Brookfield Asset Management Inc Q1 2022 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : My first question was, when we've seen the markets kind of down or turbulent in the past, Brookfield has sometimes used those opportunities to buy securities in companies. Have you been doing that given what we've seen over the past month or so? And if so, were there particular parts or sectors or parts of BAM that were more active than others? In other words, whether it was top of the house maybe on the infrastructure side or private equity side?

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : Okay. And that actually led into the other question that I had is on the M&A side of the business. Given, again, what we've seen in the markets, has there been adjustments that you've seen in terms of businesses you're looking at and the asking prices, have they been adjusted given what's been happening in the markets? And then also from the funding side, has that generally been okay for you? Or have you seen signs of turbulence, whether or not it's certain types of deals or geographies? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 12, 2022 / 2:00PM, BAM.N - Q1 2022 Brookfield Asset Management Inc Earnings Call

Question: Cherilyn Radbourne - TD Securities Equity Research - Analyst : The first question is on real estate. Your letter references several property dispositions at very strong values. And I assume that those are dispositions out of funds. But I was hoping you could give us, one, some color on the fundraising environment for real estate, specifically. And also give us a high-level update on the progress that's been made repositioning the BPY portfolio and ultimately reducing the balance sheet capital invested in real estate?

Question: Cherilyn Radbourne - TD Securities Equity Research - Analyst : Great. That's helpful color. And then the next one, I think, is for you as well, Nick. Obviously, when the public markets become volatile, investors naturally get worried about the carried interest. So was hoping you could speak to the visibility that the company has to realizing the $1 billion of growth carried interest during 2022? And also to the composition of the unrealized carried interest balance by strategy, and how much of that you think would be dependent on an exit strategy involving the public market?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Bruce, I just wanted to go back to the answer you gave to one of the questions that having the asset manager have its own cost of capital will open up some opportunities for it over the long term. Can you put a little bit more meat on the bone on that? Is this capability? Is it geographies? Is it scaling up some of the stuff you already have? I'm just trying to kind of get a better feel for what are some of those opportunities that will arguably put it on a faster trajectory of growth?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : And was there any -- maybe it's both for you and Nick. Was there any, I'll call it, science behind the 25% as opposed to a different number that's getting spun-out?

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : I think just coming back to the spin-off, 2 questions. The letter kind of highlighted the benefits of concentrated and specialized management team, and I think Bruce, you've highlighted kind of the incremental benefits of having shares and what you run. Have you decided on kind of the C-suite composition of the asset manager, as if Bruce and Nick as if you're not busy enough already, how do you think about that transition in terms of the composition of the management team?

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. And then my second question, just in terms of the asset manager cash flow. Can you talk about how tax efficient that may be going forward without the cash flow being attached to the invested capital that's going to remain within the corporation?

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : Sorry, 1 more. Just coming back to the nontraded REIT, I may have missed this, but what's roughly the fee-bearing capital in the REIT today? Have you been able to bend in any former BPY assets into the REIT, or has your kind of thought process changed at all on that? And how should we think REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 12, 2022 / 2:00PM, BAM.N - Q1 2022 Brookfield Asset Management Inc Earnings Call about the fee-bearing capital growth within that nontraded REIT, let's say, over the next 2 years given the increasing number of platforms that the REIT is currently on?

Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst : Great. And then just based on kind of past experience around the market, how long do you expect it to take for the fundraising to mature, like once you're on the platform, what's your growth like?