The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst
: Two questions. First one on private credit. I think you've highlighted in the shareholder letter that it is a source of growth, presumably at the expense
of commercial banks and the like. I guess if you could just provide some quantification as to what sort of a growth you're expecting from that over
the next, call it, 5 years? And what will that do to the overall dynamics of the fee rate and fee margins and the like at the broader Brookfield level?
So that's question number one.
And then I'll have a second one around stagflation,please.
Unidentified Company Representative
So I'll maybe just -- Bruce, I'll take the first one and just say that the question. Nick just state the question again.
Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst
: Yes, I just wanted to get a bit more maybe color around the private credit opportunity that you've highlighted in the shareholder letter, just to kind
of get a bit of a quantification around it over the next 5 years? And what sort of implications will that have to your broader I'll call it, kind of
standardized ratios that we look at. Whether it's the, call it, margins and fee-related margins and the like?
Question: Cherilyn Radbourne - TD Securities Equity Research - Analyst
: Bruce, we've had some questions from investors on recent developments in the real estate market in China. So maybe you could give your perspective
on what's going on there. And what are the outcome may be opportunities for Brookfield over time?
Question: Cherilyn Radbourne - TD Securities Equity Research - Analyst
: Great. That's helpful. Second one is for Nick. In terms of the $35 billion of committed capital that will generate fees once it's deployed, can you
remind us which pools of fee-bearing capital generate fees on committed capital versus fees on deployment? And should we assume that, that
$35 billion gets deployed relatively evenly over the next 3 years? Or is there a reason that the cadence might be different than that?
Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst
: Listen it has been 5 or 7 years ago, that you highlighted at Investor Day or AGM. I can't remember which one it was, that infrastructure could be
field's largest vertical which in 10 years, indeed, has seen material growth. You provided some 5-year growth forecast at your Investor Day, talking
about recycling capital out of real estate, in particular.
But if we look out over the next 10, 15 years, and keeping in mind some of the new growth verticals that you've discussed, how do you think about
that answer today relative to 5, 7 years ago?
Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst
: Great. And I guess my second question just relates to the capital intensity on the balance sheet. I think with more of a focus on DE, the cash flow
from perpetual affiliates was 58% of the DE before realization this quarter. You've clearly laid out the strategic benefits of the perpetual capital on
the balance sheet in the past and the importance of the partnerships. That being said, when you look out over time, are there any more macro
factors, whether it's valuation, interest rates and so on? Would -- how do you reconsider what you think to be the optimal capital intensity on the
balance sheet, given the expectation that fee-related earnings can grow at 20% plus CAGR?
Question: Mario Saric - Scotiabank Global Banking and Markets, Research Division - Analyst
: Okay. Makes sense. And if I may, just one really quick other one on the corporate liquidity, Nick, that you highlighted, $5.2 billion at quarter end.
There's been a lot of activity recently. Where would that stand roughly today?
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