Partner. Thank you. Please go ahead.
Thank you operator, and good morning, everyone. Welcome to Brookfield's first quarter 2021 conference call. On the call today are Bruce Flatt, our Chief Executive Officer, Nicholas Goodman, our Chief Financial Officer, and Stewart Upson, head of our business in Asia Pacific. Bruce will start off by giving a business update, followed by Nick, who will discuss our financial and operating results for the quarter. Finally, Stewart will give an update on our business in APAC. 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 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 are 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 hello to everyone on the call. We started the year with strong results. We are in record levels of both FFO and distributable earnings. What a difference sometimes a year makes. Results benefited from strong operating results across our businesses, supplemented by significant gains from asset sales and carry realized in the quarter. We made progress in executing on our capital recycling initiatives and generated substantial gains for shareholders and clients. Nick will touch on a number of these items in more detail in his remarks. Looking at the market environment, it is clear that we're in a recovery phase in most countries around the world as each progresses their vaccine rollouts and emerges from lockdowns. The snapback of recovery is pleasing to observe. Some countries are recovering faster than others.
I would note the U.S., the U.K., Australia, and many countries within Asia, which Stewart Upson will talk about. We're encouraged to see these countries begin to return to normalcy. I was personally in a number of cities last week across the U.S., and I can attest to travel starting back strong and retail demand recovering. Today, we have Stewart Upson with us, as Suzanne Fleming mentioned. He's our Managing Partner and Regional Head of Asia Pacific, responsible for overseeing activities in that region. He will provide an update on our operations in the region, opportunity set we're seeing today, and insight into what we are seeing in each of those various economies. Stewart stayed up most of the night to be able to speak to you as he's currently in Sydney.
Thank you, Stewart, and we hope all of you on the call will benefit in some way from his comments. Capital markets today are very robust. Interest rates remain low, and the demand for the type of assets we own is strong and getting stronger. While we expect interest rates will rise slowly over the next few years, we also believe that combined with that, central banks will be successful in engineering GDP growth and employment increases, which has already started. That will mean that global economies are doing well at the same time. This will be a very constructive environment for our asset management business and for the assets we own for a number of reasons. In this lowish rate environment, investors will continue to look for fixed income alternatives to meet required returns.
This will drive inflows to alternative strategies, which will further benefit the scaling of our existing flagship strategies. It will also be positive for our perpetual fund offerings. This provides a strong backdrop for our flagship fundraising, including our fourth real estate flagship fund, soon to have a first close, and our Global Transition Fund soon thereafter. More broadly, investor interest for all of our funds is stronger than we have ever seen. As a result, we expect these funds to be larger than predecessors, and therefore add significantly to fee-bearing capital. We also continue to deploy significant capital for our two other flagship funds, infrastructure and private equity, and we expect to begin fundraising for the next vintage of each later in the year or early in 2022.
As all of you know, global central banks have pushed an enormous amount of stimulus into developed economies to ensure markets recover from this recession. This has led to substantial availability of capital in most markets. This global stimulus has largely been funded through borrowed money, and governments will need to consider ramifications of how to pay it back. This will require one of two measures, probably both. Economies will need to grow and generate increased taxes to service the debt, and assets will need to be sold. For governments, asset sales means the sale of or future avoidance of infrastructure spending. As a result, the shift of infrastructure spending is set to increase in a meaningful way and will create opportunities for infrastructure investors like ourselves for decades. While this is an extremely positive backdrop, the other side of the coin is that many asset valuations are high.
It does make it harder to find investment, but allows us to raise substantial cash with asset sales. Through the last quarter of 2020 and the first quarter of 2021, we returned $19 billion to clients and $5 billion to our own balance sheet. This generated in the first quarter, just in the first quarter, $6.4 billion of realized gains, and there's more to come in the second quarter we are in. This has put us in the strongest cash position the company has been in ever and also generated substantial realized carried interests, which are our portion of client gains into income. It looks like 2021 will also be strong in this regard. As always, we are active putting money to work using our global reach and access to capital to achieve success. In a competitive environment, we need to even be more creative to find value.
Since we last spoke, we have further progressed our efforts to spin out our reinsurance business by filing our prospectus and expect that all regulatory requirements will be cleared in the near term. Your new shares should be in your hands by the end of June or early in July. We came to an agreement with the special committee of Brookfield Property Partners and their advisors to privatize BPY. We believe that this transaction is in the best interest of our BPY partners and ourselves. The special committee and their advisors agreed with us. This offer gives BPY shareholders a number of alternatives, but for the BAM portion of what they receive, we believe it'll give them a greater chance to compound wealth as a part of overall Brookfield than they would otherwise have been able to had we left BPY the way it is.
We have more than enough cash to fund the privatization and as opportunities arise, to repurchase the BAM shares, which are being issued to close the BPY transaction. Thank you again for your continued support, and I will now turn it over to Nick to discuss the financial performance in the quarter.
Thank you, Bruce, and good morning, everyone. We've continued the momentum from Q4 of last year and started this year with very strong financial results. The results are supported by continued strength in our asset management business, resiliency of our operations, and realizations from our capital recycling initiatives. The outlook for the business remains very positive with upcoming fundraising initiatives set to deliver step change growth in our asset management earnings, the reopening of the global economy poised to further enhance operating results, and the current market backdrop expected to support ongoing capital recycling initiatives. As we have discussed in the past, many of the businesses and assets that we own are critical infrastructure assets, are very annuity-like, and generate very stable, predictable cash flows that are predominantly contracted or regulated.
In the current economic environment of low interest rates and excess liquidity, the demand in market valuations for these assets is very high. During the first quarter, we sold approximately $13 billion of assets across the business at a significant premium to what we paid for them. Of note for you also is that many were sold at substantial premiums to their IFRS carrying value. As a result, we realized approximately $6.4 billion of gains, and that would be $4.6 billion for our clients and $1.8 billion for Brookfield. On the client gains, this realized carried interest of $681 million for us. Just as a reminder, we adopt a conservative approach to realizing carried interest in our financial statements.
We only record carried interest into income when three criteria are met: the fund has returned all of the original capital to clients, it is through the client's preferred return, and the recognized amount has minimal risk of clawback. As our earlier vintage funds are now starting to mature and business plans have been completed, our asset sales activity has increased significantly. This is crystallizing significant gains and leading to increased levels of carried interest being realized into income. In the last five years, we have recognized just over $2.5 billion of gross carried interest, but of note, close to half of that has been realized during the last six months. Today, we have $5 billion of accrued but unrealized carried interest that we expect to be recognized into income as we continue to execute asset sales.
While this will transfer into income, our new funds are larger, and if we do our jobs right, we expect to be adding greater amounts to the balance as our newer vintage funds continue to create value. Our progress in this regard can be tracked in our quarterly supplemental. In that vein, we recently announced the sale of our U.K. smart meters business, realizing 4.7x our investment and an IRR of 58%. The sale of two wind portfolios in Ireland and the U.S., realizing IRRs of 12% together. We sold an interest in the U.S. pipeline business, realizing an IRR of 21% and a multiple on invested capital of 2.4x . We recently signed an agreement to sell several office towers in Australia.
On the basis of this activity and our future pipeline, we continue to feel our target of realizing $1 billion of gross carried interest into income for the calendar year is achievable. Turning to results. Total Funds from Operations, or FFO, in the first quarter was $2.8 billion, or $1.80 per share, which was more than a threefold increase compared to the prior year quarter. Our operating FFO, which excluded the impacts of disposition gains and realized carried interests, was $777 million in the quarter, or $0.48 per share. All of this resulted in income to shareholders in the quarter of $1.2 billion, or $0.77 on a per share basis. Fee-bearing capital increased by $7 billion to $319 billion at quarter end, and is up by $55 billion over the last 12 months, which led to strong growth in fee-related earnings.
Those fee-related earnings increased to $413 million for the three-month period and totaled $1.5 billion over the last 12 months, an increase of 18% from the prior period. We have an additional $33 billion of committed capital that will become fee-bearing once invested, translating to approximately $330 million of incremental fee revenues annually. Turning to invested capital. Excluding disposition gains, FFO for the quarter was $364 million, which is a decrease of 8% from the prior period. We continue to benefit from strong organic growth and capital deployment in most of our operations.
However, this was offset by the impacts of temporary shutdowns in some of our hospitality and retail operations, decreases in our ownership of our renewables and infrastructure businesses following secondary sales over the last 12 months, and the sale of the majority of our interest in West Fraser, which triggered a change in accounting basis, meaning we no longer pick up our share of the underlying earnings of the company. To align with methodology used within the alternative asset management industry, we've decided to rename our cash available for distribution performance measure as distributable earnings, or DE. As a reminder, we provide DE before realizations, which tracks and demonstrates the stability of our core operating results and removes the variability of realizations that are subject to timing and other factors.
We provide total DE, which includes realizations and incorporates realized carried interest, and also now includes realized gains on principal investments. DE before realizations increased 29% over the last 12-month period. The increase is largely driven by continued growth in our asset management franchise, as well as increased distributions across our listed affiliates. Including realizations, DE was $6.1 billion over the 12 months, an uplift of 130% over the prior year period. Our liquidity remains very strong. In addition to $62 billion of uncalled funded commitments, we have approximately $18 billion of core liquidity, including close to $9 billion directly at the BAM level. All of this adds to a total of $80 billion of deployable capital. Our balance sheet continues to remain conservatively capitalized with 94% of our debt having no recourse to the corporation.
In April, we issued an inaugural 10-year green bond with a coupon of 2.724%, the lowest coupon we have ever issued for a 10-year. The proceeds will be used for green initiatives, but to keep our debt at similar levels, we also called approximately $500 million of 2023 bonds. The net result is we will extend the duration of our debt and lower the interest rates. Today, our corporate debt to market capitalization ratio is 11%, and average remaining term on our corporate debt is 14 years, and we have no individual piece of debt maturing before 2024. When compared to our corporate balance sheet, with $9 billion of cash financial assets and undrawn capacity on our credit lines, over $50 billion of investments, and $9 billion of additional core liquidity in our listed affiliates, this makes us financially very strong.
Finally, I am pleased to confirm that our board of directors has declared a $0.13 per share dividend payable at the end of June. With that, I'll turn the call over to Stewart Upson.
Thank you, Nick. Good morning, everyone. Today, I'm going to talk about our Asia Pacific, or APAC business, which currently includes investments in operations in Australia, New Zealand, China, Japan, and South Korea. I will provide an overview of our scale in the region, an update on our operations, and an insight into our growth aspirations in the region. We have $57 billion of AUM across the region with over 100 investment professionals and more than 30,000 operating employees, which represent significant growth from when we first started investing in the region. As with any new market, we have taken a long-term patient approach to expanding our presence in the APAC region. We've been focused on countries and markets that have a strong respect for capital, supportive capital markets, and a large market that will allow for significant scale to be built over time.
As we potentially expand in the region to new markets, we will be focused on ensuring that any target market that we enter meets all of these criteria. If we go back to where it started for us in the region, it began in 2006 with the commitment to acquire a property owner and construction company headquartered in Sydney. This initial investment was soon followed by the acquisition of Prime Infrastructure. Both of these transactions laid the foundation for our Australian and New Zealand business, which now has $31 billion of AUM across infrastructure, real estate, and private equity. The portfolio today across these two countries consists of office buildings, railways, ports, data infrastructure, healthcare, construction, and retirement living.
We have used our operating expertise to develop and construct new assets, expanding existing assets, sign new leases, execute new long-dated contracts for our infrastructure assets, and implement cost improvement plans to drive strong returns. All of our businesses are performing well. Our real estate assets, with 5 million sq ft of office space, are currently 94% leased to strong counterparties, complemented by a quickly improving leasing market. As the economy has begun to reopen, we have also seen office occupancy levels improve to close to 50%, and this should be closer to 100% over the next number of months. Our infrastructure and data assets are underpinned by long-dated contracts, and the strong commodity backdrop is giving rise to potential expansion projects at our rail business. Our private equity investments are also performing well, underlining the quality of the businesses that we own in the country.
Consistent with the comments from Bruce and Nick around monetizations, we've also been selling select assets in Australia and New Zealand, where low interest rates and high levels of liquidity have resulted in increased levels of demand and valuations for the assets we own. We recently sold an interest in two office buildings at very compelling valuations, sold a pathology business in New Zealand, and late last year, we took our port terminal in Queensland public. As we think about deployment, we remain focused on growth via development in our office and data businesses and targeted acquisitions where our scale or operating expertise put us at an advantage. Future capital rotation will also come from selective asset sales in our mature investments, and we expect to be busy on all fronts in the coming months.
As we scaled up in Australia, we also started to focus on setting up the foundations for growth in the Asia Pacific region. We have spent time over the last 10 years opening local offices in Shanghai, Tokyo, and Seoul, hiring local investment professionals and building conviction in these markets. We've remained patient in each of these markets, making sure that we understand the country's economic backdrop, how it operates, and have developed key local relationships that have given us the confidence to start putting meaningful amounts of capital to work. With regards to China, we have operated in the country since 2012, initially focused on educating ourselves on how the country does business and reviewing many transactions to build up our conviction on deploying capital.
We subsequently opened our Shanghai office in 2014. In the same year, we completed our first transaction in the country with an investment into a portfolio of prime office and retail assets. As part of the investment, we were able to support several senior Brookfield team members into the company. Although we have since exited this investment, we generated attractive risk-adjusted returns and leveraged this experience to develop our capabilities in the country. Our presence in China has grown to more than $4 billion of AUM across office, retail, and logistics properties, as well as renewable power assets. I would like to highlight a few of our more recent China investments that are emblematic of this approach. First, in 2019, we acquired a large mixed-use office and retail development, which we renamed One East, from a Chinese developer.
This project consists of three office towers and a retail mall on the Huangpu River front in central Shanghai. Construction and permitting risk remained with the seller, providing downside protection and allowing us to focus our efforts on creating value through the leasing and activation of this asset, utilizing the expertise of our local operations team. Despite the challenges faced last year, our office towers are now 55% leased, likely increasing to 70% plus shortly and fully leased by year-end. Our retail mall is now 75% committed, with a soft opening occurring later in May. All of this has been made possible by our in-house team at Brookfield Properties, who negotiated the second-largest office lease in Shanghai for 2020 at One East and have brought several new to China tenants to our retail offering as well.
As a second example, in 2017, we established a renewable energy joint venture with a China-based but global logistics developer that we have known for years. We are leveraging their local presence and our best-in-class renewables operations. This investment focuses on the installation of distributed rooftop solar panels on industrial sites and major markets. This partnership has proven to be very successful to date, with installed capacity of close to 180 MW, a further advanced pipeline of 220 megawatts, and a rapidly growing partnership. We expect this business to have an installed capacity of over 1,000 MW by 2023, supporting China's long-term goals of carbon neutrality. Our Shanghai office continues to grow, and we have around 100 people covering all of our major platforms, including 20 investment professionals, to support the continued growth of our business.
China's successful control of the pandemic has led to a resurgent domestic economy and a rebound in consumer and corporate confidence. As an indication of this, we have seen this at our own community mall portfolio in Shanghai. Retail sales and traffic are now above, that is greater than, 2019 levels. This domestic economic strength has allowed the Chinese government to focus on key macro initiatives, including the further de-leveraging of strategic sectors, including residential developers. This in itself is creating opportunity. We believe these Chinese government initiatives give rise to a need for operationally minded capital and are highly constructive to our ongoing growth plans in China. As we go forward and continue to build confidence, we will further expand our sectors of focus while remaining centered on our global areas of strength.
Moving on to South Korea, we made our first investment in the country in 2016 with the acquisition of IFC Seoul, a landmark mixed-use development comprising 5.5 million sq ft of office, retail, and the Conrad Seoul Hotel for $2.2 billion. This acquisition was large and needed creative structuring as well as operating strength. This is where we excel, and we are using these strengths in Asia. We immediately put our teams to work on improving overall leasing and operations in an effort to increase office occupancy from the then 60% range and to revitalize a tired, externally managed retail mall. Despite last year, office occupancy now currently stands at 96%, and we've replaced over half of the retail tenancies, including adding Korea's second flagship Apple Store, which opened in March of this year. We also expanded our global logistics presence to Korea in 2020.
We believe the secular tailwinds associated with e-commerce demand in Asia, Korea in particular, will prove to be highly compelling in the years ahead. At the same time, we continue to build upon our investment and operational presence to expand our investment verticals further, establishing our infrastructure and private equity platforms in South Korea as we speak. In Japan, we have had very significant financial and operating partnerships globally with many Japanese players. We also raise substantial capital in the market for our funds. We've had an established investment presence in Tokyo for several years and are pursuing many opportunities. Our initial investment focus has been on logistics properties, renewable power, and carve-outs from the industrial conglomerates. We expect the scale and scope of the opportunity set to continue to widen in the years ahead, and our strengths show well in Japan.
This will increasingly be a larger market for us. Today, investments in the APAC region accounts for approximately 10% of Brookfield's total AUM. We expect that to grow over the next 10 years. Our scale is growing and could sometime reach 25% of capital deployed. We're excited about the opportunities to continue to put meaningful capital to work across our core markets in the region. I would like to end by commenting on our fundraising activities in the APAC region. We have a long and successful history of fundraising across each of the countries I've mentioned, and in many cases, well in advance of when we began making investments in these markets. We raised 20% of institutional capital from these markets and currently have over 130 institutional investors across 10 different countries in the region. We've raised $5 billion in this region in the last year.
More importantly, we are regarded as a clear investment partner of choice among many Asia Pacific investors, having been voted in 2020 by Korean investors as the best of the best real estate and infrastructure manager, and also receiving the APAC Infrastructure Fundraising of the Year Award for 2020 from PEI. Our journey in the APAC region to date recently culminated in the completion of Brookfield Place Sydney, which will be our new Asia Pacific headquarters. We worked nine years acquiring, developing, and constructing the site, and it has been a great success for everyone. Our workforce and anchor tenants, including the Sydney headquarters for NAB Bank, will move in later this month in a show of confidence for the office market in our region.
To conclude, we are excited by the opportunities in the APAC region and our balanced focus on the continued strong operational performance of our assets. Alongside raising and deploying capital where we see opportunity positions our Asia Pacific business well to drive further growth for many years to come. With that, I will turn the call back over to the operator for questions. Thank you.
If you'd like to ask a question at this time, please press the star then the number one key on your touchtone telephone. To withdraw your question, press the pound key. Again, that is star then one if you'd like to ask a question at this time. Our first question comes from Kenneth Worthington with J.P. Morgan.
Hi. Good morning. Thank you for taking my questions. As we go into the fundraising cycle, where you're fundraising both flagship funds and funds focused on new strategies, should we expect to see any increased cost from distribution? I guess, to what extent does Brookfield utilize third-party distributors which could boost expenses temporarily? Does Brookfield expect to utilize Oaktree with the fundraising that it's pursuing, and is there compensation paid there? Do you pay your own people more if they hit or exceed fundraising targets that might drive costs, even if temporarily higher than would otherwise be the case?
Hey, Ken. It's Nick. Listen, I think a lot of the cost associated with raising the next round of flagship funds you've probably seen come through the numbers in the last six to 12 months as we've been building up our capabilities across different distribution channels. Obviously, as we develop new products, some of them might become more appealing.
To the bank channels and the high net worth channels where there is associated cost upfront, but in return for that, you earn full freight fees cost of life of the product. I think on a net basis, it's no different to our usual fundraising. I don't think you should expect to see an associated step change in cost associated with this round of fundraising any different than what you've seen in previous cycles.
Okay. Great. Thank you. Maybe moving on to insurance. Loved to hear an update here. You've got stronger cash flow, stronger realized gains. The pipeline looks great. You do have deployment opportunities in BPY that are pending. Given just the increased cash balances that you have on balance sheet, the better outlook for cash flow generation, and your comments about really wanting to build up the insurance business, what are you seeing now? What can you do? What are your aspirations as we sort of move through the rest of the year in continuing to grow that business?
I'll just start off, and then Nick can add anything. I'd just say, first off, we're in the midst of closing the one transaction that we committed to. We're pre-investing into assets, which will then be formed into the reinsurance business upon closing. With some of the excess cash we have, we've been buying assets to be able to ensure we earn proper returns from day one, which is obviously a great advantage to our business. On top of that, we are looking at other blocks of reinsurance and continue to bid on look-at blocks. I think over the longer term, this is going to be a very additive business to Brookfield in many ways. Firstly, just the reinsurance business itself should be highly profitable and additive to Brookfield.
In addition to that, the capital will be able to be deployed in many of our assets, both to the enhancement of our businesses, but also to the insurance company. So far, we're very excited about the business.
Okay, great. Thank you very much.
Our next question comes from Cherilyn Radbourne with TD Securities.
Thanks very much. Good morning. To start, I was hoping you could speak at a high level about the Brookfield Global Transition Fund and really whether that requires an education process or whether clients are set up and really ready to allocate capital at scale to that type of product.
Look, I'd just start off by saying that there is no fund out there like the fund that we have created. We're in the early stages of creating a new business for the alternative asset management industry, and it's an adjunct of other things we've done, but it's new for many of the investors. That takes some education to where we're going and what we're trying to accomplish for them. On top of that, I would say every investor in the world, or virtually every investor in the world, is interested in figuring out how they deploy money into this sector smartly.
We hope to be able to report to you, and as you know, we can't talk about fundraising specifically until it's completed, but we hope to be able to report to you that we've been able to attract a great number of investors into these strategies because the interest is very high. I think we will be successful in that. It will set a new standard for transition investing globally. We're very positive about it.
That's very helpful. Second question. The letter makes an interesting comment about opportunistically repurchasing the BAM shares being issued to fund the BPY privatization. Could you speak about how much capital you envision reinvesting in the business over the next 12 months to support some of the emerging investment strategies, and how much might be surplus for share repurchases?
Yeah. Hi, Cherilyn. It's Nick. Listen, as Bruce and I both touched on in our remarks, our liquidity levels are very strong right now. We have the BPY transaction closing in around the middle of the year, which will obviously use somewhere in the range of $3 billion of cash. We have a number of insurance transactions closing, the one Bruce talked about, and potential future growth. I think we have reinvestment opportunities for growth. We have some new strategies that we're seeding on balance sheet that we've talked about in the past, which are going very well. Are presenting good investment opportunity. It's hard to put an exact number on how much will be left over for buybacks. I think we've talked about this in the past, but it is something we're very conscious of.
Issuing BAM shares, we felt was a very important part of the consideration for the BPY transaction, and on a relative basis, it made sense. The intention was laid out in the letter that we do intend to buy those back, but it's hard to put an exact timeframe on it.
Okay, fair enough. That's all for me. Thank you.
Our next question comes from Bill Katz with Citigroup.
Okay. Thank you very much for taking the questions this morning. First question is a big picture question, and maybe feeds off your last answer. There seems to be a bifurcation of how investors are valuing the alternative managers, putting significant premium multiples on balance sheet light models versus sort of balance sheet heavy models. As you think about your business on a go-forward basis, is there any way to think through related party risk and how you might manage the business to maximize value?
Bill, the related party risk, you mean because we're invested in funds with our own capital alongside clients at times?
Right. The issue seems to be the quality of earnings coming from related parties, such as some of the limited partnerships to which you're the manager.
I think, listen, I think the first part of your question around the balance sheet, it's just been a core element of our business since inception. As you know, we originate out of being an owner-operator of assets with a long-term perspective and believe that those investments we have on our balance sheet can compound very attractive value over a long-term basis for our clients and gives us significant scale and operating expertise, which is very important to driving value creation for our clients. I think I don't see any conflict or related party interest issue. I think where you're going is our responsibility and our focus is on driving value for our investors and for our clients, and that is the priority.
I don't think that and often we're very aligned in those intentions, and you've seen that with the capital recycling that we've done recently. I think we're very aligned with our clients, and we are under no illusions to what the expectations are, is to drive value and to crystallize that value and return capital. I don't think there's any conflict in our structure.
Great. Oh, I'm sorry.
The only thing I might add to that, just for your benefit is, if stock markets come in vogue and out of vogue. This business has compounded at 18% for 20 years, and one of the great reasons it has that is because the capital we have has been aligned with our clients, and we can do different things for them and achieve different things for our clients and our shareholders because of the capital that we have. It's an enormous strategic advantage in the short term that may or may not be seen in the stock market. In the longer term, we believe having the capital on the balance sheet, and it's been proven in past, will allow us to achieve greater returns in that longer term.
We don't have any intention of splitting the capital from the business because we think it allows us to accomplish things for our clients different than others. That's sort of the answer to it.
Okay. Thank you for both of you for that. Just a follow-up question for you. It certainly seems like the momentum in the business is accelerating based on what you've written in plus the commentary today. How does sort of the real-time outlook compare to maybe your recent investor day goals for 2025? I think you sort of laid out a pathway to $500+ billion of fee-bearing AUM and $2.6 billion of fee-related earnings. Where do you sit today, you think, versus those trajectories? Thank you.
Bill, I think we're still in line with that. I think we laid out at Investor Day the core business that we have being the flagship fund strategies and the perpetual strategies and our list of affiliates were going to drive that growth between now and 2025. We would have newer strategies, which are still in their infancy, insurance, secondaries, technology, and the Transition Fund, which is progressing well. They were going to help contribute to that growth and then drive growth in year six to 10. I think what you're seeing right now is us making great progress in regard to the targets that we set ourselves over the next five years. We're also starting to lay those really strong foundations for that longer term compounded growth.
Okay. Thank you for taking both questions.
Our next question comes from Geoffrey Kwan with RBC Capital Markets.
Hi. Good morning. Just a question on the Brookfield Global Transition Fund. Aside from the typical renewable deals that, say, Brookfield Renewable would typically participate in, just wondering how active have you been in terms of seeking out, and what has been the receptivity so far of the other types of deals I think the fund is able to pursue? Like, I'm thinking partnering with companies that are transitioning to a low carbon or a carbon neutral target.
The fund is set up to do anything that's additional in renewables. The infrastructure investments that were renewables that are already built aren't additional, meaning they're not creating new carbon neutrality. Those will be in our former funds, but in new greenfield developments, that will be in the transition fund. Capital provided, the second bucket is capital provided to
companies or otherwise, to transition to net zero. We are now out speaking to a number of groups, and think that there's a lot of opportunity in that sector as well. We haven't yet closed on a first transaction for the fund. In the next short while, we probably will.
Okay, thanks. Just my second question was, Stewart, you were talking about the criteria for expanding it to new countries in Asia, and just wondering if you're able to say, which countries appear to meet that criteria, and what we might see BAM start investing in at some point in the near to medium term. Also separately, just the typical timing and process on becoming experts, and being able to assess and invest in new opportunities in such a new country.
Yeah, sure. Look, I would say our focus at present is on those markets I mentioned, so China, Japan, Korea, and bearing in mind they're all very large markets and we've got a lot of room to grow ahead of us. At this stage, I would say there are no current intentions to go into other markets, but if and when we feel comfortable and we've got the resources to allocate, it's those same things I mentioned earlier, which is we obviously want to look for countries that have good rule of law, good respect for capital, and they are large enough for us to be meaningful for us and they have opportunities that match well with our strengths. Those are the sort of things we look for.
In terms of building up, again, as I said, we take a very cautious approach when we go into these countries. We can sit in Australia or in North America and talk about Asia as if it's one place, but it's a lot of very diverse countries. They all have their own systems and approaches, and we take a cautious approach to learning all of that as we go into them. We tend to go in, set up, have a mixture of existing tenured Brookfield people on the ground. I myself actually went to China and spent a number of years there, as an example, then hiring a local team that we build into our culture and our approach to investing. Then slowly build up our investment capabilities and start to get runs on the board.
That's very much where we're at in China right now. As hopefully you heard, we've really got momentum behind us. We're partway there in Korea and are building out. Japan, we expect we're really going to start to move on that growth in the coming year or two.
Okay, great. Thank you.
Our next question comes from Robert Lee with KBW.
Great. Thanks for taking my question this morning. Maybe if I could go back to BPY for a bit. At the risk of stating the obvious, obviously buying it in because you see a lot of value there that can be unlocked, that's not being appreciated. As we think forward, over the next 12-24 months, are there some things that we should be looking for that you feel like you can unlock value fairly quickly? Once you get full control of BPY and get it outside the public realm that we can start seeing if you could maybe share what some of those things may be over the next 12, 24 months?
Yeah. Robert, it's Nicholas. Listen, I think what you're going to see over the next 12-24 months is one, just the recovery in some of the areas of the business that were impacted by the shutdown. We expect that to be a fairly strong recovery, especially in retail with the rebound in spending. I think that we've said in a private form, maybe allows us the flexibility to do more with the portfolio around development, creating potentially new products for our clients and being more focused on value creation and maybe less focused on that quarter-to-quarter earnings that a public company is focused on. A lot of that would have been plans that we may have had for the business, and we were sequencing, we can maybe accelerate some of those plans.
I do expect that over the coming months, once we effect the transaction, close the transaction, and look forward, then we can start to think about what that looks like and set out a plan for you. I think it would be a lot of what we've done in the past, but maybe we can just accelerate some of those plans, and our view on the portfolio really hasn't changed to what we've stated in the past, that these are some very high quality assets that should deliver strong value creation over the long term.
Okay, thank you. Maybe just a quick follow-up. If I think back to Investor Day, nine months ago or so, one of the new business initiatives, you've laid out several new business opportunities, initiatives over time. One of them I believe was building a secondaries capability, and I think you've hinted at maybe doing that organically, but could you update us on that and where that stands? There's been one or two of those businesses that have traded recently. Your thoughts there on an organic build versus potentially acquiring something in the secondary space, which is a space that seems to be growing as rapidly as the rest of the industry, if not more so.
It's Bruce. Look, I'll just say that the secondary space, in particular, assisting mid or smaller size general partners reorganize assets they have or deal with funds they have with clients is a very attractive area. It's possible that we do something outside, but we've decided to grow it organically. We've hired teams in real estate, and we now have funds we've raised initially for secondary investments and done a number. We're building out infrastructure, and we're going to turn to private equity next. We think we can easily do it ourselves. The reason for that is all we're doing is dealing with the same assets or types of assets that we deal with every day. We have the knowledge, and our clients are looking for solutions and places to put money to work.
We think it's a highly additive business to us and easy for us to scale up. We don't really need to buy a business to do it. One should never say never, I guess.
That was it. Thanks for taking my questions.
Our next question comes from Alexander Blostein with Goldman Sachs.
Hey, good morning, everyone. Thanks for taking the question as well. I wanted to go back to the fundraising dynamics that are maybe a little bit more near-term. Bruce, your comment sounded pretty bullish on the appetite from investors you're seeing and the current flagship, obviously, with the next real estate fund hitting the road this quarter, et cetera. How are you guys feeling about $100 billion as kind of the near-term target? How are you thinking about Brookfield's participation within that? I think 25% is something we're used to sort of thinking about, but if there's enough substantial LP demand as it sounds, could that percentage be lower? Then maybe just a quick update on Oaktree 11. It sounds like they're actually quite far along in deployment on commitment, just kind of based on their deployment activity in the quarter.
Just kind of maybe give us a quick update on where they stand as a percentage of committed to deployed capital within the latest fund, and I guess that'll kind of dictate what the next fund could look like.
I'll give you an answer to the first couple of things, and then maybe Nick can talk about Oaktree. Look, I would say we have every expectation of meeting all the targets we laid out nine months ago. The $100 billion, it's possible it's greater than that. The fundraising environment is extremely constructive today because interest rates are very low, and people have learned that alternatives are a very good way to earn a decent return with low risk in their portfolio. That, I think I'd say we have no issues with any of that.
The second question was towards % of commitments and where we come in at. What I'd say is we've now started in our funds, and we started years ago, but we're being more definitive with it when we raise funds, is we're starting by doing absolute numbers into a fund. As you know, as these funds get larger, when they go to $20 billion, $30 billion, an absolute amount of $2 billion or $3 billion is a lot of money for us, and in every fund we do. We're not really thinking of 25%, they're just absolute dollar amounts we put in. Our clients feel, obviously, that's a very large commitment from us. It's possible, going forward, that the number goes down on a % basis, but it'll always be a very absolute committed amount, which is large.
Yeah. Maybe, Alex, I can just jump in on Oaktree. Listen, their fundraising for Fund 11, as you know, has been ongoing. I think in previous quarters, we disclosed they were up to $13 billion. They're now up to $14.7 billion following recent closes. They've not had their final close yet. That will happen in the coming months. They expect to increase that fund a bit more from there. They're about 50% invested or committed in the fund to-date. The deployment has been going very well for that fund. They're seeing lots of attractive opportunities, both in the public and private market. There continues to be strong momentum on the Oaktree side.
Got it. That's great. Thanks so much for all that. A quick follow-up for you guys on the balance sheet. That's really related to the unlisted investments you carry on the balance sheet. I think it was a little bit over $9 billion. Is it possible to disclose the embedded gain within those investments? Not sure if I missed it somewhere. How are you thinking about the timing of those realizations? I know it's difficult to pinpoint a quarter, but should we be thinking of that kind of in a similar fashion, the way you disclosed your carry path, kind of the vast majority of carry? I think you're talking about realizing that over the next kind of three years. That's sort of a similar path for the embedded gains within the unlisted partnership balance on the balance sheet. Thanks.
Alex, there are a couple of different concepts in there. The unlisted investments would cover things like our residential home building business in North America and Brazil, which would be direct investments for us. It would be some direct real estate that we own. A lot of it wouldn't be in funds. Some of them would be more strategic to Brookfield over the long term, not necessarily things we'd monetize in the short term. There are some unlisted things that show up there, like our commitment to the third BSREP fund, that would be aligned to monetization, it's kind of a mix. It is broken out later in the supplemental. We do provide a bit of a breakdown of our unlisted investments, we can walk you through that.
I wouldn't think of that necessarily as things that will be disposed of and gains realized in the short term, but some of it will come in over time, to your question. Some of them are core. What we've been doing recently, and that wouldn't include the listed investments, the things like the listed affiliates, those would not be in those numbers. That would be completely different. As you know, in this quarter, the West Fraser shares, which was a very long-term investment that we've held, and it was obviously very attractive in the markets following the transaction with West Fraser. It was a very attractive opportunity to monetize and bring capital into treasury and support what we're looking to do in the business. The BEPC share has strategic value to BEPC as well. Some of these things are arguably opportunistic, but also strategic.
It really depends on the nature of the investment.
Got it. That makes sense. Thank you very much.
As a reminder, if you'd like to ask a question at this time, please press the star, then the number one key on your touch-tone telephone. Our next question comes from Andrew Kuske with Credit Suisse.
Thanks. Good morning. I guess as we're approaching 2:00 A.M. in Sydney, I've got a question for Stewart. It really is around your APAC business broadly, and it seems like the duration you've been in APAC, you're maybe one transaction away from hitting a tipping point to accelerate your business in primarily places like Japan and South Korea. If you could maybe just give some context on how you have the outlook on a near-term basis on the acceleration of activities there.
Sure. Look, I think you've characterized that well. Again, we do enter these markets cautiously and make sure that we learn them well before we do accelerate. We're at that point in the sectors that we've got experience in China, and I would say China's a huge country, and so we've been very careful in taking a very narrow approach to the sectors that we focus on. Obviously, we can go deep. Now, in those kind of tier 1 prime real estate markets, we are doing larger and larger transactions, and hopefully in the very near term, we'll have another one coming through to build up that portfolio, and similarly in renewable power.
At the same time, we are building out our investment team across infrastructure and private equity, and we expect in the next little while that we will start to invest in those business groups as well and further accelerate. In Korea and Japan, similarly, we've done a number of real estate transactions of scale in Korea already, and we have great momentum, but we are right now building out our private equity and infrastructure teams. As a result of that, we expect that we're going to be able to capitalize on the many opportunities we're now seeing in the market as those markets start to transition a little bit, where to date you've had conglomerates that have sort of bought up everything in those markets, and now they're starting to retreat a little bit and focus back to their cores.
There are a lot of opportunities as a result in the market that we're looking to capitalize on. We expect a lot of growth coming over the next few years in the market and a lot of exciting opportunities.
Maybe just to follow up on that, and probably close to your heart is, if you think back to BBI and that deal, that clearly accelerated the group's knowledge in things like rail and ports. Do you see a collateral benefit of allocating capital in places, APAC, that could actually enhance your activities globally by learning a certain area of expertise or just having more hands-on capital?
Yeah, absolutely. Look, I think one of the big advantages is just part of our broader approach is that we have global capital, and the more places we have to deploy that capital, the more opportunistic we can be. There's always markets that are in and out of favor. I would say right now, when we first entered China, as an example, it was a highly competitive market, and there were very aggressive domestic players and a number of foreigners sort of with interest in the market. To date or right now, that's kind of swung around a bit and with the deleveraging process locally in the market, there, a number of those previous buyers, local domestic buyers, have become sellers. Some of the foreigners with the various noise internationally, some of the foreigners have become more cautious as well.
That supply-demand dynamic there has really kind of swung in our favor, and we're seeing a lot of great opportunities. I think that's kind of the big benefit to having more markets available to us.
That's great. Thank you.
That concludes today's question and answer session. I'd like to turn the call back to Suzanne Fleming for closing remarks.
Thank you. Thank you, operator. With that, we'll end the call. Thank you for joining us.
This concludes today's conference. Thank you for participating.