Financial Data and Key Metrics - Fee-related earnings (FRE) for Q1 2024 were 552million,with2.2 billion over the last 12 months [26] - Distributable earnings (DE) for Q1 2024 were 547million,with2.2 billion over the last 12 months [26] - Fee-bearing capital grew by 6% year-over-year to nearly 460billion,drivenbystronginflowsandcapitaldeployment[28][29]−Thecompanyraised20 billion of capital in Q1 2024, including 10billionpreviouslyannouncedinFebruary[28]−Thecompanyhasover100 billion of dry powder available for deployment, with 11billiondeployedinQ12024,primarilyincreditproducts[30]BusinessLineDataandKeyMetrics−Infrastructurebusinessraisedover3 billion, including 2billionfortheSupercoreInfrastructurestrategy[34]−RenewablePowerandTransitionbusinessheldafirstcloseforthesecondvintageoftheGlobalTransitionFundat10 billion [34] - Private equity raised 1.5billioninQ12024,withseveralcomplementarystrategieslaunched[35]−RealestateheldafirstcloseforthefifthvintageoftheOpportunisticRealEstateFundatover8 billion [35] - Credit business raised nearly 6billionwithinOaktreefunds,including1 billion in sponsor credit and 1billioninthe12thvintageoftheOpportunisticCreditFund[36]MarketDataandKeyMetrics−Thecompanysolda491.5 billion, marking one of the largest real estate transactions globally since the pandemic [10] - Over the past year, the company sold or is under contract to sell approximately 35billionofassetsacrossallbusinesses,generatingstrongreturnsoncapital[10]−Thecompanyrefinancedover18 billion of borrowings, resulting in a decrease in the overall cost of debt [11] Company Strategy and Industry Competition - The company is focusing on long-term growth through flagship funds, complementary strategies, and the Brookfield Reinsurance platform [14] - The company has a leadership position in infrastructure, renewable power, transition, and credit, which are in high demand due to global megatrends like decarbonization, deglobalization, and digitalization [16] - The company is expanding its wealth solutions business, with Brookfield Reinsurance managing nearly 90billionofinsurancefee−bearingcapital,including50 billion from the AEL acquisition [18][19] - The company is consolidating its credit businesses under a newly formed credit group, which manages nearly 300billionofassetsundermanagement[38]ManagementCommentaryonOperatingEnvironmentandFutureOutlook−Thecompanyexpectsexcellentgrowthinoverallresultsin2024,drivenbystrongfundraising,capitalmarketsexecution,andstrategictransactions[8]−Themarketenvironmentisimproving,withliquidityreturningtocapitalmarketsandriskappetiteincreasingamonginvestors[8]−Thecompanyexpectsfundraisingtocontinuetobuildthroughouttheyear,withthreeflagshipfundsexpectingfinalclosesin2024[14]−Thecompanyisconfidentinreachingitstargetsofdoublingdistributableearningsandreachingover1 trillion of fee-bearing capital over the next four years [25] Other Important Information - The company declared a dividend of 0.38 per share for Q1 2024, payable on June 28th [31] - Bahir Manios, the CFO, will be stepping down at the end of May, with Hadley Peer Marshall taking over as the new CFO [13][32] Q&A Session Summary Question: Fund performance track records and market volatility - The company views the slight decline in fund performance as temporary, with expectations of a rebound as market conditions improve [44] Question: Castlelake deal structure - The company invested 500 million in Castlelake, with 350millionfora51150 million for carry and GP stakes [47] Question: Fundraising pace and flagship fund expectations - The company expects fundraising to be more balanced across quarters in 2024, with strong momentum in credit and real estate flagship funds [52][53] Question: Insurance business and AEL asset rotation - The company expects to deploy 1/3 of AEL capital into private funds, 1/3 into investment-grade credit, and 1/3 into liquid credit over the next 2-3 years [55][56] Question: Credit business competitive environment - The company sees strong opportunities in credit due to market disruptions, scarcity of capital, and its ability to provide certainty of capital and quick execution [59][60] Question: FRE margin and expense growth - The company maintains its guidance for low double-digit expense growth and expects FRE margins to improve as fundraising becomes more balanced and capital deployment increases [71][72] Question: Castlelake transaction multiple - The 350millioninvestmentfor5140 million expected over the next 12 months [75] Question: Oaktree incremental interest acquisition - The company invested $275 million for an additional 5% interest in Oaktree, with a multiple of 13.5x based on a formulaic calculation [77] Question: Impact of U.S. Department of Labor rules on AEL business - The company sees demographic trends supporting growth in the insurance business, with minimal disruption expected from new regulations [81][82]
Brookfield Asset Management .(BAM)2024-05-08 17:58