Brookfield Corporation · NYSE:BN
Brookfield — Investor Day (2023)
154 slides from Brookfield's investor day presentation, 2023
Slide 1: Brookfield Corporation
Brookfield Brookfield Corporation
Slide 2: Agenda
Agenda 2:30 PM Introduction Bruce Flatt 2:40 PM Overview and Financial Outlook Nick Goodman 3:10 PM Real Estate Update Brian Kingston 3:30 PM Insurance Solutions Sachin Shah 3:50 PM Q&A Bruce Flatt Nick Goodman Brian Kingston Sachin Shah
Slide 3: Introduction
Introduction Bruce Flatt, Chief Executive Officer Information in this presentation is qualified by the Notice to Recipients and Endnotes included in this presentation
Slide 4: To summarize
To summarize • Brookfield Corporation is a Premier Global Wealth Manager for institutions and individuals • We manage capital for our investors, global sovereigns, institutions and private individuals through our asset management, wealth distribution, and insurance channels • We are uniquely positio
Slide 5: In the last 12 months, we…
In the last 12 months, we… Successfully listed our Manager Grew our insurance assets to $100 billion Raised nearly $75 billion of capital Delivered strong operating results Enhanced our deployable capital to nearly $120 billion 1. See Notice to Recipients and Endnotes, including endnote 4. 5
Slide 6: We achieved a 13% total return since last year
We achieved a 13% total return since last year $83 $74 13% Total Return $74 2022 2023 Plan Value per Share Cash Distributions for our Manager Spin-Off You received $9 in distributions and still have $74 of Value working for you!! 6
Slide 7: Total annualized return on invested capital of 17% over five years
Over the next five years, we should be able to deliver a total annualized return on invested capital of 17% Plan Value per Share $163 17% Total Return $74 2023 2028 Your $74 per share should grow to $163 of Net Asset Value 1. See Notice to Recipients and Endnotes, including endnotes 1 to 3. 7
Slide 8: Positioning Brookfield as the Premier Global Wealth Manager
We continue to position Brookfield as the Premier Global Wealth Manager – for institutions and individuals 8
Slide 9: Our goal is to compound wealth for…
Our goal is to compound wealth, while taking moderate risk, for… Institutions Pension Plans Countries Individuals & Families 9
Slide 10: One of the largest pools of discretionary capital globally
We have one of the largest pools of discretionary capital globally Scale Flexible Diversified Perpetual Insurance Global Capital Float Manager $140B $100B $850B Capital Float AUM 1. See Notice to Recipients and Endnotes, including endnotes 2 to 4. 10
Slide 11: The current environment favors Brookfield
The current environment favors Brookfield Global Secular Scarcity of Investment Trends Capital Backdrop Three D’s Our access to Our deep operating capital is strong expertise differentiates us 11
Slide 12: Our significant competitive advantages are differentiating the franchise
Now more than ever, our significant competitive advantages are differentiating the franchise Deep investment & Global footprint operating expertise Large & flexible Established reputation permanent capital base as a superior partner 12
Slide 13: Executing on major transactions even in a volatile market
Enabling us to execute on major transactions even in a volatile market 13
Slide 14: Each business has a strong foundation for growth
On their own, each of our businesses has a strong foundation for growth… 14
Slide 15: When the parts work together, we achieve more
But when the different parts work together, what we can achieve is significantly larger… 15
Slide 16: Allocating cash flows and recycling capital enhances returns
And allocating cash flows and recycling capital should significantly enhance returns 16
Slide 17: The Corporation at the heart of everything we do
With the Corporation at the heart of everything we do… Asset Management BN Insurance Operating Solutions Businesses 17
Slide 18: An investment in BN captures all the value Brookfield creates
An investment in BN captures ALL of the value Brookfield creates ~$140B perpetual Stable and growing Strategic capital base annual cash flow of $5B growth Capital Appreciation Cash Reinvestment Building Our Next & Recycling Global Champion 18
Slide 19: Spotlight shifts to privately held businesses
Following the successful listing of our Manager, the spotlight has shifted to our privately held businesses 19
Slide 20: Components not separately covered
The components of the business that are not otherwise already separately covered are our… Insurance Business, which has $100 billion of assets and growing Our portfolio of high-quality real estate, which is world class Carried Interest, which generates significant cash flow for us and is our hidden
Slide 21: Never better positioned to enhance value
We have never been better positioned to enhance value… Our goal continues to be delivering 15%+ returns over the longer term 21
Slide 22: Our Asset Management business
Our Asset Management business… • Is more diverse and growing faster than ever • Has an investment track record that has delivered excellent returns to clients over a long period of time • Is well positioned around global secular tailwinds of capital deployment • Has resilient cash flows, with best-i
Slide 23: Goal to surpass $1 trillion of fee-bearing capital
Our goal is to surpass $1 trillion of fee-bearing capital $440B to >$1T Fee-Bearing Capital 1. See Notice to Recipients and Endnotes, including endnote 5.
Slide 24: Our Insurance Solutions business is growing rapidly
Our Insurance Solutions business is growing rapidly • Our goal is to deliver strong growth but take moderate risk – we limit insurance risk and enhance returns with investment performance • Our deep industry relationships and investment expertise position this business as the partner of choice for r
Slide 25: Reaching $500 billion of insurance assets
We plan on reaching $500 billion of insurance assets $100B to $500B Insurance Assets 1. Brookfield estimate. See Notice to Recipients and Endnotes, including endnote 4.
Slide 26: Our Operating Businesses are best-in-class
Our Operating Businesses are best-in-class • We deploy our capital across our global champions that generate inflation- protected, stable, predictable and growing annual free cash flows • Our strategies allow us to compound capital at 15%+ on a baseline basis • We have a proven track record of stron
Slide 27: Cash reinvestment is the secret to long-term returns
But, as in most businesses, Cash Reinvestment is the secret to long-term returns • Over the next five years, we plan to generate ~$45 billion of cash • We have no restrictions on where to deploy this cash • We focus on allocating our free cash flows to optimize ~$45B the business over the longer ter
Slide 28: Opportunistic capital allocation
Our capital will be opportunistically allocated toward the following… Investing to support our current businesses Selectively building new businesses Being ready for strategic transactions Opportunistically doing share buybacks of BN, or our other securities 28
Slide 29: Global wealth of individuals is our next frontier
Global Wealth of individuals is our next frontier to add capital • This is one of the fastest growing pools of capital globally • We are pushing growth in wealth distribution – Brookfield Oaktree Wealth Solutions • We are now delivering solutions to the middle market with insurance products • Soon w
Slide 30: What drives the Corporation's value
Bringing it all together, the Corporation’s value is driven by Our Existing Reinvestment of Businesses Cash Generated 30
Slide 31: Compounding capital by ~20% per year over five years
We are well positioned to compound our capital by ~20% per year over the next five years… 1. See Notice to Recipients and Endnotes, including endnotes 1 to 3. 31
Slide 32: And grow our moat significantly
And grow our moat significantly $74 Value Per $163 Share 1. See Notice to Recipients and Endnotes, including endnotes 1 to 3. 32
Slide 33: Overview and Financial Outlook
Overview and Financial Outlook Nick Goodman, President Information in this presentation is qualified by the Notice to Recipients and Endnotes included in this presentation
Slide 34: Agenda
AgendaAgenda 01 Summary 02 Review of the Past 03 Our Business 04 Looking Forward 05 Bringing It All Together
Slide 35: Summary
Brookfield Summary
Slide 36: In summary
In summary • Our capital base has grown to ~$140 billion with $120 billion of equity • We generate $5 billion of cash flow per year • We are well positioned to grow earnings at 20%+ annually over the next five years • Our goal is still to generate 15%+ total returns over the long term 1. See Notice
Slide 37: In summary (cont'd)
In summary (cont’d) • Our private businesses will be significant contributors to our growth • Our goal is to be the Premier Global Wealth Manager of choice • The current trading price offers a large margin of safety for an investor • Our ESG principles are embedded within our operations 37
Slide 38: Review of the Past
Brookfield Review of the Past
Slide 39: We delivered strong growth over the past year
We delivered strong growth over the past year… For the 12 months ended June 30 ($ millions) 2022 2023 Asset Management $ 2,419 $ 2,483 Insurance Solutions 85 634 Operating Businesses 1,528 1,512 $ 4,032 $ 4,629 Corporate costs and other (651) (551) Distributable earnings before realizations $ 3,381
Slide 40: Predictable, growing distributable earnings
…and continue to generate predictable, growing distributable earnings For the 12 months ended June 30 ($ millions) 2022 2023 Distributable earnings before realizations $ 3,381 $ 4,078 Realized carried interest, net 463 755 Disposition gains from principal investments 567 134 Distributable earnings $
Slide 41: Returned ~$15 billion of capital to shareholders
Over the last twelve months, we have returned ~$15 billion of capital to our shareholders ($ billions) 2023 Regular Dividends $ 0.7 Special Dividend 13.1 Opportunistic Share Repurchases1 0.7 Capital Returned $ 14.5 1. Opportunistic share repurchases include $0.2 billion completed post June 30, 2023.
Slide 42: Conservative balance sheet and high liquidity
Underpinned by our conservative balance sheet, high levels of liquidity and strong access to capital across the business Conservative Capitalization Strong Corporate Liquidity $5B Cash, ~$140B financial assets and undrawn facilities ~$60B Listed securities $11B long-term debt ~$5B perpetual preferre
Slide 43: Ahead of our baseline plans from five years ago
We are ahead of our baseline plans from five years ago ~$17.8B ~$18.3B Five-Year Cumulative Projection Five-Year Cumulative Actuals 15% $5.1B CAGR $4.3B $3.8B $2.6B $2.5B 2019 2020 2021 2022 2023 Actuals 1. Figures as at June 30th. 43
Slide 44: Sound ESG practices create long-term value
Our existing businesses demonstrate that sound ESG practices are key to creating long-term value Assess climate impact Operate one of the world’s from underwriting largest pure-play renewable through exit power platforms NZAM Net Zero Asset Managers Diversity in Action Initiative Remain committed Al
Slide 45: Continued ESG progress
…as evidenced by our continued progress Published our inaugural TCFD disclosure Raised $15B for our Brookfield Global Transition strategy 75% of independent board of directors are female Net Zero by 2050 or sooner 40% of our employee population is ethnically diverse 100% of Brookfield Properties U.S
Slide 46: Our plan value today is $120 billion or $74 per share
Our plan value today is $120 billion or $74 per share… As at June 30 24x ($ billions, unless otherwise stated) 2023 Asset Management $ 85 Insurance Solutions 8 DE Multiple (Today) Operating Businesses 45 $ 138 15x Debt and preferred capital (18) Total plan value $ 120 Average DE Multiple Total plan
Slide 47: 13% total return since last year
…resulting in a 13% total return since last year $83 $74 13% Total Return $74 2022 2023 Plan Value per Share Cash and Special Distributions You received $9 of distributions and still have the same value as before! 1. Multiple of 25x on fee-related earnings in 2022. See Notice to Recipients and Endno
Slide 48: Intrinsic value grew in line with plan
We grew our intrinsic value in line with our plan five years ago $74 Insurance Solutions Operating Businesses $39 Asset Management Carried Interest 14% 2018 CAGR 2023 Plan Value per Share 1. 2018 was adjusted for the impact of the 3-for-2 stock split on April 1, 2020. Multiple of 20x was applied to
Slide 49: Total return in excess of our target
Achieving a total return in excess of our target 2018–2023 Growth in plan value 14% Average dividend yield and benefit of spin-offs 4% Total Compound Annual Return 18% 1. See Notice to Recipients and Endnotes, including endnotes 2 and 3. 49
Slide 50: Shares delivered 19% returns over 20 years
Our shares have still delivered 19% returns over the past 20 years – 61.5 merely having the Price trade at Value brings that return to 23% 12800 51.5 $74 10800 41.5 19% 8800 Annualized Return1 $34 6800 31.5 4800 21.5 10% Annualized Return 11.5 2800 1.5 800 2003 BN BN NAV S&P 500 2023 1. Represents t
Slide 51: Price versus value discrepancy offers margin of safety
Our Price versus Value discrepancy offers a large margin of safety; or substantial upside from today As at June 30 ($ per share, unless otherwise stated) Intrinsic Value 11xTrading Total Plan Value $ 74 DE Multiple (Today) 7x Equity Market Capitalization (34) Discount to Plan Value 55% Average Tradi
Slide 52: Our Business
Brookfield Our Business
Slide 53: Perpetual capital base generating over $5B of cash flows
Our perpetual capital base of ~$140B is generating over $5B of cash flows annually Asset Management Insurance Solutions Operating Businesses (BAM) (BNRE) (BEP/BIP/BBU/BPG) $85B $8B $45B Leading global alternative Global insurance Portfolio of global, scale asset management business solutions busines
Slide 54: Intrinsic value of existing businesses is $120 billion
The intrinsic value of our existing businesses is $120 billion or $74 per share… As at June 30, 2023 (Billions) (Per Share) A Public Holdings $ 60 B Private Holdings 78 Debt and preferred capital (18) Intrinsic Value $ 120 $ 74 1. See Notice to Recipients and Endnotes, including endnotes 2 and 3. 54
Slide 55: Our public holdings are straightforward and transparent
A. Our public holdings are straightforward and transparent As at June 30, 2023 (Billions) (Per Share) BAM − 75% $ 40 BEP − 47% 9 BIP − 27% 8 BBU − 65% 3 Public Holdings $ 60 $ 37 These are all listed! 55
Slide 56: Private holdings valued at $78 billion
B. We value our private holdings at $78 billion or $48 per share As at June 30, 2023 (Billions) (Per Share) Valuation Method Asset Management Direct Investments $ 14 Fair value under IFRS Carried Interest 32 Multiple of target carry Real Estate Core 14 Fair value under IFRS Transitional & Developmen
Slide 57: Our focus today is our private businesses
Our focus for you today is to explain our private businesses Asset A) Direct investments Generating excellent returns Management B) Carried interest Will generate significant cash earnings Real Estate Premium portfolio Strong Net Operating Income performance Insurance Premium returns 20% Return on E
Slide 58: 1A. Asset Management – Direct Investments
1A. Asset Management – Direct Investments 58
Slide 59: $14 billion of direct investments in BAM funds
Directly on our balance sheet we have $14 billion of direct investments in funds managed by BAM 1. Figures as at June 30th. 59
Slide 60: Targeting strong long-term returns
…targeting strong long-term returns Target Return Original Capital Returned Current ($ billions) Investment To Date Investment Gross Net BSREP I $ 1.6 $ 2.8 $ 0.3 ~20% ~16% BSREP II 2.7 2.7 2.2 ~20% ~16% BSREP III 3.6 0.9 4.2 ~20% ~16% BSREP IV 1.8 0.1 1.7 ~20% ~16% Oaktree Investments 2.1 ‒ 2.1 ~15
Slide 61: 1B. Asset Management – Carried Interest
1B. Asset Management – Carried Interest 61
Slide 62: Carried interest is our share of profits
Carried interest is our share of the profits we earn for our clients 62
Slide 63: Carried interest example
By way of an example… Fund size $ 20B Target return 20% Management fee rate (1.5%) Net return 18.5% Carried interest rate 20% Margin 70% Annual carried interest, net $ 520M per year 63
Slide 64: Key inputs of carried interest
Key inputs of carried interest A Carry-Eligible B Investment C Carried Interest Capital Performance Rate & Margin 64
Slide 65: Carry-eligible capital grew at 36% CAGR
A Our carry-eligible capital has grown by a 36% CAGR over five years 36% CAGR $220B $176B $144B $122B $72B $47B 2018 2019 2020 2021 2022 2023 1. Figures as at June 30th. 65
Slide 66: Funds tracking to meet or exceed target returns
B Our funds are tracking to meet or exceed their target returns Target Return IRR As at June 30, 2023 Fund Number of Fund History Vintages Gross Net Gross Net Infrastructure/Renewable Power 13 years 5 13% 11% 16% 13% Private Equity 22 years 6 21% 18% 28% 22% Real Estate 17 years 7 20% 16% 23% 19% Cr
Slide 67: Carried interest rate and margin are consistent
C Our carried interest rate and margin are consistent 20% Carried Interest Rate 60% Margin 1. Carried interest rate and margin are based on Brookfield’s flagship funds. 67
Slide 68: Carry potential expected to grow over five years
…our carry potential is expected to continuously grow over the next five years Carry-Eligible Capital Annual Generated Carry Realized Carry $6B $527B $7B 19% 29% 36% CAGR CAGR CAGR $220B $2B $1B $3B $3B $1B $0.8B 2023 2028 2023 2028 2023 2028 Net Net 1. As at and for the last twelve months ended Jun
Slide 69: Monetization activity has ramped up
Monetization activity has ramped up significantly over the last five years ~$10B 2018 ~$30B 2023 1. Figures as at June 30th. 69
Slide 70: Exceeded five-year plans for realized carry
With that, we significantly exceeded our five-year plans for realized carry ~$3.1B ~$4.8B Five-Year Cumulative Projection Five-Year Cumulative Actuals 2019 2020 2021 2022 2023 $1.5B $1.2B $1.1B $0.5B $0.5B 2019 2020 2021 2022 2023 2018 IR Day Projections Actual 1. Figures as at June 30th. 70
Slide 71: Carried interest is diversified across asset classes
Looking forward, our carried interest is diversified across asset classes, risk profiles and strategies – this reduces volatility 10% 14% 36% 17% 23% Real Estate Infrastructure Private Equity Renewable Power & Transition Credit and Other 1. See Notice to Recipients and Endnotes, including endnote 8.
Slide 72: Driving growth in net realized carried interest to BN
Driving growth in net realized carried interest to BN 1.0 $20 billion $6 billion On Funds Raised to Date On Funds to Be Raised $3.6B $2.8B $2.8B $2.9B $2.9B $2.5B $2.6B $2.4B $2.2B 0.8 2.4 0.9 $1.3B 1.4 2.8 2.8 2.6 2.5 2.2 2.1 1.7 1.3 1.2 1.0 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Realize
Slide 73: How we value carry
We value carry as a multiple of target carried interest plus accumulated unrealized carry Target Carried An Industry Multiple Accumulated Unrealized X Interest (10x currently) Carried Interest Carry we expect to earn Reflecting franchise value Accumulated carry generated assuming the fund achieves b
Slide 74: Carried interests are our hidden jewel
Our carried interests are our hidden jewel in plain sight… but NONE of this is recorded in our accounts As at June 30, 2023 ($ billions) Multiple Intrinsic Value Target carried interest, net $ 2.6 10x $ 26 Accumulated unrealized carried interest, net 5.9 6 Total carried interest $ 32 We value our ca
Slide 75: ~50% of value from existing private funds
~50% of value is derived from existing private funds ($ billions) NPV of carried interest to be realized from existing funds $ 14 NPV of carried interest to be realized from future funds (Franchise Value) 18 Total carried interest $ 32 1. See Notice to Recipients and Endnotes, including endnotes 2 a
Slide 76: Key Takeaways on Carry
Key Takeaways on Carry • Carry is very meaningful, real, and not a matter of if, but when it turns to cash • We value our carry at $32 billion today • Carry should provide $26 billion of cash flow over the next 10 years alone Carry is our hidden jewel in plain sight 1. See Notice to Recipients and E
Slide 77: Plan value ascribes no value to reinvestment of excess cash flow
Also, our plan value does NOT ascribe any value to the Corporation’s ability to drive earnings growth from the reinvestment of excess cash flow, but… 77
Slide 78: Built an insurance business generating ~20% cash returns
For example, in just over three years, we have built an insurance business that generates ~20% cash returns on equity Distributable Earnings $1.2B $0.7B $0B 2020 2020 30-Jun-23 June 30, Pro-forma 2023 2023 Committed Growth1 …and provides significant strategic value to the broader franchise 1. See No
Slide 79: Looking Forward
Brookfield Looking Forward
Slide 80: To summarize
To summarize • Our global champions provide stable and growing cash flows for the business • Growth in DE over the next five years is driven by: 1) Asset Management 2) Insurance Solutions 3) Cash Reinvestment at BN • Carried interest will provide us with meaningful earnings, above and beyond our rec
Slide 81: Our franchise is stronger and value proposition better than ever
Our franchise is stronger, and its value proposition is better than ever 81
Slide 82: Five-year plan: DE per share, plan value and total returns
To summarize, in five years, we plan to Grow Distributable Earnings per share by 25% CAGR Increase Plan Value per share by 17% CAGR Deliver annual Total Returns per share of 17% 1. See Notice to Recipients and Endnotes, including endnotes 1 to 3 and 5. 82
Slide 83: Asset Management should deliver 18% growth
Our Asset Management business should deliver 18% growth without multiple expansion As at June 30 ($ billions, except percentages) 2023 2028 BAM 17% Fee-related earnings1 $ 2.2 $ 4.8 CAGR Fee-bearing capital 440 1,014 18% CAGR Margin 55−60% 60%+ Distributable earnings1 2.2 5.0 18% CAGR 1. Represents
Slide 84: Insurance Solutions is scaling rapidly
Our Insurance Solutions business is scaling rapidly As at June 30 ($ billions, except percentages) 2023 2028 Assets $ 45 $ 250 41% CAGR Spread earnings ~2% ~2% Distributable operating earnings $ 0.7 $ 3.9 40% CAGR 1. 2023 assets exclude the impact of the recently announced acquisitions. See Notice t
Slide 85: Operating Businesses continue to grow cash flows
Our Operating Businesses continue to grow their cash flows and compound in value Strong track record of Resilient and growing Compounding value risk-adjusted returns cash distributions appreciation 15% ~$1.5B ~$5B IRR Over ~35 Years Annual DE Target Annual Capital Appreciation 85
Slide 86: Free cash flow should be ~$45 billion
Over the next five years, our free cash flow should be ~$45 billion $43B 2024–2028 Operating Businesses Asset Management Insurance Solutions Realized Carried Interest 1. See Notice to Recipients and Endnotes, including endnotes 5 and 15. 86
Slide 87: Significant excess cash flow to invest
…leading to significant excess cash flow to invest into new opportunities ($ billions) 2024–2028 Distributable earnings $ 43 Less: regular dividends paid to shareholders (3) Excess cash flow $ 40 Absent investment opportunities, capital will be available to return to shareholders 1. See Notice to Re
Slide 88: Reinvestment of excess cash adds ~$3 billion of cash flows
Reinvestment of excess cash should add ~$3 billion of cash flows over the next five years $10.3B 22% CAGR $3.8B 2023 2028 Operating Businesses Asset Management Insurance Solutions Cash Reinvestment Distributable Earnings Before Realizations 1. See Notice to Recipients and Endnotes, including endnote
Slide 89: DE should be ~$14 billion in 2028
Carried interest will generate meaningful cash flow and as a result, DE should be ~$14 billion in 2028 $13.6B 25% CAGR $4.5B 2023 2028 Operating Businesses Asset Management Insurance Solutions Cash Reinvestment Realized Carried Interest Distributable Earnings 1. See Notice to Recipients and Endnotes
Slide 90: Growth in DE for BN is driven by
Growth in DE for BN is driven by 42% 35% Asset Management Insurance Solutions 25% CAGR 2% 21% Operating Businesses Cash Reinvestment 1. See Notice to Recipients and Endnotes, including endnote 5. 90
Slide 91: Conservatively capitalized balance sheet going forward
Our balance sheet and funding model will remain conservatively capitalized going forward • We have many levers to access liquidity from the markets • Our businesses are predominantly financed with asset- 8% level debt that has recourse only to the asset and has Debt to no cross-collateralization Pla
Slide 92: Bringing It All Together
Brookfield Bringing It All Together
Slide 93: DE and DE per share CAGR over five years
If we achieve this plan, DE before realizations and DE per share should increase at a 22% and 25% CAGR, respectively, over the next five years $ per share DE Before Realizations DE $6.34 $8.41 22% 25% CAGR CAGR $2.38 $2.86 2023 2028 2023 2028 Operating Businesses Asset Management Insurance Solutions
Slide 94: Plan Value per share should increase to $163 by 2028
Plan Value per share should increase to $163 by 2028 $163 Carried 26 Interest $10 28 Cash Reinvestment Insurance $74 25 Solutions Asset $34 Management 2023 2023 17% 2028 Total Market Price Plan Value Return Plan Value 37% Total Return For example, given the entry point, if we liquidated the company
Slide 95: In conclusion
In conclusion • Our franchise is stronger, and our investment proposition is better than ever • BN captures all the earnings generated across the franchise and drives additional growth through proven cash reinvestment • We are well positioned to grow earnings at 20%+ per annum over the next five yea
Slide 96: Real Estate Update
Real Estate Update Brian Kingston, Chief Executive Officer
Slide 97: In summary
In summary • Our real estate business is performing extremely well • Our core portfolio continues to outperform the overall market • We continue to execute value creation in our transitional & development portfolio • A resilient economy drives demand for land and housing • We completed all 2023 refi
Slide 98: $24 billion of capital invested in real estate
$24 billion of capital invested in real estate Premier Core Transitional & Development Residential Brookfield Place, New York One The Esplanade, Perth Wendell Falls Community, NC $14B $7B $3B 98
Slide 99: Premier Core: portfolio of trophy mixed-use precincts
Premier Core: Irreplaceable portfolio of 29 trophy mixed-use precincts Premier Office Luxury Retail 41% 47% $5.2B $6.7B $14B Luxury Urban Retail 4% Luxury Residential & Hotels $750M 8% $1.6B 99
Slide 100: Strong underlying fundamentals
With strong underlying fundamentals 10 19 Trophy Commercial Irreplaceable Complexes Shopping Centers 6% 96% 49% 8 years SS NOI Growth Occupancy LTV Lease Life 100
Slide 101: Robust same-store NOI growth drivers
Robust same-store net operating income growth driven by… Occupancy Contractual Mark-to-Market Gains Rent Escalators Leases 101
Slide 102: Debt maturities are well laddered
Our debt maturities are well laddered Core Debt Maturities 50% 16% 16% 15% 3% 2023 2024 2025 2026 2027+ 102
Slide 103: $7.5 billion core office & mixed-use business
$7.5 billion core office & mixed-use business 4% SS NOI Growth North Europe & America Middle East 55% $4.5B $3B LTV 95% Occupancy 9 years Lease Life 100% Zero Emissions Electricity by 2026 103
Slide 104: Trophy commercial complexes
10 trophy commercial complexes… As of June 30, 2023 Asset Asset Value Equity Value Occupancy WALT Premier Office New York Brookfield Place $ 4,519 $ 1,899 94% 8 Manhattan West 3,779 1,814 98% 10 300 Madison Avenue 1,232 435 100% 11 Grace Building 963 509 100% 10 London Canary Wharf 3,410 1,303 93% 1
Slide 105: Ancillary mixed-use
…and ancillary mixed-use As of June 30, 2023 Asset City Asset Value Equity Value Occupancy WALT Luxury Residential & Hotels The Eugene New York $ 529 $ 215 95% N/A Pendry Manhattan West New York 159 104 N/A N/A Canary Wharf Residential London 2,145 1,308 94% N/A Total $ 2,833 $ 1,627 95% N/A Luxury
Slide 106: Investment spotlight: Brookfield Place New York
Investment spotlight: Brookfield Place New York Five-building, eight million sf mixed-use redevelopment $4.5B 6.5% 1.1M sf Stabilized Discount Leases Signed1 Value Rate (at all-time record rents) Occupancy Average RSF BFPL NY 94% $ 73 Sub-Market 76% $ 57 1. Leases signed in the last 18 months 106
Slide 107: Investment spotlight: Canary Wharf – London
Investment spotlight: Canary Wharf – London 20 million sf mixed-use precinct, including office, retail, homes & leisure space 128 Acres 8M sf 1M sf 2.3K+ $6.1B $3.1B Total Size Office + Retail Apartments Asset Value Equity Value of Estate Lab Space 107
Slide 108: Canary Wharf transport connections
City of London Canary Wharf London City Airport 1991: DLR 1999: JUBILEE 2022: ELIZABETH LINE
Slide 109: Evolution of CWG 3.0
Evolution of CWG 3.0 % of Value 2% 2% 20% 12% 12% 24% 14% 42% 2010 TODAY 20% CWG 20% 60% 3.0 22% 30% 20% 20%20% 2% Financial Services Other Office Tenants 24%Retail 22% Multifamily Hospitality Life Sciences 12% 109
Slide 110: $6.7 billion core retail business
$6.7 billion core retail business 10% SS NOI Growth NY MA 41% LTV NV NJ IL OH 97% CO VA CA United States Total Leased 19 Malls 6.2% Discount Rate FL HI 70% Interim 2030 GHG Emissions Intensity Reduction Target 111
Slide 111: 19 irreplaceable shopping centers
19 irreplaceable shopping centers As of June 30, 2023 Asset City Asset Value Equity Value Sales per sf Luxury Retail Ala Moana Center Honolulu $ 2,445 $ 1,346 $ 1,516 Park Meadows Lone Tree 1,285 644 1,015 730 Fifth Avenue New York 1,222 597 - Tysons Galleria McLean 1,143 754 2,088 Fashion Show Las
Slide 112: Strong performance in core retail portfolio
Continue to achieve strong performance in our core retail portfolio Tenant Sales PSF1 In Place Rent PSF1 $131 $1,148 $125 Miami Design District, FL $958 +5% +20% Pre-pandemic Today Pre-pandemic Today Oakbrook Center, IL Foot traffic increased +8% YTD compared to 2022 1. Growth rate between 2019 and
Slide 113: Investment spotlight: Tysons Galleria
Investment spotlight: Tysons Galleria – McLean, VA Largest and most productive assortment of luxury retail in the Washington Metropolitan Area (sales of $2,088 per sf1) 2022 2023 +76% $30M $110M Tenant Sales1 Increase Projected vs. Pre-Pandemic Sales Volume +45% +4.8% SS NOI Growth In-Place Rent Gro
Slide 114: Transitional & Development
Transitional & Development: Maximize returns through a development or buy-fix-sell strategy Alderwood Lilia Waikiki One Leadenhall Lynnwood, WA Honolulu, Hawaii London, UK $7B 180 51% 5 years Equity Value Properties LTV Lease Life 116
Slide 115: Investment spotlight: One The Esplanade – Perth
Investment spotlight: One The Esplanade – Perth, Australia 29-story mixed-use development Significant Value Realized Acquired in May 2019, sold 75% in 2020-21 5% cap rate $18M Record Sale for Perth Office Equity Invested1 $80M 978.3% Development Profit Gross IRR1 100% 5.5x Leased (15-Year Lease) Gro
Slide 116: Investment spotlight: Alderwood Mall
Investment spotlight: Alderwood Mall – Lynnwood, WA Redevelopment of vacant anchor box into a mixed-use asset with 328 market-rate apartments and approximately 80,000 sf of new retail Before: Vacant Sears Box After: Alderwood Multifamily Development Asset Name, Location Asset Name, Location Nov. 202
Slide 117: Residential: home building, lot sales and development
Residential: Create value through home building, lot sales and development of commercial zones $510M Canada Annual Operating Cash Flow* $1B 2,340 83K Annual Home Sales* Lots in 20 Markets United 2,330 States Annual Lot Sales* $2B 14% Return on Equity* * Figures represent LTM. 119
Slide 118: Real estate outlook
Real estate outlook ($ billions) Today 2028 Equity Growth Sales Reinvest Future Core $ 14 3 (5) 1 $ 13 T&D 7 0 (7) 1 1 Residential 3 0.5 (3) 0.5 1 Total $ 24B 3.5 (15) 2.5 $ 15B 120
Slide 119: In conclusion
In conclusion • Strong fundamentals and tenant demand • Short-term interest rates impact cash flows but not long-term values • We have a well-laddered debt maturity profile to weather market volatility • Real Estate will continue to generate compelling returns for Brookfield 121
Slide 120: Insurance Solutions
Insurance Solutions Sachin Shah, Chief Executive Officer
Slide 121: Executive Summary
Executive Summary • After three years, we have the base of a world class insurance business • There is a compelling macroeconomic backdrop for this business • We have built out the capabilities to scale from here • Access to BAM’s investment expertise is a key differentiator to delivering outsized r
Slide 122: Macroeconomic tailwinds for insurers
Macroeconomic tailwinds present significant growth opportunities for insurers 124
Slide 123: Over the next 20 years…
Over the next 20 years… $7T 50% >40% Shortfall in Increase in U.S. Of the elderly retirement 65+ population over population to be savings the next 20 years financially vulnerable 1. Source: Bloomberg. 125
Slide 124: Building a long-term yield plus growth business
We are building a long-term yield plus growth business 126
Slide 125: Distributable earnings and capital generation growing quickly
Our distributable earnings and capital generation are growing quickly 127
Slide 126: Our path to $100 billion in assets
Our path to $100 billion in assets positions us well $100B AUM $50B AUM $45B AUM Scaled Annuity Specialty P&C Platform $15B AUM Multi-line Direct Origination $2B AUM Reinsurance Pension Risk Transfer 2020 2021 2022 2023 2023–2024 128
Slide 127: Liabilities have an embedded cost advantage
Our liabilities have an embedded cost advantage ~ 10 < 4% < $100K year average life average cost of funds average account size 1. See Notice to Recipients and Endnotes, including endnote 13. 129
Slide 128: Maintaining a low risk profile
While maintaining a low risk profile A/A- $30B BBB+ Rated operating Liquidity Investment Portfolio platform1 Benefitting our Policyholders 1. S&P, Fitch, AM Best. 2. See Notice to Recipients and Endnotes, including endnote 13. 130
Slide 129: Our asset base is turning over quickly
Our asset base is turning over quickly Assets Liabilities ~ 4 years ~ 10 years 131
Slide 130: At the perfect time...
Brookfield At the perfect time...
Slide 131: The rate environment is highly constructive
The rate environment is highly constructive Rates are Credit is an Banks continue normalizing attractive asset class to retreat 133
Slide 132: Leading Investment Franchise aligned with Insurance
We have the leading Investment Franchise perfectly aligned with Insurance Infrastructure Real Estate Credit That generates over $50 billion of proprietary credit deal flow annually 134
Slide 133: Our credit franchise is growing
Our credit franchise is growing • Public Credit • Performing Credit • Core Real Estate • Land Leases • Real Estate Senior Credit • Opportunistic Credit • Core Infrastructure • NAV Lending • Infrastructure Senior Debt • Direct Lending • Core-plus Infrastructure • Royalties • Credit Secondaries • Cons
Slide 134: Driving market leading investment yields
Driving market leading investment yields Assets $100 billion Investment yield ~6% Costs ~4% Spread 2% Annual cash yield $2 billion Which we should be able to achieve by 2026 1. See Notice to Recipients and Endnotes, including endnotes 5 and 13. 136
Slide 135: To summarize where we are today
To summarize where we are today • The business we have today has $100 billion in assets and can generate $2 billion of Distributable Earnings in the near term • We have an unparalleled investment franchise to deploy the capital • A highly scalable operating platform to deliver future growth • Low
Slide 136: Still in the early stages of our growth plan
PLUS, we are still in the early stages of our growth plan 138
Slide 137: Market leading annuity engine driving organic growth
We have a market leading annuity engine driving our organic growth Leading annuity platform Operating synergies Best-in-class claims management Trusted brand recognition Repeatable annual annuity franchise 139
Slide 138: Writing $20 billion of long-duration annuities annually
We can write $20 billion of long-duration annuities annually with our in-house platform and operational capabilities $10–12 $20+ Run-rate annuity generation1 Brookfield capabilities 1. See Notice to Recipients and Endnotes, including endnotes 5 and 13. 140
Slide 139: Growth self-funded through reinvestment of earnings
Which can be self-funded through re-investment of earnings $2B 10x $20B Run-rate Initial Annual distributable insurance self-funded earnings1 leverage growth Operations can support $100 billion of net new assets in five years 1. See Notice to Recipients and Endnotes, including endnote 5. 141
Slide 140: Growing assets through organic and inorganic channels
The foundation is in place to significantly grow our assets through organic and inorganic channels $20B $10-15B $10-15B In net annuity PRT Large-Block sales annually Reinsurance $100B Reinsurance Self-Funded Growth Capital 1. See Notice to Recipients and Endnotes, including endnote 5. 142
Slide 141: Setting the business up to more than double again
Setting the business up to more than double again 143
Slide 142: Contributing over $5 billion of Distributable Earnings
Contributing over $5 billion of Distributable Earnings $5B $4B Reinsurance & Other $2B Annuities $1.2B Argo Asset AEL Rotation 725 Today Today 2030 2030 Fully Ramped Self-Funded Total ~2026 1. See Notice to Recipients and Endnotes, including endnotes 5 and 13. 144
Slide 143: Brookfield Reinsurance will contribute value to BN
Brookfield Reinsurance will contribute significant value to BN for decades 145
Slide 144: Positioned to drive outsized returns and a strong multiple
Our business is positioned to drive outsized returns which should result in higher quality earnings and a strong valuation multiple Stable, recurring investment income Predictable, low risk liabilities Diversified source of earnings Perpetual capital Significant, self-funded growth Supporting a 15x
Slide 145: Strategic initiatives drove a meaningful value uplift
Our strategic initiatives have driven a meaningful value uplift $8B $18B June 30, 2023 Pro-forma known acquisitions 1. See Notice to Recipients and Endnotes, including endnotes 3 and 7. 147
Slide 146: Business profile supports a compelling value proposition
Our business profile supports a compelling value proposition Pro-Forma 2026 2030 Earnings $ 1.2B $ 2B $ 5B Multiple 15x 15x 12x Valuation $ 18B $ 30B $ 60B Per BN share $ 11 $ 19 $ 37 Which we believe is ascribed little value in BN's share price today 1. See Notice to Recipients and Endnotes, includ
Slide 147: A market leading insurance franchise in a few short years
In a few short years, we have created a market leading insurance franchise • Grown from zero to $100 billion in assets • Have a credible path to $2 billion of DE • Redeployed assets to earn attractive returns on BN’s invested capital • Established a platform that can self-fund significant growth
Slide 148: Brookfield
Brookfield
Slide 149: Thank You
Brookfield Thank You
Slide 150: Endnotes
Endnotes 1. Our outlook on the equity value and respective shares of Brookfield is based on (i) net generated carried interest, (ii) a 10x multiple to net target carried interest, as adopted by management in its business planning, and (iii) our accumulated unrealized carried interest balance. 2. The
Slide 151: Endnotes
Endnotes 10. Performance metrics are presented for flagship and predecessor funds along with similar strategies and do not include all Brookfield or Oaktree funds. Composite returns presented are calculated by aggregating total cash flows of such funds, using the same information used to calculate t
Slide 152: Notice to Recipients
Notice to Recipients INVESTOR DAY 2023 – NOTICE TO RECIPIENTS Brookfield is not making any offer or invitation of any kind by communication of this document to the recipient and under no circumstances is it to be construed as a prospectus or an advertisement. Except where otherwise indicated herein,
Slide 153: Notice to Recipients (cont'd)
Notice to Recipients (cont’d) Where this presentation refers to growth in fee-related earnings, growth is in accordance with growth in fee-bearing capital. The management fees for BEP are based on fixed fees on initial capitalization and an additional fee of 1.25% on the amount in excess of initial
Slide 154: Notice to Recipients (cont'd)
Notice to Recipients (cont’d) CAUTIONARY STATEMENT REGARDING PAST AND FUTURE PERFORMANCE AND TARGET RETURNS Past performance is not indicative nor a guarantee of future results. There can be no assurance that comparable results will be achieved in the future, or that future investments or fundraisin