Good morning to everyone, and thank you for attending on behalf of everyone at Brookfield. There will be four of us speaking today. We'd be prepared to answer questions on anything. We'll take a few questions through the presentations like we did in the earlier sessions. We'll take anything at the end as a wrap-up, if people are still interested. I guess we're here to really just talk about the company overall. We focused this presentation more on asset management than on the business units itself, presuming that people either were in attendance at those sessions, or they can get the materials from those presentations. In the questions, we'd be happy to respond to anything that came out of those. There's four of us going to speak today, which I'll do just an overview and talk a bit about our business strategy.
Leo van den Tillart is going to talk about our private fundraising and the activities that we conduct in that area and the environment and what we see out there for private funds today. Cyrus is going to cover our fourth business group, which is private equity. We had to include him somewhere. We included him in our presentation. Brian's going to sum up the presentation on just the financial impact of all of this on overall Brookfield and on the values of the company. With that, I guess I just state one more time, and this is nothing new, but our goal is really to be the leading global manager of real assets with really two things in mind. One, to protect capital, and secondly, to earn outsized returns for our clients and our shareholders.
I put them in that order because we think a lot about downside protection, and hopefully, you've seen that in a number of the presentations. If you sum up all of these presentations that we'll make over the next two hours, I guess I had five things I wanted to sum up with. Maybe you can leave after this slide if you're interested. I'd sum them up by saying, firstly, that we try to compound capital at 12%-15%. We think we can do that within the businesses and within the capital that we have on average over the longer term. Second, our fee business, the asset management business that all flows up to Brookfield Asset Management, should head towards $3 billion of fees over the next 10 years. At normal valuations, this is purely arithmetic.
At normal valuations, if you take those assumptions, you should have $150-$200 valuation for the company in 10 years. The biggest risks to that are what we identify as threefold. Number one, interest rates. There's no doubt that interest rates affect assets like ours. The question was asked earlier about discount rates and cap rates. The bottom line, we value things on long-term expected yields over into the future, and those don't take into account short-term cap rates. They do on the margins, but generally not. Therefore, we don't think it's a big deal if interest rates go up to normalized levels, which the long Treasury is in the 2.5% range today or a 10-year Treasury. If you're at four or 4.5 or even five, those are normal times, and we always expected that.
if you went to a 10-year Treasury of 8%, clearly, I think that changes your thinking about real assets. Secondly, real asset allocations. A big part of our business is deploying capital for institutional clients, and real asset allocations have been increasing across the globe. Leo's going to talk about that specifically, but I guess I'd just say we see no indications that there is less real asset allocations. We see significant money going into real assets and alternatives across the world in virtually all types of institutions. Third is execution, it's probably the biggest risk. It comes down to people and execution, we try to deploy a thoughtful way of executing, but you can always make mistakes.
I guess the only thing I'd say is we try to ensure that the mistakes we make never harm the franchise or aren't too big such that they will damage the value of the overall organization. Clearly, that's, I'd say, the third big risk. On the upside, there's nothing in our plans anywhere within the system which really take account for two things which often occur within our business. The first one is we sometimes repurchase shares, and if we can do that for value over the longer term, that's a tremendously valuable thing to an organization if you can do it. Secondly, there sometimes are transactions which can occur which advance the overall business of the company. General Growth would've been one of those for our real estate business. Babcock was one of those for our infrastructure business.
I can go back 20 years and name others. They're not every year, but every once in a while, there's some of them. I guess we'd hope that during the period of time, either those things will be additive to the franchise or they'll make up for some of the small mistakes we make along the way. If you look at the overall business, we're essentially, I guess we believe, built out to the scale that we need to run the business that we have today on slide seven in your books. We have approximately 100 offices, 700 investment people, and 30,000 operating employees. We're in virtually every country that we want to be in.
There may be others that we go to, we don't feel any real need to put people or capital into other countries, other than a few small ones that we will continue to build out. That gives us a pretty compelling offering to our clients when we deploy their capital. Not many other people in the world have that global scale. It does make us one of the largest managers of real assets, and we split it in different ways, but this slide shows it in three fashions. One is our listed partnerships, which as you know, are about $40 billion of capital. Our private funds, which are around $30 billion, and our public market assets, which are 16. So it's about $84 billion managed for others.
On top of that is the capital on our balance sheet and the other assets that we manage off our funds. I hope that you've seen throughout the presentations of the other sessions, a common thread within the businesses that we run. Our model is pretty simple, and we try to have one of the most sophisticated funding arrangements to be able to generate capital and availability of capital. What we do at the asset level is really pretty simple. We source equity from clients. We use the global REITs we've built out to find assets. We finance them conservatively, and we put the money to work in those assets and try to optimize them by using our operating people to increase the value of those assets.
Some of the things Ric talked about this morning on Manhattan West or some of the other things we've been doing, very few people have the capability to take assets and enhance them the way that we do on a global basis. One of the greatest advantages that we think we have in the real asset space is that we can be value investors. Often when you get to the scale of our organization, you're forced to just do things because you want to put money to work. We never wanted to be in that situation. To ensure that we weren't, we felt years ago we had to be in multiple businesses, and we had to be in multiple countries, because there's always a real asset or a sector or a country that's out of favor.
What it allowed us to do was to take money and have capital flexibility to go to one place or the other. That ensured that we could continue to be value investors in the areas where we operate. We invest in these multiple markets really for three reasons. The first, where we can do it, the first is really size. Given the $200 billion of assets that we have under management and approximately $16 billion of discretionary liquidity that we have, it puts us in a category that allows us to invest where few others can invest. That's just one competitive advantage. The second one is this global scale. There's not too many others that can respond to opportunities when they come in from somebody who calls us or that we reach out to with a global platform like we have.
The third is really the operating people that we have. I'd say there's no doubt that the 28,000 people add value every day to the assets we have. Maybe more importantly to the senior people in the organization is the confidence it gives us to be able to make the investments when we make them. I can give you a few examples, but I'm quite positive that many of the things that we do, we wouldn't have the confidence if we couldn't sit with or call the people on the ground that carry a Brookfield card and say, "What do you think about this and what's going on in the market?" That gives us a tremendous competitive advantage. Three or four examples just quickly. Brian talked about UCP in India.
I'm quite confident that the real estate group would not have been able to make that investment if we hadn't have put a significant number of people into India outside of that business on top of their real estate people. In addition, this requires the construction and completion of a number of properties in India. We put our construction people in business in India a few years ago, and they will help and at least oversee what's going on in this portfolio. That gives us tremendous confidence versus somebody that had no people in the country to be able to do that. In Brazil, we recently invested in VLI, and Sam talked about it yesterday in the infrastructure presentation. This is a very broad business in Brazil. Today, the country's in recession. We think it will surely come out of that.
Brazil is a great country to invest. Not many people have the confidence to invest there, but with people on the ground and with the reputation we have in the country, that has given us a tremendous advantage in investing. In China, we invested in a business called Xintiandi, which is a number of commercial properties in Shanghai. I'd say that transaction came to us because of the reputation of the organization. It allowed us to enter into a transaction which I'm not sure too many others could have accomplished for them or that this individual company would have allowed someone else in as a partner. As a result of that, it just gave us a unique transaction which wasn't available to many others. In Ireland, we were able to expand our energy business to a significant investment in Ireland.
It was when people were not too enthused about the EU, everyone thought it was going to end, there was going to be no euro again. We took a view, just given the people we have there and the confidence and knowledge that we have, that we could, A, invest in these assets, B, we could ensure downside protection, and three, the upside came from redeveloping a number of the assets in the portfolio that we could do because of our development platform, not many other people would take on the hard work and the perceived risk to be able to develop those assets. In all of those transactions, I guess they really have six things that we try to look at when we're buying infrastructure and real estate.
The first one is that it's an essential asset to the economy or the business or the environment. Second, that it has stable cash flows, or we believe we can convert it into something that will have stable cash flows. We may buy a development asset, but believing that we can sign a long-term contract on the building. Third, we believe that over time, yields will grow because buying assets that generally depreciate in value is not what we're looking for. Third, usually inflation adds extra value over time. Fourth, we try to look at things that will give us higher risk-adjusted returns and make sure that we look at the downside in the assets. Generally, we're looking for lower volatility type things, especially in our infrastructure and renewable power business. Generally, on top of that, what we try to overlay on it is the macro environment.
While I would say we have no specific view on the macro environment, and we don't believe ourself economists, and we generally don't have any view of the future other than for investing. What we try to do is take the information that we have and either quicken up or slow our pace of investing based on the macro environment we see out there. Just looking at the last 10 years, I'd say we had four specific periods. 2005 to 2007, there's no doubt we were more careful with our investments and more worried about the environment because transactions were very strongly bid in the market. 2007 and 2008, we believed because of the credit markets starting to change in the summer of 2007, that we should be raising cash and protecting the franchise.
We made these words up the other day, but I'll just put it in those terms. We were trying to protect the franchise and make sure that we could see through the bottom of the market. In 2009 to 2011, I characterize it in saying there's no doubt looking back, and at the time, we were, A, worried to still protect the franchise because no one was sure when it would turn or turn back. You all remember that. Secondly, anything that you could buy, we knew would be a good investment. We are trying to select as much capital as we could within the business to be able to put it to work.
Which leads us to this period of time from 2012 to, I'd say, 2015 or 2016, in our view, is probably what we've been doing is, A, liquidating assets, some of them that came along in 2009 to 2011, two, selectively investing and doing organic investments within the franchise. When I say selectively investing, we've been moving our capital in most of our funds and most of our businesses to markets which don't have a lot of excess capital, and that's really been Europe, Brazil, China, India. As you know, the United States is a robust market today. You'd have seen we haven't done that much in the United States other than some select things. We're out raising cash and funds on the expectation that in the next five years, there will be leaner times than 17,000 on the stock markets.
That's not to say that we don't think they'll go higher, they probably will. It's a good time to be raising money in funds and loading up the balance sheet and funds on the expectation that there will be some event in the world at some point in time. That's generally the, I'd say, the thrust of our business today. On this investing side, specifically, we're focused organically on really three themes. The first one is still Europe. I would say there's no doubt that the market has changed. There's more capital in Europe. We've seen that in a number of transactions that we tried to do in Spain on a substantial basis. Maybe the most important point is we've done a number of things in Europe within our different businesses. They've all been highly attractive.
There is enormous amount of bank deleveraging that still has to occur. While the, I'll call it, the death watch is off the European institutions, which was there for a while, we think there's a significant amount of deleveraging that has to occur, which will just bring streams of transactions for our different businesses. Second, we still think there are a lot of opportunities in the emerging markets. We used the last two years to continue to put money to work in those markets. What it has done for us is now established ourselves with assets in all the markets and a platform and people. Now we should be able to organically grow out of those operations. The most important investments are your first ones, because when you make a big mistake, you lose confidence and you lack the ability to continue to invest.
We think this was a great period of time for us to establish those operations in those markets. Lastly, the commodities-based companies produce opportunities for power and infrastructure, specifically, and also private equity. The commodity volatility is still significant. Iron ore is now in the $80 range. It just produces opportunities that people look at their balance sheets and want to generate cash from assets they have on their balance sheets versus times when it's robust. We continue to see opportunities in those areas. Generally, this strategy and all the things I just talked about has produced a pretty solid return for a Brookfield Asset Management shareholder. I'd say equally as important or maybe more important for the health of the franchise is that the returns in all of our funds have been very good over the past 10 years.
That just means that people come back to us and continue to invest with us. That's extremely important to the long-term health of the franchise, which really comes down to, I guess, six things that we've tried to do within all the businesses. For those of you that are familiar with us, these you've seen before. For those of you not, we generally, in all the businesses, try to buy great assets. We'll pay more if we have to get them for quality. We invest generally assuming we're going to own them forever, while often we don't. It just gives you the ability to have downside protection. We try to buy at less than replacement costs. We try to finance prudently, knowing that no one ever loses an asset.
None of these assets, over time, will lose value, generally, other than if you're very wrong on your underwriting. Just never lose them at the bottom of the market. Make sure they're prudently financed. We generally try to buy when capital is scarce, because that indicates the right time, and that's why we try to move places where money is less freely available. Execution's extremely important to this franchise. The last part of this presentation for me is just what we're doing next in the plan. I guess as we sit today, we built the business out. We have the operation set around the world. We have our fund structures all set up. Now what we're trying to do is leverage the franchise, really, and we're doing that in three ways. One, we're doing larger funds. Two, we're expanding the range of products.
Three, we're selectively widening our fund focus by region. We'll do that over time, and I'll talk about each of those. On the larger fund size, generally, this is just a compendium of how a private equity or a private fund size would scale out. You can just see the sizes of funds. Generally, this is how the fund sizes will increase over time. You can just see how you can scale up a fund and get larger as you bring in more institutional clients into your funds. Secondly, we're continuing to expand the things we do with our business. We do that for two reasons. One, obviously, if we can offer more products, we get paid more fees. That's good for the bottom line of the organization.
More importantly, some of these things are important to us because they actually are an offering that we can give to our clients that ensures that even if their Fund A, Institution A, is not interested in a private equity fund, we can have a relationship with them because we have one of these other products. If we have that relationship with them, the next time we come out with a fund, they may invest in that fund. What we're trying to do is expand the range of products we have to attract more institutions to the franchise, get to know them, and have them as a multi-client fund in the business. There's a number of things on this slide which shows you. I won't touch on any of them specifically, but a number of them we've launched in the last year.
Lastly, we haven't done this yet, but over time, depending on our funds and how large they get, what we may do is selectively widen regional funds from our large flagship funds. So far, we haven't had to do that because we've had enough capital and we could move it around. We may choose to have European funds. Probably even more importantly, we may, as the business in Asia scales up, some institutional clients in North America may not want to have that much capital invested in Asia, so we may have a sleeve for Asian funds. We are looking at a listed Asian business which could, again, continue to just widen the businesses that we offer for our clients. I'll end on this slide and then turn it over to Leo.
It just gives you the four priorities that we have for the business, which is firstly, to continue to consolidate the franchise and do better with what we have. Second, we're continuing to invest the capital we have in each of our funds, despite the market being more competitive today than it was 3 years ago. If I look at the investments we've made over the last 18 months, all of them have been excellent. I think it just owes to the fact that we can choose to put our money in places that where money is less robust. Third, we've been harvesting investments to both generate cash and lock in returns in funds which should bode well for the future. We're launching major new funds to be ready for, I'll call it less robust times.
If that doesn't come, we'll just keep investing the way that we have been with these funds we have right now. That was my presentation. Leo will be up next. I think I'll take a few questions if there are any. If not, we'll just go on to Leo's presentation. The question is on the slide of widening our franchise. We had the words distressed hedge fund. Our private equity business is a private business which buys control positions in distressed situations. We found over the years that many things came to us that weren't appropriate for our private equity fund because we would likely not be able to convert it into control.
We did a lot of work on a name, and we had a view that it was a good investment, but we didn't think it could be control, so it didn't fit our private equity fund. We've now started a hedge fund with our own capital. It's 100% Brookfield capital today. It's a credit event-driven hedge fund. Eventually we'll bring clients into it, and its mandate will be to participate in those kind of capital structures which would not fit into our private equity business, but are things that we like and can just make money on a, I'll call it, quote-unquote, a trade, and not be distressed for control. It's a private fund, and it will be offered. It's 100% our money today, and it'll be offered to institutional clients once we have enough of a track record to be able to do that.
Andrew Kusky, Credit Suisse. Just in the context of past years, you've mentioned Kinder Morgan as something you'd like to emulate, and you've held it up as a comp in the past for real asset owners. Just in the context of a little bit more than a month ago, they announced a consolidation of their enterprise and really bringing in the underlying partnerships. There's some clear distinctions on, they had 50 takes on some of their MLPs. You have 25, but do you foresee a point in time well into the future or even in the near term where you might have to restructure the IDRs or you wind up in a similar problem that Kinder had?
Just for everyone's benefit, if they don't know, Kinder Morgan had three limited partnerships underneath them. They had similar structures to ours. It was a very similar organization to what Brookfield is. They announced a merger which I guess ends up with the whole things merging into one company, which is about $100 billion business. Firstly, if we ever had to think of doing it would be a long time from now. I think we're different. The reason I think we're different is that the pipeline business was one business, and they had three partnerships in one business. I would say that if you're in just one business, it's just like if we were only in the property business in New York City. There's only so many things you can do in New York City prudently, and then you run out of things to do.
Our business is much broader. It's global. It's in 4 different areas. Therefore, I think the structure we have is ideal for the next 10 years. Who knows what happens in 10 years from now? We believe it's the perfect structure for today, and we'll have to see what comes in 10 years from now.
You were talking about the advantage of the global funds. You can move money to different places where the values are. When you look at the, I guess, creating these regional funds and Asian funds, how does that fit into the overall competitive advantage of moving capital where the values are? Wouldn't there be pressure within, like, an Asian fund to put the money to work? If there's no values, you still have to put the money to work because clients don't want you to just have cash.
That's an excellent question. I would say the reason why we haven't done it today is that we wanted the flexibility to be able to move our money globally. At some point in time, a fund gets to be a size which probably can't go any bigger. Like, there isn't a bigger fund than $18 billion in the world that was ever raised. When our funds get to $10 billion-$15 billion, there may be investors that want to have bigger allocations to some markets. Our business isn't there today, so this isn't something for tomorrow morning anyway. Asia is a specific one that a lot of North American investors don't want more than a 20% allocation to Asia, for example. We may have opportunities that could put 50% of the fund into Asia.
Therefore, what we may do is augment it with funds besides the big fund that we have. It's not for today, but it would only be done if that was the case. That may be something down the road.
Bruce, you have the three flagship listed vehicles now, and they, outside of private equity, are kind of BAM's investment in their given strategies. Do you feel like from a Brookfield perspective, its cost of capital is now tied somewhat to the U.S. equity markets to the extent that you need to have an attractive cost of capital, or those vehicles need to have an attractive cost of capital to be able to take advantage of global opportunities that are out there, and if the U.S. equity markets aren't cooperative, that's going to limit Brookfield's ability to invest in those given strategies?
Very good question. We think about it a lot. I would respond by saying the reason why we built out and have invested in Leo's business with enormous amount of money to attract institutional clients is because we wanted the flexibility and know that there are times when the capital markets won't afford the ability for us to issue shares in an entity like one of the three that are our three flagship entities. Secondly, the businesses are now at the scale and where each one of them is a very large enterprise in itself. They generate significant amounts of free cash within the business.
Secondly, they have enormous flexibility with the assets they have, such that we can, within relatively short periods of time, find cash within assets, either by up financing them or by drawing on bank lines or by issuing debt financing or by selling assets within the business. If those shares don't trade at the proper valuation in the market and we shouldn't sell shares, then we will have a, maybe when we're still investing, a less amount will be invested by those entities. Greater amounts will be taken by institutional clients, and they will source money from their own balance sheets through one way or the other, one of those four ways. I would say, the great thing is we got the businesses up to the scale that they are, and they are self-funding with the business that we've set out, other than with major transactions.
Therefore, it's always good to have them trading at a proper price. If they don't, I think we're still in okay shape. One more question, then Leo's up.
Bill Van Arnam, Principal Global Investors. You recently sold part of your fixed income asset management business to Conning. Just wondering what your competitive advantage is on your remaining public fixed income business and equity business?
Firstly, we felt we didn't have a competitive advantage in what we sold. Just to be very specific. We had it came along with acquisition years ago, and the reason we got in the listed business was because we thought it would help us with attracting clients and institutionalizing our company, and that was 10, 12, 14 years ago. The listed business today, we think is tremendously valuable to us, and we think there's great growth going forward, and we've centered it really around three things now, and that's why we disposed of that specific fixed income business. First is real estate long only and long-short funds. Second is infrastructure long only and long-short funds. Third is credit and distressed event-driven investments in securities, as I mentioned earlier in the question before.
We think that our competitive advantages and knowledge in those spaces from the private businesses gives us an advantage in earning decent returns for clients in the listed space. The second reason for having them is that often when we go to a smaller institutional client, they don't have that many private investments in infrastructure or real estate. For us to get in the door, it's much easier to offer them a listed security fund in infrastructure and real estate. By doing that, they get exposed to Brookfield, and they get exposed to real estate and infrastructure. Once they've done that for a few years, often we can upsell them to a private fund and introduce them that way into the business.
We think it's both a business in itself, but we think it's very integral to continuing to expand the client base and real assets within institutional clients around the world. That's why we got out of the things we weren't competitively advantaged with, and we're continuing to focus the business in that area. With that, in talking about Leo's business, I'll introduce Leo van den Tillart, who's been with us seven, eight years. We'll talk about our private funds business.
Thank you, Bruce. I guess the appropriate question to ask is, you can probably hear me, but can you see me by this podium? I feel like I'm at my commencement. Well, it really is my pleasure to give you an update on our fundraising activities and the market environment. We continue to make significant progress in our fundraising, both our private funds and our public securities group that Bruce mentioned. As an asset manager, we really have distinct competitive advantages in the real asset space. As Bruce also mentioned, we are continuing to expand our product offering, and this is all really supported by the increased allocation to alternatives and real assets. Our global fundraising capacity and relationships with investors are excellent and expanding rapidly. Today, not only are we raising capital on a global scale, but we are touching investors in most of the key markets.
As an asset manager, we have many competitive advantages, but in the real asset space, I would define us as a dominant player. Again, offering investors a variety of investments across the real asset spectrum. To support the growth of our business, we are continuing to invest in our fundraising team. This past 12 months, we've raised $6 billion of third-party capital in our private funds. In the next 6 months, we plan to launch a series of funds seeking up to $12 billion of capital commitments. Not only have we had our hand out, but we've been giving back capital to investors over $5 billion. Our dedicated fundraising group is critical to the organization, and it's something that, as Bruce mentioned, we've made a heavy investment over the past five years, and it's really paying off.
Today, we have a team of 20 sales professionals focused on private funds. We also have a team in the public securities group, and we have a large group of professional support and client service, which we think is essential, not only raising capital but making sure your client service is exceptional. This gives us a tremendous ability to not only raise capital but be in touch with leading investors around the world and really understanding what's going on in the market, both from a capital flows perspective but also from a geopolitical perspective. What's going on in their local market? What are the economic drivers? What are some of the political considerations, and others? We are very fortunate that many of our investors allow us to sit with them, and we share ideas and just have an open and frank discussion.
With the increase in capital raising, we've been able to diversify our investor base both by type and by geographic region. Today we have public pension plans, sovereigns, insurance companies , corporate and private pension plans, and we've also made inroads into the family office and high net worth and consultant space. Today, and still, a lot of our capital, in fact, the majority of our capital still comes from the U.S. and Canada, but the Middle East has been increasing in the last few years, as has Asia and Australia. We continue to see strong demand in these markets. Within Asia, we're starting to see Japanese investors allocating to infrastructure, which we think will be a major growth for us going forward. However, fundraising in Europe has been slower, but we hope it'll pick up in the years to come.
While we've dramatically increased the number of investors in capital raised, we're also benefiting by the fact that 30% of our investors are investing across multiple funds. That really points to what Bruce described as we are building a trusted relationship with our investors, and they're quite confident to invest in other areas and other products and other funds within the real asset space, and also in other investments. We expect that in the next 12 to 18 months as we begin another fundraising cycle for our private funds, that we'll actually add an additional 2 to 300 institutional investors. In the past 12 months, we've raised upwards of $8 billion. This has been a combination of closing out flagship funds, but also a series of smaller sector regional funds that we've raised. A couple highlighted here is our US Real Estate Finance Fund, a U.S. Multifamily Fund.
We also had a couple of timber funds in the market. This really demonstrates that even though we may not have a flagship fund in the market, we have other products that we can raise capital around as well. If I were to comment on the growth of our private fund business, I would say that not only is it accelerating, but really we're in a position today where it's sustainable and we see this growth to continue. With 3 flagship funds, property, infrastructure, private equity, and a number of sector and regional funds, we're continually raising third-party capital. We expect this growth to continue, and as I mentioned, we are connecting with a wider and a broader base of investors, and we're offering a broader and more deep and diversified product range.
In the next 12 months, we expect to raise an additional $12 billion across a number of offerings. In fact, in the next 24 months, we think that number will jump up to $20 billion. I thought I'd give a snapshot just demonstrating that our range of fees and returns for private funds are quite attractive. If you look at the core plus, and value add space, the average fees are around 100 to 150 bps, carried interest around 20%, and we've been achieving our target returns over a long-term period. In the opportunistic space, again, we have quite attractive base management fees, on average around 150 bps with 20% performance fees. Again, our target returns are 20% plus, and we've been achieving those returns.
As most of you know, one of the benefits of private funds is that indeed the capital is sticky because we tend to have 10 to 12-year terms on locked-up capital. I'm going to talk a little bit about the trends that we see in the real asset space. We don't see it abating at all. In fact, we see it accelerating. Different economists and different sources predict that in the next 10 years, it'll reach $15 trillion will be allocated to real assets. This really is demonstrating that investors have bitten hold of this asset class and are truly committed to it and are allocating significant portions of their allocation to this asset class that really starts to move the dial for them. In fact, we're seeing today on average around 5% to 10% a typical institution might have allocated towards real assets.
We think over the next 10 years, that'll probably jump anywhere from 15%-25%, depending on the institution and their liquidity. This slide as well demonstrates just again the shift towards real assets. In fact, in the last 12 months, over $420 billion have been raised in private equity funds, of which real assets were $130 billion. What this slide doesn't really show you is that while today there are 2,200 funds in the market competing for that capital, really it's a small group of dominant players that are raising the majority of that capital. In fact, probably 20 managers are raising upwards of 60% of that capital. We're very fortunate that we are and have undoubtedly broken through to be one of those dominant players. Just talking a little bit about our public securities group.
In fact, we've been in this space for quite some time and do have expertise. Today we run about $16 billion of assets under management. That again is in areas around real estate, long, long-short, as Bruce mentioned, and infrastructure and credit. We're seeing accelerated growth because, again, investors are looking both to invest in this asset class on a private basis and on a liquid basis. If you look at the assets under management and the growth in the last year, we've raised an additional $5 billion, half of which has come from inflows in mainly our infrastructure long space, but also through our investment performance, which has contributed another $2.5 billion of AUM growth. I just thought I would highlight for you, at least from my perspective, taking different words that Bruce has used to describe why the Brookfield story resonates with investors.
As we're out in the marketplace, we have an opportunity to pitch to investors and really understand what is it about Brookfield that differentiates us? Why are they investing with us? I would say, first and foremost, we've been able to demonstrate over a long period of time not only to generate attractive returns, but to be able to preserve capital. We also have been able to demonstrate that in times where we need to be cautious and slow down the investment pace, we're not afraid to do so. In times where it takes somewhat of a contrarian view, we're prepared to make long-term investments. We also have a lot of experience in being able to do and execute what we call multifaceted transactions and do that on a global basis and buy for value.
This allows us to have the right entry point to again protect the downside and give us the patience and time to create real wealth over a longer period of time. I would say that our operations-oriented approach, our ability to add value to the assets we buy is clearly a differentiator that we have. As well, our ability to leverage our operating platforms. This differentiator is something that is unique to Brookfield and very hard to replicate by other asset managers and I think really puts us in a dominant and privileged position. Finally, the fact that Brookfield is a significant investor alongside our investors really adds comfort to them. I think all these things together is really as we're out in the marketplace, this is really why investors are looking to grow their allocation with us and to invest across different product ranges with us.
With that, I'll open up to some questions.
Thank you. Cherilyn Radbourne from TD Securities. Just thinking about your investor base, clearly the diversity has improved substantially from when you first started to build this platform. Could you just speak to how your investor base by geography and investor type would compare with those of your larger peers in the real asset space?
Sure. I would think it actually mirrors very similar to what they have. Quite often we're calling on the same doors and talking to the same investors. What we've deliberately done is look to those regions where we have Probably not had a lot of investors. We paid a lot of attention to Asia, the Middle East, and we're seeing growth in that marketplace. We're shoring up our team in Asia. In fact, we've recently added someone in Korea. We're about to add someone in China and someone in Japan. We're also working in the smaller investor base as well, family offices, registered broker-dealers, et cetera, in the wealth channels. Overall, I would say it would pretty much mirror what our competitors are doing.
How much funds are likely to get redeemed or wind up over the next 12 months? I think you mentioned $12 billion of capital raising over the next 12 months. What's sort of the net impact to Brookfield's AUM of funds managed from what you're likely to wind up?
Sure. In order to raise a successor fund, you have to fully invest the previous fund, which we're close on a couple of the flagship funds. While the invested capital has been fully invested, we still have a trail on invested fees, to which we get management fees. We're going back and replenishing that capital. Again, the figures I'm showing you are net increases in capital inflows. I'll let Brian. I believe he's going to speak to that in his presentation. Again, as we harvest capital and harvest investments, and we at that time often will generate our performance fees.
Hi, I'm Mario Saric from Scotiabank. You mentioned that the alignment of interest with Brookfield resonates with your LP partners. Given the strong track record of your funds, how important is that 20%-50% co-investment in the funds today versus five years ago?
I'd say that clearly five years ago, it really helped establish our business. What really helps with investors as we grow our fund size significantly, it gives them comfort the fact that we're continuing to invest a significant portion of our capital alongside the funds. Really, I think it helps in that respect. The capital is meaningful, therefore, we're not just generating fees. We're looking for compounded growth on our capital as well.
With 70% of your capital still coming from North American clients, if you think about whether it's Middle East, Asia, ex-Japan, Japan, thinking out 5+ years, which of those seems like the most fertile area for you to increase your capital raising ability?
Sure. I'd actually say all three fronts. We're clearly seeing demand from Middle East investors. They're looking for large, trusted partners. I think we're benefiting by that. We've taken a lot of time and effort to develop those relationships. They're comfortable in what we're doing. They've seen through the fund investments that we have made. We've demonstrated what we said we're going to do for them. In Asia, I would say the sheer growth of that market is we're preparing for now. We're developing those relationships. We're seeing tremendous assets flowing into insurance companies. They have tremendous liquidity, and they have to export that liquidity and looking for partners to invest. We're spending a lot of time in China. Also Japan, we're seeing, particularly in infrastructure, a lot of demand.
The characteristics that Bruce described really appeals to Japanese investors, and we expect major inflows in the next 3 to 5 years. We're spending a lot of time educating investors about the asset class. In the U.S., what the slides didn't show is that we've made a lot of gains with the leading consultants, which are ranking us and approving us, and therefore we enjoy a nice inflow of capital from their client base. Where we're also making great strides are not only the large state pension plans, but the corporate and smaller pension plans. We see that particularly fertile ground going forward as we do in Canada. Thank you.
Good morning. Today, I'll give you an overview of our private equity group. I thought I'd touch on a number of characteristics that differentiate us from other private equity organizations and position us well for the future. These include things like the information and resources we garner from being part of Brookfield and we get from the other Brookfield platforms, our in-house operating capability, and global reach. We now have in place a global investment team of sufficient scale to pursue and manage a variety of transactions, both mid-market and larger scale. Our dedicated private equity offices are now in Canada, the U.S., Brazil, U.K., and Australia, and are staffed with very experienced professionals, and we work together on an integrated basis. We're also piggybacking on Brookfield's India platform and plan to establish a dedicated PE capability there in due course.
Most of our investment team have worked together for at least 10 years, which enables us to maintain a consistent culture and a consistent approach to investment management. As I have discussed in the past, we have a dedicated team of operations-focused professionals that manage our portfolio companies, and I'll give you a more specific example of what that really means. We've been investing through multiple economic cycles, and we've made great investments during periods of both growth and instability. As the size of our platform and access to capital has grown, so too has our investment base. Over the past five years, we've invested a total of $9 billion. Just over half of this was during the credit crisis, when we partnered with our real estate and infrastructure teams, when many other groups were struggling to raise money.
Today, our portfolio on private equity comprises 22 companies, which generate $9 billion of aggregate revenue and have more than 15,000 employees. Since the launch of our first fund in 2001, we have generated really strong results with overall gross returns of 27% and a three times multiple of capital on realized investments. Each of our funds has achieved top quartile performance as compared to other North American private equity funds of the same vintage year, this puts us amongst a very small group of consistently outperforming managers. This has enabled us to raise larger funds over time for fund and co-investment mandates. In the future, the primary source of capital for our private equity group's activities will come from private equity funds.
We are currently investing BCP III or Brookfield Capital Partners Fund III, which will imminently be committed to the point where we will launch our next fund. We plan to have sufficient scale in these future funds to pursue both mid-market and large-scale opportunities. Our overall objective is to be a value investor, which means investing at a discount to intrinsic value. There is no better way for us to ensure a margin of safety and ultimately realize great returns. We do this in a number of ways, but primarily by looking for out-of-favor sectors and understanding the cash flow generation potential of the businesses that we're investing in. We try to buy high-quality assets with barriers to entry, for us, that means businesses with very low operating costs or a great market position.
We have a very heavy emphasis on strategic repositioning of the companies we buy, including operational enhancements. Again, we can take this approach because we have deep operating skills across Brookfield and specifically within our PE platform. Over time, many of our companies have become industry leaders. One of the key differentiators of our private equity group is that we get tremendous knowledge from Brookfield's other operating platforms, which shapes the way we make our decisions on a day-to-day basis. For example, our infrastructure group owns a global ports operation that ships commodities around the world. We have a very good sense of what's going on with the demand and supply of various commodities across markets. This helps shape our views when we invest in natural resource companies. Our real estate experience comes to bear in many ways.
For example, we own large operations in land development and housing, we have a good sense for what's going on with housing demand by region, that drives our thinking in what we do with building product companies. Recently, we've been studying the agribusiness supply chain as a potential opportunity. We became attracted to this after speaking to our AgriLand group in Brazil. We believe there may be an interesting opportunity for us here. The on-the-ground knowledge available to us is very valuable, our culture of cooperation drives synergies across Brookfield's businesses. We focus on industry sectors where we've developed expertise over many years. These include things like packaging, manufacturing, natural resources, business services, and a variety of other industries.
In order to grow, we need to enhance our access to attractive opportunities, we have expanded our universe of investable sectors over time, focusing on those that we believe have stronger long-term fundamentals. More recently, this includes storage and logistics, where we made an investment, and we found that operating capability can make a big difference. Potential new sectors might include chemicals, the agriculture supply chain, and possibly specialized parts in the aerospace sector. We've also shifted our investment style over years from that of a pure distress investor to be able to pursue a broader range of transactions, including buyouts, corporate carve-outs, and platform investments. As a result, we're able to put money to work in any type of market environment, simply by shifting our investment style and focus.
One such example of a platform investment is Ember Resources, a natural gas producer focused on CBM or coal bed methane natural gas. We privatized Ember in 2011 when natural gas was at a multi-decade low. Our investment thesis was simple, that these were high-quality assets with very long life reserves. They also had strong elements of downside protection, given very low operating costs and low capital cost requirements. In addition, we were buying at a great value. The company's gathering system was fully developed, and we were paying less than the replacement cost of the gathering system alone. Based on the work done by Brookfield's Energy Group, Power Generation Group, and economic analysis teams, we believe that natural gas had to increase given the full cycle costs required to balance North American supply and demand.
We also saw an opportunity to roll up complementary CBM assets at attractive values. To most E&P companies, CBM assets were non-core during the depressed natural gas environment. Since our initial investment, we've acquired three other contiguous CBM plays, and Ember's production has grown by six times to 120 million cubic feet per day. We also executed on a number of operational enhancements, including rationalizing the various gathering systems we had acquired, and as a result, our operating cost has declined from $1.65 per Mcf to $1.40 per Mcf today so far. Now that the natural gas environment has improved, we're focused on increasing production through low-cost recompletions and new wells. Based on trading values of comparable companies today, we think we've created about $300 million of value in Ember on our investment of $275 million, and we think we have room to continue enhancing value.
We continue to look for additional platform opportunities, we believe in the relatively near term, Ember will be the largest CBM producer in Canada, and at the right time, we plan to IPO this company. Not all of our investments go that well, and sometimes we run into unforeseen circumstances, like the housing crisis we all lived through. In very difficult circumstances, our operations team becomes very involved. Western Forest Products was such a situation that needed additional attention. Western is a significant coastal lumber company and the largest North American producer of cedar lumber. We made our initial investment in 2002 by acquiring a distressed lumber business with a high-quality timber resource. We then acquired two other very substantial producers with contiguous properties, and that enabled us to generate $70 million a year in synergies.
Just as we were preparing to sell this company, the housing crisis hit us. Revenue declined from $900 million to $600 million, and EBITDA declined from $138 million to negative $35 million. The company was losing cash very quickly, and unfortunately, the management team that led the industry consolidation for us wasn't able to react quickly enough to the changing market conditions. Our operations team stepped in to run this business, and they did a number of things. They rationalized production by shutting three out of 10 sawmills. This allowed them to reduce working capital by $100 million. They reduced G&A by 25%, and over a period of time, ultimately sold $190 million of non-core assets. They focused on export markets, including China and Japan, given the anemic demand in the U.S. Over a two-year period, Western's earnings rebounded sharply and balance sheet was vastly improved.
We've been selling down our interest in Western for the last couple of years, and last week, we sold our last remaining position in this company, and we generated an additional net proceed of $280 million through a secondary offering. All in all, we earned a 14% IRR. This is not our target return, but we were pretty happy with the outcome given the circumstances. Finally, I'd like to comment on the investment environment for our business. As you've heard today, the North American economy continues to improve. GDP growth is steadily improving. Unemployment has dropped to the 6% range. Housing markets are steadily getting stronger. Consumer balance sheets are in very good shape, and corporate America is sitting on record cash balances. Credit remains available in abundance and at a relatively low cost compared to historical norms.
As a result, equity markets are at record highs and M&A activity has been strong, particularly for corporates, but also in private equity. This is a great environment for us to be selling our companies into, and I hope to tell you a year from now that we've sold two or three of our portfolio companies. The flip side of this is that LBO valuations have moved up to record multiples. Now, the risk for any acquirer is that multiples compress when it's time to sell in five to seven years. That could be a major headwind against otherwise good returns. When we look at investments, we generally look at acquisitions on an unleveraged basis, and we target reasonable, unlevered, free cash flow yields. Where we can be competitive is when we have real conviction on our ability to enhance a company's cash flows and enhance performance.
This is an environment where we are being cautious. Having said that, we're seeing some interesting opportunities in our other markets. In Brazil, as you've heard, capital has become scarce as their economy has slowed. The long-term fundamentals remain excellent, and we've been in discussions with companies about giving them capital to either deleverage or to grow. In Europe, the recovery is more mixed, and the ECB is continuing to add stimulus. Lending remains restrictive as a number of banks are being recapitalized. In this background, we were able to make a $100 million investment as part of a broader recapitalization of Eurobank, one of Greece's systemic banks, at a discount to tangible book value. In Australia, commodity prices have softened significantly, in particular iron ore, putting pressure on certain parts of that economy and the entire mining supply chain.
That is a sector we're very comfortable with, and we continue to pursue. In India, with a new banking regulator and a new government, banks are being pressed to deal with problem loans, and this is creating a variety of opportunities for private equity. In summary, against that backdrop, we're feeling pretty confident and comfortable that our group is well-positioned to continuing to put capital to work and earn good returns for our investors and our shareholders. With that, I'm happy to take any questions.
Andrew Kusky, Credit Suisse. Cyrus, just in the context of looking at the legacy history of Brookfield, you've done a lot of recapitalizations, buying distressed debt to start off with, and it's been very North American-centric. As you look at this model more globally, and we look at the debt markets and really the lack thereof in places like Europe, where it's not as well developed and a lot of things sit on bank balance sheets. Does that bode better for Brookfield on a longer-term basis? Because you get in to the bank, effectively do negotiated deals to try to have them take the marks, take that book of business, and then recapitalize a company, versus here, where it's much more in the public markets, where we can see what prices debt are trading at, and it becomes more active in that kind of context.
I think for our business, anything we can do to broaden the universe of the investable opportunities is good for our business. More specifically in Europe, we've had a team there now for several years. I would say it's only just now that banks are now starting to sell things and deal with their balance sheets, at least from what we're seeing in private equity. That should be a great source of opportunities for us. As the banks get recapitalized and next month, in fact, ECB has AQR test, Asset Quality Review test going on. I suspect a lot of banks are cleaning up their balance sheets, and they're going to have to recognize the issues they have on their balance sheets, and that should create opportunity for private equity.
Thanks, Bert, BMO. Cyrus, will the new strategies or transaction types, will they get their own funds, or will existing guys just get the expanded suite of offerings?
It's the latter. I would say they're already getting that because we have shifted our business over years so much. Our preference is to have one global fund where we can do everything out of and maximize our flexibility. We're really well positioned to do it. Thank you very much.
Thanks, Cyrus. Good morning. I'm going to just pull together some of the themes and points that my colleagues have made over the preceding presentations and tie those back into some of the key financial metrics that we look at in terms of how the business is progressing and the profitability of it, particularly focusing on what we call the asset management or the general partner, GP, side of the business. Then, as is our custom, bring that back into how we see that moving out in terms of hypothetical numbers over the next five years and the share value potential. Again, a couple of you were asking me yesterday about whether we'd be providing a number and things like that.
As obviously as stewards of your capital, one of the most important metrics overall is the value per share that we can create going forward. Just thinking about the asset management side of the business, there really has been a tremendous momentum and increase in the profitability of that business over the past year or so. It stands to reason, given how successful we've been in expanding the fee-bearing capital over the past couple of years. That's evidenced in this chart here. Particularly the last couple of years, you see how it's stepped up. A lot of that is, last year we talked about raising $14 billion of capital on the private side and having a $7 billion infrastructure fund and $5 billion property fund and a number of other on the private equity side, stepping up the funds there.
Over the past year as well, getting Brookfield Property Partners successfully launched, merged in with Brookfield Office Properties really sets the stage for growth there and has also a significant impact on the fee-bearing capital under management, which in turn leads to the ability to generate increased fee revenues. You'll see there's a little bit of a multiplier effect. A certain amount of capital leads to an even greater growth rate on the fee revenues. I'll come back and talk about that in a few slides. That growth increases even more when you think about it on a fee-related earnings. That's one of the big metrics we look at, which is, in essence, the base fees and the incentive distributions and other fees that we earn on an annualized basis, less the costs that are directly attributable to those activities.
You'll see it's grown over 40% over the past couple of years. A lot of it is, we've talked about the ability. We've invested a lot in the platform in the early years, now what we're doing is reaping the benefits of that investment in our ability to scale up our operations without necessarily having to increase the costs on a comparable basis. That's led to significant growth on that. That's a very important metric for us. Just to tie it back to what we talked about last year, what we show on this slide is for the 2013 Investor Day, we suggested that by 2018, hypothetically, the growth rate would be up to that number. If you just interpolate in between, we should have, in theory, been around $275 million. We're at $341 million in terms of our fee-related earnings.
With some of the great progress we've made over the past period of time, we've actually moved ourselves, in essence, a bit faster towards those potential targets than we would've if it had just been on a straight line basis. We're quite encouraged about that, and that obviously gives you a better point to be going from today going forward. Part of that, if you think about the amount of fee-bearing capital that we have and how that translates into the annualized base fees, one of the things we are very focused on is not just the quantum of the fee-bearing capital, but the quality of it. When I say quality, really talking about whether it's the stickiness of it, the terms, but also importantly, the fees.
The fixed income business that we sold last year, $7 billion, generated about $7 million on an annualized basis, 10 basis points. That obviously wasn't adding a lot to the profitability of the manager. Aside from the fact from in terms of competitive advantage and things like that, it was just lower margin business. By selling that, and then with the capital that we added, which earns higher fees and higher margins, obviously increases the profitability of the business. If you pull that together, where we stand today, again, this is another important thing we look at, is on an annualized basis, what does that fee-bearing capital we have in place potentially generate for us?
Leo mentioned the stickiness of these fees, and then the funds either they're perpetual in the sense of it's the listed partnerships, or they have 10 or 12-year lives in terms of the private funds. They're very sticky fees, and they're contractual-based terms. What we really like to see is just a sequential increase in the level of annualized base fees. Generally, that's attributed at quite a high multiple in the marketplace as well. The incentive distributions. I'll come back and talk about this. They're still not a huge number, but they've grown nicely. The way that with the distribution increases at the listed partnerships, those will continue to increase. I've got a slide on that later on, just to give you some sense of it. You'll notice that the target carried interest actually hasn't really moved year-over-year.
That is an important thing for us in the sense that we want to grow that. What you will have noticed as well is that we harvested quite a lot of capital that generated carry last year, in particular with the monetization of the GGP fund. We returned about $5 billion of capital, a lot of which earned carry, but we've replaced that. That's, I guess, the good news of it. With our ability to go out and raise larger funds, we believe we can step up that level of carry-eligible capital significantly over the coming years. One thing we haven't really talked about a whole lot in prior years is we've increased the diversification of the fee revenues, both in terms of the asset sector and the product mix.
There's a nice balance between the private funds and listed partnerships in terms of where we're generating the fees from. They're very complementary attributes of the two forms of capital, but it's also very nice to have that diversification as well. Just pulling that back to a number. As I mentioned, the fee-related earnings tend to be very stable, predictable, and that's why generally they attract quite a high multiple in the marketplace. If you put a 20 times fee-related earnings multiple on that, you'll see that we've increased what we think the value that is attributable to our GP activities quite substantially over the prior year. That's without much increase on the carry side. We think we've got a lot of potential to add further value there.
Just to talk a bit about the progress that we've made over the last little while. Big part of it was expanding the capitalization of listed partnerships. It now stands around $40 billion between Brookfield Infrastructure, Brookfield Renewable, and Brookfield Property Partners. A big part of that is the launch of Brookfield Property Partners and the merger with BPO. We really shouldn't overlook the tremendous performance of Brookfield Renewable Energy and Brookfield Infrastructure over the past while. Both these companies had presentations yesterday.
I'm not going to belabor any of it other than just to point out to folks that both from a total return on the unit price and the ability to grow the distributions and the confidence in our ability to continue a very attractive distribution growth rate over the coming years, I think bodes very well both for investors in those entities as well as Brookfield as the manager of the entities. While Brookfield Property Partners doesn't have the same track record as yet as a public issuer, it's quite new. The number of major steps, and of course, you all heard about that more this morning, so I won't go over this. The company is clearly positioned, and with its ability to rotate capital, add operating excellence to the returns, and the larger public float, we think bodes extremely well for Brookfield Property Partners.
Again, John mentioned our confidence in the ability to grow the cash flows and hence to increase the distributions on that front. Leo's talked a bit about the substantial momentum in the private fund activities, and just a few metrics over the past 12 months. We did return about $5.4 billion of capital investors. That's the initial capital. On top of that was the gains, and so it represented about a 38% gross return on GGP, for example. As a result, we talked about carry. We actually collected $565 million of carried interest. A lot of that was in respect of GGP. We replaced that, in fact, increased it a little bit with $5.8 billion of new commitments.
As you'll see from this slide, we are in very good position to continue to raise large funds, just focusing on the three flagship private funds that we have. They are all well invested, and as Leo mentioned, and Cyrus, once you get to a certain level of investing, then you're out in launching marketing to raise funds. If you look at just about any successful asset manager, and given our track record, as Bruce had a slide on this in his deck, there is almost invariably an exponential increase in the size of the successor funds related to the previous fund. Certainly, while you're in the growth phase of the development. We believe we are still very much in the growth phase, and that we have not in any way approached the large size funds that we can launch and operate and manage effectively.
On the public market side, talked a little bit about that, but really good progress on the bases there. Also very successful on the performance fees that they earned on an LTM basis. A lot of that is due to the type of returns that they've got under their belt in the market over the past little while. All of that, while it's been quite an exceptional 12 to 18 months in building out this business. Looking forward, we see continued momentum, and really the ability to take this business. It has been very significant progress, but to really take it to another level. A lot of that comes back to the fact that the listed partnerships continue to have access to low-cost capital. They can issue equity to fund investments through the funds and directly on their balance sheet on an accretive basis.
That's very important to us as we build out the capital in those funds and as they continue to invest and increase the distributions to the unit holders. Lastly, as Leo mentioned, or secondly, as Leo mentioned, $20 billion of new private funds within, let's say, the next 12 to 18 months, $12 billion in the near term. Continued expansion of the public markets business. Again, just given the track record and the market profile of that group, we think that's eminently achievable. What that comes back to is continued growth on the fee-bearing capital side of things. This is around a 10% growth rate. Frankly, it's not hard to look past that to see outperformance on it, particularly if you think about the types of funds that we're going to be looking to raise over the next period of time.
Also, with that level of distribution growth within the listed partnerships, the degree to which the unit price should accrue up, and hence the market capitalization of the partnerships, again, should lead to increased fee-bearing capital in that regard. That leads to higher fee-related earnings. As I mentioned before, there's a bit of a multiplier effect on that. We'll see that growing at +20%, hypothetically, over the next five years. The reason why we see this accelerated rate on the growth in fee-related earnings is, first of all, it comes back to that quality of the earnings on the fund. Thinking about the private funds, we're tending to shift the emphasis more towards value-add and opportunistic-type return funds, which create better returns, higher returns for investors, and also provides for higher fees to the managers. That's a big part of it.
You've seen, we've generally stepped up the average rate across the board on the private funds by 10-15 basis points a year if you went and looked through the numbers over the past couple of years. We could see a continued increase in the average level of fees. Leo talked a bit about that in his presentation. Also, the listed partnerships grow at a faster clip because if you recall, Brookfield Renewable and Brookfield Property Partners were launched with a flat fee, which was pretty low on an average basis point. We earn 125 basis points on all of the capital growth in those funds. That's another reason why we get an enhanced growth rate on that.
Lastly, the IDRs, the incentive distributions, there's a slide later on that demonstrates that more clearly, tend to have a bit of a back end, but again, very much of an accelerated growth curve on it. The other point is that with these new funds, they generally have higher carry potential. Very important. As mentioned, we generated half a billion dollars plus on the GGP consortium alone. Having this ability to generate the carried interest can lead to very strong profitability for the firm. Again, all of that, in our view, leads to the potential for a meaningful increase in the value of the general partner. Again, it's 20 times the fee-related earnings that we saw stepping up to $800 and some odd million by 2019.
Similarly, on the carried interest, we think we can double that over the period with the launch of new funds. I did want to touch a bit on the invested capital. I'm not going to say a whole lot about it because so much of it is, you've already heard about through the presentations on Brookfield Property Partners and Brookfield Renewable and Brookfield Infrastructure. As you know, a lot of our balance sheet is invested in those entities. The capital on our balance sheet, it's around $28 billion based on just taking the stock market prices. As we've mentioned, about 85% of the balance sheet is actually in listed entities. All you do is just put the stock price on it and then say IFRS values for the rest, unless it's independently valued.
It generates over $1 billion of cash distributions, not FFO, actual cash that hits our bank account. As the distributions increase, we are finding an increased level of cash coming into Brookfield from this source alone. We think there's, again, a lot of potential for further growth in the values, and the cash flows, and the FFO in these businesses for the reasons on this page that I'm not going to go through because that's going to have been dealt with thoroughly in the previous presentations.
Again, one of the things that we've talked about over the previous couple of years is because of the liquidity of the balance sheet, we do have the opportunity to rotate capital around and achieve higher returns than we might otherwise, either because we're reallocating it on a direct investment basis, or we are looking to expand our business, or we're looking to buy back stock. We talked a fair bit about that last year, and we've had a number of conversations with folks over the course of the year, and we still are very much focused on buying back our stock over time. There are a few decision factors that are very important to us in making that decision. At the end of the day, what we're focused on is that long-term per-share value creation.
If we see there are better opportunities within the business that are consistent with the long-term growth strategy and will get us to a higher number at the end of the day, that's where we're going to put our money. That may mean, like last year, we didn't buy back that much stock. We bought back 4 million shares, $150 million. Not a whole lot. We also did a number of other things, and we were very focused on being there to support those initiatives and take advantage of those capital opportunities. It's not something that we've lost sight of. It's still very important to us, and I'm sure you'll see us do a lot of that down the road. I guess with that as a backdrop, we do see that there's a lot of growth potential in the business.
We laid out some hypothetical growth trajectories for the asset management business. I just wanted to touch on a few of those in terms of how it might come together in terms of where we see potential share values over the next five years. First of all, we showed this slide last year as well. Basically, we assume 10% growth in fee-bearing capital, and we get a 50% margin on fee-related earnings. We think there is a pretty reasonable case to be made that we can outperform that, either because we will generate a higher growth rate on the fee-bearing capital, just because of the success we're having with our private fund investors and because of the potential with the listed partnerships, also to achieve a higher margin.
A lot of that comes with the refocusing on the higher margin business, because some of the business we have today, the IDRs, there's not really any cost associated with it. As they grow, it really contributes to the margin. We do think there's good potential. We're at 49% over the last 12 months in terms of our margin. We think we can pretty easily see getting through that over the next period of time. I've mentioned the IDRs a couple of times, but this is how they look. If it's around $50 million today, five years' time, it increases fivefold. That's just based on hitting the average distribution growth range. Obviously, if we surpass that, the numbers will increase significantly. If we hit the low end, it'll be lower.
The other thing that we've talked about is that potential for getting outsized returns on the carry. We certainly saw that with GGP, you get your returns up into the 30% on a fund or an initiative, you can generate very substantial carry. This is, again, another area where we think if we outperform on the investing side, where that can lead itself to really significant share values. Even on the invested capital side, which again, we haven't really talked a whole lot about, but typically, we've been pretty good at hitting 12%-15%. That's just the typical rate of return across the board that we look for. If you go back over the years, we've generally exceeded that.
While we've dialed in 12% here, there's definitely the potential to surpass that based on our ability to reallocate capital and the opportunities that we see within the business across the globe. If you pull all that together, and sorry for all the numbers on this one particular slide. In essence, I'll call it the base case, let's say, which is that first column. That's that 10% fee-bearing capital growth rate, 50% gross margin, which we're hitting already, and a 12% return on our limited partnership capital. If you just compound up the simple maths on that, you end up with around $100 a share, which would be a 17% total return, which we think is pretty good.
Obviously, if we outperform on those things, whether we hit a higher fee-bearing capital growth rate on the 10%-15% increase, or expand the margins, or increase the LP returns, then obviously the share values would potentially be that much higher as well. Look, this isn't really to tell you what the share price is going to be, obviously. What we do want to do is give you some idea of how we think about the business, and where we see the value being created, and the kind of levers or metrics that we have to pull on, and the metrics that we look at that we think are important in valuing the business to give you some sense of how we're thinking about the future over the past five years.
With that, I would be delighted to take any questions on this part of the presentation, and I think Bruce is going to come up and handle questions on behalf of all of us, I guess. Yes, Robert.
On buying back shares. Brian, you mentioned buying back shares. Would you consider Brookfield Asset Management itself buying back shares of some of its public funds, the Infrastructure, Renewable Power, or Property, as opposed to those outfits themselves doing it? Because maybe they don't have excess capital like you apparently have or can generate.
Right. That's certainly a possibility. I think that latter point you made is very important. If they have the capital to do that, then generally our bias has been to allow the entity to buy back its own stock and benefit all of its unit holders or shareholders first. Having said that, if that's not its priority, then we certainly have the opportunity to do that. We've done it over the years with various of our investee companies, primarily in support of their business, and to help them achieve their aims. It's certainly open up to us in the future. Yes, Brandon.
Brian, if you look at the AUM goals that are out there, you achieve all of that, what does that mean for how much capital gets invested on an annual basis going forward? How does that compare to what you've done in the past? Do you feel like you have the organizational breadth to be able to handle that level of investment if it's a significant increase from what Brookfield's done historically?
I guess the short answer to it is, yes, we are very confident in our ability to handle that growth. As I mentioned, we spend a lot of time building out the resources around the globe and in the various asset classes. Generally, our approach has been, especially with the new regions, is probably to over-invest in the resources a bit. You saw that in India and in China. We've had people there for quite some time. We have that capacity in those markets. At the end of the day, we'll have to increase it somewhat. Because what we're talking about here is close to a doubling. Which would suggest that there's close to a doubling in terms of the investment capacity. I guess our observation, it's always tough to do that.
Bruce and Cyrus and others have laid out a number of the reasons why we think we have the necessary attributes to be able to invest substantial amounts of capital year in, year out, generally, on an attractive basis. I think we're in good shape in that regard.
Yeah. Andrew Kusky, Credit Suisse. Just a question on the context of the funds growing and all the private funds growing. Do you get to a point in time when the general principle that you've had of investing Brookfield money into those funds, that comes into question just because the funds become so large that it starts to strain either the BAM balance sheet, or it strains some of the underlying balance sheets? Because if you're raising, let's say for argument's sake, $15 billion, and you choose to have 20%-30% of Brookfield money in that fund, does that become too taxing at a certain point that that actually constrains your growth in the private world?
I suppose at some level, hypothetically, it could. It's an important dynamic that, I guess we really get to reset the bar every time we launch one of these new funds. The kind of thinking that would go into it would be, okay, from the BAM or the listed partnership entity, how much capital Well, I guess it really starts with: What do we think the investment set is for that fund over the next three years period? We really shouldn't be going out and raising more funds than we think we can put to work properly. Then you factor that back into what does the capitalization liquidity profile look like for, let's say, one of the listed partnerships in terms of how they're thinking about harvesting assets and their own initiatives in terms of accessing capital through the capital markets.
All of those factors will get weighed in to that decision. We have the opportunity to reset that every two or three years as we launch a new fund. I think at this stage, seeing no other questions for me, I'm going to hand it back to Bruce. Thank you very much.
I take any other questions if there are any. Other than that, I'll just make a couple final comments, but if there is anything else that I can ask that hasn't been asked, I'd be pleased to answer it.
I'm Cherilyn Radbourne from TD Securities. As you introduce increased products, obviously the opportunity for conflicts between the various mandates increases. I wonder if you could just address the issue of whether your current, I'll call it compliance infrastructure, is robust enough to handle that today.
The simple answer is yes. The more long answer is, we've invested, as we have in operating platforms and people around the world, we've invested, even though we're lightly regulated, we have a very significant compliance regime. A lot of that, as an asset manager in multiple products, revolves around conflicts and ensuring that you're not mixing between funds or anything like that. All I can tell you is we're hyper-sensitive to it, because as with anything, if people think that you've taken advantage of them or done something, even if it was legal, we go beyond legal to make sure that there isn't even people thinking about that. So far, we've really had no issues because we've tried to be very thoughtful about what we put in funds and what the mandate of each fund is.
Therefore, if you think a lot about it upfront, you usually don't have any issues. That's not to say we don't have discussions with some, but we try to be very thoughtful about it.
Can you talk a little bit about the risk of higher interest rates? Is it simply cost of financing and the competition for capital from your institutional partners, or is it more than that? Is there anything not so obvious that you can talk about, and anything you can do to prepare for that if you see that coming?
With respect to interest rates, I would say on the cost of our shareholders, we've been preparing for five years. It's cost us a lot of money on behalf of every one of you. We think it was a prudent investment. We think it was a prudent decision. Every one of our financings, or not every one, but most of the financings we have at the asset level and all of the businesses are fixed rate. When you had fixed rate financings, we're paying 5% for money or 4% for money, we could have been paying one and a half. If you do the math, that's many, many, many billions of dollars we've cost, quote unquote, our investors in our different funds and on our balance sheets. I'd say we've paid the price.
We're not relenting, many of our assets are fixed at the asset level. Many of our financings are fixed, therefore, 50% of the risk is taken out of it. On the equity portion of the balance sheet, we've layered in some hedges, that's cost us significantly over time because we've been waiting for the increase in interest rates, meaning we've been pre-financing liabilities that were coming up in the short term. That's cost us money. We're continuing to do it. Therefore, we're prepared more than what we generally would have on the asset level. Third, these real assets we have actually do very well in an increased interest rate environment because generally what it means is inflation is higher and revenue streams actually increase.
In the short term, I'm talking a large increase, not a small increase, there's a disruption in the market when that occurs. Over time, these type of assets are exactly what you want to own. Therefore, you will get it all back. In fact, you're going to do very well. What we can do, I'd say increased interest rates to some extent, because we're well capitalized and because we did all the things that you did, and because we have access to cash and because we have access to funds, may be more beneficial for this organization in the longer term, because what it's going to do is disrupt the market for those that aren't prepared.
We actually excel in our organization and make greater amounts of money over the longer term when events occur that people aren't prepared for, i.e., they didn't fix their interest rates, their costs went up, they couldn't afford their mortgage. Therefore, we could buy the property or the infrastructure asset or the renewable power plant. I actually think in a perverse way, a significant increase in interest rates will be additive to this business over the longer term. I don't think it's going to occur. We think that interest rates are going to go up slowly over the next 3 years as the economy grows in America. The rest of the world, they'll slowly go up, but they can't go up at the same pace, and Europe can't go up any. You're going to see that change.
We don't think there'll be the tremendous disruption, but there will be some that get caught, and I guess we want to be prepared to be one of the groups that are advantaged by that environment versus disadvantaged. It's cost us something to be prepared, and it will continue to cost us something to be prepared. We'd rather be on the prudent end of that versus being aggressive during these times. I hope that maybe is more expansive than you asked for, but I hope that answers the question.
Bruce, in terms of the amount of carried interest that gets turned into comp, as those numbers get bigger and bigger, is there an opportunity there? Do you actually put in your forecast that some greater percentage of carried interest over time comes to shareholders as opposed to turn into comp? Do you have the opposite problem in that as infrastructure gets bigger and more popular, you've got private groups that are willing to pick your people off by paying ever larger amounts of their carried interest into comp? I'd just be curious how you see that equation working over the next 5 to 10 years.
As to the model that Brian showed, just to be very specific, I think we show compensation within there, and he takes account of what he thinks is going to be the compensation shared with our management teams to pay our people. Just like we take other expenses, we've factored that into the calculations. As to the actual how that affects our business, over time, we've had a philosophy of compensation, which was that people should and will and could earn a lot of money at our organization if the shareholders or the constituents they manage money for make a lot of money. Full stop. That's really the thesis of what we have. Nobody's going to earn very much if everyone else doesn't do fine.
We'll offer you the opportunity to make a significant amount of money relative to what you could do in other places if you do well on the capital you have and others make it. We've never had a real problem attracting people. I don't think we will going forward. As we scale up the funds, we ensure that we bring back the percentages because we do it on an invested capital amount versus just a percentage of fund. If it gets bigger, you have the same percentage. We've tried to be very thoughtful about that in setting the stage of these funds for the next 20 years, knowing that they will scale up so you don't have those problems. It's always possible, I guess, that there will be an organization that can be successful that will offer more to someone.
We don't generally have that problem. We've had it on occasion, but not too much, largely because people like to work for our organization, and we offer a lot of the benefits that you've seen in our organization. It's a very important point and probably one of the most important things in any organization to deal with. We've tried to continue to be judicious about it and thoughtful, setting the stage for the longer term.
Thanks, Bruce. You said that you're raising cash funds for leaner times, yet you're out in the market raising funds. You're making pitches to prospective LPs. Is that the pitch? Give us the capital. We're there. You get the optionality around when there's a down market. We'll put that capital to work in a smarter way than anybody else. Is that how you're positioning the funds when you're talking to investors? I'm just trying to reconcile your macro comments with your fundraising initiatives and how that's working with the pitch that you're giving to the prospective LPs.
Yeah. Our pitch is that we can invest organically and because of our franchise, through any environment. We've seen that many of you that have watched us over the years have seen that we can put money to work almost in any environment. It's really because of the sheer scale of the organization. Things just come to us because of our name, our franchise, our operations, our people, and the business. Therefore, we really can invest a lot of money over time in almost any market. We like to have more money available at times when it's leaner. Right now, the markets are pretty good in North America. They weren't in 2009. I'll contrast those two. I'd just say our pitch is really we can put your money to work anytime.
We do really well and can make a lot of money when there's more distress. Therefore, our money today is mostly going towards economies that aren't as robust as the United States. There may be times which are less robust in the U.S., and we'll switch the money back and forth. That's the advantage we have with large global funds. Seeing no other questions. I would just say we're grateful that you took the time to be here or listen on the phone. We thank you for everything, and we thank you for investing in Brookfield. Anything that we can ever be helpful to any of you on, please contact any of us. If not, before, we'll see you next year at this time. Thank you.