also reflects a deliberate long-term approach to building our business with great partners.

We believe long-term business success requires many things, but 3 in particular stand out together. They make the difference between good and great long-term returns. First, it starts with identifying businesses that can endure and evolve. For decades, we focus on building the backbone of the global economy. And while that focus has remained consistent, long-term success requires evolving as the economy itself evolves.

Second, when a business is well positioned and well run, compounding becomes the dominant driver of value creation. Over long periods of time, small differences in annual returns can lead to very large differences in outcomes. And third, and maybe most important, avoiding disruption to the compounding process and business success is critical. Compounding works best when capital is allowed to be remain invested for long periods of time.

For us, that means that we must always keep excess capital to ensure that we can ride through any market cycle. And our balance sheet strength as Nick will later gives us flexibility to do just that. It allows us to stay focused on long-term value creation, allocate capital selectively and take advantage of dislocations when others are more constrained.

Real estate illustrates this well. Over the past 40 years, we have invested in operated and monetized real estate across many market cycles. Our approach has always been ground in fundamentals. We acquire assets for value, finance them conservatively and manage them actively. In the most recent cycle, dislocation was driven largely by capital markets and shifting sentiment rather than a deterioration in underlying fundamentals.

While many step back, we remain active, continuing to invest, develop and reposition assets. And today, this sentiment is beginning to realign with fundamentals. New supply across core markets is very muted, demand is growing and asset values are set to rise substantially. We enter this next phase from a position of strength, owning the highest quality real estate in supplies constrained markets, operating it through our leading platforms.

And as we have seen across cycles, great real estate owned and managed well, always wins over time. That same long-term mindset applies to our other businesses, including how we think about our structure in the public markets. Over the last 15 years, as many of you know, we've offered listed versions of our investment strategies through what we refer to as our listed partnerships. To broaden accessibility for global investors need to later paired with sister corporate entities.

And when we created our insurance business 5 years ago, we followed the same approach, establishing it as a listed sister company to Brookfield Corporation, trading under the symbol [ BNT ]. These structures have served our business extremely well. But as markets evolve and with the continued expansion of index investing, splitting market capitalizations has become sub-optimal, as a result, we're now focused on streamlining and consolidating our market capitalizations.

As an initial step last year, we announced the combination of Brookfield Business Partners with its sister company, Brookfield Business Corporation. This transaction creates a single listed entity that is index eligible for the entire market capitalization and it now reflects the full scale of the business in one company. Building on that momentum, this year, we intend to work on merging Brookfield Corporation with its paired sister insurance entity, [ BNT ]. This will streamline our structure and enable the next evolution of Brookfield, bringing together our insurance and our balance sheet investment activities into one entity.

This will also add substantial capital to our insurance operations, supporting growth in that business that is underpinned by our real asset-focused investment strategy while our excess capital will enable us to operate at industry low operating leverage.

In closing, we have strong momentum across all of our businesses, significant access to capital and a long runway of growth. We're well positioned and confident in our ability to continue to deliver financial results and compound value for shareholders. 2026 should be another strong year. Thank you all for your continued support and interest in Brookfield. I will now turn it over to Nick.

Thank you, Bruce, and good morning, everyone. We delivered record financial results in 2025, supported by strong momentum across each of our core businesses. Distributable earnings or DE, before realizations for the year were $5.4 billion or $2.27 per share, representing an 11% increase over the prior year. Total DE, including realizations was $6 billion or $2.54 per share and total net income was $3.2 billion for the year.

Our Asset Management business delivered record results in 2025, generating $2.8 billion of distributable earnings or $1.17 per share. We raised $112 billion of capital during the year across a diversified set of strategies, reflecting continued investor demand for our fund offerings. Fee-bearing capital increased by 12% to over $600 billion and drove a 22% increase in fee-related earnings to $3 billion.

Looking ahead, with strong fundraising visibility, including the launch of our latest flagship private equity fund and our inaugural AI infrastructure fund, and with the announced acquisition of Oaktree, our asset management business is well positioned to deliver another year of meaningful earnings growth.

Our Wealth Solutions business delivered strong results in 2025, generating $1.7 billion of distributable earnings or $0.71 per share, representing a 24% increase over the prior year. Our results were driven by continued growth in our insurance platform with $20 billion of annuity sales during the year, alongside improved profitability in our P&C business. On the investment side, we deployed $13 billion into Brookfield managed strategies, supporting a sustained 15% return on our equity, while generating a 2.25% growth spread and Sachin will expand on this in more detail in his remarks.

Our operating businesses continued to deliver stable and growing cash flows, generating distributable earnings of $1.6 million or $0.68 per share for the year. This performance was supported by strong underlying fundamentals across the platform. Operating funds from operations in our renewable power and transition and infrastructure businesses increased by 14% over the prior year, and our private equity business continues to contribute recurring high-quality cash flows.

Within our real estate business, we have seen sentiment realign with the strong underlying fundamentals that have been in place for some time now. The environment today reflects several years of limited new supply across major global markets, while tenant demand has continued to grow, translating into strong leasing activity and meaningful rent growth for high-quality assets.

During the year, we signed nearly 17 million square feet of office leases globally with net rents averaging 18% higher than expiring leases across our super core and core+ portfolios. Few portfolio highlights include: in New York, we signed 2.4 million square feet of leases at rents 20% higher than those expiring. In Canada, leasing activity picked up meaningfully over the year. We signed 2.4 million square feet of leases at rents 10% higher than expiring levels. And in London, we signed nearly 800,000 square feet of leases at rents close to 10% higher than those expiring.

This lease activity reflects strong demand from large creditworthy tenants such as Moody's and Visa who are relocating their regional headquarters to our properties, alongside many -- of many of our other high-quality tenants that executed long-term renewals and expansions. At the same time, properties that we delivered or substantially repositioned over the past few years, including office assets in major global markets are now nearly fully leased and achieving some of the highest rents on record.

As a result, our portfolio finished the year in a very strong position with our Super Core and Core+ portfolios more than 95% occupied and poised to continue delivering robust NOI growth in 2026.

Turning to monetizations. 2025 was a record year, advancing $91 billion of asset sales across the business at attractive returns, including $24 billion in real estate, $22 billion in infrastructure $12 billion in renewable power and $33 billion from private equity and other investments. Substantially, all sales were completed at or above carrying values, realizing meaningful value for our clients.

During the year, we realized $560 million of carried interest into income and ended the year with $11.6 billion of accumulated unrealized carried interest. And with a strong pipeline of planned asset sales across the business, we expect carried interest realized into income to accelerate over time.

Moving on to capital allocation. In addition to investing excess cash flow back into the business, we also returned $1.6 billion to shareholders in 2025 through regular dividends and share buybacks. We repurchased more than $1 billion of Class A shares in the open market at an average price of $36, which represents nearly a 50% discount to our view of intrinsic value including approximately $150 million repurchased since last quarter.

We also maintained strong access to capital markets during the year and executed approximately $175 billion of financings across the franchise including $53 billion in infrastructure, $42 billion in real estate, $37 billion in renewable power and more than $40 billion in private equity and other businesses.

At the corporation, we issued CAD 1 billion of 7- and 30-year notes at favorable spreads in December and subsequent to year-end, our real estate business completed an $800 million fixed rate financing at a supercore office property in Manhattan at very attractive spreads further underscoring lender appetite for high-quality assets.

Lastly, we ended the year with a conservatively capitalized balance sheet, strong liquidity and record deployable capital of $188 billion. Taken all together, the strategic initiatives we advanced in 2025 fueled meaningful momentum with a $180 billion permanent capital base, strong liquidity and multiple avenues for growth, we are well positioned to continue compounding shareholder value in 2026 and over the long term.

With that, I am pleased to confirm that our Board of Directors has declared a 17% increase in the quarterly dividend to $0.07 per share payable at the end of March to shareholders of record at the close of business on March 17, 2026. Thank you for your time. And with that, I will now pass the call over to Sachin.

Thank you, Nick, and good morning, everyone. I'm pleased to join the call this quarter to provide an update on Brookfield Wealth Solutions. 2025 was a strong year. We finished with over $140 billion of insurance assets, generated $1.7 billion of distributable earnings and delivered a return on equity above our mid-teens target.

As we look ahead to 2026, we are very well positioned to deliver continued growth across both our retirement and protection businesses. As always, our ability to invest into the broader Brookfield investment platforms continues to be a key advantage for us. Access to long duration, real asset equity and credit strategies that provide stable recurring cash flow growth and attractive returns provides a differentiated foundation for driving the business forward.

On our current trajectory, we expect to end 2026 with circa $200 billion of insurance assets, over $2 billion of distributable earnings to Brookfield and a capital base exceeding $20 billion, well above our regulatory targets. Importantly, this growth is supported by a highly diversified business across multiple scale geographies, high-demand retirement products and a growing protection franchise which together provide multiple avenues to source long-duration, low-cost liabilities.

We have a number of important priorities in 2026, and I will highlight a few of them now. which we believe will drive stable, reliable earnings growth over the next decade and should lead to continued growth in the value of our business. First, we are focused on closing, integrating and scaling our U.K. acquisition. Over $50 billion of pensions are expected to come to the U.K. risk transfer market in 2026 and over [ GBP ] 500 billion of pensions will come to the market over the next decade. This represents a large and growing opportunity set. We have made substantial investments in the pension markets acquiring platforms for value while building out operational capabilities required to scale.

Our recently announced acquisition of the [ just Group ] in the U.K. is expected to close in the first half of 2026 and we are already advancing plans to grow that business and execute on over [ GBP ] 5 billion of pension opportunities annually.

At the same time, we are working to grow our footprint in Asia where savings products continue to be in high demand as populations age and retirement income is highly desirable. Japan's life and savings insurance market is one of the largest globally with approximately $3 trillion of assets on insurer balance sheets today, reflecting the depth of long-term savings and retirement liabilities that create significant opportunities for retirement income and growth-oriented solutions in the region.

More broadly, across Asia Pacific, demographic shifts are driving a rapid increase in financial assets with life and pension savings representing an increasing share of household wealth. We are in the early stages of building our business in Japan and broader Asia, having completed our first transaction in Japan at the end of 2025.

We have a strong pipeline of opportunities ahead of us, which should translate into $3 billion to $5 billion of annual flows over time. In the U.S., we are expanding our retirement distribution capabilities to drive in excess of $30 billion of inflows into the business annually over time.

U.S. fixed annuity demand exceeded $300 billion in 2025 as aging populations continue to look for stable retirement income. A significant portion of that demand flows through large bank and broker-dealer channels, which have been a key area of focus for us. On average, these channels account for 2/3 of U.S. retail annuity sales, whereas they have only represented about 1/3 of our sales historically.

Given the sustained demand through these channels, we have been investing into these relationships. We've expanded our offerings on one such platform already this year are on track to launch a second before the end of this month and expect to launch 2 additional platforms within the calendar year. Given our expansion, our annualized organic inflow should comfortably grow to over $25 billion in the near term.

As it relates to our protection franchise, we are prioritizing and identifying opportunities for scale as markets soften through selective M&A, organic growth and expansion of our reinsurance capabilities. Our protection business delivered $8 billion of float to manage in 2025 at virtually no cost of funding. We have made tremendous progress to date focusing the business on reducing risk, exiting low profitability lines of business, and positioning for softer markets ahead, which we believe will lead to more compelling growth opportunities over time.

Lastly, we are continuing our pivot towards equity-oriented strategies to enhance investment returns using our strong capital base to deliver higher quality earnings with lower operating leverage. In 2025, we deployed $13 billion into Brookfield originated strategies and average net yield 8.5%. We also made additional commitments to Brookfield-sponsored private funds, which will be further accretive to our earnings as those funds call and deploy capital over the medium term.

To bring this together, the strategic initiatives we have executed to date, together with our priorities outlined for 2026, position the business for continued earnings growth. We have a platform that benefits from diversification across distribution channels geographies and product types, allowing us to access the most competitive risk-adjusted cost of capital.

With a strong pipeline of real asset investments across Brookfield's various strategies, we feel confident in our ability to continue compounding our capital at well above our mid-teens targets. Thank you for your time. And with that, I'll turn the call over to the operator for questions.

[Operator Instructions]. And our first question will come from the line of Kenneth Worthington with JPMorgan.

You've spoken in the past about scaling the P&C business. And today, you called out the protection business and the improved profitability a number of times in the prepared remarks. So I was hoping you could flesh out your comments and talk about where the business stands today, maybe a bit more on how you plan on scaling it from here? And then lastly, what's the right relative size of the P&C business to the life and annuity business for you?

Sure. It's Sachin here. So you're right. We've talked a lot about our PMC or protection business, as we call it, I would say the last few years, and you would know this just from the general market backdrop has been a very hard market. You've seen record profits in established P&C platforms. And during that period to acquire businesses for value was very difficult.

Owners would expect significant multiples on book capital and not everyone had a great platform or has a great platform, yet valuation expectations were tremendously high. Our approach during that period was to acquire platforms where we felt we could acquire them at a significant discount to book, work on repositioning them and really orient them to the next cycle that will come, softer markets and ensure that we have a good risk culture, a good cycle management culture and that we could grow them organically even if markets start to soften, which we're seeing pretty significantly right now, in particular on the property side.

Where that leaves us is we now have a business that is generating strong profits. We've been able to reposition our investment portfolios much more to equity-oriented strategies we are breakeven on underwriting profit and we'll be generating underwriting profits going forward. And we now have a platform that as markets soften, we think that we can pursue M&A. There will be some platforms who struggle in this environment.

We think we can build out reinsurance capabilities. and we can continue to diversify our lines. So I think from the outlook perspective, the business has a very strong outlook ahead. In terms of size, we have about $3 billion of capital that supports our protection business, $8 billion of float. And I think we could comfortably see a path to $20 billion to $25 billion of flow by the end of the decade. I'll pause there.

And that will come from the line of Bart Dziarski with RBC Capital Markets.

Wanted to ask around the decision to simplify the structure and collapse P&T. So I know you called out a few reasons in the letter, but can you maybe unpack the decisioning there why now and the expected time frame?

Bart, it's Nick. I think in the letter and in Bruce's comments, we provided a lot of the background. What I'd add to that is -- we have seen an evolution in public markets. And as our business has evolved, we do believe at this point in time, it makes sense to streamline and simplify and we've seen the benefits of that play out for [ BBU].

And as we think about -- when we set up BN originally -- sorry, BWS, when we started investing in insurance, we did so thinking it was a very attractive stand-alone investment opportunity. And to stand it up on its own 2 feet, we set up a paired security [ BT ] that added value and provided optionality as we continue to scale the business.

I think, as you know, as we've discussed, we see things quite differently now. The insurance business has scaled meaningfully. There's great growth potential ahead for that business. And as it's grown, we've realized the tremendous synergies that it has with overall Brookfield and therefore, it has increasingly become more integrated with the corporation. And today, the business fully benefits from the investment ecosystem of BAM, offering ideal investment solutions to back the liabilities that we have.

But we think the next step is to also allow the business to fully benefit from the capital base of the broader Brookfield the full $180 billion of capital that we have to back its growth while allowing it to maintain low operating leverage. So what that means for the business is that we're working on a plan to combine BN and BNT into a single-listed company, one security.

We would see no change to the governance, the management team, the investment processes, the risk framework within the business, but the end result would be a streamlined structure that provides investors with simpler access to our business, will sustain and ultimately enhance the long-term growth profile of the business. So we will continue to work on that. And as we said in the letter, we'd like to think we can execute it within the next 12 month.

Great. Very helpful. And then just sticking with, I guess, Brookfield Wealth Solutions. Very strong ROE. It looks like it's north of 15%. I think we get it on the asset side as to how the strategy is differentiated. Is there anything on the liability side that's also contributing to that? And what's the outlook there in terms of preserving that ROE in this year?

Bart, it's Sachin. Yes, on the liability side, we've really been focused on diversification of product type. That started with simple annuities and a small P&C business. It's really morphed into geographic expansion, a multitude of retirement products that we sell through all of our businesses, getting into the pension markets and scaling there and broadening out our P&C business.

What that really means in practice is at the top of the house, we can look at where our capital is allocated, and we can allocate it to where the cost of funding is the lowest. And therefore, we can move our capital around by geography, by product type and ensure that as competition increases in one area, we move away to an area where we see better value. We couple that with our investment franchise at Brookfield and that leads to really robust spread and really robust total returns for the business.

That will come from the line of Alexander Blostein with Goldman Sachs.

Thank you. Good morning, everyone. Just maybe another one around PC definitely seems like you guys have been hinting to that for a couple of quarters now, but it definitely feels like you're leaning into that more aggressively, both organically and perhaps inorganically.

How are you thinking about the risk that brings to the BN platform as a whole, obviously, quite different than the annuities business. And when we think about the opportunity that, that creates for [ BAM ] as far as incremental assets that could be managed or fall under the [ IMA], what would be the implications for the management fee business?

I'll start with, just the balance sheet of the P&C business. As you know, it's a lower leverage business. So I think it requires capital to grow, but you don't get the same operating leverage as you do an annuity business. And for that reason, you don't get the same projected assets going over to BAM.

That being said, our annuity business is very large. It's global. And we really have focused the last 5 years on scaling that. So we have a regular flow of capital coming into the group. On the P&C side, the real benefit for us is there will be times where that business, we see opportunities to drive our funding cost down because we can move into parts of the protection market that don't have as much competition.

And remember, the annuity market today is very competitive. All of our peers are in that space. Many small asset managers have gone into it and all the incumbent insurers are very aggressively growing their retirement business as well. So it was prudent for us to build other levers to drive funding costs down and to be able to allocate capital in parts of the business that have less competition.

Got it. All right. That's helpful. Okay. Second question for you guys, maybe pivot to real estate. The fundamentals in the business look like continue to improve. If we look at NOI, FFO, any of the metrics you guys put out, looks like it's been a nice improvement over the last couple of quarters now, but help us maybe unpack what's been driving that?

And within that, I believe there's quite a bit of floating rate debt that still benefits the cash flows of your real estate franchise. Maybe help with some sensitivity around kind of, I don't know, 25 basis point cut in rates, how much does that impact the cash flows across the entire [ BPG ] real estate.

Alex, listen, I think we've talked at length about the fundamentals and the market dynamics going on in global real estate right now, and they are continuing to build momentum. And I'd say that's across the highest quality office and retail. If you look at the office markets in global gateway cities, there is very low to no new supply coming on market.

New supply is not expected for -- in large scale anytime soon, and yet tenant demand continues to grow. And we've seen that inflection point in that business in the last couple of years, this year, accelerating still going on with a number of tenants. We're actively engaged with through a very large requirements for high-quality space. We signed -- 2 of the largest leases in downtown last year, I think, is the largest ever move of a tenant in the downtown core are definitely for some time into a trophy building and we can see that momentum continue.

Look in London, one of the tightest markets globally now setting record rents with each lease we signed in the city, tenant demand in Canadian Wharf, the strongest we've seen -- so those are the underlying drivers for the growth in the NOI in office. Now as we move those tenants in and we vacate space, it takes time to come through the numbers, but the underlying momentum and the valuation appreciation is coming through the numbers and in retail -- the sales continue to be very strong.

We have a very strong seasonal performance in our assets this year, strong total year and again, expect sales growth this year with strong tenant growth. And all of these assets continue to sign leases at very strong positive spreads to the leases that are expiring. So that's driving the NOI growth, and we see that trend continuing. The capital markets are incredibly supportive of these assets. We just completed a financing in downtown New York last week and the debt stack was 10x oversubscribed up and down the stack.

So the capital markets are incredibly constructive. We continue to drive in spreads. So that's driving the NOI performance. On the FFO, you're right. We have some floating rate debt. We're probably right now about 75% to 80% fixed rate. But that floating rate movement, 25 basis points, it's probably roughly about $35 million to FFO on an annualized basis. But I'd say there's more going on than just rates coming down. We have the benefit of tightening spreads, and we have the benefit of some delevering come through the P&L. So I think the FFO trajectory continues to look positive from this point forward.

And that will come from the line of Michael Cyprys with Morgan Stanley.

I wanted to ask about heard the helpful commentary around some of the initiatives globally. I was hoping maybe we could double click on Asia. And if you could maybe elaborate a bit on some of the steps you're taking to grow your footprint in Asia, what we can expect from Brookfield here in '26 and over the next couple of years?

I think you mentioned a pipeline. Can you just elaborate on that pipeline, what that looks like? And then in Europe, as we move past the just deal, and we look out to later this year into '27, can you speak to some of the stuff that you're going to be taking to capture the opportunity set in Europe?

Sure. It's Sachin here. So first on Japan, I would say our pipeline -- we've been pretty active for the last 3 years in the Japanese market with teams on the ground focused on relationship building, leveraging the broader Brookfield brand. And as you know, there has been a pretty steady history of Japanese insurers undertaking reinsurance with foreign counterparties. And we've been able to build trust. We've been able to get onto the list of acceptable counterparties. We completed our first deal as we've announced last year with [indiscernible] [ Frontier Life].

I would say we now have strong relationships with half a dozen of the top insurers in Japan all of whom are advancing discussions with us about entering into partnership deals on both flow and in-force reinsurance. Not all of them will hit, but we expect a number of them will. And we feel pretty good that we will have just a recurring steady flow of reinsurance relationships in the country.

Beyond Japan, we're actively looking at markets like Korea and Hong Kong, Taiwan, where you have a similar savings dynamic that's occurring and aging populations that really aren't earning a proper yield in their savings products and look to insurance products to supplement returns for themselves. And I would say we're actively conducting outreach in those markets as well looking to build on our pipeline. Europe, I would say, is a bit more of a challenge. We've spent a lot of time in Europe.

On the annuity side and on the protection side. But I would say on the annuity side, the market there is much more regulated around what's called the with-profits business. And what it effectively means is your ability to generate spread is very limited by regulatory constructs. So I think if we're going to advance our business in Europe, we're going to do it very slowly, very carefully and make sure that we don't end up in a situation where -- the things that were good at Brookfield investing into real assets are not able to be done, that would be problematic for us.

Great. And then just a follow-up question, if I could, on carry. I was hoping you might be able to help how are you characterizing the outlook here for carry into '26 relative to '27?

Thanks, Mike. So I think we had a good performance in 2025, probably slightly ahead of plan for the year. And I know we've talked in the past about seeing an inflection point coming this year. The pipeline for monetizations continues to be very strong as we look out this year. And I'd say it's active in the right areas as it relates to carry. It's active specifically in the funds that are relevant for realizations across infra, real estate and within Oaktree.

So I think we feel -- we feel good about where we are today. Obviously, we feel very good about the valuation of the assets we're bringing to market. Timing is slightly outside of our control. But if we had to estimate, we think we'd see it start to step up in the second half of the year and then continue to scale into '27 and '28, as we've talked about before. So the valuations are good. The processes are going. The pipeline is strong, and it just depends on timing now.

And that will come from the line of Mario Saric with Scotiabank.

Just wanted to talk about the dividend increase was the largest and some time kind of double 5, 10-year CAGRs, the largest month of the booked publicly traded companies this year. I'm pretty sure it's not a result of lack of investment opportunities as we're hearing on the call. So I'm curious whether the increase is kind of a shift in dividend growth policy that better mirrors expected underlying cash flow per share growth going forward?

Yes. Mario, it's Nick. No, I think it's more simple than that. We obviously split the shares. And at BN, we haven't done sort of fractions of a penny increases. So we stuck with a penny. The payout ratio is still very low, as you know, -- so whilst it looks like a high increase on paper and it is a nice increase, the payout ratio is still very low and it's not a change in strategy.

We still are focused on reinvesting capital back into the business. And when we return capital to shareholders, we look to do it opportunistically through buying back shares. So I don't think it's a significant change in strategy. It's more a product of the fact that we split the shares this year last year.

Okay. Makes sense. And my second question, in the letter to shareholders, you talked about identifying fees that enable investment growth. You've talked a lot about digitalization, decarbonization and equalization have maintained over the past decade, associated with your commentary about the need of an organization to evolve over time, if you have to guess, what are some themes that you may be discussing at your Investor Day 5 years from now that may or may not be ticked on what you're talking about today.

Listen, I think the themes that we have today have a long runway ahead of them. We are in the very early stages of the build-out of supporting the growth of AI and this revolution. And I think the themes will still be anchored by the same fundamental principles.

They're anchored today by the same principles we were talking about 10 and 15 years ago. So it's very hard to predict exactly what we'll be talking about 5 years from now. But I think it will be anchored on the same core fundamentals, but we do expect a very long runway from the current themes that are driving the growth of the business.

And that will come from the line of Jaeme Gloyn with National Bank.

Just a quick question on the North American residential portfolio. Just looking at the operating FFO this quarter, stepping up from Q3. Was there any increase in activity on sales this quarter versus the prior quarter? Or is that just more reflecting some of the seasonality in the business? And then kind of maybe talk through some of the outlook around that portfolio into 2026?

Yes. It's very much due to seasonality. The best way to analyze the performance of that business would be comparing the quarter performance for the prior year quarter as opposed to the prior quarter. There tends to be seasonality and strong performance in Q4. And when you look at it compared to Q4 of last year, we did have a onetime gain on a sale of a large lot.

So there is an outsized gain in last year's numbers. I think that the trend in that business continues to be what we've talked about for a while. It's a very well-performing business for us, very well run, generates good cash flow. But for sure, we are seeing muted activity in the housing markets in Canada and the U.S. for now.

We expect that over time, the performance will improve as we see a shortage in housing, and we are very well placed with a very nimble platform and if you think back to Q1, we did derisk that investment by pulling out $1 billion of capital by exiting a few of our master planned communities, and we've positioned that more as an asset-light business now -- we continue to scale the land servicing and land management businesses for our clients, generating fees for Brookfield Asset Management. But I think as we look forward, we do see sort of muted performance at the start of this year, but very well positioned to benefit when the market improves.

And then following in the same theme around the real estate assets, if I kind of go back to a couple of Investor Days, the view would be that real estate assets would sort of decline through the 2029, 2030 period. But we've kind of seen that tick up over the last several quarters.

So I guess, is that a reflection of just paying out of the assets for now until better monetization opportunities present themselves? And do you see that sort of accelerating in the early part of the year, second part of the year? Or is it maybe more of a '27 story when you see that start to unfold and see the capital levels start to drift lower?

Yes. Listen, I know I'm going to say that we've necessarily been aggressively acquiring as [indiscernible] and stepping up from acquisition, but we have obviously, been holding on to the assets. We've been focused on operational improvement and performance. And we've seen that. And as I said, the operating fundamentals have been strong for a while now, and that growth is only accelerating.

Capital markets get stronger by the day. And I think we are seeing market sentiment and broad market sentiment out of those really involved in the business day to day, really start to appreciate what's going on in the office market and the durability of high-quality office in the cycle and in long-term growth. And I think as that sentiment and acceptance broadens, you're going to see transaction activity really pick up. We've seen it more broadly for real estate businesses that we sold last year around the world, and we expect it to pick up for high-quality assets. The exact timing is always as hard to give you, but I do think it's close to coming back in a meaningful way. And when it does come back, we will be poised to monetize a number of assets in the portfolio.

And our next question that will come from the line of Cherilyn Radbourne with TD Cowen.

Thanks very much, and good morning. With respect to the plan to merge and BMT, if I recall correctly, there were some tax advantages associated with the holding [ DNT]. So I'm curious if losing those is effectively the cost of simplification. And to the extent that these were just paired securities, maybe you can elaborate a little bit more on how the insurance business was not previously benefiting from a full capital base of Brookfield.

Cherilyn, it's Nick. Listen, I think the -- we will be very focused as we work through this process over the next 12 months of preserving and maintaining all the operational benefits we have in the business. So you can be assured that we're focused on preserving that. I think today that it's a paired security but it is technically under insurance, a separate ownership structure.

So while per security, the ownership chain is slightly different. So as we have looked to capitalize BWS since inception, it has involved us actually moving capital over the business of the BN balance sheet. And I know that's a subtle difference, but having them under the single ownership will allow us to put the business under the total capital base of the organization. So it's a slight structural nuance. It served a lot of benefits as we've grown the business for inception, but there is a clear benefit now to putting them together and realizing that full potential.

Okay. That makes sense. And then a question on BWS and the reallocation of the flow to ban managed strategies. I think you reallocated $13 billion in 2025 versus annuity inflows of $20 billion. So I assume that still results in some timing-related pressure on the spread. Does that $13 billion need to step up in 2026? And can it step up as [ Dan ] holds first closes on 3 large flagships?

Cherilyn, it's Sachin. So first, the $13 billion that we invested into BIM strategies, that represents the illiquid private portion of our total asset base, which today is about 50% liquid, 50% private and we'll stay in that range. So I would say, in fact, as we've been rotating the asset portfolios from companies that we've acquired, we're exceeding our 50% target because we started with a very large liquid base of assets.

So as money comes in, you should think of it that in general, half the money will stay in liquid cash and liquid securities and half the money will go into Brookfield private fund strategies or other opportunities that come into the Brookfield investment universe. So I'm not worried that we won't be able to keep pace. In fact, we've been exceeding the run rate pace that we need to achieve.

Okay. So if I understand that correctly, basically $10 billion of the $20 billion should have gone into private strategies. And so the $3 billion is kind of a catch-up on the liquidity that you had entering the year. Is that a good way to think about it?

Yes, that's correct. If you were to keep it very simple, that's the correct way to think about it.

And that will come from the line of Sohrab Movahedi with BMO Capital Markets.

Okay. Sachin, I wonder if you could just unpack something you said a little bit earlier in -- I think in response to kind of managing the cost of funds you were talking about having the flexibility or the ability to kind of allocate capital to the lowest kind of cost of fund I guess, jurisdictions to generate the returns. When I look at your cost of funds throughout the year, presumably, you've been doing that. So is this as good as it gets -- or can cost of funds come lower from here? And how quickly can you pivot from one jurisdiction to another in the capital allocation?

Sohrab, so first of all, it's not as good as it gets. I think there's still -- there's always room to do things better in a business. I think Japan, in general, is a low funding cost market. So as we build out there, that should help us drive our funding cost down. The P&C business is when run well, and you saw it in this year's results, we had 0 cost of funds. So they meaningfully drive down your funding cost. And as we grow both of those areas of the business, you should see that help drive the weighted average cost of funding down.

In terms of the speed at which you can move, we're in the market every day. We have products that get repriced on the annuity side monthly. And so we can pull back pretty quickly. Pension markets are bid on as individual transactions. And when they get too expensive for us, we pull back on bidding on them. and P&C float has a shorter duration. So you can quickly shrink your book if you feel like the markets there are either softening too much or there's too much capital chasing deals. So for us, it was important to have that level of diversity, and we think we can be pretty nimble.

Okay, that's excellent. And given that flexibility and nimbleness, is it aspirational of me to think you could move that 15% ROE higher? Or is that 15% target given everything you just said?

I think -- the way I would look at it is we are trying to maintain a pretty conservative balance sheet. We're trying to keep leverage levels low, and we're trying to keep capital base high. All of those things go against higher returns, as you can imagine, but they lead to a safer balance sheet and a higher quality of earnings.

If you couple that with our investment strategy and our ability to drive funding costs down, that's why we say mid-teens is our target. If we ran at the same operational leverage as maybe some of our peers in the space, the returns would be higher, but we would be taking more risk to do so. So I would look at it as if we're trying to build a business for a very long-term horizon, we're trying to do so where we've got a lot of excess capital, and we're pretty comfortable that mid-teens is just a good target for us to maintain.

I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Ms. Katie Battaglia for any closing remarks.

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

Ladies and gentlemen, thank you for participating. This concludes today's program. You may now disconnect.

Okay. Thank you. Good morning, everyone. It's my pleasure to introduce Bruce Flatt, CEO and Chair of the Board of Brookfield. Over the last several years, the Brookfield ecosystem has evolved into a leading global alternative asset manager with over $580 billion in fee-bearing capital across a wide range of strategies.

The firm also operates a fast-growing insurance business and annuities business on the other side of the house now under BN, with deep expertise across the investment landscape. We look forward to hearing Bruce's perspectives on the environment, obviously, what's in store from Brookfield over the next year and beyond.

So thank you for being here. It's always great to spend some time with you at this time of the year as we turn the page on to 2026. So thanks for doing it.

Thanks for having me.

So I wanted to start with a bit of a bigger picture question for you guys, really on the back of some of the targets you announced at the Investor Day a few months ago, which effectively calls for a doubling of the business. And you have lots going on. You're on your way there. 2025 was a strong start in terms of the fundraising targets that you laid out. But as you look out into 2026, talk to us about the fundraising environment and how you expect that year to shape up for Brookfield from a fundraising perspective.

So I think probably the most important thing for us is we have a very diversified business. We have a big real estate business, a big infrastructure business, big renewables business, a big credit business, a big private equity business. And each of those is spawning other strategies as we go. I think next year, we have 50 funds in the market. So this is a broad and diversified franchise, which just means that no one single business is so important to the franchise.

And secondly, the asset management business, when it was spun off is largely fees today, and it grows into carry over 5, 7, 10 years. But today, it's largely -- it's just fee-bearing capital that's generating fees not influenced by carry. And as a result of that, the resiliency of the business is extremely strong. And we just haven't had -- maybe because of the diversification and because of the operations mentality and because of the quality of the type of business we have, we just haven't had issues raising money.

We raised $120 billion last year -- in 2024, I think. We've raised $100 billion this year. I think next year will be larger because we have a lot of our big funds in the market next year coming or starting now and through into next year. So we just haven't had the issues with fundraising that a lot of people have had.

When -- I think the issues have been if you're in a single industry or an industry that got hit a lot, like clearly, some of those issues affected us. But when you have a broad, highly diversified and highly global business, we just get the benefits from that.

Yes. Let's spend a couple of minutes on some of the bigger initiatives you guys have coming up. Obviously, AI, all things AI, AI infrastructure has been incredibly topical for the space, but really for you guys as one of the leaders in the space. You've actually described AI infrastructure as a multitrillion dollar capital formation cycle. You've been executing against that opportunity well with obviously a number of partnerships. You're in the middle of raising your large AI infrastructure program as well. You talked about that space being $100 billion of assets to Brookfield at some point of time potentially.

So what are the priorities into next year as you're building out this ecosystem, how the fundraising dialog is coming along as you're embarking on this kind of next leg of your journey?

So maybe the first thing just to step back and identify is that the single #1 thing that's important for artificial intelligence as we build out the backbone of intelligence is power. The biggest gaping hole in virtually every single country in the world, but in particular, in the United States is the fact that we do not have enough power to power AI. So we're -- we happen to be extremely lucky that we've been in the power business for our whole -- in fact, the whole company's history, but in particular, in the last 40 years. And we're the largest builder, operator, owner of power plants in the world in many different types of technologies. So that's the most important thing.

Second, what's going on now is that the fundamental backbone layer of artificial intelligence is being laid down. And the way I would refer to it is, in years past, we laid down railways, and we put down roads and we put down water systems, and we put down in the last 25 years, fiber and mobile networks. And now what's happening is we're laying down this artificial intelligence network. And countries need to have artificial intelligence networks or their companies and their systems of government will fall behind. So every single country in the world and every hyperscaler who are leading this are looking to build artificial intelligence infrastructure to warehouse compute capacity for their companies and for their countries.

And what's probably the most important thing because we decide the stock market. There's only a certain number of stocks out there. Therefore, when money tries to push towards one set of stocks, the PE multiples go up. But if you look at the fundamentals of what we do is we just build backbone infrastructure for companies or countries. So we've done transactions and we provide them power or we provide them compute capacity or data centers. We've done transactions with Microsoft and Google and Sweden and France and Qatar this morning, and we continue to build out in the United States. And all of that is really just the necessary backbone.

So I think probably the most important thing to leave you and everyone with is no matter what happens in stock markets, this artificial intelligence backbone build-out is very large, will be going on for 15 years. And those that have the operating capability to lay down the fiber, we'll be doing it for 15 years and the counterparty contracts in it are extremely good. And if you know what you're doing, very few mistakes will be made. And that's probably the most important thing.

So this -- back to your original question is how big is this going to be? It's going to be very, very large. And it affects everything. It affects our power business because we can't build enough. It affects our infrastructure business because all data centers and all types of infrastructure are getting affected by it. We set a separate fund up because we didn't want to gulf our infrastructure fund with artificial intelligence only. Therefore, we're -- we have a separate fund for that. It affects our real estate fund because many of our industrial sites that we have today, we're reverting away from industrial logistics to data centers if we have power and if we can locate the building.

So it's affecting all of these businesses. And of course, when these conditions exist, one has to be very careful. And I know that we will be and some others will be and some will not be. And they'll make mistakes along the way like always.

Yes. So just maybe double-clicking on that, given your exposure to this ecosystem and given all the headline concerns that we've seen, especially in a couple of months around the AI theme and potentially areas of overheating, how do you make sure you don't make some of those mistakes? So what areas you're avoiding and where are you leaning in?

I would just say that we've been building backbone infrastructure for the global best in various forms for our whole existence. And this backbone infrastructure is no different. The technology may be different. The companies or countries you're dealing with may be different. In fact, difference number one is they're all better credits than we used to deal with when we dealt with mining companies or forest companies or businesses that rented our real estate. But this is actually the same thing.

This is really just a real estate business. We build things, rent them to people, take credit risk and make sure that we have long enough contracts to get all our money back and a return on that capital. It's really -- this is really simple. People will make mistakes, but it's really simple at the fundamental basis of it.

And the good news is we have huge operating teams in all of these places to build out this infrastructure, but people will make mistakes when they don't know what they're doing on construction and building. They don't have financing properly put in place. They make missteps on contracting with counterparties. Those are the 3 risks. But they're all the same 3 risks that have always been in place, but every type of infrastructure in the world.

And I think the most important thing here is this is just for what we do anyway. Like we're not a technology provider, and we're not intending to be. We're just behind the scenes providing infrastructure like we always have.

Yes. So back to your original point where there's really not enough capital in the world today to support it. There's certainly not enough government capital to really support this. So when you think about your initial leg into this theme, you have the big AI fund that you're fundraising today. What are the vehicles? What are the products? What are the strategies you think could evolve around that? And when I think about Brookfield's history of building businesses, transition business is in one of the examples, more recent examples. How big do you think the AI infrastructure business will be for you guys over the next several years?

First point is there is enough money in the world to fund this because there's $60 trillion in sovereign institutional plans around the world. There's $40 trillion, $50 trillion of retail money that's out there. So there's $100 trillion. The funding we're talking $10 trillion. What you need to do -- it all sounds like small numbers. But what you need to do is figure out what's lacking is people to convert the $100 trillion into the $10 trillion. You need owner operators that know what they're doing and have the trust of countries and hyperscalers to be able to do that.

That's really what it is. It's the skilled intermediaries to build infrastructure and raise money from that $100 trillion to build out the $10 trillion. And so there is enough money. It's just -- we just have to figure that out.

And I would say what's important today is that the hyperscalers don't have enough money on their balance sheets. They're spending, I think it's quoted this year, $600 billion. It's estimated at $500 billion, $600 billion a year over the next 5, 7, 10 years. That's a lot of money even for $3 trillion to $5 trillion companies if they keep stacking it on the balance sheet. So they need access to groups like us that can convert the $100 trillion into investments that support their business and infrastructure. And the bottom line is that's what we've been doing in various businesses we have for many, many decades.

Great. Okay. Let's pivot away from AI for a minute. To your point earlier, Brookfield has a really diverse set of businesses across a number of different verticals. Where else are you finding interesting deployment opportunity? It feels like the pace of deployment has steadily been picking up. What else is interesting for you guys in terms of capital deployment over the next 12 to 18 months?

So I think in '25 to date, we invested $110 billion across the business, and it's pretty well diversified. We've done a lot of private equity businesses. We put a lot of money into real estate. We just announced a transaction in Australia, buying storage for $2.5 billion with GIC as a partner. We've done a lot of infrastructure deals, renewable power deals. We just did the deal with Westinghouse on nuclear. So it's pretty broad.

And I'd say that's the -- the success of our business is keep broadening the business and over time, keep growing it, but never concentrated in any one area because when you're building a business for the next 20, 30, 40, 50 years, being diversified helps. And it means that we're never subject to the markets. And if things are valued too high in one sector, we can just allocate capital somewhere else.

Yes. The other side of that coin is obviously monetization activity. It's been a place where the industry has sort of struggled for the last couple of years. It's really nice to see finally turning the corner in 2025. It's certainly been -- it's been a better year for realizations for the space. It's been a better year for you guys as well. I think over $75 billion of sales year-to-date through Q3. It's really across the franchise.

How should investors think about Brookfield's monetization outlook in 2026? And then within that, maybe talk a little bit about what are the segments or the product categories that are likely to be the biggest sellers?

One never knows what the future brings, but fundamental conditions out there are favorable towards continued monetizations and increasing monetizations for groups. Now still, there are some groups that are having difficulties because it's the type of businesses that they own. And I would say, in general, over the past 3, 4 years when monetizations were less, we did much, much better than average because most of the things we buy are cash flowing high-quality long-term businesses, which we've been able to sell.

And as you said, we sold $75 billion of investments this year. And if I took it in general, it was operating businesses, even in real estate, it was operating businesses which were very high quality that had teams to grow into the future. And largely, we did better monetizing outside the United States than inside the United States. With interest rates now coming down in the U.S. and with capital markets back I'd say, probably as efficient as they've ever been, you're going to see a lot of more monetizations in the United States, and that's good for us, but it's also good for the industry in general.

And the quantum, again, with the caveat that nobody has a crystal ball, but is the expectation '26 to be better than '25?

Yes, probably. I would say for us, it all just depends on the life cycle of different investments. We're not selling things just to sell. But generally, we sell $75 billion to $100 billion a year. Generally, we invest $100 billion to $125 billion a year. That keeps growing all the time as our funds get bigger and broader. But I think $75 billion to $100 billion next year is probably a good number.

Okay. All right. Let's pivot a little bit. I would love to spend some time on insurance and BWS, which is obviously part of Brookfield, the corporation, BN. It's been growing rapidly. You guys obviously established this platform as an investment-led insurance organization. It's really important to BN. It's really important to BAM. It's obviously very important to shareholders across probably both sides of that aisle.

So when you think about 2026 and beyond, can you talk about what are some of the levers you're pulling on to sustain the growth, number one? And number two, and perhaps more importantly, to continue to deliver 15-plus percent type of ROEs?

So for Brookfield Asset Management, I guess the simple point for it is it doesn't take exposure to insurance risk. It manages assets for institutional clients, retail clients and insurance businesses. And the largest client it has is Brookfield Corporation. Increasingly, it will become even a larger client because 4 or 5 years ago, we took $25 billion of the equity capital we had and we stuck it into an insurance business, into the equity of an insurance business. And now it's almost -- it will be almost $200 billion of assets shortly. And a lot of that capital is getting allocated in various strategies at Brookfield Asset Management. And we can't think of a better group to manage our capital. So I'd say that's what's important for Brookfield Asset Management.

At the parent company, our goal is to continue to seek financial services businesses that are -- can both earn us a very good long-term return on capital, but in addition, are symbiotic with the businesses that we have today. So insurance was super important to us because we thought we could invest into at a point in time, build the skills, make the early mistakes you always make when you're starting out in a business by getting into it at a point which was very fortuitous because interest rates were 0.

But the -- we thought it was a good business in itself, but it's an excellent business for the combined group because it will be a $500 billion business someday and all of that capital gets allocated to our asset management arm. And so it's -- there's a double win when we can do that. And increasingly, we continue to -- really our goal is seek capital with as little risk as possible on the liability side of the balance sheet and try to out-earn to earn excess returns by investing wisely. And that's always what we've done for our own balance sheet. That's always what we've done for our clients, and now we're just doing that for our insurance company is -- but we're not trying to take insurance risk and why we say it's an investment-led insurance company.

The difference is that we're not trying to take insurance risk to make money. What we're trying to do is minimize insurance risk, receive float and invest wisely. And that's -- it's just -- it's a different model that -- there are some that are like this, but it's different than most monoline insurance companies.

Right. So given, I guess, how important the investment capabilities are going to be for BWS to sustain the sort of 15% ROE, maybe even grow it over time. Talk to us a little bit about how the asset side of the balance sheet could evolve versus where it is today? What runway you see for utilizing more of Brookfield's asset management capabilities on the BWS balance sheet?

So our strategy so far has been as opposed to running an insurance company which just invests into traditional -- in traditional ways into both liquid and private credit. Our strategy has largely been a barbell approach not unlike what Berkshire Hathaway has always done, which is hold very large amounts of cash, which we hold today. And that allows you to put significant money into equity strategies, which earn much higher returns. So don't try to earn 7%, earn 3% in 14. And if you can earn 3% in 14, that averages to 7%.

But in our view, you can, a, earn a higher return on average if you do your job right, but b, you can take less risk because of the things that we know that we're doing. And the advantage that we have is that the strategies that are the underpinning of Brookfield Asset Management are long-term yielding cash flow type assets in renewables, infrastructure, real estate that are very well treated and earn excellent low-risk returns in an insurance company.

Got you. Another one on insurance topic for you, Property and Casualty. So I know when we talk about BWS, mostly is the annuities business. It's mostly the business that's been quite aligned with alternative asset managers when we look at a lot of your peers that are kind of participating in the same. You do have a small P&C business. What sort of strategy behind P&C? Is that a -- is it an opportunity? Do you see space to grow organically or maybe even via M&A? And how does that play into the symbiotic relationship with the asset manager because that's quite a different type of risk and probably different asset management strategy as well.

So the property and casualty business is a very diverse business, and most people think of it as we're underwriting hurricanes. That's not generally where we want to put our capital longer term because you're making risk and taking insurance risk. Our -- the business is small today. What we'd like to find is a relatively low-risk P&C area where we can become globally dominant and create float to be able to invest into our strategies, in particular, our higher earning equity strategies.

And as an example, we underwrite -- today, we underwrite insurance for real estate construction in New York City. And you might think we -- I hope you think that we have some knowledge to underwrite construction risk insurance in New York City as one of the largest owners of property in the city. So I don't know if that's one that we could take across the U.S. and then take across globally, but it's possible.

And so it's -- we're always trying to use the knowledge we have from our businesses and optimize our capital but earn low risk -- take low risk and earn a reasonable return by doing it but find areas where we have something special. I think we have something special in that. So we've been now -- we're now underwriting warehouses. We're a huge owner of logistics warehouses across the United States and globally. So we're now writing insurance for warehouses. We're writing insurance for renewable facilities. Of course, we know how to run renewable facilities and know how to replacement and are one of the largest insurers on the other side. So we know exactly what we're paying.

So we're trying to figure out -- we may never find one or we're going to find an amazing area where we can be a globally dominant player where we have more information than anyone else, and therefore, we can take risk that nobody else can. And then if we can do that, the goal is -- sorry, the goal is just take small amounts of risk on the liability side, create float to be able to allocate to our asset strategies.

Sure, sure. And if you don't find something like that inorganically, is there appetite to just write that kind of business organically and just kind of chug along and make it somewhat additive to the whole ecosystem?

Yes. Look, maybe we'll find one to buy. I don't know. In the absence of that, we'll just keep growing it organically. In the absence of that, we won't do it. Like the fact is that we have many things like that, that grow organically. Sometimes we find acquisitions. If we can't find it and it doesn't work, we'll shut it down.

So it's not -- these are all options. What our goal is how do we find low-risk float to be able to invest into using our investment skills to earn a higher return than we're paying on the float. And that's the simple strategy of BN. And Brookfield Asset Management is just there every day trying to put the money to work.

Great. Okay. Let's go back to Brookfield Asset Management discussion for a couple of minutes. I would love to get your thoughts on private credit. Obviously, it's been super topical for the last couple of months. It's your largest business. It accounts for about 1/3 of Brookfield's Asset Management management fees.

Now a lot of the concerns in the market have really been surrounding direct lending and some of the more levered part of the ecosystem. You guys actually don't have a whole lot of exposure there. But when you kind of zoom out and when you think about the multi-asset credit platform that you've built, what are some of the more attractive areas to deploy capital, number one? And how do you think about that platform growing over the next few years?

So again, it's important, but it's not everything. To us, we're highly diversified. So that's, I guess, the first point. Second is our -- we've spent the last 7, 8 years putting -- knitting together both organically within Brookfield and with a number of partner manager partnerships. We've been knitting together really a highly opportunistic credit business, which is our Oaktree franchise, alongside asset-backed finance, which we think will continue and continue to grow on the private side.

So when you think about it, it's funding of real estate, it's funding of infrastructure, it's funding of airplanes. It's funding of all of asset-backed finance. And our goal is to become the best asset-backed finance lender out there. And again, the reason is we think we have more information than most people who do this. Therefore, we should be able to earn either higher returns or take lower risk and earn the same returns.

And so we're continuing to grow that business. We're quite excited about it. And to the actual -- just the industry of private credit, I would say the private credit has caught a lot of headlines recently. I think everyone needs to just step back and consider the credit industry, of which Goldman Sachs participates in as well.

Last time I checked, yes.

And the credit industry right now, there aren't that many defaults. Defaults are very low. Credit is generally pretty strong. And you haven't seen a lot of issues. Now there's a few that came about that have been headlines. But this industry is not going away. There's going to be liquid credit and there's going to be private credit. Private credit is really what banks did for years, and a lot of that got pushed off the balance sheet to be able to ensure that they optimize their capital ratios.

And all private credit is we're accessing those clients we have over here with the $100 trillion to be able to put their money directly into loans. And our specialty is asset-backed finance and opportunistic, but everyone -- others will have their own specialties within each area they're in.

Great. All right. Another important area I wanted to make sure we talk about is real estate. Again, not a whole franchise, as you pointed out, you guys a diversified platform, but it's an important one. And it's important for both for a variety of reasons, right? It's important for BN on one end, and it's important for BAM on the other one.

So over the last few quarters, you've been pointing out signs of recovery, both on the fundamental side of the picture, but also the capital markets healing and hopefully, the lower rate environment will make it easier to start to sort of transact in the real estate space as well.

So as you look out into 2026, maybe talk to us a little bit about your plans for further monetizations out of the BN portfolio and sort of lessons learned so far in terms of the appetite for the assets that you're bringing in the market. And then on the fundraising side, at what point do you see healthier transaction activity translate into a more favorable fundraising outlook for real estate strategies?

So on fundraising, we just raised our big fund. I think it ended at $17.5 billion, if I'm not wrong, and circa that number. And therefore, there's not a lack of money out there for good sponsors who have good track records. That's point number one. I'd say the -- what happens in recoveries and this -- every cycle is different, especially in real estate. Every business, it's different, but real estate, in particular, every cycle is different. And this one is really weird because fundamentals are actually very, very strong. The issues have been in capital markets and some markets in the world, I'll say.

But capital markets got affected because of the psyche of people that real estate was bad because everyone went home and didn't go to the office and everyone didn't shop anymore, which both of those have been debunked, I think, would be the word to use. And so the fundamentals are actually very, very strong. In fact, I was reflecting this morning, we built 5 office buildings during COVID, 5 globally, Dubai, 1 in Dubai, 2 in London, 2 in New York, either got renovated or built, 3 in New York. They are 100% full today at 50% higher rents than pre-COVID and the highest rents ever signed in leases in each of those cities. That's an amazing fact. That's the worst business we've had, let alone storage, multifamily, et cetera, et cetera.

What the issue was is there was this psyche at the bottom of the market, compounded with interest rates went up fast and therefore, affected the capital structures of many people, many groups assets. And that was really the effect, and that's sorting itself out now. And capital markets are coming back. Transaction activity is coming back. All -- most assets are financeable today like in a normal fashion. And what that leads to is once you can finance assets because real estate can't be purchased without financing, once you can finance assets, sales start to come back. And you're seeing that today across the world. The U.S. was probably the heart of the most affected because interest rates went up the most and the fastest. But as interest rates come down here, you're going to see real estate come back even more.

Great. Perfect. Well, I think we'll leave it there. Bruce, thank you very much for joining us again this year. See you next year, hopefully, as well.

Thank you.

Hello, and welcome to the Brookfield Corporation Third Quarter 2025 Conference Call and Webcast. [Operator Instructions] After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]. I would now like to hand the conference call over to your first speaker, Ms. Katie Battaglia, Vice President, Investor Relations. Please go ahead.

Thank you, operator, and good morning. Welcome to Brookfield Corporation's Third Quarter 2025 Conference Call. On the call today are Bruce Flatt, our Chief Executive Officer; and Nick Goodman, President of Brookfield Corporation.

Bruce will start off by giving a business update, followed by Nick, who will discuss our financial and operating results for the quarter. As a reminder, we completed a three-for-two stock split on October 9, 2025. Accordingly, all per share amounts that are discussed during the conference call are on a post-split basis.

After our formal comments, we'll turn the call over to the operator and take analyst questions. In order to accommodate all those who want to ask questions, we request that you refrain from asking more than 2 questions. I would like to remind you that in today's comments, including in responding to questions and in discussing new initiatives in our financial and operating performance, we may make forward-looking statements, including forward-looking statements within the meaning of applicable Canadian and U.S. security laws.

These statements reflect predictions of future events and trends and do not relate to historic events. They are subject to known and unknown risks, and future events and results may differ materially from such statements. For further information on these risks and their potential impact on our company, please see our filings with the securities regulators in Canada and the U.S. and the information available on our website. In addition, when we speak about our Wealth Solutions business or Brookfield Solutions, we are referring to Brookfield's investments in this business that supported the acquisition of its underlying operating subsidiaries.

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

Thank you, and welcome, everyone, on the call. We delivered another strong quarter of financial results. Distributable earnings before realizations were $1.3 billion for the quarter, or $0.56 per share and $5.4 billion over the last 12 months. That was $2.27 per share. That was an 18% increase over the same period last year. Our outlook remains strong with each of our underlying businesses continuing to execute their strategic plans, driving strong organic earnings growth.

Turning first to markets. Economic activity and corporate earnings remain healthy. Capital markets are open and transaction activity is picking up across most asset classes. For our business, that backdrop is constructive and highly supportive of real assets. So far this year, we financed $140 billion of debt across our operations and closed $75 billion of asset sales at attractive values, including over $35 billion in just the past few months.

At the same time, the direction of monetary policy is turning. After an extended period of elevated interest rates, some softness in the labor market has started to prompt policy easing from the Federal Reserve to support growth and maintain balance across the economy.

And while the current environment is influencing policy decisions today, it is important to consider the structural forces that shape where policy goes from here. Over the past 15 years, governments have relied on fiscal stimulus offset slowdowns, leading to a buildup of public debt that is difficult to sustain in a higher interest rate environment.

Policymakers around the world are now evaluating the tools available to stabilize these debt burdens. The most constructive outcome of that and the one that we hope for is faster economic growth that outpaces debt, which can be helped by AI and innovation. Second, austerity is always possible, but not too many governments have shown the desire to push that.

And third, if growth stays modest, policymakers may instead quietly manage rates below inflation to ease debt burdens, lowering short rates and guiding long rates down. If this path is pursued, it would likely lead to a period of declining real yields and low nominal rates. This environment will provide the optimal conditions for real assets we invest into. Our portfolio is built around inflation-linked durable cash flows backed by hard assets that protect real returns.

The benefits of real assets are always evident, but in this evolving environment, they are becoming an essential investment product for every portfolio. A suppression of real yields will amplify these benefits and enhance long-term value across the franchise. Turning to the business. We are entering the final quarter of 2025 with strong momentum and a record almost $180 billion of deployable capital, position our business to invest for value in powerful secular trends that define the next chapter of growth in Brookfield, but also the global economy.

First, AI innovation is fueling unprecedented demand for large-scale infrastructure. Second, aging populations are reshaping global savings and driving demand for new wealth and retirement products, which is going to last for decades. And third, the real estate recovery is well underway. Nick will cover that and gaining momentum. Each of these trends represent a multi-decade opportunity to invest where our scale and expertise gives us a major advantage.

To that end, we advanced a number of strategic transactions during the quarter. In our Wealth Solutions business, we received shareholder approval for our acquisition of Just Group in the U.K., a region where growing retirement market is creating significant opportunities for long-term investment. We also announced a reinsurance agreement with a leading Japanese insurance company, marking our entry into Japan insurance market, the first of many expected opportunities in the region.

We agreed to acquire the remaining 26% of Oaktree that we don't own already, which will bring our ownership to 100% upon completion of the transaction. From the outset, our partnership with Oaktree has been grounded on shared principles, including a value-oriented approach to disciplined investing with a focus on compounding capital over time.

Our scale and real asset expertise combined with Oaktree's deep credit experience has created one of the most comprehensive and diversified credit platforms globally. Third, we continue to partner with leading institutions, corporates and governments around the world, and this is what makes our business different, combining capital expertise and our global reach to capture opportunities for all.

We have several initiatives underway to deliver the next generation of energy transition in AI infrastructure globally, and I'll just mention a few. Through Westinghouse, during the quarter, we partnered with the U.S. government to deliver $80 billion of nuclear reactors. For context, that is the equivalent of 8 large-scale nuclear plants, enough, for example, to power the entire state of Utah. These projects will help rebuild critical supply chains in the U.S. revitalize the domestic nuclear industry and marks an inflection point for the growth of nuclear energy in North America.

With Bloom Energy, we are developing 1 gigawatt of behind-the-meter power generation from fuel cells to meet the growing demand from AI data centers and other energy-intensive applications and we think this is just the beginning.

And through our strategic partnership with Figure recently announced a leading developer of humanoid robotics, we are providing access to our portfolio of real assets to create the real-world environments needed to develop, train and deploy this technology safely and effectively, positioning us, most importantly, at the forefront of one of the most significant technological advances of the coming decades.

Looking ahead, despite our size and scale today, our growth potential is greater than it has ever been. Our investment discipline, operating expertise and access to large-scale capital positions us to deliver another strong phase of growth for shareholders in years to come. As always, thank you for your support. We appreciate your continued interest in Brookfield and over to Nick.

Thank you, Bruce, and good morning, everyone. We delivered strong financial results for the quarter, supported by continued momentum across our core businesses. Distributable Earnings, or DE, before realizations were $1.3 billion for the quarter or $0.56 per share and $5.4 billion over the last 12 months or $2.27 per share, representing an 18% increase over the prior year period.

Total DE, including realizations was $1.5 billion or $0.63 per share for the quarter and $6 billion or $2.54 per share over the last 12 months with total net income of $1.7 billion over the same period. Starting with our operating performance, each of our businesses continues to perform well.

Our Asset Management business generated distributable earnings of $687 million or $0.29 per share in the quarter and $2.7 billion or $1.14 per share over the last 12 months. Strong fundraising momentum led to $30 billion of inflows during the quarter and included over $6 billion from our retail and wealth clients.

Fee-related earnings increased by 17% to a record $754 million as fee-bearing capital grew to $581 billion. During the quarter, we held the final institutional close of our second vintage flagship global transition strategy with total commitments of $20 billion exceeding our target and marking the largest private fund globally dedicated to energy transition.

We also launched our seventh vintage flagship private equity fund focused on essential services and industrial businesses and are preparing to launch our inaugural AI infrastructure fund, which together will drive strong fundraising momentum going into 2026. Finally, jointly with Brookfield Asset Management, we announced the acquisition of the remaining interest in Oaktree, of which $1.4 billion will be funded by the corporation.

The transaction expands our ownership in Oaktree's carried interest fee-related earnings and balance sheet investments and further strengthens our global credit platform. Transaction is expected to close in the first half of 2026, subject to customary closing conditions and regulatory approvals.

Turning to our Wealth Solutions business. We delivered another quarter of strong growth with distributable earnings of $420 million or $0.18 per share in the quarter and $1.7 billion or $0.70 per share over the last 12 months. This represents organic growth of over 15% year-over-year, supported by strong investment performance, robust underwriting across property and casualty lines and disciplined capital deployment.

During the quarter, we originated $5 billion of retail and institutional annuities, bringing our total insurance assets to $139 billion. Importantly, we continue to focus on raising long-duration liabilities with approximately 80% of new retail annuities written during the quarter, having durations of 5 years or longer. Our investment portfolio generated an average yield of 5.7%, contributing to spread related earnings that were 1.7% above our average cost of funds.

As we continue to reposition the portfolio into higher-yielding real asset investments sourced within Brookfield, we are well positioned to sustain strong spread-related earnings. During the quarter, we deployed $4 billion into Brookfield managed strategies at an average net yield of 9%, which helped support a 15% return on equity, consistent with our long-term target.

We also made meaningful progress internationally, expanding across the fast-growing retirement markets in the U.K. and Japan. In the U.K., we received shareholder approval for the acquisition of Just Group, which remains on track to close in the first half of 2026 subject to customary closing conditions and regulatory approvals.

Upon closing, our insurance assets are expected to grow by approximately $40 billion to $180 billion. In Japan, we announced our first reinsurance agreement in the region with a leading Japanese insurance company to reinsure annuity policies on a full basis. These initiatives strengthen our position in key international markets and position us to capture the growing global demand for retirement solutions.

Our operating businesses continue to deliver growing and resilient cash flows generating distributable earnings of $336 million or $0.15 per share in the quarter and $1.7 billion or $0.72 per share over the last 12 months. These results underscore the strength of our operating performance and the continued momentum across each of the businesses.

Our infrastructure and renewable power and transition businesses remain at the forefront of secular trends, reshaping global investment opportunities. Recently, we announced new initiatives to advance next-generation power and AI infrastructure including our partnership with the U.S. government through Westinghouse to deliver $80 billion of new nuclear plants in the United States.

In our publicly listed private equity business, we announced plans to simplify its structure into a single listed corporate entity aimed at broadening the investor base and improving trading liquidity. Our real estate business continues to perform well, supported by improving market conditions and strong fundamentals.

Leasing activity remains concentrated in high-quality, well-located assets, driving strong operating performance across the portfolio. Our Supercore portfolio continues to outperform with 96% occupancy at the end of the quarter and our Core Plus portfolio, which shares similar high-quality characteristics ended the quarter with 95% occupancy.

During the quarter, we signed 3 million square feet of office leases with rents on newly signed leases averaging 15% above those expiring. Notably, at Canary Wharf, leasing activity remains very strong with over 450,000 square feet leased year-to-date putting 2025 on track to be its best leasing year in the past decade. The leasing pipeline is also the strongest it has been in years, underscoring the depth of demand for high-quality space and Canary Wharf positioned as 1 of the world's leading business destinations.

Turning to monetizations. Market conditions remain highly favorable for high-quality assets and businesses like the ones we own. To date this year, we have had $75 billion of monetizations across our franchise including $22 billion of real estate assets, $14 billion of infrastructure assets, nearly $11 billion of renewable assets, $7 billion from private equity and $21 billion from credit and other diversified assets.

Two recent highlights to note are as follows. In our infrastructure business, we completed the IPO of Rockpoint Gas Storage, one of the largest independent natural gas storage operators in North America. The offering was well received and oversubscribed raising CAD 810 million, the largest IPO on the Toronto Stock Exchange since May 2022.

Following the IPO, we have now realized a multiple of capital over 3x for retaining significant ownership interest in the business. And in our real estate business, we advanced the sale of the remaining assets in our U.S. manufactured housing portfolio for $2.5 billion, resulting in a total investment IRR of 25% and a 3.5 multiple on invested capital.

Substantially all sales completed this year were at or above carrying values and have crystallized significant value for our clients at attractive returns. Through these monetizations, we realized $154 million of carried interest into income during this quarter. Importantly, because our earnings recognition follows European water for model where carried interest is recognized only after we have returned to funds invest the capital and achieved the preferred return.

A number of the realizations have advanced our mature funds closer to that carried interest realization. Shifting to capital allocation. During the quarter, we reinvested excess cash flow back into the business and returned to the $180 million to shareholders through regular dividends and share buybacks. To date this year, we have repurchased over $950 million of shares in the open market at a roughly 50% discount to our view of intrinsic value.

Moving on to our balance sheet and liquidity. We continue to maintain a conservatively capitalized balance sheet and high levels of liquidity with record deployable capital of $178 billion at the end of the quarter. We also maintained strong access to the capital markets, executing $140 billion of financing so far this year, including the issuance of $650 million of 10-year senior notes at the corporation during the quarter.

Other notable financings include the successful refinancing of a $1.9 billion 5-year loan at a luxury resort in the Bahamas and 2 5-year CMBS issuances at New York trophy office buildings each over $1.25 billion, reinforcing the capital continues to flow to high-quality assets at attractive returns.

Bringing it all together, our financial results continue to be very strong, and we expect continued growth in our results over the remainder of the year and into 2026. I am pleased to confirm that our Board of Directors has declared a quarterly dividend of $0.06 per share, payable at the end of December to shareholders of record at the close of business on December 16, 2025.

On a post-split basis, the quarterly dividend is consistent with the previous quarter's dividend. Thank you for your time, and I will now hand the call back to the operator for questions. Operator?

[Operator Instructions] And our first question will come from the line of Michael Cyprys with Morgan Stanley.

If we think about the pillars of your success over the years, I think it's been your ability to adapt the business and innovate in recent years. You've added wealth solutions, continue to grow that. But recently, you've made some partnerships around AI, humanoid, partnership with Figure as one example. So I was hoping you could talk about how you see humanoid and AI broadly potentially creating another leg of the stool for Brookfield over time. I remember at your Investor Day, I think, embedded in your 2030 DE guide was about $2.6 billion of DE from capital allocation. Maybe you could help unpack the components there and how you think about other different contributors over time.

Good morning Michael and thanks for the question. I would break the answer into 2 parts. I'd say most of the capital deployment and the focus that we have today is around building the backbone infrastructure to support the build-out of AI. The growing demand, the secular trend of the growth of AI, the need for compute capacity and also the need for the power to drive that and be able to supply the electricity for the compute capacity is where we are investing most of our time in our dollars right now.

And we have a very unique position around that, given our capability and our global reach and our operating expertise around renewable energy, nuclear and other energy sources and then our data center and AI fund that we're launching soon. So I'd say that, that offers great growth potential for the franchise, and we're very well positioned to participate in that and are investing in a disciplined way to drive really, really impressive results so far.

I'd say the second component and the figure transaction that you talked about. Brookfield Corporation, what we're doing is looking to stay ahead of the curve and deploy capital for the benefit of the rest of the organization and for the benefit of our operations.

And what we see with the developments in AI in humanoid robotics, we believe that over time, will have a material impact on the way that businesses are run an even broader society. And so I think this is about investing as a defensive investment and an opportunity to make money, but to really learn and be at the forefront for the benefit of the broader organization and we would look to do that, I'd say, over time, we'd look to do that selectively as we see good opportunities to do so.

So I don't think of this as necessarily the next leg. I think it's a force and a trend that's driving broad growth across the organization, and we're well positioned to participate in it.

Okay. And then just a follow-up question on Wealth Solutions. So you signed the first reinsurance agreement in Japan expanding your global footprint. I was hoping you could talk about that arrangement? How you see that contributing. What's the scope for others in Japan as well as elsewhere around the world. Maybe you could just update us on your global ambitions. Clearly, you have that transaction underway in the U.K. .

Yes. Thanks. My guess, as you mentioned, we made the transaction -- well, we've agreed the transaction in the U.K., and we're working towards closing that transaction in the early part of next year. That's a significant step for us, scaling PRT and giving us access to a long-duration local of low-risk liability -- sorry, long duration pool of low-risk liabilities. And so we're excited to close that.

That really sets us up well in the U.K. market. And we identified Asia and Japan as the next market that we look to grow into and doing that in partnership with local players. This reinsurance, it's a flow agreement. So it's really a transaction that will build over time, month-to-month, quarter-to-quarter as we participate in the business that they're writing.

So it has the potential to scale and then it also has -- we also have the potential to partner with other local players. So very much about continued growth in both markets. And those are the 2 markets we're predominantly focused on outside of North America today.

One moment for our next question. And that will come from the line of Mario Saric with Scotiabank. .

Coming back to the Wealth Solutions business, Nick, I was wondering how long do you think it may take to get to your approximate 200 basis point target net investment yield spread? And then secondly, how should we think about the evolution of gross versus net insurance lows? I think in this quarter, it was -- the net was about 40% of growth. So just curious on what your thoughts are on those 2 items.

Yes. I mean, listen, the 200 basis points is a long-term -- medium- to long-term target. So it will take time to grow into it. And as you know, as cash comes in, we're very disciplined on the deployment. And we're looking at a sort of barbell approach on deployment sitting in significant short-term liquidity and balancing that with investment into real assets or in credit and equity. So it just takes time for the deployment.

But as we work through the plan, we do expect that spread to start to broaden out and work towards it. Importantly, we think about ROE, Mario, as opposed to just spread and the return on equity that we're generating and the capital is compounding at 15% plus, and that is in line with our long-term targets. We're very happy with the performance there. On the gross to net flows, it should stabilize out to about 1/3 outflows versus inflows in a quarter as we move forward. .

Got it. Okay. And then my follow-up, just with respect to the recently announced Oaktree acquisition, has the composition of the $3 billion purchase price between BAM BN shares and cash. Has that been settled? And how do you see the transaction impacting the velocity of BN share repurchases going forward, if at all?

So yes, Mario, we do have the elections finalized. And the end result, what I'd say roughly was $250 million of BN shares elected. The balance will be in cash and almost 100% of the BAM consideration will be in cash. And it will have zero impact on our buyback. We will buy back the 250 million of shares that we issue, but it won't have impact on our broader buyback strategy. .

One moment for our next question, and that will come from the line of Alex Blostein with Goldman Sacs. .

Just maybe zoning back to trajectory of the insurance business, so really good growth. So the sales are coming through nicely. On the spread, though, and I hear your comment around the ROE. But the spread, I think in annuities was 165 basis points this quarter. So maybe help us think through kind of the near-term dynamics over the last maybe 12 to 24 months on the trajectory of that spread as you kind of start to earn your way back towards the targets.

Yes. So first of all Alex, welcome to the call. I know it's your first one. It's great to have you. I'd just say that the spread is right 165, and it's really because we're being disciplined in deployment. And you know the way we think about the business. We run it for the long term. And so we're being patient in the deployment.

We are sourcing very attractive real asset investment opportunities in the credit and equity side, as I just said, and so as we look forward, we do expect it to work its way back up, but we're not running, as you know, the business quarter-to-quarter. We're running it long term. So we're going to be patient and wait for the right investment opportunities. And as they come in, you'll start to see that spread widen out. But again, what it all comes back to is the ROE. And so we're happy with the performance. .

Got you. And then for my follow-up, we will just maybe stay with insurance. Can you spend a couple of minutes maybe on how you're progressing towards closing the Just acquisition? I know there's probably a lot of limitations to what you could say publicly. But as you were to sort of frame the spread-related earnings contribution and then strategically, how you think this could accelerate growth of your presence outside the U.S. and PRT markets in U.K. and Europe broadly, which would be helpful to understand what this deal could mean financially for the business over kind of medium term.

So I do apologize because we are limited in what we can say, and we haven't really talked to date about what the pro forma looks like as we work our way through the regulatory approvals. I would just tell you that we're working through it. We have the shareholder vote. We're working with the regulator. As you know, we previously were licensed under Bluemont in the U.K., so we have a good relationship with PRI, but we're working through that process. .

I'd say that Just has got a good track record of issuing PRT on a consistent basis in the U.K., I think in the year before we acquired them about GBP 5 billion of origination. So we would expect to hopefully be able to continue that and scale it with our capital -- but as for performers, it will have to wait until we're further along in the process.

One moment for our next question. And that will come from the line of Cherilyn Radbourne with TD Cowen.

Ever since the framework agreement to build new nuclear capacity in the U.S. was announced. The biggest question we've been getting from clients is -- to the extent that Brookfield alongside LPs will invest capital in nuclear project development, what kind of downside protection would you be seeking -- and is that investment likely to occur in a discrete nuclear strategy or in the DGTF strategy? .

Cherilyn, thanks for the question. So I'd say, first of all, I'd say that it's out it's been bought within Westinghouse. So the transaction that is being done is being done between Westinghouse and the U.S. government and the U.S. government is buying as the equity investor, $80 billion of nuclear facilities. Our role within that is to help deliver the facilities and then provide, as you know, the services that we provide, which is the fuel rods, the fuel and then the servicing of the facilities going forward.

So the end result will look very much like the Westinghouse business that we have today, which is to service and provide the fuel to the nuclear reactors, and it's really scaling Westinghouse as a global nuclear champion, but it will be done through Westinghouse which is owned by BGTF 1.

And maybe just extending that to the plans that are being evaluated in South Carolina, maybe you can elaborate on how that might be structured?

Yes. So again, we're in a process there, and it's very early days. But what I can tell you is, as we think about the growth in the space, we are focused on downside protection. So anything that we would do in the space where we're looking to get involved in either bringing Westinghouse services or Brookfield Capital and would be structured in a way to provide strong downside protection. .

One moment for our next question, and that will come from the line of Kenneth Worthington with JPMorgan. .

You've talked in the past about 2025 being a transition year for carry. You've talked about the improved outlook going through 2030. Given what continues to be -- continues to look like a better M&A environment and a better realization environment with better valuations. Can you talk about how carry generation is shaping up for 2026 -- and then maybe wrapping the follow-up in the same question.

As we think about realizations, how are -- how is the outlook developing for realization on balance sheet versus realization in the Brookfield funds as you think about the intermediate term outlook, I guess, I'll be vague like that.

Thanks, Ken. So I'll just say that the outlook for carry hasn't changed. So this year, as we said, would be a bit of a bridge year and it's played out in that direction, largely consistent with last year. And with the monetizations that we have in the pipeline, either those that are progressed or that we plan on launching and through the end of this year or into the early part of next year, therefore, which should close in 2026.

We do still see the potential for a step up in carried interest in 2026. So that is still continuing to step up in 2026 and then again into '27 and a strong year in '28. So that's the outlook, the expectation of what we can achieve in the next 3 years really hasn't changed from what we presented at Investor Day and we're still optimistic and we still believe that it is a very healthy transaction market and the strong capital markets is supporting that activity.

As it relates to the split between the balance sheet and what's being done in the funds. As you know, we operate completely independently of each other. So we continue to advance the monetizations in the fund. It's a globally diversified portfolio of many assets in many geographies, so it has the ability to be a bit nimble around where assets are ready to trade and where the capital is there and the appetite is strong.

On the balance sheet, we're talking about the office and retail assets in the U.S., and I can tell you that the capital markets are stronger now even than when we had our last call when we talked about the strength of the markets. We had very successful financings in the quarter at spreads and all-in rates we couldn't have achieved even a month ago, and that all lends itself very favorably towards increasing transaction activity.

We've been able to dispose of a few smaller assets, which don't make a dent in the numbers, but they do show that appetite for acquisition activity is returning. So as that picks up, we expect to see continued activity into next year.

One moment for our next question. And that will come from the line of Bart Dziarski with RBC Capital Markets.

Just wanted to ask on real estate. So within the LP, the NOI really ticked up this quarter. So $465 million versus, I think, last year is about $80 million. So apologies if I missed this in the prepared remarks, but anything to call out there in terms of the drivers of that step up?

Hi, Bart. Yes. So listen, the performance of the LP portfolio is the running returns that we earn plus it's the disposition gains that we earned. So during the quarter, we benefited from disposition gains from monetization and that's what's driving the increase, sorry, in the FFO during the quarter. .

Okay. Got it. And then just a follow-up on carry. With regards to target carry framework that you have, could you help us kind of understand if there's a pickup that will -- like will the target carry increase once your Oaktree pickup deal closes? And if so, maybe a rough frame as to how much that could increase.

So we will own more of Oaktree target carries represents the kind of the annualized carry that's compounding for us. On the carry eligible capital that we manage. So yes, when we do acquire Atrium, we have more carry eligible capital, it will pick up, but it won't be material. It won't be a significant adjustment to the numbers that we have today.

One moment for our next question. And that will come from the line of Sohrab Movahedi with BMO .

Okay. I just wanted to go back to the earlier remarks about broadly speaking, the 3 types of economic environments that could play out. I think Bruce was talking to that. And I understand the implications of those from an investing perspective. Is any one environment of those three better than the others from a fundraising perspective?

Listen, I think, Sohrab, we've been through a pre severe cycle in just the last 5 years, and we've experienced a few environments in a very short period of time. And I think through all of that, demand for alternatives has stayed strong. And I mean specifically real asset alternatives and essential service investing.

So I think as it plays out -- the ones that we framed for you should still attract strong demand from the clients into the assets that we have, they've proven their durability the founder place in investment portfolios and investors now appreciate and like the characteristics of the income and the returns that they generate. And so I think that irrespective of where we end up demand for real assets will stay strong.

Okay. I appreciate that. I just wanted to see if there's a likelihood in a scenario, some of the targets that would have been discussed, let's say, at the Investor Day could actually get upgraded.

Sure. I mean, listen, if you go into the environment of sort of lower nominal yields then I do think real assets have the potential maybe to become even more attractive in that scenario. So maybe it could be an upside. But not to the extent that we've changed our plans today, we continue to drive the business and think that the growth outlook is incredibly strong already. .

And one moment for our next question. That will come from the line of Dean Wilkinson with CIBC World Markets.

Nick, I guess, when you look at growth of the business over time, do you hit a point where you start to worry about the law of large numbers? I mean the ability for you to put out capital is seeming to exceed the rapid rate that you're growing, BN and BAM and everything together, is there a point where that sort of flattens out? Or do you think that those opportunity sets are going to continue to grow quicker than you can actually grow the underlying business? .

I think it's exactly that. When we look today at the trends going on in the market and the amount of capital that is needed to deliver in the areas of the infrastructure renewable power we see that being a significant growth. And I think today, the scale of the opportunities are significant. I say the quality of the opportunities are probably the best we've ever seen.

And so the ability to earn returns while deploying large amounts of capital is a great place to be, and I don't think we foresee in the short term any shortage of opportunities to deploy and probably even in the medium and long term.

One moment for our next question. And that will come from the line of Jaeme Gloyn with National Bank.

Thanks, and sorry, I jumped on late, so I apologize if this was addressed. But in the Wealth Solutions business, just looking at the annuities distributable earnings from annuities stepped down a little bit quarter-over-quarter, year-over-year. hoping you can kind of talk through a little bit of the moving parts there. and as well as the -- looks like a 10 basis point step down in the yield on investments in that portfolio.

Yes. I would say there's nothing significant. The year-over-year performance. We continue to drive strong earnings. We may have had some one-off small movements in the portfolio of the earnings, but nothing significant.

The portfolio continues to perform incredibly well. The drop-down in the spread, which we touched on briefly earlier, is really just a product of capital coming in inflows coming really being parked in cash until we invest them. And the point I made earlier was that we're being very patient and waiting for the right real asset investment opportunities and getting the right time to put the capital to work and it will come. And as we put that capital to work, you'll start to see the spread increase again back towards long-term targets.

That is all the time we have for question and answers today. I would now like to turn the call over to Ms. Katie Battaglia for closing remarks. .

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

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