Brookfield Q1 2024 Earnings Call Transcript

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Provided by Quartr
May 9, 2024

There are 9 speakers on the call.

Operator

Hello, and welcome to the Brookfield Corporation First Quarter 2024 Conference Call and Webcast. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. I would now like to hand the conference call over to our first speaker, Ms. Angela Yullo, Vice President.

Operator

Please go ahead.

Speaker 1

Thank you, operator, and good morning. Welcome to Brookfield Corporation's Q1 2024 Conference Call. On the call today are Bruce Flatt, our Chief Executive Officer Nick Goodman, President of Brookfield Corporation and Sachin Shah, Chief Executive Officer of our Wealth Solutions business. Bruce will start off by giving a business update, followed by Nick, who will discuss our financial and operating results for the quarter. And finally, Sachin will provide an update and the outlook for our Wealth Solutions business.

Speaker 1

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 ask that you refrain from asking more than 2 questions. I'd 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 Canadian and U. S. Securities laws.

Speaker 1

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 impacts on our company, please see our filings with the securities regulators in Canada and the U. S. And the information available on our website.

Speaker 1

And with that, I'll turn the call over to Bruce.

Speaker 2

Thank you, Angela, and welcome to everyone on the call. We generated strong financial results in the Q1 with distributable earnings before realizations of $1,000,000,000 for the quarter and $4,300,000,000 for the last 12 months. This represented an increase compared to last year of 10%. The outlook remains strong with each of our underlying businesses continuing to execute their respective business plans, driving organic earnings growth supplemented by strategic acquisitions. Of note, our Wealth Solutions business reached a significant milestone through its recent acquisition of American Equity Life or AEL.

Speaker 2

Our asset management business announced an important investment in Castle Lake, further enhancing our asset backed lending capabilities. And our operating businesses continue to deliver resilient earnings backed by strong demand for their high quality assets. Sachin Shah, the CEO of our Well Solutions business is with us today and will spend more time on the AEL transaction in his remarks. Since the start of the year, we repurchased over $700,000,000 of our shares at excellent prices and we continue to allocate capital to share repurchases enhancing the value of each of your remaining shares. Shifting briefly to the markets.

Speaker 2

The macro environment continues to normalize with interest rates expected to have peaked and inflation beginning to cool, liquidity has returned to capital markets. Most major economies in the world are performing better than anticipated and risk appetite has come back to most markets. With conditions less restrictive, it appears that we are in a more stable and constructive market than in the past couple of years. With this backdrop, transaction volume is picking up, in particular for high quality businesses and assets of the type that we own. This enabled us to advance a number of monetization initiatives, which Nick will touch on in his remarks.

Speaker 2

At the same time though, we see we anticipate seeing investment opportunities from companies with balance sheets and capital structures that cannot withstand this more normalized rate environment. With a record $150,000,000,000 of capital to deploy, this should be an excellent period for us also to invest. Turning to the performance of our business today. Our advantage of scale, our global platform and our operating capabilities combined with the synergies across our Brookfield ecosystem make our franchise stronger and more resilient than it has ever been. The compounding of all of these factors enables us to achieve strong and stable financial returns throughout market changes and we've always found that this is the safest way for long term wealth.

Speaker 2

In terms of generating and earning returns, we offer a few comments on the many ways to make a good return for stakeholders. As we own and build the backbone of the global economy, there generally are 3 main drivers of performance for private investors like us. The first is margin expansion and growing a business. In other words, earning more by running a business well. The second is multiple expansion.

Speaker 2

For instance, convincing someone of the long term benefits and having built the business getting a higher multiple than you paid for an income stream. And lastly, adding more financial leverage, which amplifies returns by having the excess return earned on a smaller amount of equity. Most of the returns on our investments come from managing our business as well and growing the underlying cash flows. In addition, we have found that the safest way to earn good returns is through finding businesses that can continuously deploy capital in a more productive way, grow their operations and also operate in a cost disciplined fashion, therefore expanding margins. As the era of free money diminishes, running businesses better through operating capabilities is becoming increasingly relevant to differentiating reasonable returns from excellent returns.

Speaker 2

This drives our approach to continuously growing our operating teams and assisting our underlying businesses to be better and improve. In summary, we continue to execute on our business plans and growth initiatives, differentiating ourselves through our significant amount of deployable capital, global scale and the deep operating expertise I just mentioned. As always, we remain focused on generating strong returns and compounding wealth over the long term for shareholders. Thank you as always for your continued support and interest in Brookfield. And with those comments, I'll turn the call over to Nick.

Speaker 3

Thank you, Bruce, and good morning, everyone. Results for the Q1 were strong as our businesses continued to generate stable and growing cash flows. Distributable earnings or DE before realizations were $1,000,000,000 or $0.63 per share for the quarter and $4,300,000,000 or $2.70 per share over the last 12 months. This represents an increase of 10% per share over the prior year after adjusting for the distribution of 25% of our manager in December 2022. Total DE was $1,200,000,000 or $0.77 per share for the quarter and $4,900,000,000 or $3.07 per share over the last 12 months with net income of $5,200,000,000 over the same period.

Speaker 3

And starting with our operating performance, our asset management business generated distributable earnings of $621,000,000 or $0.39 per share in the quarter and $2,500,000,000 or $1.58 per share over the last 12 months. We continue to see strong demand for our private fund strategies with total inflows of $20,000,000,000 in the Q1. Fee bearing capital was $459,000,000,000 as of March 31, 6% higher than 12 months ago with fee related earnings in line with the prior year quarter. We recently announced the acquisition of a majority stake in Castle Lake, a premier asset backed lender focused on aviation, specialty and real estate finance, broadening our presence in asset backed lending. We expect fundraising to build throughout the year, leading to strong growth in earnings.

Speaker 3

Our Wealth Solutions business had a strong quarter, continuing to generate stable and growing long dated annuity like cash flows. Distributable operating earnings were $273,000,000 or $0.17 per share in the quarter and $868,000,000 or $0.55 per share over the last 12 months. And the average cash yield on our capital today is 18%. As at the end of the quarter, the average cash yield on our investment portfolio was 5.7 percent, approximately 2% higher than the average cost of capital, which has a duration of 10 years on average. Sachin will speak to our Well Solutions business in more detail.

Speaker 3

However, it is worth emphasizing that with the close of AEL in May, our annualized earnings are now approximately $1,400,000,000 and we are on track to grow annual earnings to approximately $2,000,000,000 driving significant cash flow growth at the corporation. Through our combined wealth solutions platforms, we continue to raise approximately $800,000,000 a month from retail products for high net worth and mid market clients. And we remain on track to reach over $1,500,000,000 of monthly retail flows in aggregate or close to $20,000,000,000 annually. Our operating businesses continue to deliver stable cash flows, generating distributable earnings of $337,000,000 or $0.21 per share in the quarter and $1,500,000,000 or $0.95 per share over the last 12 months. Cash distributions are supported by the resilient and high quality earnings across our businesses.

Speaker 3

In our Real Estate business, we continue to see the outperformance of our high quality assets in an increasingly bifurcated market, Specifically in our core portfolio, same store net operating income grew by 5% over the last 12 months and occupancy levels remain at 96%. In the quarter, we signed over 7,000,000 square feet of office and retail leases. Focusing on our office portfolio, leasing spreads increased by 14% in the quarter, and our leasing activity remains robust. A few examples of our leasing activity include 233,000 Square Foot Leased in Toronto 179,000 Square Feet in New York and 211 Square Feet between London and Berlin. In addition, a large office tenant recently announced it will be extending its long term lease at New York.

Speaker 3

And looking ahead, our office leasing pipeline remains strong at roughly 1,000,000 square feet. While in our retail portfolio, leasing activity continues to trend positively with leasing spreads of 15%. Overall, we see many tailwinds for the earnings and valuations in our Real Estate business with core operating cash flows continuing to grow. Interest rates and inflation peaking and expected to come down, financing spreads tightening and transaction activity picking up. In our Renewable Power and Transition business, we continue to see robust demand for clean energy with accelerated global trend of digitalization.

Speaker 3

Subsequent to the quarter, we signed a landmark agreement with Microsoft to deliver over 10.5 gigawatts of new renewable energy capacity between 2026 2,030 through the development of projects in the U. S. And Europe to support Microsoft data center growth. Now turning to monetizations. Across all our businesses, we are very active on a number of sales processes.

Speaker 3

With transaction volume picking up, we're seeing a flight to quality with buyers focused on the highest quality businesses and assets. We recently announced the sale of a 49% stake in a premier office asset in Dubai, generating an above hurdle return. We're also progressing the sales of a hotel at our premier mixed use complex in Seoul, Korea, a fiber platform in France and a road fuels operation in Europe. Most importantly, substantially all sales were completed or expected to be agreed at prices in line with our carrying values. In addition, we are advancing a significant pipeline of renewable asset sales targeting $3,000,000,000 of proceeds in aggregate this year at attractive returns.

Speaker 3

Over the last 12 months, we recognized $547,000,000 of net realized carried interest into income. We also generated $1,700,000,000 of unrealized carried interest, increasing our total accumulated unrealized carried interest to $10,100,000,000 of which $9,100,000,000 is directly owned by the corporation. And with our asset sales pipeline active, we expect to realize additional carried interest into income through the remainder of the year. Shifting to our balance sheet and liquidity. We continue to maintain a conservatively capitalized balance sheet and high levels of liquidity.

Speaker 3

Today, we have a record $150,000,000,000 of deployable capital, enabling us to invest opportunistically and at scale. Liquidity coming back to the capital markets, we executed on approximately $40,000,000,000 of financings across the group over the last few months. Notable highlights would include: At the corporation, we issued $750,000,000 of 30 year bonds to enhance liquidity. The offering saw the highest demand from investors we've ever seen and speaks to the significant appetite for quality and duration in the market today. In addition, our corporate credit rating with S and P was reaffirmed to A3 and A- respectively.

Speaker 3

In our Real Estate business, we completed close to $15,000,000,000 of financings, including $4,000,000,000 in our office portfolio. As an example, we executed on $2,000,000,000 of debt at our Premier Mixed Use Complex in Seoul, Korea. We've repriced approximately $12,000,000,000 of financings across 6 portfolio companies, extending duration and reducing spreads by 40 basis points on average. And lastly, our Renewable Power and Transition and Infrastructure businesses executed on key financings, including the issuance of $3,850,000,000 of investment grade bonds as part of our partnership with Intel for their semiconductor facility in Arizona with the issuance being heavily oversubscribed. These financings emphasize the continued demand from lenders for transition and digitalization opportunities.

Speaker 3

Moving on to capital allocation. We reinvested our excess corporate cash flow back into our businesses and returned $626,000,000 to shareholders through regular dividends and share buybacks in the quarter. To date this year, we repurchased over $700,000,000 of shares in the open market, adding approximately $0.50 per share of value to each remaining share. And we will continue to allocate capital for further share repurchases should prices remain attractive for us. Overall, we have had an active start to the year, delivering strong financial results and executing well on our strategic plans.

Speaker 3

As we look ahead over the course of 2024 and beyond, we expect that the continued momentum in our financial performance combined with our record level of deployable capital sets us up to grow earnings and enhance value even further. With that, I'm pleased to confirm that our Board of Directors has declared a quarterly dividend of $0.08 per share payable at the end of June to shareholders of record at the close of business on June 13, 2024. I thank you for your time and I'll now pass the call over to Sachin.

Speaker 4

Thank you, Nick, and good morning, everyone. With the recent close of the acquisition of AEL, we thought it was worthwhile to provide an update on our Wealth Solutions business and its outlook going forward. As many of you know, we launched Brookfield Reinsurance in late 2020 to focus on annuities and retirement income at a moment in time when historically low rates presented a unique opportunity to learn the business and potentially meaningfully benefit if rates gradually normalized to higher levels. Our strong capital position, decades of investment experience and deep operating capabilities positioned us well to build a scale business as demand for retirement income was on the rise. As we set out to build the business, our focus as always was on compounding capital at 15% to 20% returns on equity over the long term, while managing downside risk.

Speaker 4

Today in the United States, there is a significant shortfall in retirement funding for aging populations to the tune of a $7,000,000,000,000 deficit. There are approximately 60,000,000 people in the U. S. Who are 65 years or older, representing 1 out of every 6 people. 100 years ago, that number was 1 out of every 20 people.

Speaker 4

And over the next 2 decades, the U. S. Will add another 25,000,000 people to that aging cohort. Accordingly, as the population gets older in the Western world, the retirement deficit that exists today will only compound. Furthermore, less than 50% of U.

Speaker 4

S. Workers qualify for retirement benefits through their employer, putting significant pressure on government entitlements. As a result, the demand for private sector solutions that provide stable annuity like income for an aging population are not only large today, but will grow well into the future. Accordingly, in 2023, record annuity sales surpassed $385,000,000,000 in the United States. Our business today is primarily focused on long duration fixed annuity and pension products, where we provide a fixed rate of return to individuals for a predictable number of years.

Speaker 4

These products help individuals plan for retirement, manage and protect their wealth, and ensure they have a stable income source well into the future. These products also have a very stable and predictable profile for us, allowing us to focus on investment returns rather than insurance outcomes. As we have built out our business, we have maintained this core principle, where our products are designed to provide long term stable income to individuals and a predictable profile to us, which then allows us to utilize our investment capabilities to generate consistent excess spreads. The stable profile of individual income requirements and the long dated nature of our investments ensures our earnings are highly predictable and very cash flow generative over a very long period of time. In effect, we are leaning on the skills that have made us successful for decades, while generating stable and growing utility like earnings, similar to the earnings generated by our other Brookfield businesses.

Speaker 4

3 market differentiating capabilities unique to Brookfield continue to underpin our business. 1st, Brookfield Asset Management's leading investment franchise sees over $50,000,000,000 of credit opportunities across Brookfield's ecosystem annually. These investment products are ideally suited to insurance balance sheets due to their low volatility, capital efficiency and stable returns. And importantly, our Wealth Solutions business and the credit business within Brookfield Asset Management complement each other and should grow in tandem, driving earnings and cash flow generation. 2nd, Brookfield Corporation has $155,000,000,000 permanent capital balance sheet, underpinned by its long term approach to investing capital, earning attractive risk adjusted returns with downside protection and not taking undue risk with capital.

Speaker 4

We've applied the same philosophy to growing our Wealth Solutions business. Our $8,000,000,000 of equity capital within Brookfield Reinsurance has been invested from Brookfield Corporation's balance sheet, providing 100 percent alignment with insurance policyholders, distribution partners and other stakeholders. And third, our operational expertise. Historically, we have been successful across Brookfield when we manage operations to lower risk and drive growth. In this case, that approach led us to quickly being more than just a financial investor and focused us on building out our own direct policy origination platform.

Speaker 4

The ability to get closer to customers, create new products, manage risk and align business initiatives to our long term objectives supports our ability to deliver high teens returns and compound capital over the long term. Our progress in building out the business took its first major step in 2022 through the acquisition of American National, a writer of premiums across life, annuity and property and casualty product lines. At the time of our acquisition, American National had never sold more than $1,000,000,000 of annuities in any year of its 100 year operating history. Following our acquisition, we focused the business through strategically exiting a number of non core product lines, optimizing the investment portfolio and improving capital efficiency. In our first full year of operations, we sold over $6,000,000,000 of annuities out of American National.

Speaker 4

In 2024, we are targeting $11,000,000,000 of annuity and pension origination. Today, our investment is realizing over 20% returns on invested equity and our growth prospects are tremendous. To further scale and diversify our capabilities, we recently completed the acquisition of American Equity Life. Although we only closed last week, we have hit the ground running to integrate the business seamlessly into our broader operations. We have improved AEL's credit rating given our financial strength, and we are positioned to record the highest annuity sales in the company's history over the next 12 months.

Speaker 4

With the acquisitions we have made over the last few years and our organic growth, we have built the business into one of the leading providers of annuities and pensions in the U. S. We now have over $110,000,000,000 of diversified insurance assets and the capability to originate over $20,000,000,000 of annuity sales annually in the near term. Our business today generates approximately $1,400,000,000 of annualized earnings on $8,000,000,000 of invested capital. As we optimize and reinvest the asset portfolio, we expect earnings to grow significantly from here as our portfolio today has over $25,000,000,000 of cash and shorter duration financial assets.

Speaker 4

And as we reinvest these assets over the next 18 to 24 months, the existing business is on track to surpass $2,000,000,000 of cash earnings annually. Applying a conservative multiple to these long dated annuity like cash flows, we believe we have built a business and a franchise that is worth in excess of $20,000,000,000 Given our scaled operational capabilities and significant embedded growth, combined with our M and A capabilities, we see a credible path to once again doubling this business over the next 5 years as we continue to target 15% to 20% returns on our equity compounding over the long term. With that, I will turn the call back over to the operator

Operator

Our first question comes from the line of Mario Saric with Scotiabank. Your line is now open.

Speaker 5

Good morning and thank you for taking my questions. The first one is maybe for Nick, just on carried interest and realizations. Nick, on the last call, you talked about realized carry maybe being in the $400,000,000 to $500,000,000 range for 2024, fairly consistent with 2023. Q1 was off to a surprisingly solid start at just shy of 200,000,000 with the language suggesting transaction markets should continue to improve. So I guess the question is, is 400,000,000 to 500,000,000 still a reasonable range?

Speaker 5

Or can we see BN exceed that level?

Speaker 3

Mario, good morning. Yes, I think it's still a reasonable range. We expected it to be a little bit front loaded this year just given monetizations and where they're coming from and in which funds. So I would still work off that previous level we gave you.

Speaker 5

Okay. And then my second question just on real estate debt. I think you mentioned $15,000,000,000 of refinancing was highlighted. Can you talk about what you've seen in terms of spreads on both the unsecured and secured market quarter over quarter for the types of assets that you're looking to refinance as well as kind of lender appetite in terms of where LTVs are going?

Speaker 3

Yes, sure. I would say as a general comment, liquidity in the capital markets has been very strong to start the year. We highlighted a number of financings, but we are continuing to execute very strong financings across the business every day. And I think when you're bringing high quality assets to the market, the bid is very strong and especially when people are looking for duration backed by long duration cash flows. In real estate specifically, it's been a really strong start to the year I think in the market in the U.

Speaker 3

S. There's more CMBS issued already this year than in totality in last year. We've seen demand strong across the spectrum. Retail very strong multifamily logistics and all those kind of assets industrial and we're starting to see the bid improve for office as well. We've seen some office assets start to come into conduit CMBS for the highest quality real estate.

Speaker 3

So we're starting to see the liquidity and appreciation of the bifurcation of office and the demand for debt on high quality real estate improve. So spreads have tightened, I'd say across the board, I'm not sure LTVs are drifting that much higher, but demand is definitely stronger across the capital stack. But the flow of demand for the AAA is driving down the spreads and that helps the overall cost. So I would say generally we see spreads continue to tighten. But more importantly, we're seeing the demand depth being there, which is supporting refinancings and will start to support transaction volume in the U.

Speaker 3

S. Outside of the U. S, the markets are very strong. We did $2,000,000,000 financing in Korea, which is predominantly office, the $600,000,000 office financing in Perth, Australia. So I would say that demand and depth of appetite for real estate across the spectrum, including office continues to be very robust globally.

Speaker 5

Great. Okay. Those are my 2. Thank you.

Speaker 3

Thank you.

Operator

Thank you. Our next question comes from the line of Ken Worthington with JPMorgan. Your line is now open.

Speaker 6

Hi, good morning and thanks for taking the question. Part of the Brookfield game plan has been to monetize the non core part of the real estate holdings. And the thought was this could be done over say like a 5 to 7 year period. Nick, you and Bruce called out this morning the improving conditions. You called it the monetizations that you're executing on.

Speaker 6

How do you see the monetization picture developing for what you'd previously called out as those non core balance sheet investments versus how you're seeing the Brookfield funds monetize given the difference in the investment mix? And I guess the follow-up would be, is AEL going to be a factor in terms of the monetization picture going forward?

Speaker 3

Yes. So let me address the different parts of that Ken and maybe I'll start with insurance first. I think we've identified that the core real estate that we own, the top 35 office and retail assets that we want to own all of a portion of a very long time, which are truly some of the best real estate in the world with long duration cash flows, high quality assets. Those are perfect assets for insurance companies to look to own. So as we think about the long term ownership of the core, I wouldn't just say AEL, but the Broadwell Solutions insurance platform will play a part in that and we expect to make progress on that in the next 12 months.

Speaker 3

As it speaks to monetizations, yes, liquidity and transactions has started to pick up. We sold an office building in Brazil. So it's not specifically assets outside of office, but we're seeing capital markets improve, liquidity improves and that supports transactions. Office in the U. S.

Speaker 3

Maybe has a little bit more time to go before transaction activity really picks up and that will be supported by the improved liquidity in the capital markets. But our outlook for that hasn't changed and our strategy is the same.

Speaker 6

Okay, great. Thank you very much.

Operator

Thank you. Our next question comes from the line of Cherilyn Radbourne with TD Cowen. Your line is now

Speaker 7

Cowen. Good morning. I wanted to start with a question on Wealth Solutions, so probably for you, Sachin. In the letter, you mentioned further growth through pension risk transfer and international expansion. So I was hoping you could touch on the current environment for pension risk transfer deals and comment on some of the complexities and opportunities associated with international expansion.

Speaker 4

The pension markets both in the U. S. And the UK are very strong. The UK has been at it now probably for about 6 or 7 years where every year you get a very large set of pensions coming off corporation balance sheets into private hands. And as a result, we've seen very meaningful growth in some of the pension aggregators in the UK.

Speaker 4

But there is still probably 20 years and close to $1,000,000,000,000 of pensions that have to come off corporation balance sheets in the UK alone over that next 2 decade period. So we see tremendous growth there and it's a market where we think given our asset origination and what's called matching adjustment in the UK, we could be highly successful. The U. S. Is much earlier in their transition from pension sitting on corporate balance sheets.

Speaker 4

And so I think we have not only a longer runway, but given the scale of U. S. Companies, even a larger volume of pensions that will come off. All that being said, we started building out our U. S.

Speaker 4

Pension business last year. We in the last 12 months have done $3,000,000,000 of U. S. Pensions in terms of transactions that we've won. And we're still just in the very early days.

Speaker 4

I think that's a business that can comfortably scale to $7,000,000,000 to $10,000,000,000 a year in the U. S. For us. And in the UK, we're in the process of getting licensed. We should be at a position by the end of the year where we're actually bidding on transactions.

Speaker 4

And similar to our U. S. Strategy, we'll start small and eventually migrate into the larger transactions.

Speaker 7

That's great color. Thank you. And then just in terms of capital allocation during the quarter, we noticed that there was just over $450,000,000 that was reinvested back into the operating businesses. Can you give us some color as to what that went towards?

Speaker 3

Yes, for sure, Cherilyn. So that was, as you say, capital allocation. So taking the consolidated cash flow that we have, we use that to retire corporate bonds within BPY, which I think we've talked about in the past, deleveraging that corporate balance sheet as a capital allocation decision when we weigh up that against other things we can do. So that's where the cash went in the quarter.

Speaker 7

Perfect. That's my 2. Thank you.

Speaker 3

Thanks, Sharon.

Operator

Thank you. Our next question comes from the line of Geoffrey Kwan with RBC Capital Markets. Your line is now open.

Speaker 8

Hi, good morning. The discount to NAV remains wide, but it has narrowed meaningfully in the past couple of quarters. And just given your outlook for capital deployment, how has that changed your appetite for share buybacks, with given where the discount is today?

Speaker 3

Jeff, I think it remains the same. We have complete conviction not only in the intrinsic value of the business, but if you listen to all the remarks today, the growth potential and the tailwinds that we have across the franchise, we still see tremendous growth from here today. So we still see buybacks being a very attractive use of our capital. We weigh that up against other opportunities that we have and we have lots of strategic initiatives going on in the organization, a couple executed recently, which are all highly additive to the franchise, but they're just as attractive now as they've been over the last few months.

Speaker 8

Okay. And just my second question, maybe expanding on Ken's question on the T and D monetization. I mean, if we're looking at over the next 5 years, if we've seen the monetization market, call it opens up at some point this year, Do you see that monetization of the T and D portfolio as you've got a, I don't call it a material amount of the portfolio that could get monetized kind of call it out of the gate? Or is it something that maybe a little bit more back end loaded thinking about that profile?

Speaker 3

Listen, Jeff, I think we'll just take it as the market comes. To be clear, T and D still is good real estate. These are good assets. We're comfortable owning them. And when the transaction market improves, if transactions are at levels that are attractive, we'll look to monetize.

Speaker 3

We think over the next 5 years that market will be there. But we're under no pressure to do this. And when you think about it in the context of the overall business of Brookfield, this is not a material driver to us achieving our strategic objectives. This is about rightsizing the business over time and we'll do it when it makes sense. So that's how I'd summarize the approach.

Speaker 5

Okay. Thank you.

Operator

Thank you. I would now like to turn the call back over to Ms. Angela Yulo for closing remarks.

Speaker 1

Thank you everybody for joining us today. And with that, we'll end the call.

Operator

This concludes today's conference call. Thank you for participating and you may now disconnect.

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Earnings Conference Call
Brookfield Q1 2024
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