Brookfield Asset Management Ltd.

Ladies and gentlemen, thank you for standing by, and welcome to today's program entitled Brookfield Asset Management 2019 Year-End Results Conference Call and Webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. As a reminder, today's program is being recorded. I would now like to introduce your host for today's program, Suzanne Fleming, Managing Partner, Brookfield Asset Management. Please go ahead.

Thank you, Operator, and good morning. Welcome to Brookfield's 2019 year-end conference call. On the call today are Bruce Flatt, our Chief Executive Officer, Brian Lawson, our Vice Chairman, Nick Goodman, our Chief Financial Officer, as well as Craig Noble, Managing Partner and CEO of our Alternative Investment Strategies. Bruce will first give an update on our business, followed by Brian, then Nick, who will discuss the highlights of our financial and operating results for the year. And finally, Craig will talk about our growing alternative investments business. After our formal comments, we'll turn the call over to the operator and take analyst questions. I'd like to remind you that in responding to questions and in talking about new initiatives and 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're subject to known and unknown risks, and future events 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 US and the information available on our website. Thank you, and with that, I'll turn it over to Bruce.

Thank you, Suzanne, and good morning, everyone. Thank you for joining. 2019 for Brookfield was a strong year for the business. And while we are also pleased with the market performance of Brookfield shares, I would note that our primary focus will always remain on growing the intrinsic value of Brookfield over the longer term. Over the past year, we achieved many important milestones in that regard. A few highlights. First, we now own 61% of Oak Tree, the premier credit franchise globally, that deepens our capabilities we offer our clients and positions us even better across market cycles. It also means we have one of the most diversified offerings in alternative investments, offering clients a full suite of products. Second, just last week, we announced the final close of our flagship infrastructure fund. The fund size totaled $20 billion, and together with co-investment, this round of flagship funds raised $50 billion of capital. Today, these funds are about 45% deployed in aggregate, which means if we're successful in deploying the remainder of the capital, we expect to be in the market depending on pace. with our next round of flagships potentially starting later this year and into 2021. With these funds, we continue to diversify and stabilize our cash flows. Today, approximately 40% of our fee revenues come from perpetual vehicles, 45% of fee revenues from long-term locked-up committed capital, and together they provide very growing and substantial stable streams of cash flow to Brookfield Asset Management. Despite not being in the market now raising capital for any of our large flagship funds, we do expect to be very active raising capital for our other specialized core and perpetual strategies. Today, we have Craig Noble, our CEO of Alternative Investments, joining us on the call to discuss how we are growing our offering and distribution capabilities to meet the demands of clients across each of the pools of capital that we access and what this can mean for fundraising in the next 12 to 18 months. Moving on to deployment of capital, we invested over $30 billion of capital across our businesses in 2019. Most recently, in the fourth quarter, we invested $14 billion of capital, including closing previously announced acquisitions within our infrastructure business, including transactions which you would have read about, Genesee and Wyoming, as well as a federally regulated group of pipeline assets in a carve-out transaction. In addition, in our private equity group, we closed on the acquisition of 57% of Genworth Canada. During 2019, we also sold $13 billion in investments for average prices 9% above their most recent IFRS values, which we had in our accounts. Despite all this activity, we continue to increase our capital available for deployment, which stands at approximately $65 billion across the business for deployment into opportunities that we are seeing globally. Turning to markets, and I'll be brief, Europe is slower but still quite resilient. The United Kingdom seems to have pushed past Brexit, which should be positive for businesses making long-term commitments. As an example, office space in London is extremely tight on the leasing side. No properties have been started for close to four years. Rents are going up. Cap rates are starting to go down and hence values going up largely due to inflows of capital starting to come back to the UK. Companies in India and China are clearly under more stress than they've been for years with banks in India dealing with significant non-performing loans and in China, banks are pushing borrowers to sell assets. Brazil looks to be back on track to continued recovery, albeit slowly, with interest rates now under 5%. The developed economy markets are not showing any signs of stress at this point in time. The United States, Canada, and Australia in particular have strong economies, but assets are more fairly priced. So we need to be selective with opportunities, looking for transactions in out-of-favor sectors that play to our strengths. An example of this was the carve-out of Clarios last year, or the Genworth Canada acquisition, which highlighted our ability to move quickly and access different pools of capital. The corporate credit markets are also performing well, but we believe this is where great value will be found in the next downturn. We have historically performed well counter cyclically, but now with Oak Tree, we are even better positioned to capitalize on this situation while continuing to invest the same way we always have with an emphasis on fundamental analysis and downside protection of capital. As discussed, our share price performed well in 2019, generating a total return over 50%, which was driven in part by growth in our asset management business as well as the strong performance of our listed partnerships. Finally, before turning the call over, I would like to note that Brian Lawson, who has been our CFO since 2002, that's 18 years, We'll be assuming the role of vice chairman, and the board today appointed Nick Goodman as our new chief financial officer. I look forward to introducing you all to Nick. Brian has made a very, very significant contribution to our business over many years, and as vice chair, he will continue to be involved in many things we do, including finance and risk management activities. while also continuing to sit on the BAM board. So to Brian, thank you. So while Brian continues to be very involved in the company, on behalf of all the shareholders, I wanted to thank him for that. And with that, actually, I'll turn it over to him.