Brookfield Asset Management Ltd.

Good day and thank you for standing by. Welcome to the Brookfield Asset Management third quarter 2021 conference call and webcast. At this time, all participant lines 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 then one on your telephone. Please be advised today's conference may be recorded. If you require operator assistance during the call, please press star then zero. I'd now like to hand the conference over to Suzanne Fleming, Managing Partner. Please go ahead.

Thank you, Operator, and good morning. Welcome to Brookfield's third quarter 2021 conference call. On the call today are Bruce Flatt, our Chief Executive Officer, Nick Goodman, our Chief Financial Officer, and Josh Raffelli, who heads our growth strategy. 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, Josh will give an update on the growth strategy. After our formal remarks, we'll turn the call over to the operator and take analyst questions. I'd like to remind you that in today's comments, including in responding to questions and in discussing 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 law. 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 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. And with that, I'll turn the call over to Bruce.

Thank you, Suzanne, and welcome everyone on the call. Our results for the quarter were excellent. with distributable earnings of $1.2 billion, taking total earned for the last 12 months to $6.6 billion. Nick will talk about that later. During the quarter, we also completed or advanced a number of strategic initiatives across the business. We monetized numerous mature investments, deployed capital into a number of new opportunities, and continued with strong fundraising across the board. I would make an observation, which is that despite the size and scale of the business today, our growth potential seems greater than it has ever been. With our differentiated investment and operating skill set, we have built five market-leading businesses that are positioned around global investment themes with secular tailwinds to grow. This gives us conviction in doubling the size of these businesses over the next five years On top of that, we are adding new growth strategies for the future, insurance solutions, technology, transition, and secondaries, and we'll touch on a number of these today. The low interest rate environment will continue to push allocations of institutions towards alternatives over time, which is positive for our growth trajectory, but also allows us to attract new clients by broadening our product offerings across each of our businesses. Turning to the market environment for just a moment, with almost all major markets lifting restrictions, we have seen a continued reopening of the global economy. This has meant strong GDP growth, improved labor markets, and a constructive environment for capital markets activity. pent-up demand continues to be released. But with disruptions across most global logistics, it has been challenging to match unleashed demand with supply, creating increases in prices for at least the time being. We do expect this to stabilize in 2022. Importantly, despite this, the 10-year U.S. Treasury note is still hovering around the mid-1% range, and we expect rates will remain lowish for longer. This backdrop is a very positive environment for our business, given the nature of real assets and the businesses that we own, which generally benefit from economic growth and have revenues that adjust by contract or with inflation. As Nick will discuss further, investment performance has been very strong, and we continue to be active on the monetization front, generating $42 billion in proceeds over the last 12 months. This has allowed us to surpass the preferred hurdle in our early vintage funds, and we now have at least one flagship fund across each of our businesses realizing carried interest. All monetizations within these funds going forward will drive further carried interest, all of which has been accumulating for years. Valuations in many areas are high, but I would note for you that many are not. This includes numerous non-U.S. markets. I'll just give an example, India, China. South America, as well as some sectors like midstream pipelines. In addition, we are able to leverage our deep operating capabilities, our flexible capital, our global scale to find opportunities to deploy capital for value, even in growth sectors. Some examples of the investments recently made include our closing of the inter-pipeline transaction in our infrastructure business, and the agreement to acquire a stake in First Energy Transmission, both within our various infrastructure funds. A $6 billion deal to acquire scientific games in our private equity business, and a number of real estate, renewable power, and credit investments. Over the last 12 months, we have invested or committed over $60 billion of capital. On the other side, Fundraising activities have been extremely strong from both a flagship perspective, but as important with respect to our new product offerings. Since the end of last quarter, as noted in our release, we raised $34 billion of capital across our various flagship funds, but also complementary strategies. We currently have four out of five flagships in the market and are on track to reach our $100 billion target for this round of flagship fundraising and maybe even surpass it. Our flagship infrastructure fund is also expected to launch fundraising early next year. Efforts in the quarter include raising $9 billion for the flagship real estate fund, $7 billion for the close of our transition fund, the founder's close of the transition fund, and demand remains strong for these offerings, and we expect to close additional amounts of capital in the coming months. We have been advancing our new strategies and product offerings all while continuing to scale our existing businesses. Our insurance solutions business, which we spoke at at our investor day, is progressing well and growing quickly. The business has recently closed two large block insurance deals for a total of $12 billion, of long-dated annuities, and we are now redeploying this capital across a variety of investment strategies, including a number of our Oak Tree credit strategies and our Brookfield credit funds. The addition of American National Group to the business, which is expected to close in the first half of 22, will provide us with an insurance platform from which to grow our presence in the U.S. market. We completed the transition to become the advisor of Brookfield REIT, a public non-listed real estate investment trust last week, which will help us enhance our footprint across the private wealth channel and should attract new investors in the private wealth space. This product is an income-oriented investment strategy and will invest in high-quality stabilized assets, those that we have specialized in for many decades. With three newly contributed investment assets from Brookfield to the portfolio, the total value of Brookfield REIT has more than doubled since our purchase to $1 billion, and we are just getting started. We have also been active with our growth technology strategy, and we held a final close for our second fund for over $500 million this week. Josh Raffale, Managing Partner and Head of Growth Strategy, as Suzanne mentioned, is here with us today, and he's going to talk about that. As usual, we have a lot on the go. Thank you all for your support, and I'll hand it over to Nick now.