Brookfield Asset Management Ltd.

Hello, and welcome to the Brookfield Asset Management first quarter 2023 conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. I would now like to hand the conference call over to our first speaker, Ms. Suzanne Fleming, Managing Partner. Please go ahead.

On the call today are Bruce Flatt, our Chief Executive Officer, Connor Teske, President of Brookfield Asset Management, and Bahir Manios, our Chief Financial Officer. Bruce will start the call today with opening remarks, followed by Connor, who will talk about some of the themes we're focused on. And finally, Bahir will discuss our financial and operating results for the 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 ask that you refrain from asking more than two questions at one time. If you have additional questions, please rejoin the queue and we'll be happy to take additional questions at the end as time permits. 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 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 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.

To a strong start in 2023, our financial performance was strong and we have good momentum on fundraising. We posted distributable earnings of $563 million. That was up 15% compared to the prior year. Inflows year-to-date have been $19 billion, which on a 12-month basis, that's almost $100 billion in the last period. Despite macroeconomic headwinds that generally make all business harder, we expect 2023 to be another very strong year for the business overall and for fundraising, on par with 2022, which was a record year for our business. We currently have all five of our flagship funds and several other complementary strategies in some stage of fundraising this year. Our ability to raise capital is driven in large part by our long track record of exceptional investment returns, the relationships we've built over time with institutional investors around the world, and a particular focus on businesses which are well positioned in this current environment. Our long life, high quality assets and businesses with durable, stable, or contractual inflation protected cash flows have proven their resiliency in every economic cycle over the past 30 years. They remain resilient today, and they should remain so for another 30 years. Deployment has also been strong. Public valuations are more reasonable today, which has allowed us to complete a number of take privates with little or no competition. We recently agreed to deploy more than $12 billion of equity into a number of exceptional long-term investments. These transactions highlight the type of investments that we can find and which few others can execute on. Bringing together our strengths as a value investor, our significant capital resources, and our heritage as an owner and operator of real assets over many decades. The largest of these transactions was Origin Energy. where alongside a consortium of investors, we made a commitment to acquire the company at an enterprise value of approximately $9 billion in a public to private transaction. The transaction will enable us to deploy our renewable development capabilities to decarbonize and transition a very large energy market player in Australia in line with the Global Transition Fund's mandate while also generating what we believe to be excellent returns. At the same time, the private markets remain fairly open in terms of asset sales, particularly with respect to infrastructure and renewable assets that generate strong inflation-protected cash flows and often include assumable debt financings. Our infrastructure business has been very active on the monetization front transacting on seven asset sales in the past year at strong valuations and have a number of others that we expect to execute on in 23. Our renewables and transition group has also been active on this front, executing numerous transactions in the past six months, and we expect more over the remainder of the year. As we look ahead, we see a number of opportunities to put our vast resources to work. The current market environment has accelerated growth opportunities with a particular focus on take privates and opportunities in and around credit more broadly speaking. First with respect to take privates, we continue to explore a number of significant take private opportunities across the business and we expect more on this front this year across virtually every one of our businesses. Second, in distressed debt, the volatility we are seeing in the market today, including the issues in the regional bank market in the U.S., are accelerating the opportunity to put money to work at excellent returns. We have not seen markets like this for a while. This is a significant opportunity for our distressed debt franchise and likely also our private equity funds and real estate funds. Our long track record of achieving excellent returns for clients in times like this give us a great advantage as the market evolves. Our business usually excels in periods such as now, and this presents great opportunities for us. Third, in private credit, in addition to distressed debt, we are seeing a significant opportunity more broadly in private credit. We have methodically built out a private credit franchise over the past 15 years centered around our core competencies with the view that loans from banks to corporates, real estate owners, and sponsors would decrease over time, creating a sizable investment opportunity. We've been seeing our thesis play out for many years and with the recent tightening in credit conditions, Our track record expertise and ability to invest vast sums of capital will continue to scale this business. Our inaugural large cap flagship loan fund with $2 billion newly committed from Brookfield Corporation will be one of hopefully the largest funds in the industry. But this is just the beginning for us in private credit. Before I turn the call over to Connor, I'll just make a few quick remarks on the state of the markets and how they reflect on our business. Inflation is beginning to ease to more moderate levels, and the market's expectation for interest rates is starting to stabilize. While the Fed's continued rate hikes have had their desired effect of curtailing inflationary pressures, The secondary effects of this sharp rise in interest rates are only beginning to work through the financial system. Capital has become increasingly scarce and relatively more expensive versus the lows of the last number of years. This leaves asset owners who must refinance debt or fund growth with fewer options. This should create an opportunity for large asset managers with significant dry powder to put to work and we're included in this group. Thank you for your continued support of our franchise. I'll now turn it over to Connor, and he's going to cover specifically infrastructure.