管理層發言
Hello, and welcome to the Brookfield Corporation Third Quarter 2025 Conference Call and Webcast. After the speaker presentation, there will be a question-and-answer session. I would now like to hand the conference call over to your first speaker, Ms. Katie Battaglia, Vice President, Investor Relations. Please go ahead.
Thank you, operator, and good morning. Welcome to Brookfield Corporation's Third Quarter 2025 Conference Call. On the call today are Bruce Flatt, our Chief Executive Officer; and Nick Goodman, President of Brookfield Corporation. Bruce will start off by giving a business update, followed by Nick, who will discuss our financial and operating results for the quarter. As a reminder, we completed a three-for-two stock split on October 9, 2025. Accordingly, all per share amounts that are discussed during the conference call are on a post-split basis. After our formal comments, we'll turn the call over to the operator and take analyst questions. In order to accommodate all those who want to ask questions, we request that you refrain from asking more than two questions. I would like to remind you that in today's comments, including in responding to questions and in discussing new initiatives in our financial and operating performance, we may make forward-looking statements, including forward-looking statements within the meaning of applicable Canadian and U.S. security laws. These statements reflect predictions of future events and trends and do not relate to historic events. They are subject to known and unknown risks, and future events and results may differ materially from such statements. For further information on these risks and their potential impact on our company, please see our filings with the securities regulators in Canada and the U.S. and the information available on our website. In addition, when we speak about our Wealth Solutions business or Brookfield Solutions, we are referring to Brookfield's investments in this business that supported the acquisition of its underlying operating subsidiaries. With that, I'll turn the call over to Bruce.
Thank you, and welcome, everyone, on the call. We delivered another strong quarter of financial results. Distributable earnings before realizations were $1.3 billion for the quarter, or $0.56 per share and $5.4 billion over the last 12 months. That was $2.27 per share. That was an 18% increase over the same period last year. Our outlook remains strong with each of our underlying businesses continuing to execute their strategic plans, driving strong organic earnings growth. Turning first to markets. Economic activity and corporate earnings remain healthy. Capital markets are open and transaction activity is picking up across most asset classes. For our business, that backdrop is constructive and highly supportive of real assets. So far this year, we financed $140 billion of debt across our operations and closed $75 billion of asset sales at attractive values, including over $35 billion in just the past few months. At the same time, the direction of monetary policy is turning. After an extended period of elevated interest rates, some softness in the labor market has started to prompt policy easing from the Federal Reserve to support growth and maintain balance across the economy. While the current environment is influencing policy decisions today, it is important to consider the structural forces that shape where policy goes from here. Over the past 15 years, governments have relied on fiscal stimulus to offset slowdowns, leading to a buildup of public debt that is difficult to sustain in a higher interest rate environment. Policymakers around the world are now evaluating the tools available to stabilize these debt burdens. The most constructive outcome of that, and the one that we hope for, is faster economic growth that outpaces debt, which can be helped by AI and innovation. Austerity is always possible, but not too many governments have shown the desire to push that. If growth stays modest, policymakers may instead quietly manage rates below inflation to ease debt burdens, lowering short rates and guiding long rates down. If this path is pursued, it would likely lead to a period of declining real yields and low nominal rates. This environment will provide the optimal conditions for the real assets we invest into. Our portfolio is built around inflation-linked durable cash flows backed by hard assets that protect real returns. The benefits of real assets are always evident, but in this evolving environment, they are becoming an essential investment product for every portfolio. A suppression of real yields will amplify these benefits and enhance long-term value across the franchise. Turning to the business, we are entering the final quarter of 2025 with strong momentum and a record almost $180 billion of deployable capital, positioning our business to invest for value in powerful secular trends that define the next chapter of growth in Brookfield and the global economy. AI innovation is fueling unprecedented demand for large-scale infrastructure. Aging populations are reshaping global savings and driving demand for new wealth and retirement products, which will last for decades. The real estate recovery is well underway. Nick will cover that and gaining momentum. Each of these trends represents a multi-decade opportunity to invest where our scale and expertise gives us a major advantage. To that end, we advanced a number of strategic transactions during the quarter. In our Wealth Solutions business, we received shareholder approval for our acquisition of Just Group in the U.K., a region where the growing retirement market is creating significant opportunities for long-term investment. We also announced a reinsurance agreement with a leading Japanese insurance company, marking our entry into the Japanese insurance market, the first of many expected opportunities in the region. We agreed to acquire the remaining 26% of Oaktree that we don't own already, which will bring our ownership to 100% upon completion of the transaction. From the outset, our partnership with Oaktree has been grounded on shared principles, including a value-oriented approach to disciplined investing with a focus on compounding capital over time. Our scale and real asset expertise combined with Oaktree's deep credit experience has created one of the most comprehensive and diversified credit platforms globally. We continue to partner with leading institutions, corporates, and governments around the world, which makes our business different, combining capital expertise and our global reach to capture opportunities for all. We have several initiatives underway to deliver the next generation of energy transition in AI infrastructure globally, and I'll just mention a few. Through Westinghouse, during the quarter, we partnered with the U.S. government to deliver $80 billion of nuclear reactors. This is equivalent to eight large-scale nuclear plants, enough to power the entire state of Utah. These projects will help rebuild critical supply chains in the U.S., revitalize the domestic nuclear industry, and mark an inflection point for the growth of nuclear energy in North America. With Bloom Energy, we are developing 1 gigawatt of behind-the-meter power generation from fuel cells to meet the growing demand from AI data centers and other energy-intensive applications. We think this is just the beginning. Through our strategic partnership with Figure, a leading developer of humanoid robotics, we are providing access to our portfolio of real assets to create the real-world environments needed to develop, train, and deploy this technology safely and effectively, positioning us at the forefront of one of the most significant technological advances of the coming decades. Looking ahead, despite our size and scale today, our growth potential is greater than it has ever been. Our investment discipline, operating expertise, and access to large-scale capital positions us to deliver another strong phase of growth for shareholders in the years to come. Thank you for your support. We appreciate your continued interest in Brookfield, and over to Nick.
Thank you, Bruce, and good morning, everyone. We delivered strong financial results for the quarter, supported by continued momentum across our core businesses. Distributable Earnings, or DE, before realizations were $1.3 billion for the quarter or $0.56 per share and $5.4 billion over the last 12 months or $2.27 per share, representing an 18% increase over the prior year period. Total DE, including realizations was $1.5 billion or $0.63 per share for the quarter and $6 billion or $2.54 per share over the last 12 months, with total net income of $1.7 billion over the same period. Starting with our operating performance, each of our businesses continues to perform well. Our Asset Management business generated distributable earnings of $687 million or $0.29 per share in the quarter and $2.7 billion or $1.14 per share over the last 12 months. Strong fundraising momentum led to $30 billion of inflows during the quarter, which included over $6 billion from our retail and wealth clients. Fee-related earnings increased by 17% to a record $754 million as fee-bearing capital grew to $581 billion. During the quarter, we held the final institutional close of our second vintage flagship global transition strategy with total commitments of $20 billion exceeding our target and marking the largest private fund globally dedicated to energy transition. We also launched our seventh vintage flagship private equity fund focused on essential services and industrial businesses and are preparing to launch our inaugural AI infrastructure fund, which together will drive strong fundraising momentum going into 2026. Finally, jointly with Brookfield Asset Management, we announced the acquisition of the remaining interest in Oaktree, with $1.4 billion funded by the corporation. The transaction expands our ownership in Oaktree's carried interest fee-related earnings and balance sheet investments, further strengthening our global credit platform. The transaction is expected to close in the first half of 2026, subject to customary closing conditions and regulatory approvals. Turning to our Wealth Solutions business, we delivered another quarter of strong growth with distributable earnings of $420 million or $0.18 per share in the quarter and $1.7 billion or $0.70 per share over the last 12 months. This represents organic growth of over 15% year-over-year, supported by strong investment performance, robust underwriting across property and casualty lines, and disciplined capital deployment. During the quarter, we originated $5 billion of retail and institutional annuities, bringing our total insurance assets to $139 billion. Importantly, we continue to focus on raising long-duration liabilities, with approximately 80% of new retail annuities written during the quarter having durations of 5 years or longer. Our investment portfolio generated an average yield of 5.7%, contributing to spread-related earnings that were 1.7% above our average cost of funds. As we continue to reposition the portfolio into higher-yielding real asset investments sourced within Brookfield, we are well positioned to sustain strong spread-related earnings. During the quarter, we deployed $4 billion into Brookfield managed strategies at an average net yield of 9%, which helped support a 15% return on equity, consistent with our long-term target. We also made meaningful progress internationally, expanding across the fast-growing retirement markets in the U.K. and Japan. In the U.K., we received shareholder approval for the acquisition of Just Group, which remains on track to close in the first half of 2026, subject to customary closing conditions and regulatory approvals. Upon closing, our insurance assets are expected to grow by approximately $40 billion to $180 billion. In Japan, we announced our first reinsurance agreement in the region with a leading Japanese insurance company to reinsure annuity policies on a full basis. These initiatives strengthen our position in key international markets and position us to capture the growing global demand for retirement solutions. Our operating businesses continue to deliver growing and resilient cash flows, generating distributable earnings of $336 million or $0.15 per share in the quarter and $1.7 billion or $0.72 per share over the last 12 months. These results underscore the strength of our operating performance and the continued momentum across each of the businesses. Our infrastructure and renewable power and transition businesses remain at the forefront of secular trends reshaping global investment opportunities. Recently, we announced new initiatives to advance next-generation power and AI infrastructure, including our partnership with the U.S. government through Westinghouse to deliver $80 billion of new nuclear plants in the United States. In our publicly listed private equity business, we announced plans to simplify its structure into a single listed corporate entity aimed at broadening the investor base and improving trading liquidity. Our real estate business continues to perform well, supported by improving market conditions and strong fundamentals. Leasing activity remains concentrated in high-quality, well-located assets, driving strong operating performance across the portfolio. Our Supercore portfolio continues to outperform with 96% occupancy at the end of the quarter, and our Core Plus portfolio, which shares similar high-quality characteristics, ended the quarter with 95% occupancy. During the quarter, we signed 3 million square feet of office leases with rents on newly signed leases averaging 15% above those expiring. Notably, at Canary Wharf, leasing activity remains very strong, with over 450,000 square feet leased year-to-date, putting 2025 on track to be its best leasing year in the past decade. The leasing pipeline is also the strongest it has been in years, underscoring the depth of demand for high-quality space and Canary Wharf positioned as one of the world's leading business destinations. Turning to monetizations, market conditions remain highly favorable for high-quality assets and businesses like the ones we own. To date this year, we have had $75 billion of monetizations across our franchise, including $22 billion of real estate assets, $14 billion of infrastructure assets, nearly $11 billion of renewable assets, $7 billion from private equity, and $21 billion from credit and other diversified assets. Two recent highlights to note are as follows. In our infrastructure business, we completed the IPO of Rockpoint Gas Storage, one of the largest independent natural gas storage operators in North America. The offering was well received and oversubscribed, raising CAD 810 million, the largest IPO on the Toronto Stock Exchange since May 2022. Following the IPO, we have now realized a multiple of capital over 3x for retaining significant ownership interest in the business. In our real estate business, we advanced the sale of the remaining assets in our U.S. manufactured housing portfolio for $2.5 billion, resulting in a total investment IRR of 25% and a 3.5 multiple on invested capital. Substantially all sales completed this year were at or above carrying values and have crystallized significant value for our clients at attractive returns. Through these monetizations, we realized $154 million of carried interest into income during this quarter. Important to note, because our earnings recognition follows the European water for model, where carried interest is recognized only after we have returned to funds invested capital and achieved the preferred return. Many of the realizations have advanced our mature funds closer to that carried interest realization. Shifting to capital allocation, during the quarter, we reinvested excess cash flow back into the business and returned $180 million to shareholders through regular dividends and share buybacks. To date this year, we have repurchased over $950 million of shares in the open market at a roughly 50% discount to our view of intrinsic value. Moving on to our balance sheet and liquidity, we continue to maintain a conservatively capitalized balance sheet and high levels of liquidity with record deployable capital of $178 billion at the end of the quarter. We also maintained strong access to the capital markets, executing $140 billion of financing so far this year, including the issuance of $650 million of 10-year senior notes at the corporation during the quarter. Other notable financings include the successful refinancing of a $1.9 billion 5-year loan at a luxury resort in the Bahamas and two 5-year CMBS issuances at New York trophy office buildings, each over $1.25 billion, reinforcing that capital continues to flow to high-quality assets at attractive returns. Bringing it all together, our financial results continue to be very strong, and we expect continued growth in our results over the remainder of the year and into 2026. I am pleased to confirm that our Board of Directors has declared a quarterly dividend of $0.06 per share, payable at the end of December to shareholders of record at the close of business on December 16, 2025. On a post-split basis, the quarterly dividend is consistent with the previous quarter's dividend. Thank you for your time, and I will now hand the call back to the operator for questions.
分析師問答
Our first question will come from Michael Cyprys with Morgan Stanley.
If we think about the pillars of your success over the years, I think it's been your ability to adapt the business and innovate in recent years. You've added wealth solutions, continue to grow that. Recently, you've made some partnerships around AI, humanoid, partnership with Figure, as one example. So I was hoping you could talk about how you see humanoid and AI broadly potentially creating another leg of the stool for Brookfield over time. I remember at your Investor Day, I think embedded in your 2030 DE guide was about $2.6 billion of DE from capital allocation. Maybe you could help unpack the components there and how you think about other different contributors over time.
Good morning Michael and thanks for the question. I would break the answer into two parts. I'd say most of the capital deployment and the focus that we have today is around building the backbone infrastructure to support the build-out of AI. The growing demand, the secular trend of the growth of AI, the need for compute capacity, and the need for the power to drive that and supply the electricity for the compute capacity is where we are investing most of our time and dollars right now. We have a very unique position around that, given our capability and our global reach and our operating expertise around renewable energy, nuclear, and other energy sources and then our data center and AI fund that we're launching soon. I think this offers great growth potential for the franchise, and we're very well positioned to participate in that and are investing in a disciplined way to drive impressive results so far. The second component is the figure transaction you talked about. Brookfield Corporation is looking to stay ahead of the curve and deploy capital for the benefit of the rest of the organization and for the benefit of our operations. We believe that developments in AI and humanoid robotics will have a material impact on the way that businesses are run in broader society. I think this is about investing as a defensive investment and an opportunity to make money, but to really learn and be at the forefront for the benefit of the broader organization. We would look to do this selectively as we see good opportunities to do so. I don't think of this as necessarily the next leg; I think it's a force and a trend that's driving broad growth across the organization, and we're well positioned to participate in it.
Okay. Just a follow-up question on Wealth Solutions. You signed the first reinsurance agreement in Japan, expanding your global footprint. I was hoping you could talk about that arrangement? How you see that contributing. What's the scope for others in Japan, as well as elsewhere around the world? Maybe you could just update us on your global ambitions. Clearly, you have that transaction underway in the U.K.
Yes. Thanks. As you mentioned, we made the transaction in the U.K., and we're working towards closing that transaction in the early part of next year. That's a significant step for us, scaling pension risk transfer (PRT) and giving us access to a long-duration pool of low-risk liabilities. So we're excited to close that. That really sets us up well in the U.K. market. We have identified Asia and Japan as the next markets we look to grow into and do that in partnership with local players. This reinsurance is a flow agreement, so it's really a transaction that will build over time, month-to-month, quarter-to-quarter as we participate in the business that they're writing. It has the potential to scale, and we also have the potential to partner with other local players. So very much about continued growth in both markets. Those are the two markets we're predominantly focused on outside of North America today.
One moment for our next question. And that will come from the line of Mario Saric with Scotiabank.
Coming back to the Wealth Solutions business, Nick, I was wondering how long you think it may take to get to your approximate 200 basis point target net investment yield spread? And then secondly, how should we think about the evolution of gross versus net insurance flows? I think in this quarter, it was about 40% of growth. So just curious on what your thoughts are on those two items.
Yes. The 200 basis points is a medium to long-term target. It will take time to grow into it. As cash comes in, we're very disciplined in deployment. We're looking at a sort of barbell approach on deployment, sitting in significant short-term liquidity and balancing that with investment into real assets or in credit and equity. It takes time for the deployment. As we work through the plan, we do expect that spread to broaden and work towards it. Importantly, we think about ROE as opposed to just spread, and the return on equity we're generating and the capital compounding at 15% plus are in line with our long-term targets. We're very happy with the performance there. On the gross to net flows, it should stabilize to about 1/3 outflows versus inflows in a quarter as we move forward.
Got it. Okay. And then my follow-up, just with respect to the recently announced Oaktree acquisition, has the composition of the $3 billion purchase price between BAM BN shares and cash been settled? How do you see the transaction impacting the velocity of BN share repurchases going forward, if at all?
So yes, Mario, we do have the elections finalized. The end result is that roughly $250 million of BN shares were elected. The balance will be in cash and almost 100% of the BAM consideration will be in cash. It will have zero impact on our buyback. We will buy back the 250 million of shares that we issue, but it won't have an impact on our broader buyback strategy.
One moment for our next question, and that will come from the line of Alex Blostein with Goldman Sachs.
Just maybe zoning back to the trajectory of the insurance business, so really good growth. The sales are coming through nicely. On the spread, though, I hear your comment around the ROE. But the spread I think in annuities was 165 basis points this quarter. So maybe help us think through kind of near-term dynamics over the last 12 to 24 months on the trajectory of that spread as you start to earn your way back towards the targets.
First of all, Alex, welcome to the call. I know it's your first one. It's great to have you. I'd just say that the spread is at 165, and it's really because we're being disciplined in deployment. You know the way we think about the business; we run it for the long term. We're being patient in deployment. We are sourcing very attractive real asset investment opportunities in the credit and equity side. As we look forward, we do expect it to work its way back up, but we're not running the business quarter-to-quarter; we're running it long term. So, we're going to be patient and wait for the right investment opportunities. As they come in, you'll see the spread widen. But again, what it comes back to is the ROE, and we're happy with the performance.
Got you. For my follow-up, can you spend a couple of minutes on how you're progressing towards closing the Just acquisition? I know there's probably a lot of limitations to what you could say publicly. But as you were to sort of frame the spread-related earnings contribution and then strategically how you think this could accelerate growth of your presence outside the U.S. and PRT markets in the U.K. and Europe broadly, it would be helpful to understand what this deal could mean financially for the business over the medium term.
I do apologize because we are limited in what we can say, and we haven't really talked to date about what the pro forma looks like as we work our way through the regulatory approvals. We're working through it. We have the shareholder vote. We are working with the regulator. We previously were licensed under Bluemont in the U.K., so we have a good relationship with PRI, but we're working through that process. Just has a good track record of issuing PRT on a consistent basis in the U.K., I think in the year before we acquired them, about GBP 5 billion of origination. So we would expect to hopefully be able to continue that and scale it with our capital. As for performers, it will have to wait until we're further along in the process.
One moment for our next question. And that will come from the line of Cherilyn Radbourne with TD Cowen.
Ever since the framework agreement to build new nuclear capacity in the U.S. was announced, the biggest question we've been getting from clients is – to the extent that Brookfield alongside LPs will invest capital in nuclear project development, what kind of downside protection would you be seeking? Is that investment likely to occur in a discrete nuclear strategy or in the DGTF strategy?
Cherilyn, thanks for the question. First of all, it’s been bought within Westinghouse. The transaction being done is between Westinghouse and the U.S. government, and the U.S. government is buying as the equity investor $80 billion of nuclear facilities. Our role is to help deliver the facilities and provide services, which include the fuel rods and servicing of the facilities going forward. The end result will look very much like the Westinghouse business we have today, scaling Westinghouse as a global nuclear champion, but it will be done through Westinghouse, which is owned by BGTF 1.
Maybe just extending that to the plans that are being evaluated in South Carolina, could you elaborate on how that might be structured?
We're in a process there, and it's very early days. As we think about growth in the space, we are focused on downside protection. Anything we do in the space where we're looking to get involved in either bringing Westinghouse services or Brookfield Capital would be structured to provide strong downside protection.
One moment for our next question, and that will come from the line of Kenneth Worthington with JPMorgan.
You've talked in the past about 2025 being a transition year for carry. You've talked about the improved outlook going through 2030. Given what continues to be a better M&A environment and a better realization environment with better valuations, can you talk about how carry generation is shaping up for 2026? As we think about realizations, how is the outlook developing for realization on the balance sheet versus realization in the Brookfield funds as you think about the intermediate term outlook?
Thanks, Ken. The outlook for carry hasn't changed. This year would be a bit of a bridge year, and it's played out consistently with last year. With the monetizations in the pipeline that are progressed or that we plan to launch, we see potential for a step-up in carried interest in 2026. This expectation hasn't changed from what we presented at Investor Day, and we believe there is a very healthy transaction market supporting this activity. Regarding the split between the balance sheet and what's being done in the funds, we operate completely independently of each other. We continue to advance the monetizations in the fund, which is a globally diversified portfolio of assets and geographies. This makes it nimble where assets are ready to trade, and where the capital is available. On the balance sheet, we are talking about the office and retail assets in the U.S., and I can tell you that the capital markets are stronger now compared to when we had our last call. We had successful financings at spreads and all-in rates that we couldn't have achieved a month ago, lending itself to increasing transaction activity.
One moment for our next question, and that will come from the line of Bart Dziarski with RBC Capital Markets.
Just wanted to ask on real estate. Within the LP, the NOI really ticked up this quarter. $465 million versus about $80 million last year. Any drivers of that step up?
Hi, Bart. The performance of the LP portfolio includes running returns that we earn plus disposition gains that we earned during the quarter. We benefited from disposition gains from monetization, which is what's driving the increase in FFO during the quarter.
Got it. On carry, with regards to the target carry framework you have, could you help us understand if there's a pickup once your Oaktree deal closes? If so, can you give a rough frame of how much that could increase?
We will own more of Oaktree target carries, which represents the annualized carry compounding for us on the carry eligible capital we manage. When we acquire Atrium, we will have more carry eligible capital, and it will pick up, but it won't be material. It won't be a significant adjustment to the numbers we have today.
One moment for our next question, and that will come from the line of Sohrab Movahedi with BMO.
I just wanted to go back to the earlier remarks about broadly speaking, the three types of economic environments that could play out. Is any one of those three better than the others from a fundraising perspective?
We've been through a severe cycle in the last 5 years and experienced a few environments in a short period of time. Through all this, demand for alternatives has stayed strong, specifically real asset alternatives and essential service investing. Demand for real assets will stay strong irrespective of where we end up, as they have proven durable and established their place in investment portfolios. Investors appreciate the characteristics of the income and returns they generate.
I just wanted to see if there's a likelihood that some of the targets discussed at the Investor Day could be upgraded.
If you go into an environment of lower nominal yields, real assets could become even more attractive. It could be an upside, but our focus remains on driving the business and we believe the growth outlook is already incredibly strong.
One moment for our next question, and that will come from the line of Dean Wilkinson with CIBC World Markets.
When you look at the growth of the business over time, do you hit a point where you start to worry about the law of large numbers? Is there a point where that kind of flattens out? Or do you think those opportunity sets are going to continue to grow quicker than you can actually grow the underlying business?
Today, the trends in the market and the amount of capital needed to deliver in the areas of infrastructure, renewable power suggest significant growth. The opportunities' quality is the best we've ever seen. The ability to earn returns while deploying large amounts of capital is a great place to be, and I do not foresee any shortage of opportunities to deploy in the short term and probably even in the medium to long term.
One moment for our next question, and that will come from the line of Jaeme Gloyn with National Bank.
In the Wealth Solutions business, just looking at the annuities distributable earnings from annuities stepped down a little bit quarter-over-quarter, year-over-year. Hoping you can kind of talk through a little bit of the moving parts there, as well as the 10 basis point step down in the yield on investments in that portfolio.
There’s nothing significant. The year-over-year performance continues to drive strong earnings. We may have had some one-off small movements in the portfolio but nothing significant. The portfolio continues to perform incredibly well. The drop in the spread, which we touched on briefly earlier, is a product of capital coming in, inflows being parked in cash until we invest them. We’re being very patient, waiting for the right real asset investment opportunities. It will come, and as we put that capital to work, you'll start to see the spread increase back towards long-term targets.
Thank you, everybody, for joining us today. With that, we'll end the call.
This concludes today's conference call. Thank you for participating. You may now disconnect.