Ladies and gentlemen, thank you for standing by, and welcome to the Brookfield Asset Management Fourth Quarter 2021 Results Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Ms. Suzanne Fleming, Managing Partner. Please go ahead.
Thank you, operator, and good morning, everyone. Welcome to Brookfield's fourth quarter and 2021 full year conference call. On the call today are Bruce Flatt, our Chief Executive Officer, Nicholas Goodman, our Chief Financial Officer, and Natalie Adomait, Managing Director in our Renewable Power and Transition group. Bruce will start off by giving a business update, followed by Nick, who will discuss our financial and operating results. Finally, Natalie will give an update on our transition strategy. After our formal remarks, 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 a time. If you have additional questions, please rejoin the queue, and we'll be happy to take any 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 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. With that, I'll turn the call over to Bruce.
Thank you, Suzanne, and welcome everyone on the call. We reported strong results for the year with record total net income of $12.4 billion and distributable earnings for common shareholders of $6.3 billion. Results were driven by $71 billion of inflows of capital and associated fee related earnings, strong performance from our principal investments, and gains in carry received from $42 billion of asset sales, where we booked $16 billion of gains, $12 billion for clients, and $4 billion which came to BAM. As we enter 2022, the normalization of central bank monetary policy has caused volatility in the markets, mostly in sectors trading at high multiples. Those did not affect us in any major way. Our general view is that this has been a healthy re-rating and will likely create opportunity.
For our business, with interest rates still very low on a relative basis and expected to stay so for some time, combined with the positive inflation of revenues, we are seeing a positive backdrop for most of our businesses. Our asset management business is continuing to attract large amounts of capital with our product offerings aligned around several positive global investment themes. Our underlying operations continue to strengthen coming out of the recession, and with many of our businesses directly generating inflation-linked cash flows or positioned to benefit from economic growth, we are well-positioned. Turning now to our strategic initiatives. 2021 was a busy year in that regard. First off, we spun out and paired our reinsurance business, establishing BAM Re. Subsequent to that, we completed a number of reinsurance agreements and committed to acquire American National, which we expect to close in the coming months.
American National will give us a U.S. insurance platform and provide us with direct origination capabilities. In total, we are heading towards $50 billion of insurance AUM, and the team is just getting started. Second, we privatized our real estate business. In short, we own one of the highest quality portfolios of prime properties in the world. Real estate securities were, and in fact still are, trading in the market at discounts to their fair value. On the other hand, private markets are not. BPY shareholders were offered the ability to just participate in BAM, so in our view a privatization was a win-win. To date, it has turned out to be that way for everyone. In the last year, the tone of the private real estate market has improved dramatically, and liquidity in private markets is now returning to pre-pandemic levels.
The recovery started with the growth sectors like industrial and life sciences, followed by multifamily, is now, and has now turned to office, with the rest to follow. In accordance with the plans we laid out for you at the time, we recently sold approximately $10 billion of real estate across a variety of sectors. We realized a gain of $2 billion above purchase price last year in these sales, representing a 47% annualized gain on the asset portion of ours.
A good example of this is One Manhattan West, which is a phenomenal office tower in New York City we completed in 2019 in a complex where we own five other towers. We recently signed an agreement to sell a stake in it, which values the property at $2.9 billion, representing a 2.5x multiple of capital and a 25% IRR since we started it. We're also retaining a controlling stake in the property that will continue to provide us with long-term compounding cash flows going forward. As the recovery continues to gather pace, we are well-positioned to strategically monetize further select assets and unlock more value in our real estate to be deployed elsewhere. Our third strategic initiative was to repackage, rebrand, and expand our renewables investing strategy into a fund for transition to net zero.
This culminated in a large fund which will close at $15 billion shortly. Natalie Adomait is here today to provide more details for you on that. Our last strategic initiative was a review of our overall structure of our asset management business as the financial markets evolve. As noted in our year-end letter, over the past 25 years, we have become one of the largest, fastest-growing, and most diversified managers globally. Combined with the fact that we have very long duration, annuity-like cash flows, our manager is now of the scale that it could be separated out from the rest of our capital. In a market environment that seemingly prefers asset-light managers, it may therefore make sense to separate part of the manager and offer investors a security that owns our asset manager separate from our capital.
For backdrop based on comparable multiples for pure-play, asset-light alternative investment managers, our managers should be valued in the range of $70 billion-$100 billion. This is in addition to the $50 billion of net capital that we have invested in our businesses today. If we separate part of the manager, this could increase the simplicity and ease of valuing our asset management business, provide a security for those that wish asset light, and also possibly open up new growth options for the overall business. As you all know, our business has compounded at an annualized return of 20% for 20 years. Our job is always to continue to invest well, take care of our clients, and review our structure from time to time to ensure we unlock value for all shareholders. We will report on this as we move along.
As always, thank you for your support. With that, I'll turn the call over to Nick to tell you about our financial results.
Thank you, Bruce, and good morning, everyone. We had strong financial results for the year with record net income of $12.4 billion, and this compares to $707 million of net income in the prior year. Distributable earnings, or DE, for the year were $6.3 billion or $3.96 a share, compared to $4.2 billion or $2.74 a share in 2020. The uplift in both net income and DE was due to excellent operating and financial performance across our businesses. Our asset manager continued its strong growth trajectory, supported by record levels of fundraising, with total inflows of $71 billion. We ended the year with $364 billion of fee-bearing capital, an increase of 17% from the prior year.
Inflows were supported by the continued scaling of our flagship funds, as well as the success of many of our complementary product offerings. During the year, we held a final close for our latest opportunistic credit fund for $16 billion, the largest ever raised for the strategy. We've been successful in deploying this capital at attractive returns with this fund already approximately 75% invested or committed today. We will shortly close on $15 billion for our transition fund and combined with our fourth flagship real estate fund, we have raised $24 billion in aggregate for those two funds to date. Our sixth flagship private equity fund launched fundraising in the fourth quarter, and we also recently started fundraising for our fifth flagship infrastructure fund. To meet our clients' needs, we're also introducing new products.
To give a couple of examples, our growth equity fund, which focuses on technology investments that are adjacent to our businesses, recently had a final close of over $500 million. We've seen an accelerated pace of deployment for this fund. As a result, we expect to be in the market with the next vintage shortly. We also launched our real estate secondary strategy, raised $2 billion of capital for it, and have now launched a traditional commingled fund. We also established a focused wealth solutions marketing group. This team is focused on developing and distributing our products into the private wealth channel, and this includes our traditional closed-end funds and new products, including our private non-traded REIT. The growth in fee-bearing capital directly resulted in higher fee-related earnings, which were $1.9 billion for the year, an increase of 33% from the prior period.
As the business scales, we would note that our margins continue to remain stable. In addition to the current capital base earning management fees, we have $40 billion of additional committed capital that when invested, will translate to approximately $400 million of incremental annual fee revenues. This is a big tailwind to add to our earnings. Looking into 2022, we expect a notable step change in our fee earnings as we receive the full benefits from the funds raised in 2021 and our ongoing fundraising initiatives. As our earlier vintage funds mature, we are now realizing carried interest in each of our flagship strategies and in other complementary funds. We executed on a number of landmark capital recycling initiatives during the year, surfacing $42 billion of capital and crystallizing gains of $16 billion.
We realized a record $1.7 billion of carried interest and $2.1 billion of disposition gains from principal investments. Our remaining investments continued to perform very well across all our managed funds. We generated $5 billion of unrealized carried interest during the year, increasing the total accumulated unrealized carried interest by 107% to $7.7 billion, net of that realized into income. We are projecting to realize up to $1 billion of carried interest in 2022 as we continue to execute on asset sales. Lastly, our principal investments continued to provide strong and steady contributions to our distributable earnings. This year, distributions from our investments were $2.2 billion, 19% higher than the prior year.
The increase was driven by distribution growth at BIP and BEP and the higher ownership of our real estate business. Funds from operations or FFO before realizations increased 15% compared to the prior year. The increase is largely driven by the continued growth in our asset management franchise, strong organic growth across our existing operations, as well as contributions from recent acquisitions. Including realizations, FFO grew by 46% to $7.6 billion. It's worth noting that going forward to further enhance and align our financial disclosure, we will use DE as the primary measure of our performance. Our liquidity position remains very strong. In addition to $77 billion of uncalled fund commitments, we have approximately $15 billion of core liquidity, meaning we have a total of $92 billion of deployable capital. This is further bolstered by our annualized DE before realizations.
Our scaled capital will continue to allow us to capitalize on the attractive investment opportunities we see every day. Before I hand the call over to Natalie to discuss our transition strategy, I am pleased to confirm that our board of directors has declared a quarterly dividend of $0.14 a share payable at the end of March, representing an 8% increase over the prior quarter. Natalie.
Thanks, Nick, and good morning, everyone. I'm pleased to be here today to talk to you about Brookfield's new transition fund and the exciting opportunities we see for this strategy. Climate change is one of the most pressing and significant issues facing the economy today. While climate change has been a focus topic for governments for years, the pace at which corporates are making commitments to lower emissions to net zero are now accelerating at a rapid pace. In the last two years, we've seen emissions covered by net zero commitments triple. An increase in the number of commitments of seven times for countries, five times for companies. Finally, commitments from the financial sector recognized by the Glasgow Financial Alliance for Net Zero increased 26 times from $5 trillion to over $130 trillion.
Achieving net zero emissions, and more specifically, the goals of the Paris Agreement, will require a massive amount of capital. It is estimated that over $150 trillion will need to be invested through 2050 to drive the decarbonization of energy systems and our economy. That's approximately $5 trillion every year. At Brookfield, we are rising to meet this capital need and exciting investment opportunity. We are currently in the final stages of raising approximately $15 billion for our first flagship transition fund, the Brookfield Global Transition Fund, of which Brookfield itself will be the largest investor. Our fundraising has exceeded our expectations. Once we reach final close, we will have raised more capital and faster than we had planned, and we have already started to put that capital to work.
The success of our fundraising demonstrates that we have many like-minded investors who also recognize the urgency and the magnitude of capital required to transition the global economy to net zero. More importantly, they also understand that this investment opportunity can deliver strong financial returns and also a positive environmental impact. More than that, our investors have chosen to invest with us because they recognize that in order to be a successful investor in decarbonization, it is essential to not only have access to capital, but to have deep operating expertise, particularly in power markets and renewables, both of which Brookfield has a proven track record in. The reason this expertise is so important is because about three-quarters of global carbon emissions can be traced back directly or indirectly to power generation and the energy sector. Every business uses energy.
Therefore, if you can help decarbonize the production of energy and electricity, you can enable the decarbonization of every industry in the world. If renewables are the first step to decarbonization, we think our platform puts us in a leadership position. Today, we own and operate one of the largest renewable power platforms globally. We are a leader in major renewable technologies, and perhaps most importantly, operate in every major power market around the world. We have operating and development capabilities, as well as local M&A teams sourcing and identifying decarbonization investments across every continent. Our fund will have two overarching goals. To generate strong risk-adjusted returns for our investors and to deliver on meaningful decarbonization targets. While we see a very wide range of opportunities to deploy capital, which can meet these objectives, today I want to highlight just two. The first, of course, is clean energy.
Given the scale of new build clean energy required, a core theme of our transition fund will be adding clean energy to the global electricity grid. In fact, one of the first investments that we recently made was Urban Grid, a leading U.S. solar developer with a 20,000 MW development pipeline and a strong position in a high-value energy market. We acquired the business for $650 million with the opportunity to invest hundreds of millions of dollars into further growth in the future. This was a bilaterally sourced opportunity where our ability to transact quickly and leverage our existing commercial relationships enabled us to transact with Urban Grid at attractive terms.
As an example of how we bring these commercial relationships to our development projects, well, the fund has already made investments into other renewable assets for the benefit of commercial partners across various sectors, including for the likes of Amazon, Enbridge, and Scotiabank. A second large growth opportunity for BGTF is to use our knowledge of power markets and our operating capabilities to provide energy transition and decarbonization solutions to governments and businesses around the world that need help reaching their own decarbonization goals. This is a theme we're calling business transformation. Industries such as steel, cement, chemicals, and utilities all require both clean energy to lower their carbon footprints and capital to decarbonize their production processes or way of doing business. The auto industry is an example of this. Significant investment in public electric vehicle charging infrastructure will need to be made to decarbonize the transport sector.
Similarly, in the power sector, utilities require significant capital to enable them to shift from coal to gas and from gas to renewables. To have a material impact, you need to be willing to go where the emissions are. Our fund plans to target companies in the hard-to-abate energy-intensive sectors, which will continue to be a fundamental part of our society for years to come, and make sure that companies in those industries have the capital and the shareholder support to put them on a viable pathway towards lower emissions. We believe that businesses on a path to net zero will benefit from premium valuations versus their peers, given the de-risk nature of their operations. Therefore, by investing in this theme, we will not only achieve our desired decarbonization impact, but also generate attractive commercial returns for our investors.
The Brookfield Global Transition Fund will be just the first fund in what we believe will be a very attractive growth avenue for Brookfield. We see the potential for this business to grow to $200 billion plus for Brookfield over the coming decades. Similar to our other platforms, such as infrastructure and real estate, we are beginning with a flagship fund. We expect that over time, this theme could present the opportunity to offer a number of additional products to our investors, including equity and debt and at various risk-return profiles across the spectrum. Lastly, we recognize that our clients' needs have grown and that ESG has become a big theme. We feel confident that we can leverage our history in renewables and the build-out of our transition business to maintain our best-in-class ESG approach within all our investment strategies.
Over the next decade, we will continue embedding that into all our investment processes and further strengthen measurement, reporting, and disclosure around ESG. This is a priority for our clients, and we think that this will become a critical part of how we put capital to work going forward. Thank you all for your time, and I'll turn the call now back over to the operator for questions.
Thank you. To ask a question, you will need to press star one on your telephone. We respectfully ask that you please limit yourself to two questions. To withdraw your question, please press the pound key. Please stand by while we compile the Q&A roster. Our first question will come from Cherilyn Radbourne with TD Securities. Please go ahead.
Thanks very much, and good morning. In terms of the discussion regarding the separation of an asset-light manager, can you expand a little more on how you weigh that internally, just considering the flexibility that the balance sheet has provided historically, versus the opportunities that you referred to, that would open up if you had a more appropriately valued asset manager?
Hi, Cherilyn . It's Nick. I think, you know, as Bruce laid out, we talked in the letter, we've always been focused on delivering strong returns to shareholders. You know, over the last 20 years, we've realized 20%. We've achieved that by deploying capital for value and evolving with financial markets. We know we've done it in the past, and we're always wanting to make sure that we're evolving with markets. Two things have happened, you know, over the last few years. One, our asset management business has achieved significant scale, and it has benefits of being close to capital, and that has benefited us as we've grown the business from its infancy. But now it's at a position where it's one of the largest asset managers in its own right with a strong growth profile.
Secondly, the markets have evolved and currently have a clear preference for asset light. You know, to Bruce's point, we listen to the market, you know, we often look to respond accordingly, and we believe that spinning out a part of the manager would allow investors that want access to just that asset light part of the business, access without maybe losing the overall synergies that we have in the business.
Okay. I'll let others pick that up. I'm sure you're gonna get lots of questions. I did wanna ask one about the wealth channel, which the alt asset management industry has really just only started to tap. Can you talk about how much of your fee bearing capital and current fundraising is coming from that channel? But also, how do you factor in the significant retail ownership of the perpetual affiliates when you think about your scale in retail or wealth?
Yeah, that's a good question, Cherilyn. I think on the private fund fundraising, it was in that 7%-10% range, and it's coming from that private wealth channel of our fee bearing capital. You're right to observe that, you know, with our listed affiliates, we also have, you know, a really strong retail following and a retail product through that channel. That does play into it. For the business, as you know, we have been building out our retail marketing efforts with the creation of Brookfield Oaktree Wealth Solutions and with the creation of the distribution capabilities. We've been selling existing products but also creating new products that are specifically designed and resonate with that channel, with the private REIT being the first.
I think there's more to follow, and I think it's just an extension of what we already do, in some of our products and where we have that expertise, and we can leverage the platforms that we have. There should be more products to follow, and we think that it will be a good source of capital going forward.
That's my cue. Thank you.
Thank you.
Thank you. Our next question will come from Mario Saric with Scotiabank. Please go ahead.
Hi. Thank you, and good morning. Just coming back to the potential asset manager spin out. I think you've referenced a couple times the potential to spin out or separate a part of the manager. If we sit back and just think about intrinsic value of the company today, it's in the invested capital, as you pointed out, and the value of the asset manager. Is the part in reference to differentiating between kind of public and private fee streams? I'm just hoping you can expand on, like, how you define part in terms of the options that you're considering.
Yeah. Part, Mario, more just refers to the actual percentage of the manager that we spin into public hands. You know, maybe the public would own X% of the business, and Brookfield parent would still own a meaningful part of the business. Meaning, if people have a preference to invest in asset-light, they can invest directly into the manager, or for those that want to invest in the manager and the capital.
That still option would still exist.
Got it. Okay. I guess there's a couple different ways you can go about doing it in terms of separating the asset manager from the invested capital. What are kind of some of the ways that you're thinking about today? Or is it too early to say?
It's too early to say. I think those parts we're working through, and it's too early to talk through that in detail.
Right. Okay. My second question just pertains to real estate asset dispositions. It seems like there's daily headlines of BAM selling assets, as you pointed out, in good valuations. Do you have an expected range of real estate dispositions of BAM share for 2022? And if so, like, where do you think most of the focus will come from in terms of geography and asset type?
Yeah, Mario, I don't think we have an expected range. We obviously have assets that we've executed the business plan on, and we think if the markets are right, then they are candidates to sell in line with what we laid out at Investor Day. We executed a lot in Q4, and we have others coming. I'd say it's broadly spread geographically and by asset class. As Bruce said, others are catching up. You know, retail is probably the one that the ground on the data is excellent, and the leasing activity, the spreads are back. The performance is great. Maybe sales for retail might not be the immediate focus, but other asset classes where capital is flowing significantly, we're being very active.
Okay, thank you. Those are my two.
Thank you. Our next question will come from Sohrab Movahedi with BMO Capital Markets. Please go ahead.
Yeah, thank you. I just wanted to also maybe start off by thinking about the scheme you're talking about to make sure that the underappreciated value of the asset manager is realized. I mean, Nick, in the past, we've talked about maybe buybacks as a way of extracting some of that value. And I wonder if you could even talk a little bit about where we are on that, but also what about distributing some of the invested capital to the BAM shareholders? I guess the essence of the question being why would the holdco, if you will, then not trade at a discount if you had this spin out? I'm just trying to kinda think through a bunch of these things if you can, please.
It's Bruce, and maybe I'll take a shot at trying to answer your question. Look, our thinking is that our job is to run a great business, which we're still trying to do, and to unlock shareholder value when it makes sense and optimize our structure. If we can have our cake and eat it too, i.e., we can have our capital up top, investors that want to invest into the parent company will stay there or keep their shares in that company, and they'll have us invest their capital, plus they'll own a part of the manager. If we list part of the manager separately, it would enable those investors who choose to or want to own an asset, like asset manager, the ability to do that.
If either of those securities in the future don't trade properly, we can always buy shares back into the treasury and continue to increase value by buying if they're trading less than fair value. You know, the bottom line is all of those options are open. All we're trying to do is maximize the value of the business in the longer term. All the things you say are possible.
Okay. That's it for me. Thank you.
Thank you. Our next question will come from Robert Lee with Keefe, Bruyette & Woods. Please go ahead.
Good morning. Thanks for taking my questions. You know, maybe just sticking with the theme of the day on the potential spin. I mean, it kinda sounds like this is something in on a high level. Don't wanna put words in your mouth, but maybe you've decided. So really it is at this point, kinda going through the mechanics of how that would look, you know, any tax impacts. Again, kinda like we think this will be a good thing, but now we just gotta work through the mechanics of it. Is that kind of pretty much where you're at right now?
You know, the bottom line is we think it's a very executable plan. It's now in the public. All of our owners can express their views to us and we're gonna come up with the right plan based off of all that, plus the information we have. We're heading down a path, and we're quite serious about it, or we wouldn't have put it in the letter the way we did.
Okay. Great. Maybe shifting gears a little bit to fundraising. I mean, clearly for you guys, it's going gangbusters. You've seen it, you know, actually across many of your peers. I'm just curious, you know, number one, are you seeing any signs of, I don't know, for lack of a better way of putting it, you know, fatigue among LPs? I mean, clearly, we know there's secular demand here given the rate environment and whatnot, but, you know, are you starting to see at least on an interim basis, kinda, I'm getting this impression that LPs are flooded with, you know, fund offerings, and that maybe there's been, like, slowdown, push back. Are you seeing any signs of that that may impact how you're thinking about the timing of fund closes at all?
I'll give you a short answer. No. Look, the longer answer is we're in a very low interest rate environment. As noted in the letter, eight interest rate hikes gets your short rate to 2%. We're in a very low environment, especially when the products that we invest for clients earn 6% on the low end and 25% on the high end. These are very attractive products, and there doesn't seem to be any reason to have that slow down.
Great. Thank you for taking my question.
Thank you. Our next question will come from Jeff Kwan with RBC Capital Markets. Please go ahead.
Hi, good morning. Just going back to the asset manager potential spin. I'm just wondering obviously, you've talked about it's still a little bit preliminary, but would any sort of spinoff have at least theoretically the potential to change the relationship with BIP, BEP, BPG, BBU, in terms of management services agreement, whether or not it's financial terms or other, as opposed to keeping the status quo? Or is that, you know, probably one of the considerations as you think about what, you know, ways to go about doing it if you decide to go with the spin?
Jeff, the short answer is we would expect no change.
Okay. Then my second question was just on the global transition fund. I mean, it sounds like obviously the opportunity is large and numerous. I'm just trying to, I guess, understand a little bit, you know, how you're going about figuring out where to focus on where the best opportunities are, whether or not it's the renewable assets themselves or if it's, you know, making investments with, you know, operating companies that need help with the transition. Are there certain geographies that are more attractive, that sort of thing?
Sure, Jeff. I'll take that. It's Natalie here. First of all, the immediate first place we're starting is renewable energy. When you look at the range of decarbonization solutions that are available for corporates today, thinking about cleaning up their Scope 2 emissions, so cleaning up how they purchase their electricity or reducing their electricity consumption by way of investing in things like distributed generation, that is the best way for corporates today to make an immediate impact on their carbon footprint and to help buy them time as the cost of other decarbonization technologies comes down. That's the absolute first place we'll start.
I would say what's exciting, and particularly why we mentioned that we're going to be spending time with the hard-to-abate sectors like steel, cement, and chemicals, is because the timeline for those companies to implement their solutions will take 5-10 years to invest in the infrastructure to actually enable them to decarbonize by 2030. Those capital projects are starting now, and those conversations are starting now, and we're having active dialogue with all of them. We will focus on those that have the highest energy intensity and the largest capital needs is where we're seeing the most opportunities to add value.
Okay, great. Thank you.
Thank you. Our next question will come from Alexander Blostein with Goldman Sachs. Please go ahead.
Thanks, everybody. Good morning, and thanks for taking the question. Back to the structure. From what it sounds like, you're really considering the spin-off to be not really separation, but more the tracker stock. It'll just give investors an opportunity to play the kind of pure asset management side of the business. A, just wanna understand that that's correct. B, I guess what is your timing ultimately in terms of the structure, how should investors think about the cash flows that will be coming into that vehicle? Meaning that are you guys gonna distribute it? Are you gonna retain it? Currently, you guys have a pretty material tax shield, given that everything's combined under the BAM umbrella.
Are you gonna be able to retain the tax shield or the kinda earnings from the new co? The asset manager will be taxed at a typical rate?
It's Bruce. I think you asked four questions. I'll try to be quick, although I'm not gonna get into too much detail on this call until we have more fulsome answers for you. I'll try to answer three. First, you said is the security gonna be a security or a tracking stock? It will be a full security and a listed company. The BAM parent may own a part of it, and we're gonna separate and distribute to our shareholders a part of the business, a quarter, a third, whatever that number is to start off with, but it will be a separate, separately listed security. As to payout, we'll have to consider that based on all the other securities that are out there and what's best for the shareholders.
there will not be a lot of need for cash in the company, so it could have a full payout of its cash flows if we so choose. As to the shields we have within the business, we'll allocate them to the right spot, at the time when we list the security, and everyone will know about that at the time.
Great. Thanks so much. I guess my second question or maybe second topic, wanna circle back on the wealth business. It sounds like you guys are on four platforms now, up from one, you know, earlier, or, you know, late last year. I'm curious to get your sort of take on what the reception has been from financial advisors and, kinda key gatekeepers to the product?
Any update you have for us in terms of monthly flows would be helpful. Ultimately, what would you consider a sort of success from this wealth channel over the course of the year?
Look, we're early days. We put together BOWS, Brookfield Oaktree Wealth, six or nine months ago, and it's had a very meaningful impact with our relationships with the wealth channels. I think it will be very meaningful going forward, but we're just starting into it. I don't really have a prediction for you as to the numbers that will be coming in on a monthly basis. The early indications are that our products like they are to institutional clients, will be highly attractive to wealth and we need to pick the right ones to put into those channels, and we're going to do that.
Great. Thank you so much.
You're welcome.
Thank you. Our next question will come from Andrew Kuske with Credit Suisse. Please go ahead.
Thanks. Good morning. I guess one of the key principles for Brookfield on a longer term basis has been compounding historically, and of course, you highlighted this in the letter this morning as the miracle of finance. Could you maybe just step back a little bit and address your businesses? Are you seeing multiplier effects across some of the businesses as they interact together? Maybe one example would be just what you can do on the residential front, the, you know, residential infrastructure being HVAC, multifamily, distributed generation. Do you see multiplier effects across those businesses as they're now sort of merging together to a certain degree from an opportunity standpoint?
Yeah. Look, I think that part of the success of our business is that we've tried to ensure that we coordinate all of the affairs within the business. Therefore, many of our groups work together. When we find new ideas, we try to flow them across different areas. I think it just helps when you have a big, broad platform to be able to do that. Maybe even as important is when we learn something in one country, it may not have been applied the same way in 29 other countries that we're in, and therefore we can take our businesses and globalize them.
Many of the things we're doing today and are taking ideas that we have in one country that we found that are really successful and applying them in other areas. It's doing the same thing but doing it in another country where it hasn't been done before. Both from an operating and a financial perspective, that has been extremely positive for the business.
That's helpful. Then maybe related to that, slightly different. As you look at the market conditions now globally, where there's a bit more volatility, some inflation concerns in parts of the world, uneven economic recovery, you're positioned in multiple markets. You know, do you see the transactional environment and potential now in the outlook in the next 12 months as being more favorable from a deployment standpoint than what you saw in the last 18 months?
Look, there's never a perfect environment because when there's no money available, there's usually lots of opportunity. When there's lots of money available, there's less opportunity. I would just say that, given our broad platform in many countries, and we're in multiple sectors, there's never every one of them doesn't offer opportunities, but there's always something to do. I'd say today we see lots of opportunity out there, and I'd say it's no less than it was before. A lot of them are things that you would not even think there should be opportunity available, but people require our capital, require our operating skills, require a partnership with somebody like us, and therefore we find opportunities.
There's an excellent market today for opportunities for most or all of our businesses.
Okay. That's great. Thank you very much.
Thank you. Our next question will come from Bill Katz with Citigroup. Please go ahead.
Okay. Thank you very much for taking the questions. Just coming back to spin yet again. I certainly apologize. I guess maybe a conceptual question from me. Why not spin the whole asset management business or spin the invested capital platform? How are you thinking about milestones here just to keep the market abreast of your thinking? Thank you.
Look, here's what I would say. If we create the most value by entirely separating the business, we would do it. Our view today is that having the capital company have an interest in the manager to be able to align itself and put its capital and have its capital managed in a fashion that it's happy about is the right way to go. Over time, if that made sense, we could do it in four steps, or we could do it in one all upfront. Our view today is that creating the asset light manager listing part of it is the way to go. If owners of ours have views, we'd be pleased to talk about it.
Okay. Just to follow up, you had mentioned that your current form is holding you back in certain growth opportunities. I was wondering if you could expand a little bit about what the holdbacks are and what growth opportunities you see. Which comps were you using to value the asset management business?
I'm gonna let Nick deal with the second one. But what I would say is just to be crystal clear, we've compounded it 20% for 20 years, so there aren't any holdbacks here. What our job is to do, our job is to look at the business, run a great business, unlock shareholder value as we can. That's what we're in business to do. Our view, therefore, is just we should keep at that effort. If we have securities that trade properly in the marketplace at their fair value, it opens up to options to use those securities for something you wanna do in the future if the opportunity presents itself.
Bill, it's Nick on the second question. It's consistent with what we used at our investor day. 25-40 on FRE and 10 on our target carry.
Thank you very much.
Thank you. We do have a follow-up question from Robert Lee with Keefe, Bruyette & Woods. Please go ahead.
Great. Thanks for taking my follow-ups. You know, maybe sticking with the fundraising, and not the spin. You know, really maybe a two-parter. I mean, if I look at the number of strategies outside of the flagship strategies that you have in market, I think you pointed out something like 35. I mean, it's really kind of expanded tremendously the last bunch of years. I'm just curious, I mean, could you maybe give us a sense of how you actually have, you know, maybe changed your organization or how you go to market to actually try to maximize that? Because to have so many things in so many places, you know, how do you make sure you're kinda not missing opportunities or maximizing your potential there?
Then maybe the second part of the fundraising is, you know, there's, as you point out, there's so much demand. Historically, you've taken very large, you know, chunks of your own funds. You know, how is your own appetite for, you know, whether your participation will be 5% or 15%, you know, changing to create more capacity for third-party clients?
Hi, Rob. Yeah. On the first part, you know, I think the number of complementary strategies has really evolved as the scale and size of each of our businesses has evolved. How we have evolved is, you know, we have four businesses, plus we have Oaktree, so five businesses. Each of those businesses have client relationships. As clients have allocated more and more capital to alternatives and have looked for solutions, I'd say up and down the capital stack with different risk profiles, we have the investing and the operating expertise and the experience to offer them those products across the channel. It's really leveraging the platforms that we have and catering to our clients' needs and providing them with these products. We start, as Natalie said, like we're doing in transition.
We started with the flagship funds, but that knowledge and expertise, you know, translates well to scaling up a core offering in the same sectors with different risk or profile, and adding a couple of investment professionals to lead each strategy, but really leveraging the underlying platform to inform our decision-making, our diligence, and then operating when we own the asset. I'd say that's how we have evolved, and we stay on top of it by having close relationships with our clients and responding to their needs. That has led to this growth in products. As we laid out yesterday, real estate is probably the most evolved, and our other businesses are evolving quickly with new products all the time and catering to new channels as we go.
On our own appetite, I would say that, as the size of the funds is growing, it's a decision we make each time, but the absolute dollars are still significant. So percentages may change, but the dollars are meaningful, which shows our conviction in the funds and still creates that strong alignment of interest. It evolves over time, but the capital is still meaningful.
Okay. Thanks for taking my questions.
Thank you. We do have a follow-up from Sohrab Movahedi with BMO Capital Markets. Please go ahead.
Thank you. Just a more detailed or maybe a final one. I think you mentioned about $10 billion of real estate dispositions. Any indications as to what the plan is for that cash?
Sohrab, the $10 billion would have been the gross number of sales. I think we mentioned about $2 billion of gains. That gains is obviously accruing to the real estate business, some being reinvested and some being repatriated to Brookfield. It's in line with the plan that we would have laid out. We'll look for opportunities where the most optimal places to deploy that capital within the organization.
Nick, just to be crystal clear, it may involve, you know, making new investments in the real estate suite.
It could do. It could, yes, or it could be repatriated.
Thank you.
Ladies and gentlemen, thank you for participating in today's question and answer session. I would now like to turn the call back over to Ms. Suzanne Fleming for any closing remarks.
Thank you, operator. With that, we will end today's call. Thank you for joining us.