Brookfield Corporation (TSX:BN)

Investor Update

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Sep 28, 2016

Good afternoon and thank you everyone for taking the time. 2 administrative things. 1, for those of you that weren't here earlier, there are tables at the right or left side of your desk. You can pull out and use them for writing on if you want to. Secondly, for those of you, again, that weren't here this morning, there are questions that we have that are going to come on to the iPads. We have a few of them through the presentation and we'd be interested in your opinions or your comments. So if you participate, that would be great. Of course, we won't know whether you do or not. So firstly, I just say we really appreciate the support of everyone here, both that are online and in the audience. We hope the information that we give you today is useful and helpful to you in analyzing the company and not only this presentation, but there's 4 others that are being done over the days. For those that are going to those, thank you for doing that. I guess the second comment I'd make is that we do this, we try to make it helpful. If you have comments that of things that could be more helpful or that should be done better or different, we would love your opinions because it's really done for you. And we want to make sure that we make it as useful as possible. And each year, we try to incorporate some of the comments we get from people. But please e mail into any of us if you can if you have them. I would say, and before I get into some slides, the overall theme of this presentation, and I put it in my words, is really just an accelerated version of the same old plan. And there's really nothing different that we're doing or we're proposing to do with this company. And essentially nothing has changed. Although what I would say is that from prior years, and Brian will show you this when he goes the financial numbers, the numbers are bigger. Money has been raised faster. And therefore, the return should be higher and come quicker if you if I put it in some short sentences. And Brian will show you that as he goes through the numbers. All of that is really dependent on 3 things, which I think we'd leave you with, which are critical to our organization. Number 1 is investment performance. If we don't perform for our institutional clients and for our public market clients and our listed funds, nothing matters. Nothing else will be relevant to this company. We have to perform. And every day, we try to make sure that we have performance in the business. Number 2, we continue to try to evolve the products that we offer to our clients and make them innovative and match the needs that they have. And with interest rates coming down and other things, we continuously have to look at the things that we're doing for them. And number 3, and I think we're doing well on this, it's taken us 15 years to build it, but we have to serve our clients extremely well. And if we don't do that, even if you have good investment performance, they're not going to come back. You all know that from your businesses, but that's an extremely important third point. And with all that, I'll get into some of the slides that are in your deck. I thought I was going to get into some slides that are on your deck. You have a guy. Okay. We don't have slides. It's working on your iPad. Okay, there we are. Okay. So first off, just so you test the iPad technology, if you weren't here before. How many investor meetings of Brookfield have you attended? A, this is a really tough question. We need your opinion. This is my first one. B, more than one other. C, more than 5. D, almost all of them. And E, all of them. We've had 12 before for those who don't know. So, I would ask put in actually we had 4% of the people that have been every single one. That's pretty good. Okay. 39% says more than one other wins it. And I think that's probably good. The crowd continues to grow and but we have some long term people in the organization, so with the organization. So thank you. We'll move on to actually some questions. There's there are some parts of my presentation. Could we have the slides? Okay. So the agenda is 5 things that I'm going cover. Number 1, just a review of the past 12 months. Number 2, fundraising. Number 3, what we think are our competitive advantages. Number 4, the growth of the funds and what we've been doing number 5, where do we go from here and then Brian is going to cover most of those things but put numbers to them. In the past 12 months, I generally say we've made good progress in building the business into what we biggest thing that's changed since 12 months ago. We raised $27,000,000,000 for our latest round of flagship funds. That's in addition to all the other money that we raise. These are large funds, which ended up being 14 for infrastructure, 9 for real estate and 4 for the private equity fund. As important, we continue to introduce new investors into the franchise. We introduced 150 new institutions. I can tell you that takes a lot of work to onboard them into our funds with these large sovereign institutional funds. The number is 425 today and our goal is to have that at 1,000 in the next number of years or next round of funds. We continue to diversify the investor base. And the numbers, both the base is broadening out. So the institutions in North America that we've dealt with before, we're getting the smaller institutions now dealing with us. And in Asia, significant numbers of institutions coming from China, Korea and Japan. That's allowed us to continue to fund the investment plans we have. We put $16,000,000,000 of work in the last 12 months And it's pretty broadly focused and I'll tell you why that's tremendously important for us. And that's continued to let us grow total assets under management, which have compounded on a total basis at about 11% over the past 5 years and ends up just under $250,000,000,000 of total assets under management. In addition to that, we completed the spin off of Brookfield Business Partners, which as many of you were here earlier and heard the team, I guess, we think of 3 things it's going to do. Number 1, it lets investors invest directly in that business with us. 2, it creates a permanent base for the businesses such that for businesses that we want to sell, we will still sell. But for businesses that we want to keep, we can keep them forever on that balance sheet. And 3rd, it gives us a currency to use that if we need to use paper, to do a transaction, we can do it without ever having to dilute the shareholders of Asset Management. And we've achieved pretty favorable results in the listed partnerships. And I guess we look at 3 things. 1, our goal is to continue to build value in the business and turn that into increased cash flows for the business, which allows us to pay out further cash flows out of the company. And we've done that in all the vehicles. 2, we've continued to have price appreciation. And 3, our goal is to continue to grow those entities prudently, which for us what that's led to is significant and meaningful growth in our operating results, which as Brian will describe later in more detail. Fee bearing capital is 15%. Our fee related earnings are up 50% and our annualized fees and carries are up 41%. So all, when compared to investment managers of traditional or fixed income managers, these are all very significant growth rates, just given the sector that we're in, which we'll talk about in a minute. We often have this slide and our model is those have been achieved really with our simple and repeatable model that we try to apply in all of the businesses that we have. And it's pretty simple. 1, we find equity. 2, we try to use the large scale that we have to advantage us in some way with our investments. Number 3, we often are investing around the world given our breadth of operations, so we can find value investments from place to place. Number 4, we try to always finance things on a low risk basis, so we never get in trouble at the bottom of the markets. And lastly, we try to use all the people that we have to enhance the cash flows and leverage all the operating businesses we have. And that runs across really every business that we have within the company. As important is to the business because we can do all those things, but if we don't have capital to invest, it's difficult to access opportunities. And institutions, I can tell you, continue to allocate increasing amounts of capital to real asset strategies and the things that we do. And I guess I would say part of that is because interest rates, I'm going to come to that in a second. And part of that is because stock markets and stock market returns. And since you're all experts in the stock markets, we thought it would help us by getting your advice. So maybe we just go to this question on the S and P 500. So by the next Investor Day, when we do it next year, will the A, will it be the S and P 500 be higher by a lot? I'll say that's 10%. Higher by a little, unchanged or lower by a little. Very interesting. So higher by a little, we have a bunch conservative people, you're around the band, lower by little or higher by little within the room. So you're here for infrastructure and real estate. It's probably appropriate why you're here. So let's go back to the slide. Thank you. The when I think of that and you think of the S and P 500 and you think of equity and fixed income investments and we talk to our clients, what probably the two things that we take away from them when we're thinking about investments is number 1 is that negative interest rates in Japan and Europe continue to put downward pressure on U. S. Rates. And because of that, that is pushing people to real assets. And secondly, global growth is slow and therefore it looks like we're going to continue in a low interest rate, relatively low interest rate environment for a long time. And as a result of that, our belief is, and I think 5 years ago, people would have said, will people continue to invest in alternatives? And I'd say today, given the time and the duration that they've been in alternatives and given the situation that's on this slide, institutional investors are continuing to search for more alternatives. And if you look at this slide on 2019, we continue to anticipate real assets will grow substantially in the portfolios of investors. Reflecting back on these numbers aren't that scientific because they're hard to get. But it was probably 10% in 2000 or around that. It's maybe 15% today, if you took an average of funds. And we think they'll continue to go to 40%. And in a that you don't need a low interest you don't need a lower interest rate environment. We expect a higher interest rate environment by modest amounts. And I think you'll continue to see this. That's being driven really by three factors, which we observe when we talk to clients. And number 1 is that the this macroeconomic environment, is slow growth and low interest rates as I just described. 2nd, there's a continued acceptance within institutions the large funds got there years ago, but now the smaller funds are finding people to deploy money for them, where real estate and infrastructure are becoming a component within their portfolios. And that's continually getting accepted in institutional clients and that's a really important fact. And if you would have had a quick blip of 2 years of low interest rates and then everyone went back to something else, I don't think it would have ever taken hold. But what's happened is it's now taken hold in these institutions. They've done well. And therefore, they're building teams and they're building groups to be able to facilitate giving people like us money. And 3rd, just changes in regulation. And I'll just make one observation. Alternatives and foreign investments by Asian institutional investors continues to increase and some of those are just regulatory changes. China used to have a 5% cap, originally 3% then 5%, now it's 15% on foreign investments in insurance companies. And a lot of the amounts of money being driven out of Asia and out of China is really driven by these regulation changes that are happening in the funds. And all of those things are shifting people towards more real assets and alternatives. And we think the trends will continue despite, irrespective of interest rates increasing and whether they put another 25 or 50 or 75 basis points on the short end. Firstly, I guess we think 2 things. 1, that we'll push long rates up, but it will be the long rates will be lower due to negative interest rates in the rest of the world than they would have otherwise been in that situation. And secondly, even at those amounts, we do very well in real assets and interest rates should slowly move up. Our business works very well at that. And these type of assets hold their value across the cycle we've always found. Next polling question. One of the reasons that real assets is like this. And I guess we would truly like your opinion on this because, a, many of you or most of you have a vested interest in us. And if you actually have an opinion that is different than ours and what I just told you about interest rates, then we'd like to hear it. And we think either negative interest rates are coming, a prolonged interest rate environment, slow increase in rates over time or significant inflation. Okay. So Brian Lawson put in the significant rise in interest rates come back sudden inflation. I told him he was going to get 0. But I think the interesting thing is 2 years ago if you asked this question, I think it's possible this would have been different. It's possible people would have said rates are going up a lot. And what you really see is a sophisticated group basically agreeing with what we think is that interest rates are going to be low for a long time, but they're going up slowly. And but they are going up over time. Back to the slides, please. Our view is sovereign investors have the same observation as what we just saw in that slide. But they're leading the way into real assets, largely because they can commit large amounts of capital. Many of them have long term and very global mandates. Most of them are quite sophisticated and diverse. And for us, what's important is they're looking for partners to deploy their money. Even the really large institutions, we can generally get capital from because we can offer them co investment opportunities and other things, which they can't get in other places. And that's establishing real assets in their portfolios. And we think we're positioned as a partner of choice for these type of real asset strategies, largely because of our competitive strengths, which essentially come down to we have 55 1,000 people. We can offer them multiple funds. So when we go and visit them, they can they're talking to in one meeting a very large amount of capital that they've given us and it's across a broad sector of things that they want to put money in and that's important. Number 3, we've established the governance and the client servicing capabilities to take care of them. Number 4, we can put large amounts of money to work for them. We can put that to work in over 30 countries, which not many other people can do for them. And lastly, our and probably most importantly, our track record is strong so that they feel comfortable when they give us that money. And one of the big advantages we have is that, and I said it this way on the slide is that when we're investing, probably the big advantage we have is that real asset investing, developing a piece of real estate, building a toll road, running a power plant or running any one of our real asset type businesses, it's hard work. It takes operating skills. It takes people. It takes tremendous there are tremendous amount of issues every day. And that gives us a huge competitive advantage over a financial player or someone else that's just going to do it on their own or someone that just starts up tomorrow morning. It gives us a big competitive advantage over them. And we provide 3 distinct offerings to investors, our limited partnerships, as you know, our private funds and our public securities business. And that today totals about $108,000,000,000 But in addition to that, we source money from many different ways. And Sam, tomorrow in Brookfield Infrastructure will talk about the pipeline we just committed to buy in Brazil. And we used all five sources of capital that are on this sheet to complete that transaction. We put part of it in a private fund, part of it went in the listed partnership, part of it went to co investors who invested with us, part of it we bought as a commitment on Brookfield Asset Management's balance sheet and we intend to syndicate to other clients that didn't have time to underwrite it prior to us closing the commitment. And lastly, we have joint venture partners. And that is a unique thing that we can do that not many other people can bring to the table in large transactions to be able to go ahead. And we think that industry that we're marketing towards will continue to head towards around $70,000,000,000,000 into the 2020s And that we've put together the backbone to manage the growth. And there's really two things they want. They want investment performance, but they want to be taken care of. And we've invested the money to have the compliance, the governance and the servicing capabilities. And this large sale capital is a very distinct advantage for us because real asset transactions can usually take large amounts of capital commitments. Today, we have about $18,000,000,000 of dry powder in our private funds, plus we have the liquidity of our listed partnerships and the perpetual equity that they possess, plus we have our balance sheet on top of it that can support them. We have significant relationships that we've built with institutions to co invest beside us. And that allows us to do things which other people can't. And really, it comes down to in an environment that we've been in, we've been able to generate the returns that are on this slide, which on the opportunistic side are in the 20s and on the core and value add side are in the mid teens, which are very good returns. And these include the financial crisis vintages. Our investment approach really focuses to be able to do that. It focuses on 2 things. 1, purchasing for value and 2, making repeatable investments. And I'd say if you think of how we do what we do, continuously think about those two things when we add to the company. Is it for value into it or is it a repeatable investment? Often, it's both. And a couple of examples, in the renewable company, we bought a Colombian hydro portfolio. We think we bought add value and we've done it 130 times before. So it's an easy underwriting for us do it. We recently went into the self storage business in the United States and we continue to acquire self storage facilities in a very repeatable way to build out the business. In District Energy and our infrastructure company, we started with one large business in Toronto and we've continued to add other cities across the United States using the platform, the people that we acquired with that acquisition. And the three things that it really comes down to for us to give us an advantage to earn the returns, as I described, are our large scale capital, our global reach and the operating capabilities we possess. And to use just 3 short examples, before I do that, I'm going to I just asked you for your advice on the Ipads. If you are going to give us advice on where we should invest, and by virtue of that, I'll take where you don't want us to invest. Number for the next 5 years, would you have us focus on Australia, Brazil, China, India or the U. K? Okay. I think the jury is in. So I would say we must have Brookfield supporters here, because there may be no other client in history that has said we should invest in Brazil and India. But I would say there's no doubt. Australia is a low growth market where we'll find add ons, but there isn't great value there today. China is always difficult to invest. So it I'd agree with that. The U. K. Is more uncertain and we may find some opportunities, but I don't think they're going to be in really scale. And Brazil and India have some incredible opportunities, which you will hear about over the next few days. So thank you for that. To the slides, please. So if you think of those competitive advantages that we have and you think of large scale capital, global reach and operating capabilities, we picked three examples just to try to fit that in so you understand what we're talking about, because sometimes examples mean more than words. And if you think of the pipeline we just bought, it's $5,000,000,000 It's in Brazil and it takes operating capabilities to underwrite and operate. And not many people could compete with that. We bought a $1,300,000,000 office complex in Germany that is office, retail and hotels. In fact, it looks similar to this complex, just a little bit smaller. It's 21 buildings of residential, retail and office. And but it's there's not too many people that can compete with that. And in the hydroelectric business, we've put $1,500,000,000 of capital into the U. S. With our renewables platform in the last little while. And again, there's not that many renewable players that can put that money, that type of money to work. All of that enables us to continuously invest our funds in a prudent fashion. And just to give you the where we are is that our latest funds, which we raised, the 3 funds we just closed earlier this year, BESREP II, the real estate fund is 65% invested because we had a long fundraising period. BIF III is 30% and BCP IV is about just over 30%, which should position us to start fundraising for the next series of funds starting early in 2017. So what does that all mean for the overall company? I'll leave you with a few things. Number 1, we think we've achieved global scale in the businesses we're in. It's often hard work, but we think this the business which we have, which is very broad in 30 countries with 700 investment people and 55,000 people gives us a great advantage. And it gives us the capacity to continue to grow at an enhanced rate in the business. Our pipeline for real asset investment opportunities is pretty is very strong. And often I get asked why that is in an environment where interest rates are low and it seems that money is chasing everything. And the fact is, we just try to find spots where other people are not. And your Brazil and India comments on the slide are part of that. Interest rates look like they're going to be low, but commodities and emerging markets are definitely recovering. And we think that Brazil has bottomed. And I'd say we saw that based on the fundamentals of the businesses we have there in February or March of 2016 this year, January, February, March of this year. And it's going to be a slow way back, but we think it's slowly coming back. On top of the business that we have today, we continue to launch new products in the company. We're expanding our real estate and our infrastructure finance funds. And with the banking sector, not wanting to lend to some parts of the capital structure, That's an advantage for us. We're creating core plus private property funds for our institutional clients and we're continuing to look at geographic sleeves for funds. On the public side, we added a distressed hedge fund in 2015. We're adding additional long short and long only infrastructure funds, and we've created a real asset fund for public markets. Looking ahead, we're really focused on 5 things. Number 1, enhancing the returns and the asset values that we have in the business, trying to drive extra return out of the things we have. Number 2, making sure that we serve the clients that we have. Number 3, putting the money to work that we have from clients to invest these funds prudently. Number 4, preparing for the next series of funds, which will start in 'seventeen. And lastly, optimizing the value of the listed issuers we have, because those are extremely important to us, both for the success of our asset management business, but also we have an enormous investment in them. And bringing it all together, I would say just the following three things. We think the environment is favorable. There's a strong demand for real asset strategies, attractive investment opportunities and financing conditions are almost too good to be true because spreads are coming in, rates are low and you can finance assets at incredible numbers today and we're fixing for as long as we possibly can in as many places as we can. We're positioned with large scale capital and a strong client base to grow. The execution of our strategy will continue to generate value over the next 10 years. And Brian is going to go through in detail the numbers, but where we at a very high level, where we head towards is $4,000,000,000 of asset management cash flow. And I noticed this morning that Elon Musk had a press release and he said by 10 years, 2026, he was going to have people on Mars. And we actually don't plan on going to Mars at this company. But what Brian thinks are mathematical exercise, if you look at the compound returns of what we do in the business, each of the businesses and the asset management franchise on top of that, the intrinsic value of the business where it trades, who knows, but the intrinsic value is about $160 in 20.26. So that's 10 years from now. And with that, I'm going to turn it over to Brian and he'll try to describe the financial results for you. Thanks, Bruce. Good afternoon. So which one of these? This one, right? Okay, there we go. So I'm going to cover 3 themes in my remarks this afternoon. First of all, some of the progress since last year. Want to spend a bit of time talking about our balance sheet and our liquidity profile and also the growth potential that we see within the business. And as Bruce mentioned, we did achieve a lot of growth and progress last year. And so to put some numbers around that, that $16,000,000,000 increase in private fund capital leads to about $160,000,000 of additional annualized base fees and importantly another $355,000,000 of target carry. So, good contribution there. And also on the same side, with the listed partnership capitalization, that price appreciation, capital generation and launch of BBU added about 9 $1,000,000 to our annualized fee revenues as well. So you pull that together, that's how you get to the 50 percent increase in fee related earnings on an LTM basis that Bruce referenced earlier. And you'll see most of it comes from that step up in the base fees and the IDRs from the new capital coming in. And what that meant is we showed you a growth trajectory last year and that's the blue bar. And then if you look at the orange ish bar, that's where we are today. And the comment I make and Bruce referenced this in his leading comments is that by having that significant progress last year, what that allows us to do, and this is common to the industry, is you get to bring a lot of future growth forward because and I'll talk a little bit more about just the whole fundraising cycle, is it just accelerates a lot of those out years and brings them closer and that's what enables you to have this parallel shift up in the growth potential for the company. So, at the same time, as we increase the fee related earnings, that new private fund capital coming in increased the amount of capital that we have that's eligible to earn carry. And so that target carry number that we talked about, I'll come back to that one as well, increased significantly as well over the past year. And if you take those two things together and you apply the same kind of multiples that we did at this time last year, what you'll see is there's a very significant increase in the intrinsic value of the company of the asset management franchise within the company and again, well above past that growth trajectory that we outlined last year. And again, that's 20 times fee related earnings and 10 times that target carry net of the associated direct costs. In addition, there were a number of things. Bruce mentioned the first couple. The third one, we did achieve 11% total return on our IFRS portfolio values. And what that refers to is it's the FFO and to the extent that we record any valuation adjustments on our IFRS book values, no currency impact, generated 11% return, which is it's okay. We'd like to do better than that, but it was, I guess, okay under the circumstances. And then we did have 8% dividend growth on the BAM share dividend. And I'll talk a bit about our capitalization and liquidity profile, but we through ongoing debt and preferred share issuance continue to strengthen that. And then the liquidity profile is quite an interesting one and how the free cash flow is building up in the business. So we'll come to that right now, which is the balance sheet. And there's really a few key strategic advantages that it gives us both on the strength and liquidity side. Bruce talked about how it facilitates our execution and complements the asset management business and also gives us the opportunity to create value throughout the organization, but in particular, to receive some of that value creation on our balance sheet and do a couple of other things as well. So, as we stated in prior years, and this is an important feature we think for the company is roughly 85% of that invested capital. So that $30,000,000,000 on our balance sheet is in the form of listed securities, which gives us a lot of flexibility, liquidity and I think really provides increased transparency in what Brookfield really looks like. Makes it, I think, pretty simple in that regard. And we continue to finance everything on a very conservative basis. This is one of the mantras throughout the organization is heavily dominated by investment grade financing. And so at the Brookfield corporate level, we have roughly $8,000,000,000 of leverage, dollars 4,000,000,000 of it is in the form of long term corporate bonds, fixed rate, 8 year average maturity and then the equal amount of perpetual preferred shares. So that gives us a very long and stable form of leverage that we think is quite helpful to enhancing the returns to the common shareholders and that's basically our market cap in there, the 1,000,000,000 shares at around 35 dollars a share. And then from a liquidity perspective, having that balance sheet and having that largely replicated throughout the listed issuers as well gives us what we call core liquidity of $6,000,000,000 across the group and also $18,000,000,000 of the uncalled fund commitments, that so called dry powder that Bruce referenced earlier. So it's a total of $24,000,000,000 of firepower that we have coming off of our balance sheet and as commitments into our funds. And in terms of some of the benefits of that, so Bruce talked earlier about the co invest and how if we are and Sam is going to talk more about another and you'll hear it come up throughout the presentations, having the access to that capital is a tremendous competitive advantage when we are pursuing these large transactions. But in addition to that, what it also means is some of the innovation that we talk about that's an important thing for us throughout the business. It gives us the capital and liquidity to develop some of these products on our own balance sheet, establish the track records, build the resources and the execution before we roll that out to and open it up to investors. And then mentioned value creation, there's a number of ways that we can get at that. Obviously, we participate in the intrinsic value that gets created. There are areas that we can narrow discounts as well, BPY in particular, and you're going to I know hear more about that tomorrow. But the liquidity of that balance sheet and the fact that it's held for listed issuers, even if down below we've got a number of private assets that aren't necessarily that liquid in and of themselves at that asset level, does give us the ability to redeploy and reallocate capital within the Brookfield balance sheet. We've talked about that in the past. And then also with the opportunity to conduct share buybacks for value when it makes sense and we do that from time to time. I did want to talk a bit about how we see just the returns coming within the balance sheet. And if you think about in particular one of the listed issuers and if you've got a distribution yield of X and you add a distribution growth rate of Y, it gives you a pretty simple estimate of a total return. So that's really what this slide lays out is we've got the cash flow that we get from our invested capital. So that would be the distributions. We get about $1,200,000,000 distributions from the listed issuers and other public holdings on our balance sheet. And when you average that out with some of the businesses that we largely redeploy the capital in, you end up with just shy of a 4% cash yield. And then if you look at the targeted distribution increases and you take the midpoint of what we've projected for the listed issuers and some of the other companies you end up with another 7%. So basically you're at about 10% or 11%, assuming that the yields stay about the same and you hit your distribution growth rates. So that's a big chunk of how we contribute to the balance sheet growth. And then we've highlighted in particular one obvious one, which is that BPY discount. So the way this table here works is you've got at the top that's at $30,000,000,000 and that's simply the quoted market value of our balance sheet that doesn't take into consideration intrinsic value or anything like that. And then you add those factors in, in terms of the capital appreciation and then some cash that comes in and out, pay our dividends, you end up with $55,000,000,000 at the end of 5 years in 2021 and that's about a 13.5% compound increase in the balance sheet, in the invested capital. So that's just a quick math on the DPUI discount from a band perspective. It's 500 units, dollars 8 a unit is close to $4,000,000,000 and that compounds up over a 5 year period about $5,000,000,000 So pretty simple concept. Obviously, there's lots to do in that regard to make it happen. And so this is one of the things that we've not a whole lot about in the past, but the amount of free cash flow that we are now generating within Brookfield itself. So the fee related earnings, those are very cash generative and you basically they come in quarterly and you pay your direct costs associated, but that's now tracking it well LTM was $660,000,000 So we're through that now. And then as I mentioned, there's about $1,200,000,000 of cash distributions that come in, again, quarterly from our holdings on our balance sheet. So then we do pay out interest on our debt. We pay out some corporate costs and then we pay our preferred share dividends. So just if you're wondering about why the difference is between the $356,000,000 and the $489,000,000 that's because the preferred dividends don't show up in your FFO. That's gets deducted when you do your FFO per share. So that's the increase to that $489,000,000 But the upshot of it all is, is we have $1,400,000,000 of very consistent cash flow coming in and that's what we pay our dividends out. So last year was about $500,000,000 of dividends. So there's a lot of cash flow building up and accumulating within the business to fund these initiatives. And that does not include anything for carried interest nor does it include any disposition gains in terms of rotating capital on our balance sheet. And if you track through some of the growth profile in the business, that number should continue to grow significantly over the past 5 years. So all in all, what we see ourselves is having a lot of cash flow growth within the business. Just talking about the dividend quickly, we have had a it was 8% last year, it's generally been around 7%. Over the past 5 years, it's obviously well covered and we don't really expect any significant policy change in the near term. Obviously, we reassess it on an ongoing basis with the Board of Directors. But then the other point we'd make in addition to that cash dividend, we pay you every once in a while, we pay you a special distribution, whether it's this year with BDU, but BPY in the past and BIP as well. So looking ahead, so we made the comment about the growth rate accelerating quite quickly over the past 5 years. And so we'll talk a bit about that. Before we get into that polling question, so just in terms of other asset managers, alternative asset managers such as an Apollo or Blackstone or KKR, just curious in terms of the audience here, how many of you would follow and own, follow but don't own, follow the traditional managers, but none of the alternatives or none of the above. So okay. So that seems to be settling in a spot where a lot of where we, I'd say to a certain extent, are almost a bit of an anomaly for you in the sense that we're an alternative asset manager. But yes, so I guess that falls in about the yes, the 36% of what we follow, well, maybe the ownership side of that. So perhaps we can move into the slides. So I think that's so with that, I think we do have a couple of slides to talk a bit about our take on how the alternative asset management model works for us, how we see it. So I think given that polling response, hopefully it's of help and interest to you. But in essence, if you really boil it down and we talked to you've heard this a few times, but there's 3 key drivers to the growth. 1 is raising that capital, establishes the fee base for us. 2 is performance. You have to do it obviously to perform for your clients, but what it also obtains for us is carried interest and that performance allows us to compound the cash flow growth within the listed issuers, which enables us to increase distributions, which increases the IDRs. And if you think about it just respect to private funds itself, that part of our business, there are multiple points of value creation. As I mentioned, when you raise the money, you lock in that fee base and it's there for a long period of time if you deploy that capital. So once you deploy that capital, you lock it in for the full length of the fund And then you get into the enhancing the value of it, generating that IRR, generating the multiple capital that gives you investment performance, but also gives you those carried And then when you get into harvesting mode, then you're returning you're monetizing returning the capital and that's when you lock in the carry and that becomes in our jargon, no matter what you're realized carry and we'll talk a bit about that. So one of the things that's important for us and that we think is really helpful in the quality of these cash flow streams is we've raised a lot of the capital within the last 5 years. So you think about these as being 10, 12 year funds, that means that roughly 90% of that capital is still in place in 5 years' time. And in the meantime, we're going to be raising more funds. And so that stacking effect of having incremental fund capital really accelerates the growth. We talked a bit about that last year. But then the other thing that we've seen, particularly with the last series of funds, is that acceleration of pace. We've shortened that cycle in terms of launching and deploying these funds and that infrastructure fund was basically 10 months to raise and then it's already 30% deployed. And Bruce mentioned the rate on Bezrep to the extent that it's deployed. So what that means for us is the potential to raise 2 more series of funds over the next 5 years. And if we just match the amount of fee bearing capital out of that last $27,000,000,000 that will be another $20,000,000,000 in each of those raises for the next two series of introduced funds. Plus we're planning to do some core funds and some niche funds and some public securities and that would add about $600,000,000 of base fees. The other side of it on the listed partnerships, we talked about shrinking valuation gaps, but also just hitting the midpoint of the distribution growth and issuing some non dilutive capital, so I'm talking about preferred shares and corporate debt, gives us another 32 $1,000,000,000 and another $400,000,000 of fee revenues between now and 2021. And all of that sorry, and also with the increase in the distributions that step up our IDRs, so that we would add about $250,000,000 of IDRs from the current level of around $100,000,000 to $340,000,000 is the midpoint base case. And that gives strong growth in the fee related earnings and drives a big increase in the valuation. So the top line, the base fees, that $1,000,000,000 increase, that's really the $600,000,000 from the private funds and $400,000,000 from the listed issuers and the $250,000,000 increase in the IDRs and maintaining that gross margin at 60%. So we provide you this business model and there's really a couple of things. One is, we think hopefully it illustrates the key drivers and relationships within the business and that it reinforces what we think is a pretty simple business model. And hopefully, what that will enable you to do as we report results in the future and our progress that it will allow you to take that and assess your views as to where the intrinsic value of the shares are building over time. So that's really the why we walk you through these numbers on an annual basis. And in addition to the fee related earnings, we do see a lot of carried interest coming in. So I thought I would just take a moment and we went through this last year, but I think there were a few people that are here for the first time, value of the polling question. The target carry is what we talk about as being the potential that if we hit our target returns in the fund just mechanically what we stand to earn over the life of that fund and that we simply average it out on a straight line basis. So it's probably a little bit forward leading. But I think the reason why we do that is just to give you an appreciation for when we raise a fund, what type of earnings potential we're adding to the organization every year when we do that. 2nd is the unrealized carried interest and that is based on the actual investment performance to a period end. And based on that performance, if we wound our fund up on that day, how much carry would we earn? And that's the number we put in our supplemental information we provide you each quarter as well as number 1. And then 3 is what shows up in our financial statements. And I made the comment earlier that a lot of our carry gets crystallized at the tail end and we don't book it in our financial statements until there's no more potential for clawback. So that means it's right towards the tail end of the fund. We're one of the few asset managers that does that. So our numbers will not be comparable to a lot of the other peers that we posted up earlier. So we just want to make sure that we point that out. So when you hear us talk about carry and you wonder where the heck is it in our financial statements, well, that's why. It doesn't it's building, but we don't book it until when it's no more carryback. So it's pretty conservative approach. In terms of that unrealized carry that's accumulated, it's roughly $1,000,000,000 and you'll see it spread out over a number of funds, some of which are going to come up sooner, but some of them which will come up later. And then looking forward, that growth projected growth in our private fund capital leads to a 70% increase in the amount of carry eligible capital and a commensurate increase in the amount of target carry. And we would see if the funds go out on that, I'd say mechanical basis, they come towards the end and we wind them up and we hit our target returns, we stand to realize roughly $8,000,000,000 of carry on over that period of time, mostly from funds that are in place today, but you'll see also largely in the out years. So pulling it all together, there are a number of different opportunities that I think you've seen so far that we can share that we can increase share value. But before we just roll into that, again, another polling question, we'd just love to get your views for which parts of our business you think is the toughest to value. So there's the manager fee related earnings, the carried interest, the balance sheet, all of them that you don't understand or you get all of them and it's easy. Okay. So far not a big surprise. And I'm delighted to see number A. So okay, so we've got some homework to do on the carried interest. Thank you. So maybe we can move to the next slide because that's the inverse question. I have to hit the button. So what's the easiest? I suspect I already know the answer from what you last did. So it's the management, what's the easiest part to value, fee related earnings, carried interest, the balance sheet, all of them, none of them. There we go. Okay. Fine. I think we know what we need to do out of this one and how what we need to add into our disclosures and look, the carry is going to tough. It's because a lot of it does occur over time. But hopefully, we'll just keep telling you as much as we can about it. And I think it's a bit of an industry wide challenge, but I do have a comment I'd like to make on that later on. So perhaps we just move back to the slides, Ed. Thank you. So here is as we do each year, we say, okay, if this happens and that happens, what could it look like in 5 years' time? So if we do that fundraising on the private side that we talked about, and that should generate roughly $1,500,000,000 and fee related earnings 20 times multiple, dollars 29,000,000,000 ditto on the carried interest. And then on the invested capital, we have that 13.5% compound increase in it leads you to the $55,000,000,000 and so that's $92,000,000,000 $92 a share, Total return including assuming that our dividend rolls forward with 7% annual increase is about a 22% return. And so just thinking about that, I think one of the things that you should watch in terms of that is the pace at which we can raise that capital. So if that 2 series of funds takes us a little bit longer, then maybe we're into 2022 or but I would say even if it takes us a little bit longer, we're still going to be posting some pretty good returns in terms of building up intrinsic value. And as much as that's perhaps one area that things might slip a bit, and but I think based on what we've seen happening in the industry and our own experience in raising funds, we feel pretty good about our prospects in doing that. But there are other areas as is our case that we would point out to you where we could outperform. And so from that perspective, one of the things that we've seen in the progression of our funds and the increase in scale of each funds is we've just assumed that the next two series of vintages of flagship funds are the same. We would hope that each one is significantly larger than the predecessor funds. And so you could add $5,000,000,000 and $10,000,000,000 and another in the commensurate increase in fee related earnings and target carry. Similarly, on the listed partnerships, we posted that at the baseline of the midpoint. And you've seen in the past, we've had a good track record of exceeding those. We can hit the high point on our distribution growth. And if we can issue some equity on an accretive basis, then that also has a good increase in the fee side of it as well, which should give us another 8 point $3,000,000,000 from the fee related earnings, another $2,100,000 from the target carry. And that then would roll into an increased value for the manager and other and then on the invested capital side, that increase in the intrinsic value and distribution growth should lead us to higher values on our own balance sheet, all leading towards $113 share price based on those mechanical assumptions. So we had one last polling question for you and that is, I guess it's coming back to the carry. So I think I know one of the words that will be up there. But in terms of things that we can help you with by providing you more information throughout our annual reporting and communications, but also this time last year. So whether it's carry, performance, what our pipeline looks like, we'd love to get some feedback from you. Okay. There we go. Culture. Okay. Good one. Taxes. Okay. I think we're going to have to stop this at some point in time because we've already got enough homework out of this one. Okay, good. So let's move on. Otherwise, we're going to be working a lot of overtime. Okay. So, I did want to talk about and maybe this has been part answering some of the questions that came up there. Just before wrapping things up here is just the some of the favorable characteristics that we see and why we think this is a really favorable business in terms of the fundamentals of the cash flows. So first of all, and I think you all get this on the fee related earnings, very stable. There fixed rate contractual arrangements. The capital is very sticky. The IDRs, it's a simple mechanical calculation based on distribution policies and we give you target distribution increases and things. And the costs are largely controllable. We don't have these big input costs that can vary wildly. The carry is an interesting one and we'll see how this plays out. But our belief with respect to the type of investment strategies that we have that we earn carry, a lot of them, it should become a pretty good stable source of cash flow because in these circumstances, a lot of it is driven by relatively lower volatility asset classes and is supported by growth in tangible asset values. And importantly, the realization of a lot of these assets within our funds are not subject to an IPO market value or an IPO or IPO market conditions. A lot of them you transact with on a private basis or a portfolio basis, you always have the IPO as an option. So we think that's something that increases the quality of the carry that we can look forward to earning. And then on the balance sheet, if you look through those listed issuers, what you see is a portfolio of assets that are predominantly high quality core, core plus returns. And cash flows, the cash flows we receive are very visible predictable distributions, but underlying that are a lot of contractual cash flows. And then finally, just to pick up on Bruce's comments at the outset, there really are I've talked a lot about numbers and things like that. But there really are those 3 key priorities that are fundamental to us being able to achieve the types of things that we're hoping to achieve within the business. And again, just to reiterate them, it's that best in class investment performance. It's designing the innovative funds for our clients so that we can meet their ongoing investment objectives in the future. And then lastly, excellence of service across the board. And those really are stepping back the key determinants of our long term success. So with that, I will hand the podium back over to Bruce for Q and A. Thank you. Before I take questions, the only comment I'd make just on carry and I'll make this comment to try to be helpful to the comments that Brian or be additive to the comments that Brian made on Kari. And the way really to think about Kari is that for the franchise that we have and for all of the things that we possess and for all the people that we pay for around the world, Our institutional clients pay us a small fee on an annual basis and then they pay us essentially 20% of the returns out of the funds. And those funds are as long as we achieve a threshold. But because the assets that we buy are the assets that you think about when you think about Brookfield, there are great office buildings or malls or toll roads or pipelines. As long as we're buying conservative grade investments, leveraging them conservatively and holding from them for long durations, we should be able to earn 12%, 15%, 16 percent returns on a levered basis. And if we do that, we get 20% of the return. So the carry to Brian's point, this is not other than our private equity business. The rest of the business, which is 80% of the assets, is very long term duration assets, which earn those returns. So that the carry that we generate within our funds is much different than private equity returns, which are dependent upon IPO markets, sales and other things. These are much, much longer in duration. So I just make that comment with respect to carry and when you're thinking about it and analyzing the company. So with that, I'd be happy to take any questions or Brian as well. Over in the back there. Bruce, my recollection is a year or 2 ago you had talked about the possibility of spinning out the asset management business. And I think you mentioned a time period of perhaps 10 years. Are you still thinking about that? Can you give us some of your thoughts? So I don't know if I said that a couple of years ago or not, but it's possible. Here's what I'd say just and the question is towards just would we ever will we spend the asset manager of our field out. And I think on occasions over the past 10 years as we've built the company, we've thought about should the manager be separate from the capital or should the capital be tied to the manager. Originally, what we told you and told investors was that while we were building the business, we felt it was extremely important to have the capital beside the business. I'd say the business is built today. It's very large. And it's possible today that we could spin the manager out and it would trade well on its own and it would have its own life. I think it's also possible that having the amount of capital that we have on the balance sheet tied right beside the manager is more valuable forever because of the extra benefits that it gives us. We think about it all the time as to how do we maximize value in the organization for the common shareholder of the company. And it's possible that it's right to keep the whole thing together. Today, we think given the markets that we can use that capital prudently and not spin it off. But it's possible at a point in time we think it's the right thing to do. So the specific answer is we're open to it. We're not planning on doing it at the moment. But we continuously think about it with only one thing in mind. How do we create the most value for the shareholders over the long term with the structure? And I guess the only other thing I'd say is that we need to ensure and we've learned this maybe over the years, we need to ensure that the shareholders of Brookfield can understand the company and it's transparent to them. And it doesn't confuse them by things that we do. So I'd say that's the only other added thing that we put on to it. It's 1, just how do we maximize value. And number 2, we need to make sure that everyone understands exactly how everything fits together. So I hope that answers the question, but it's not a definitive one as we sit. Andrew Kuske, Credit Suisse. Bruce, could you just give us some color and commentary on your co investors and just the dynamics on fee structures or lack thereof? And then effectively with some of the larger co investors, it's good that they write very large checks, But are you getting to the smarter and asset classes where they ultimately wind up competing with you or against you? So hopefully everyone heard the question and that's just that what about co investors coming into funds and the fees that they pay and how that fits into the business model? And secondly, will they ultimately compete with us? And I'd say it's something we think about a lot and we talk to every one of those 4 100, 500 clients and probably another 200 or 300 on a monthly basis. So we have a lot of feedback from them. And I characterize it the following way. There are some institutions that invest with us and they have either they don't have a lot of investment people in their own organization and therefore they just allocate funds to us. And they do that because we essentially act as an outsourced investment management department for their real asset allocations. And that's either because they're smaller in size or they just don't have they haven't set it up on their own balance sheet yet. So we're their outsourced organization. They may have 2 others, they may have 10 others, they may have 20 others, but we're one of them. So that's group number 1. Group 2 is people that have either they're of the size where they can put more sizable amounts of money out or they've actually hired people internally to do this, but they don't have the skills to do it on their own. And what they do is they give us money and into our funds. And what they want from us is something else than that. They want to come into our funds, but they're learning the business. And we're a quasi outsourced investment management department for them. But in addition, they want to interact with us and they want to do other things with us. And that's where we have a tremendous advantage of being able to offer them products, not only just our funds, but because, for example, in the real estate business, because we own 100,000,000 square feet of office buildings and 60,000,000 square feet of multifamily buildings and 100,000,000 125,000,000 square feet of retail, etcetera, etcetera. We can offer them other things and then just fund investments and we can offer them co investments. So we offer them direct investment co investments and we engage with them. And so I would say that second group of institutional clients is a vast group. And they range in types of people and types of size. And each relationship is slightly nuanced and different. And what we try to do is tailor given the scale size and multi product business that we have, there's not too many people that can offer that to them. So we have a tremendous advantage in there. Group number 3, to your second part of the question about competition. Group number 3 is, there are some organizations in the world that have built full scale investment management organizations that rarely need somebody to outsource investments to. There are maybe 10 in the world, if you stretched it, that really have that. Maybe it's 20, some are smaller and have it, but it's not that many. And therefore and I don't think it will be that many. And I identify the reason why is there aren't that many really large funds and the things that we do often take really large amounts of capital. Number 2, many don't have the governance setups to be able to hire the people. They're government organizations, which have pay structures and other things that don't allow them to hire the people that we do. And number 3, just size. And so I guess I'd just say that 3rd group, there's no doubt, there are a few organizations that are over in this group that don't give us money, that are very active. And in fact, many people of our investors are Canadians. There are many Canadians that have done that. And there is advanced in their investment management capabilities of anyone in the world. And therefore, some of the big ones don't invest with us anymore because they've built their own organizations. But what that's led to is many of smaller organizations and midsize organizations in Canada looking at their allocations to real assets. So I just say it's even group number 3 that may or may not invest with us and some do, even though they have big organizations. What that's done is it's broadened, it continues to broaden the base of investors that will invest into real assets. And that's really, really good for the business, for us and for others within the business. Hopefully that answers the question. You have a question down here. I guess I'm curious in your thoughts around your dividend policy within the context of the world that you see and the value of current income versus and the cash flows you've demonstrated? Yes. So the question is just on dividends. And we've had a view over time, I guess, that we didn't really want to have a die dividend policy, largely because we want to ensure that at the bottom of the market, we could make unbelievable investments that allowed us to do things that others could never do. We may be getting to the point where we have very large amounts of free cash flow within the business. And therefore, we can crank up the dividend if that's what we should do. I'd just say that even though we have enormous amounts of capital and even though we have very large amounts looking forward of free cash flow, I can tell you that Brian in particular, but me and others, always are worrying about how much money we have to deal with the opportunities that come forward. So, and part of it is this business continues to grow at very large pace, the funds get bigger. That's all good for the franchise. Don't get me wrong. It's all good. But it means that you're always concerned about how much money you have in the machine to ensure that you never, A, get yourself in a situation where you aren't liquid. And number 2, you have available capital to do the things like we've done in past. We bought these buildings in 1990 3. We bought Babcock and Brown out of bankruptcy. We've got General Growth out of bankruptcy. We could buy a pipeline in Brazil. And I can give you 20 more examples. It's amazing what availability of capital does in the business. So you never want to A, you never want to have to go back and retrace your dividend with your investors because they really get mad at you. I can tell you that. And but I think what I don't think Brian basically said, we've grown at 7% or 8% in the past number of years. We're going to continue to grow at that pace over time. And I think that's easily within the means of the company. And I'd say if you all wrote us and said, you should do, we need to have a higher dividend because it would be great and that's what we want, we'd consider it. Bottom line, we're here to manage the money for the shareholders of the company. If shareholders of the company want high dividend within the confines of everything we can do, we could have a higher dividend. It's just not I think, I guess I'd say we think we can deploy the capital within the business, a, tax more tax effectively and b, at higher rates of growth than what you'd get. I guess you could argue we're coming into a world where income is much, much more attractive and maybe the security in the short term trades higher, if you had a higher dividend, then that's certainly possible. It all depends on what you want. So if you, Charles, think that we should have a higher dividend, you send me an email on Monday. Thank you. Thanks. Anne Dye from KBW. Bruce, earlier you spoke about banks stepping back from certain types of lending and funds that you're raising around that. So I'm wondering if we can step back a little bit and look at the entire opportunity set for BAM within the credit space across the credit spectrum, whether it's in your private funds business or in public markets? And if we just look out 5 to 10 years, is credit a much bigger piece of the BAM story? So the question is just, I'll paraphrase and make sure I get it right. Where does credit fit into Brookfield's life for the next 10 years? And is it a big opportunity? And I maybe make three comments. Number 1, the credit area is a dangerous area and many banks over the past 25 years, you'll all know them, got themselves in trouble because credit is a risky business. And if you don't do it right, you don't have the right form of capital. Eventually, loans go bad and you have credit issues. So number 1, we're we come to it, to the space with a very hard asset view and want to make sure that anything we do in credit is based in the same fundamentals that we run our businesses with to ensure and why we really think it's important to come from that direction is that any one fund we have or any investment we have or anything we do reflects across everything. And therefore, if you have one fund that has a bunch of investors in it that has a problem, it can for somebody that's a large manager like us, it can ripple across all your funds. So the first comment is we're very we come to it with that in mind. Number 2, there's no doubt the financial system has with the regulations that have been put in place in the United States and Europe, in particular, have been offloading the riskier parts of the capital structure onto non bank financial institutions. And so we've focused on 3 things and are going to continue to grow those businesses. And I think to directly answer your question, over the next 10 years, each one of them will be quite significant and could contribute a lot, although they don't pay $2.20 Our private equity funds are private funds that we have are very high margin funds. These are they don't earn as much and therefore they don't pay as much. So when someone grows their business by a lot of credit, you can say you have a lot of assets under management. What gets to the bottom line is a lot, but it's not so much compared to a private equity business. But we're growing our mezzanine real estate business, which is buying mortgages and second mortgages on real estate. And those we're in our 5th fund now and that business continues to grow. We're growing. We started a similar business infrastructure and we'll be doing we're doing the same thing with corporate credit. So I think all three of those will grow and they could become very big, but it will they'll be very targeted to make sure that we don't make any mistakes. Thank you. Bruce with all these specialized funds now, do you worry all at all about a silo effect, people not necessarily being on the same team the way that they might have been in the old days, people feeling more or less an allegiance to their particular fund or their particular asset class. And I'm just curious too, I don't begin to know of the 700 investment professionals, do the BIP people sit in with the BPY people sit in with the BEP people? I mean, how do you construct all this so that you get everybody pulling the oars together and on the same team and not the internees and warfare? Thanks for the question. So the good news is they're all Bs. Here's what I'd say. 15 years ago, when we started doing private funds, we had these businesses and we operated them all with our own money. And we made a very, I think, strategic decision at the time. It was very tough. In fact, most people told us we couldn't do it. But we decided that the funds we would raise would be Brookfield funds. And if you had we would we essentially marketed these as you were buying Brookfield. And if you're going to come to us and you're going to come in your fund, no, no, no, you're not getting that person or that person or that person. Yes, you're going to get people focused on the business and on that fund. But what you're really buying when you come to us, you're buying a franchise of Brookfield and you're buying us as an organization. And from that, our compensation plans are set to ensure that a client gets taken care of, their compensation doesn't necessarily isn't all based off of one fund or one thing or anything they do on a daily basis. And therefore, it's created a culture in the organization that continued the business that we always ran, which was you come to work, we'll give you more opportunities than you ever found anyone else. If the shareholder, whoever that shareholder is, makes a lot of money, you're going to get you're going to make a lot of money. And you're aligned with everyone. And because of doing that, I'd say we don't we've managed to avoid look, there's no doubt when we had 70 people and we have 700 people, the culture is not the same. But I think we've managed to keep relatively low amounts of silos and people work across and we've done that by cross pollinating. We've moved people from business to business, sometimes not operating people that are in businesses, but at the investment level. And all of the senior people, to answer part of your question, all the senior people, whether they work for the renewable business or the infrastructure business, property or private equity, A, they all sit in the same offices globally. So our 6 main offices, Sao Paulo, Sydney, Toronto, London, New York, etcetera. Everyone's in the same office. B, most of them are compensated. In fact, all of them are Asset Management Compensation. They have nothing to do with the funds. Whatever fund they do, whatever it is, they have no reason to not be working for all of Brookfield Asset Management. And again, I'd say that was an important thing we did early on to make sure the culture was right. And it tears down from there. Hi Bruce, it's Cherilyn Radbourne from TD Securities. So we've seen an exponential increase in the size of your private funds, which is typical of the industry pattern. Just wondering if you could talk about the thought process that goes into deciding where to cap a particular fund And whether you think there's some kind of practical limit on a single fund size at SunStage? Yes. So I guess to paraphrase, I'd say, can we invest the money that we get in funds? And do we try to limit the funds to make sure that we don't make stupid mistakes? You didn't use that word. When we're investing the capital. And I just say that the business gets bigger all the time. We have 3 competitive advantages. Number 1 is size. Number 2 is our global operations. Number 3 is our operating people. Every day we try to make sure we have the operating people to build the business. Number 2, we continue to build out the global franchise. Few people have it. It's an amazing opportunity thing for us to have. And number 1, size. I just say, if you look back 20 years ago, 15 years ago, 10 years ago, even 5 years ago, I'm not sure that we understood the advantage of having the size that we have and the ability to do the transactions we do. Many of the things we do come to us or only offered to us or we can react quicker or we can do them because of our size. And so for now, I would say each of these funds can get bigger. We can deploy the money. We've never had an issue in deploying the money within the investment period. I think all the investments we've made have been excellent. Adherence to the value principles of investing. And moved from our adherence to the value principles of investing and that's largely because of group number 2. We're on a global we have a global franchise that few people have. And therefore, if United States, if interest rates are really low, you know what, either we should be selling things or at least not buying anything in this series of vintage of funds, but we're going elsewhere. And therefore, we can be in India, we can Brazil, we can be in Australia, we can be in Europe, we can bring wherever else. Often, people don't have that luxury. And so I just say, because of that global franchise, we can continue to put money to work. Specifically, there will be some point, I think, with funds where and it's not money, will we be able to put the money to work, it's going to be our clients are not going to want to have the concentrations of size in a fund. So I think there's limits of where you get to. Private equity funds seem to have stopped at $20,000,000,000 I don't think I don't know there's a private equity fund at greater than 20,000,000,000 dollars I think $20,000,000,000 seems to be in people's mind that that's the size that they can go up to. I think infrastructure and real estate can clearly be that size. Private equity clearly can. Over time, that may grow as the world always gets bigger. But I think it's more just the size that institutions want. And what we're going to have to do then is just start splitting out some of the areas where we do things. But for the time being, we don't really see it as a governor. Okay. Bruce, you talked about onboarding being a lot of work, taking your institutions to 1,000 from 450 today and client service is key to keep your clients. And the clients or the institutions are getting smaller. So how does that impact the operating leverage in the asset manager? Can you grow and service your clients and still produce the profits or improve the operating profit in the asset manager going forward? Or does that start to get diluted over time? Thanks. Yes. So I'll take that one, give Bruce a break here for a minute. So thanks Bert. So there is a number of there's a lot that goes on in identifying the new client relationships and bringing them on board. What I would say on that front is that as much as we've made a tremendous amount of progress and increased the number of clients significantly, investors over the past number of years, there are a number of areas that we are still heavily underrepresented. And so even in a market like America, where we have a lot of relationships with a lot of key investors, it is by far the largest provider of funds to these sorts of strategies. And if you look at any of our peers, the type of capital they attract in America, we have a tremendous runway in that regard. Europe was another area that we're very light on. I think it was 7% or something like that. And part of that comes to having the right kind of products that really appeal to European investors. And so we're working on that as well. And Asia, Bruce talked about the 15% limit now, the increase of the 15% for example, Chinese insurance companies and other pools of very large pools of capital in Asia. So there is a in our view, while we've made a lot of progress, we're just scratching the surface of the broader investment community. Thanks, Mike. Thank you, Bruce, for hosting us. Would you be kind enough to share with us as an investor a mistake that you've regretted over your career? And what lets you draw from it? So I can actually say this now, I've been doing it a long time. And I just say that we make mistakes all the time. And I'd say probably the what we try to do always when we're making mistakes is to, A, remember them and B, institutionalize them. So what we try to do is and we keep a lot of our Chairman around the company because decades can go by and you bring new people in, they've never seen a cycle before. And so I'd say, we have many we have different rules of things. And some of the great mistakes we've made is buying dying businesses where we thought they were really, really cheap. Actually, there was just really, really bad. And you can buy we got a business, I won't even mention it. Some people that work with me here that are here will remember it, but we got it for $1 and it cost us $200,000,000 by the end of it. And it's just these are bad businesses. So over time, what that's done to us and what we've tried to engrain in the people in the organization is pay more by great things. And in the end, they'll work your way out. And in the worst case scenario, you're going to get a little bit lower return over a longer term. And it just doesn't matter. And so I'd say we've learned to focus on quality and great things. 2nd, I'd say we're in the development business in all of our businesses and around our businesses. We have probably have $10,000,000,000 or $15,000,000,000 of projects we're going on. We're building toll roads. We're building pipelines. We're building office buildings. We're building malls. We don't view ourselves as a developer, but because we're in the business around the edges and as a component of the business, we're always developing things. And one of the mistakes I'd say we've made is buying portfolios of assets that had development characteristics in them, especially in foreign places or in markets where you don't know, because the locals can change the rules and you can lose value very, very quickly. So we're very we buy lots of things. But businesses that are you're unsure of the side, Cyrus Madden was here talking earlier, someone asked him a question about buying a construction company. It's tough to know 150 projects, especially some of them are civil works, you're building toll roads or you're building some infrastructure assets, it's very difficult to know what's down underneath. So we're very we spend a lot of time thinking about that and rarely do it. Usually, we're doing it organically because of the mistakes we've made. So I'd say those are probably 2 large ones. There's a question over there and then we'll come down here. Bruce, I don't know that you mentioned your investment in Energy Future Holdings and I know that various things have been going on. Could you briefly review what's going on with BAM and where you're at now? So I'm going to try because I have the microphone. And if I don't get it right, Cyrus Madden is sitting in the front row there and I'm going to get him to add to this. If I say something incorrectly or if I mess it up. We own a large position with some clients in Energy Future Holdings. It's a utility in Texas, utilitygeneration company in Texas and the utility business getting sold and what we'll end up with out of the reorganization will be a generation company in Texas, which is a very large amount of the generation capacity in Texas. And it's coal mostly coal and gas plants. It will emerge from bankruptcy by the end of this year. And we're quite excited about the business and what we may be able to do with the business. There's 2 other large holders, I think, will be the largest owner of the shares when it emerges from bankruptcy. And we intend to use it as a business to grow with it and assist it. Would you add anything else, Aras? Thank you. There's question I think down here. In an earlier slide, you talked about the impact of interest rates rising at a gradual pace and how that should be good for your business? And also in regards to negative interest rates, you discussed how that wasn't really something we're looking at or maybe it was in a poll I don't recall. But is there an economic environment over the next few years that you think might be detrimental to the Brookfield business? Or is there something that you think might slow the fundraising in the different various funds? Look, you never say never. I'd say there's nothing we see on the horizon of economic situation around the world in the different countries that we operate that tells us that there's going to be an economic collapse. In fact, I'd say the opposite. United States, things are good in most of the businesses. Housing continues to grow. Housing related businesses continue to grow. Everyone complains a lot, but GDP is positive. And it's going to be it's just going to be that way for the next while. It's not going to be what we used to remember was GDP growth in the United States. So I'd say economically, we're not that worried. On interest rates, I think our what I would tell you is we used to say the long treasury at 4% will be just great for our business. So we're at 1.5% on the U. S. Treasury today. And I think it'd go to 4% and our business just works great. And I think I don't think you're going to see 4% in the next while. But if you do, it's fine. I think the only environment of interest rates will be problematic is a significant increase in interest rates to a high amount. And I don't know what that amount is, but I think anything over 4%. If it goes 5%, 6% quickly, then I think you'll have enormous disruption in a number of industries, in particular, the bond market. But it would disrupt a lot and it would disrupt the business. We would be fine because we'll just start the engine over at that time. But it's not going to be very much fun for a few years to a lot of people. And I think that's the one environment that if you believe that, you should put your money in cash and you should wait for that moment. We don't believe that, but that would be the one thing that would be difficult. Other than that, I don't I guess we're pretty either positive or Following up, do you think the U. S. Election could have any impacts at all on any of your businesses either way? I don't think so. We're just we're little people that buy things and no one cares about generally. And so I actually don't think, especially in the United States of America, there's great governance in this country. And therefore, it just it'll be whatever it is. And I really don't think it matters. Over the next 25 years, it'll matter. Governance matters. But in a 5, 10 year period, it doesn't really matter. Any other questions? Okay. Suzanne? So just a couple of housekeeping things. One is you should all have a brief survey that's been pushed out into your iPad If any luck it's there. If you don't mind taking a minute to fill that out that would be great. At one of the tables on the way out and then you can collect a new one in the morning. Thanks.

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