BN Q1 2026 Conference Call & Webcast

Good day, and welcome to the Brookfield Corporation First Quarter 2026 Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Ms. Katie Battaglia, Vice President, Investor Relations. Please go ahead.

Thank you, Operator, and good morning. Welcome to Brookfield Corporation's first quarter 2026 conference call. On the call today are Bruce Flatt, our Chief Executive Officer, Nick Goodman, President of Brookfield Corporation, and Sachin Schell, Chief Executive Officer of our Wealth Solutions business. Bruce will start it off by giving a business update, followed by Nick, who will discuss our financial and operating results for the quarter, and finally, Statkin will provide an update on our Wealth Solutions business. After our formal comments, we will 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 meanings of applicable Canadian and U.S. security laws. These statements reflect predictions of future events and trends and do not relate to historic 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. In addition, when we speak about our Wealth Solutions business or Brookfield Wealth 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, Katie, and welcome everyone on the call. We had a strong start to the year. Distributable earnings were $1.6 billion for the quarter and $6 billion over the last 12 months. More importantly, it also looks like the business will get stronger over the year. Our businesses performed well, and we continue to execute against initiatives which will drive our next phase of growth. Our asset management business delivered strong earnings growth supported by continued fundraising momentum across our institutional client base. Our operating businesses generated stable cash flows backed by resilient underlying fundamentals. Our Wealth Solutions business performed well as it continues to scale globally. In April, we closed the acquisition of Just Group, a leading pension risk transfer platform in the UK. This increased total insurance assets by $40 billion, and we're now heading to $200 billion, and strengthens our position in one of the world's most active, attractive retirement markets. Nick will cover our financial results in more detail, and Sachin will spend more time on Just Group and the continued growth of our Wealth Solutions business. Before that, I would note that the current environment has had no shortage of macro developments competing for investors' attention, from geopolitics to trade issues, inflation, and interest rates. And while these factors are important to monitor, they often receive far, far more attention than their long-term impact warrants. Bottom line, we largely try to ignore them when building our business. This is particularly true in periods when capital flows, sentiment, and prevailing market narratives influence price, which can increase the impression that the business fundamentals have changed, when in most cases, they have not. Value, on the other hand, you all know, is determined by the cash flows of a business that it generates and management's ability to reinvest that capital at attractive returns. Our role as investors is to capitalize on attractive entry points to acquire good businesses for value, operate them well, and allow compounding to work over time. Equally important is ensuring that compounding is not disrupted by being forced to act in detrimental ways during periods of market stress. This discipline shapes how we allocate capital and build our businesses. We take the time to watch an industry, learn how it works, invest in a measured way, refine a business model, and only then scale a platform. This allows us to make small mistakes while avoiding large ones. In our experience, successful businesses are not built quickly. They are built deliberately with the resilience to allow one to compound cash flows and create value through economic cycles. And by adhering to these principles, our shareholders have earned excellent compound returns over long periods of time. Over that same period, we've navigated many market environments. Each felt dramatic at the time, but the most important point is that each period of market disruption, in hindsight, had very little impact on long-term outcomes. Today, we believe many of the market distortions we are seeing are temporary and will moderate in the sectors we focus on. And while the current environment may feel volatile, it is ultimately constructive for businesses like ours. In addition, as uncertainty around growth and inflation rises, capital tends to shift towards high-quality cash-generative assets, an environment that favors real assets, which we are specialists in. We are now seeing large flows of funds due to the halo effect, that's hard assets, low obsolescence, and are seeing this across the board within our businesses. real estate is a good example of this sentiment is now catching up with fundamentals financing markets are much much stronger new supplies limited across our core markets and demand for the best assets continues to grow in office as an example replacement costs have risen significantly across our core markets. As a result, the rents required to justify new construction are well above, in many markets, double current market rents. This makes new supply very difficult to deliver, and with demand remaining strong, in fact, very strong for the best buildings and the best markets, rents continue to rise substantially. To put this in perspective, at Manhattan West, one of our super core assets in our portfolio, it would cost around $2,500 a square foot to build that same building today, compared to our cost of just over $1,000 a square foot. Fortunately, we started this at the depths of COVID in 2020, when few decided that they should build an office building. So we benefited in many ways due to our counter-cyclical investment. Our most recent lease there was signed at rents nearly three times higher than the first lease in the complex, and the financing recently completed cashed out approximately $400 million of net cash, which was due to the increase in value of the asset. This took our debt to almost the construction cost of the building, exemplifying the increase in cash flows since launching the building, and I'd note we continue to own the property. More important, despite rents and where they are, they actually need to go higher to justify a new tower like this being constructed today. And we're seeing the same dynamic play out across our global portfolio. Another example being one Leighton Hall in London, a brand new asset which we consider as core plus in our portfolio, was fully leased within six months of completion and achieved the highest rents ever in the city of London. With very limited new supply and demand for the best buildings continuing to grow, Premier assets are becoming increasingly scarce, and values are set to continue to rise. Capital markets are also beginning to recognize this as well. The aforementioned financing of 2 Manhattan West was $1.9 billion for a 10-year non-recourse mortgage with a 5.5% coupon and was done at 107 basis points spread to Treasury. Buyers looking for solid assets are moving back from software to real assets like these. Given all the drama in the news over the last five years, I will repeat that comment. The cash flows of this property allows us to complete a non-recourse investment-grade financing and generate real cash of $400 million from the property. This is the benefit of owning great real estate through cycles. as fundamental strengthens and capital markets improve, the embedded value of portfolios that was always there become increasingly evident. At the same time, uncertainty is increasing the urgency for companies and governments to reposition around AI, energy security, data sovereignty, and supply chain resilience. These priorities sit at the intersection of the themes we have invested behind for years, namely digitalization, decarbonization, and deglobalization. Of course, if you have followed us, these themes are not new. But they are more prominent today than ever, and the form they take continues to evolve, taking them in order. Digitalization started with fiber networks and telecom towers, then hyperscale data centers. Today, artificial intelligence is driving the next wave of demand through AI factories, which require enormous amounts of computing capacity and reliable power. Second, decarbonization. The opportunity is no longer just energy transition. It is energy addition. In plain English, that means more. Electricity demand is rising at a pace not seen in decades driven by electrification, reindustrialization, and digital infrastructure. Meeting this demand will require enormous amounts of new generation capacity with solar, wind, nuclear, and batteries increasingly well placed given one or all of their attributes. Being they're low cost, they can be deployed quickly or they have limited reliance on imported fuel. Last, degolization began as reshoring, manufacturing, and reorganizing supply chains. It has now evolved to include data sovereignty where governments and companies want critical data stored and processed within their own borders, leading to the build-out of domestic digital infrastructure, including large-scale data centers. We are working with major governments and enterprises around the world to help build this infrastructure. And while digitalization, decarbonization, and deglobalization will continue to evolve, each is driving significant long-term demand for new infrastructure. Our ability to provide scalable solutions across technologies and regions reinforces our position as a partner of choice. And with almost $200 billion of capital to deploy, together with what we expect to be a record fundraising year in 26, we are well positioned to scale these businesses. Thank you all for your continued support in Brookfield. I'll now turn the call over to Nick.

Thank you, Bruce, and good morning, everyone. Financial results were strong for the first quarter, underpinned by continued momentum across all of our businesses. Distributable earnings, or DE, before $4 billion, or 10% increase before realization. Total DE, including realizations, was lumped in the quarter, and $6 billion. Asset management business started the year strong, $65 million, $2.8 billion. The $40 billion investment mandate from just $2 million. That's our flagship and complementary strategies for the record year of fundraising in 2026. Our results also benefited from a gain on the partial monetization of one of our technology investments, $20 million of D&D, an innovation-driven that are positioned to benefit from major secular treasonously $1 billion at the pre-IPO mark, which is part of the $2 billion total investment. In his remarks, $30 million or $0.18 per share in the quarter and $1.7 billion or $0.71 per share over the last 12 months were driven by continued growth in our asset base, including $4 billion of annuity inflows during the quarter and the ongoing rotation of the portfolio into higher yielding investment strategy. Our P&C business also performed well, achieving a combined ratio of 99%, contributing to an overall reduction in our cost of funds. Businesses continue to deliver stable and resilient cash flows of $360 million, or $0.15 per share for the quarter, and $1.5 billion, or $0.65 per share, over the last 12 months. Operating funds from operations, equity, and energy businesses increased by 19% of the continued momentum in the underlying businesses and ongoing execution of each platform. quality-led, with tenants, lenders, and capital increasingly focused on the best assets in the store, 95% occupied, and we continue to sign new leases that rents material and limited new supply. In our retail portfolio, tenant consolidation and demand for our well-located, high-quality assets, and during the quarter, one point of leases globally, with average net rents 15% above 7,000 square feet of leases in the U.S. It rents more than double expiry in Canada. It rents 30% above expiring levels, including a 203,000-square fee. The leasing activity represents meaningful embedded up-site. Fundamentals remain here, period, primarily reflected the absence of a prior year gain on the sale of five master plan communities, as well as the delayed timing of certain losses. Activity remained active across most asset classes. During the quarter, we advanced seven partners Importantly, this transaction marks another step toward carried interest realisation for the fund and shows the resilience and dominance of the office portfolios we own. In the quarter, we realised $157 million of carried interest into income and ended the quarter with $11.8 billion of accumulated unrealised carried interest. We continue to expect with realisations ramping up in the second half of the year. Moving to capital allocation, during the quarter we returned $598 million of capital to shareholders through regular dividends and share buybacks. Year-to-date, together with BAM, we have repurchased over $1 billion of shares at very attractive $175 million to buybacks, enhancing the value of each. Capital markets remain constructive, with capital increasingly underpinned by essential services and real assets that generate predictable cash flows to $45 billion of financings across the franchise, including $15 billion in our real estate business. And we continue to maintain substantially capitalized balance sheet, providing significant flexibility to support. We want to briefly touch on our corporate simplification. Efforts to streamline our corporate structure, we are working toward combining the corporation on our wealth solutions business, creating a fully integrated insurance investment organization. The conversion of our listed private equity business entity earlier this year and the progress we have made in the infrastructure. When we establish Wealth Solutions, we see our listed affiliates, asset-based, greater access to approximately $145 billion of incremental capital from our permanent capital base will enhance capital efficiency and flexibility in optimizing our capital structure to support the continued expansion of the business over the long term. few other insurance businesses in the world have access to this scale of excess capital combined with deep investment capabilities across real assets we expect this will strengthen the certainty we provide to our policy holders and create significant long-term value for our shareholders we continue to work through the final details to implement the transaction and expect the board of the boards of directors of BN and BNT to conduct a final review in the coming weeks. We tend to see shareholder annual general meetings scheduled on July 6th. Altogether, we have had an active start while continuing to execute your performance to continue. And with that, I am pleased to confirm that our board of directors have declared a quarterly dividend of seven cents per share payable at the end of June.

We thought it would be worthwhile to provide an update and the outlook going. As we speak to you today, we have a scaled global $180 billion dollar investment-led insurance business focused on retirement and wealth solutions and a growing protection business. Our objective is to compound our capital at 15% plus returns over the long term while maintaining a disciplined approach to risk and generating stable, predictable earnings. Today, that opportunity we set out to pursue remains very large and continues to grow. Across developed markets, populations are aging, longevity is increasing, and the decline of defined benefit pension systems is driving significant demand for private sector solutions that can provide stable income. Trends are not cyclical, but rather structural, and they underpin a long runway for growth in our business. To grow our business, we have focused on originating long-duration, predictable liabilities, primarily annuities and pensions, and paired those with high-quality cash-flowing investments sourced through the Brookfield ecosystem, allowing us to generate consistent excess returns while maintaining low leverage and a high degree of earnings visibility. Our business today is as follows. First, in North America, our annuity platform, built through American National and American Equity, provides us with leading distribution capabilities across the retail and institutional annuity and pension channels, and the ability to originate significant volumes of long-duration predictable liabilities, longer dated than what we see across the industry today, continues to be a core driver of organic growth and earnings for BWS. In parallel, we have our U.S. property and casualty platform, or protection platform as we call it, through Clearbrook. Clearbrook adds an important element of diversification for us, allowing us to participate in specialty insurance markets with a low leverage profile, while also broadening our investment flexibility. The last few years, we have significantly improved this business by de-risking the liability profile and focusing on profitable growth. We have done this through exiting volatile lines, reducing our catastrophe exposure, and strengthening underwriting. As the P&C market sees pockets of softening, we believe there will be substantial opportunities for us to continue to scale this platform both organically and through M&A. In a recent addition of Just in the UK, we can extend our proven annuity track record into new geographies. This transaction represents a significant step forward in scaling our business internationally. The UK is one of the largest and most developed pension risk transfer markets globally, with substantial volumes, around 50 billion sterling annually, expected to come to market over the next decade. With the addition of Just, we now have immediate scale and a strong platform to build upon. This has operated for over 20 years, serving approximately 700,000 U.K. pensioners across institutional and retail policies, and the transaction adds approximately $40 billion of assets into VWS. This business is an attractive going-in return of approximately 10% to 12% on our $1 billion of invested capital, and we close this transaction on April 1st. From a strategic standpoint, our priorities following the close are very clear. First, we are focused on reinforcing and growing Just's core business lines, particularly in pension risk transfer and retail annuities, where the company has an established track record and a strong market position. Second, we will apply our investment-led approach to enhance returns by optimizing the asset portfolio and leveraging Brookfield's global origination capabilities. Today, the business has the ability to write approximately 5 billion sterling of pension flows annually, and we expect that to continue and grow, as capital support from our balance sheet and the redeployment into Brookfield-originated investments allows Just to be more competitive on large-scale transactions. Beyond the UK, we continue to make progress on our broader international growth initiatives. In Asia, we are in the early stages of building a presence in what we believe will become a very significant market over time. We executed our first reinsurance transaction in Japan in late 2025, and we are seeing growing interest from our counterparties who believe this channel, focused on long-duration, predictable liabilities, will represent an important driver of growth in the years to come. Now turning to the quarter briefly. Our business had $20 billion of regulatory capital supporting policyholders inside the insurance companies. In that regard, we had a strong quarter across our distribution channels and continue to see opportunities to write longer-dated policies at our target duration to match our real asset investment strategies. We originated approximately $5 billion of sales across long-dated retail annuities, funding-backed agreements, and pensions. We continue to expand our distribution capabilities, particularly through bank and broker-dealer channels. We recently launched our products on two major bank platforms, with more to come this year, which we expect will contribute incremental annual sales as these platforms typically seasonally slower, particularly in pensions, we expect activity to increase meaningfully as the year progresses and remain constructive on the outlook for 2026, where we expect to write circa $25 billion of new policies across all of our retail and institutional annuity channels. That being said, our approach to growth remains consistent. We remain disciplined in writing business that meets our target returns and aligns with our investment strategy. Our priority is not maximizing volume, but generating high-quality, durable earnings. We have a growing number of products and distribution channels, which gives us the unique ability to allocate capital towards the most attractive opportunities across channels, products, and geographies when one market becomes more competitive. On the investment side, we continue to leverage Brookfield's global platform to source high-quality opportunities and seeing attractive, risk-adjusted investments suitable for our – Over the last 12 months, we have deployed nearly $15 billion into Brookfield's strategies, including $4 billion in the most recent quarter at an average total return exceeding 10%, reflecting the benefits of our investment franchise and our stable, long-duration liability profile. Today, our business generates more than $2 billion of annualized earnings, and we remain confident in our ability to deliver at our mid-teens targets. We're very pleased with the progress we are making, and with the recent addition of just continued expansion across our core markets and a disciplined investment-led approach, we believe we are well-positioned to continue to scale this business while maintaining a high-quality and resilient. Thank you. With that, I will hand the call over to the operator for questions.

Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, press star 11 again. Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster. Our first question will come from the line of Sherilyn Radbourne with TD Cowan. Your line is open.

Thanks very much and good morning. So clearly issues in private credit and software have significantly affected the public share prices of the alternative asset managers. I'm just curious how much fundamental damage you think has been done and does that put on the cusp of further industry consolidation.

It's Nick. Listen, I think it's a fair question Bruce talked about, which is I think there are issues that are grabbing a lot of headlines. But in the scale of the broader investment markets, their materiality is low. So for sure, it's not a systemic broad issue in any way to broader markets and valuations. And I think the degree of relevance varies based on managers and their investment strategies. And I think that where you see price and value differentiate, they will prove out their investment posture, capabilities, and exposure. So I think for managers that are well invested around the right sectors like us with real asset exposure where performance is incredibly strong, I think you'll see that continue to differentiate over time and come through with the performance. And I think for us, when you take a step back, opportunity for our real asset strategies around AI and with the Oak Tree's discipline investment strategy and capabilities, we think this could be an attractive investment opportunity for us, and maybe over time it may create consolidation issues in the market or opportunities even for good managers, but I think this exposure will pass. There may be some that have some of those sectors and there are impacts, but I think for the best managers with good investment strategies, differentiate itself over time. But I think if you look at it as it relates to Brookfield, these are very immaterial asset classes to us based on our deliberate posture and our presence in AI is more around the backbone build out we have no software exposure and our credit portfolios performing incredibly well so for if anything we see this as just a continuation of our strategy and our performance should differentiate itself over time.

That's good detail. The other question we've been getting is around Brookfield's posture in the Middle East and and just how the war there is is impacting your LPs and investments in investment activity in that region?

Yeah, I think we've reiterated this at length recently, Sherilyn. We are absolutely committed to the region. These are tremendous countries with tremendous potential and some of our best partners in the LPs, and we remain absolutely committed. We continue to have constructive conversations with them around our investment strategies and their commitment to our funds. And predating this and continuing, we also continue to have discussions with them around investment into the region. So, again, we see this as a core part of our business over the long term and not impacted by the short-term volatility caused by the war.

Thank you for the time. That's my two.

And one moment for our next question. That will come from the line of Mario Saric with Scotiabank. Your line is open.

Hi, good morning, and thank you for taking the questions. Just I want to circle back on the proposed BN-BNT combination. I appreciate the circular is not out yet. It sounds like the boards are reviewing in the coming weeks. But do you have any initial sense regarding the range of potential tax implications for BN shareholders with respect to the options that you're considering?

I want to tell you that we are still working through the final details of the transaction as there's tax efficiency and the impact for shareholders.

My second one, you included a new slide in the supplemental discussing new business investments, including a billion dollars of SpaceX shares. You've talked in the past about technology-related spend. How should we think about the progression of that investment at the BN level over time?

Yeah, it's a good question, Mara. If I just take a step back, as you know, technology companies are increasingly moving into structure, be it power, you know, real estate, AI factories now through the AI fund and data centers. We are developing objects with the major technology companies, and that is enabling us to have access to, as in the Trash Report, have access to technology potentially that can create capabilities that could benefit the broader root field ecosystem, but by staying close to these technologies, they could be meaningful for our businesses over time. In terms of the size and the risk profile of what you see, And we're investing selectively where we think we have differentiated assets, strong partners or strategy that's highly attractive and good for the business. So I think of this as targeted allocations of capital to investments that have attractive financial returns and potential strategic value to the franchise. And just given the strong performance to date and hence the growth in size, we felt now was just a good time to call it out. moment for our next question.

And that will come from the line of Bart Ziazarski with RBC Capital Market.

Great. Thanks. And good morning, everyone. I wanted to ask with regards to Brookfield Wealth Solutions. So, you know, we're seeing the regulatory environment evolving, including recently the UKPRA looking at funded reinsurance agreements with Bermuda Captives. So maybe if you guys could talk us through higher managing regulatory capital as the environment evolves. Thanks.

$20 billion, in excess of $20 billion of regulatory capital that's inside the insurance Insurance companies that write policies is rated, generally operate about four times the regulatory minimum requirement of capital, and that's allowed us to gale because we're seen as a, on top of that, as you know, we have $180 billion of permanent capital sitting in BN, which has supported our growth and which acts as an incredible, if not often and talked about layer of additional protection. We're in great shape and we have a runway for years to come to be able to use that capital and grow the franchise. On your point on the UK, pushing back on Bermuda as a jurisdiction, I don't think it has a material impact to us, just doesn't use it today. And I would say the answer there is the UK, and even in Europe, migrating insurance liabilities and assets to the UK doesn't really provide much of a capital in light of Bermuda adopting rules that were consistent and so for the PRA to say you know we don't want you to use editors in that marketplace but certainly not for us because okay great very helpful thanks Sachin and then maybe just sticking with with insurance and on the just group so you talked about you

know you can write five billion of business annually today but you're looking to scale that could you unpack that opportunity a little bit I think there's there's a chance to move up market and maybe other areas you're looking forward to tap into that growth. Thanks. Sure.

So what Jess was very, and is very, very good at, is operating in small pension schemes, not highly competitive because of their size, and generating really attractive returns on those. And they built a franchise in and around small schemes. And we intend to continue that because there's not a lot of competition and you can pick up great returns. But with our capability to bring capital and investment expertise to their business, we think they can now move to the upper end of the market and write policies in excess of $500 million or in excess of a billion dollars, where again, there's less competition on both ends of the extreme spectrum. So in the very small policies and the very large policies, there just is less competition. And if we can play in both of those spots, we can pick up attractive returns. And in playing on the larger policies, we can bring a lot of the expertise we have from the U.S. and Canada into that market.

Great. That's helpful. Thanks for seeing the questions.

Thank you. One moment for our next question. And that will come from the line of Alex Blostein with Goldman Sachs. Your line is open.

Good morning, everyone. This is Michael on for Alex. I wanted to ask a quick question on the PNC business. So you've mentioned that you continue to exit parts of that business. We were wondering what the run rate D impact is after you fully rationalize those parts of the PNC business. How far along are you towards those goals? And then as a corollary, what are the capital implications of exiting those lines?

So I would say we have completed the quote-unquote exiting of lines. We exited Surety, our professional lines business. We exited last year on the business we had. and we really are careful on the property side because of – and we have a small and very stable admitted business. If I was to look ahead over the next five years, I think what we're seeing is as the property markets continue to soften and rate comes down, and as casualty markets are starting to show the first signs that we think our specialty business – one is we could be a very reliable counterparty to the broker-led market because we are in good shape, we have strong capital, and we have a track record now of profitability. And then two, we think there'll be platforms out there that will need capital. I don't see any further reduction in the business. In fact, where I see it now over the next five years is we have the potential to substantially grow this.

Great. Thank you. As a follow-up, on the full year, $25 billion target for origination, Obviously, there's some seasonality in the retail channel for the first quarter, but accounting for the, you know, $4 billion year to date, I think that implies something like $7 billion per quarter for the rest of the year. So, maybe we can kind of walk through the sources there. It sounds like about $5 billion of that is expected from Just, but anything on the sources of the $25 billion, the cadence over the year and the confidence in hitting that target. Thanks.

What we did see in the first quarter disseminated is that demand for fixed annuities is down nine or ten percent in the US this year over last year. So we are seeing for the first time a slight softening of annuity demand. In that environment we actually picked up market share. We picked up four points of market share in a weaker market, which is a really good fact pattern. It shows that we're able to sell in this market, pick up as others sort of, and what we're seeing now is the early signs of us entering into the bank channel market. Just so you have sort of a perspective on the importance of the bank channels, today we sell about one-third of total annuities in the U.S. on the bank channel. Most of our competitors sell about two. So we have a tremendous runway of growth as those channels ramp up. We got onto two important bank channels in the first quarter this year, and we have a third one coming likely in the third quarter of this year. So, we have a lot of runway for growth. We think we'll pick up market share. And if you take that increased market share in the U.S. plus the combination of just, we feel pretty good, if all things stay consistent where they are, that we'll be in line with our targets.

Thank you, guys.

Thank you. One moment for our next question. And that will come from the line of Saurabh Movahedi with BMO Capital Markets. Your line is open.

Okay. Thank you, Sachin. I wanted to just say with you, if I can, what are the two or three KPIs you want BN shareholders to watch for to see how best you are capturing at BWS, you know, compounding intrinsic value for BN?

We'll return on invested capital in this business to compound capital at mid-teens or high-teens for a very long period. So if I had to focus you on one thing, I would say that we're not a top line. We see a long runway of growth, and we don't think that that's – but really, compounding capital is very – we then look at total return over our cost of funds, which is more of a per-unit measure. So what is – I know in the market, sometimes analysts and others look at spread, but we add on top of spread, you know, unrealized gain on investments. And so we really look at total return on our invested capital, and we look at it both on a gross business basis and on a per-unit basis. Beyond that, what I would say is we're trying to build, and we are maybe the only ones who can do this, is we're trying to build a business where at the top of the house we can move our capital around to geographies and products, and we can do that without any conflicts or clients or other invested capital partners sitting in any parts of the business. So if the UK is a great opportunity, we can move capital there. If the U.S. presents a more compelling opportunity, we can go there, and we can be fungible in how we allocate capital with that singular goal that I described at the outside. Does that help?

Yeah, that's very helpful. And so maybe just as a bit of a follow-on to that, you know, maybe it's a bit of a naive question to ask for field, but is there a size at which or is there a scale or market position at which you would say we can put a mission accomplished kind of sign on BWS?

As long as you see a credible path to a business where you can continue to compound at mid-teams, you don't really put up a mission accomplished sign. It comes down to, does the next dollar of capital offer a compelling investment opportunity?

Thank you very much for taking it. Yeah, I appreciate that. Okay, thank you for taking the question.

Thank you. One moment for our next question. And that will come from the line of Jamie Gloin with National Bank. Your line is open.

Yeah, thanks. Good morning. I'll stay with the star of the show today, Sachin. And then a question on retail flows, annuity flows. So I think you kind of addressed it a little bit a couple of questions ago. But I wanted to focus in on the outflow side of the equation, which increased materially from this quarter last year. Can you talk about the drivers of those outflows? Is there, you know, some lumpiness? Is it consistent? Maybe just to help Matt, Frank.

It should be at somewhere between $10 billion to $12 billion, consistent with our single digit. you know for the most part year range and so if you blend out on an eight to nine years and for modeling purposes if you're trying to plan you should plan yeah okay understood and then

you're stepping up higher level on the breakdown of distributable earnings and just looking at cost of funds growing at a faster rate than the net investment income in that in this quarter anything to pull out from that result?

One thing that I think, and all of our front end of the yield curves come to the end of the curve, you're bringing in dollars on day one in cash that have just earned less money. And I think what you have to then be able to look at, so therefore your weighted average net investment yield is lower on day one than it would have been a year ago when the yield curve was higher, and yet your cost of funds is the same and has crept up a little bit as the back end has come up. With that steepening of the yield curve, I think what you guys have to look at is who's best positioned to capture that total return. And what we are really focused on is rotating that cash position into equity and credit strategies where we can hide teams' total return on a per-unit basis. And if you look at our results, as you said, we're capturing market share. our total return is still somewhere in the 225 basis points. I'm not worried, but if you – Okay, makes sense.

Thank you. One moment for our next question. And that will come from the line of Dean Wilkinson with CIBC. Your line is open.

Thank you. Morning, everyone. Nick, I just want to talk on the buybacks. I mean, it's been a tremendous use of capital over the past five years. But when you look at that relative to the value that, say, sits at the manager, has there been any thought as the gap closes at that ownership level, kind of saying would you take that back to the historical 75, or are you just trying to match those buybacks with what the manager is doing?

Hi, Dean. Yeah, listen, thanks for the question. Listen, I would think of BN and BAM as two distinct companies with their own of each other. At the BN level, as you know, we have significant cash flow coming in every year. we have very attractive investment opportunities. Here's where we see that discount persist between price and our view of intrinsic. As we've executed this year's with $475 million, $470 million year to date, that's a good pace and we're not even halfway through the year. And so for us, this is just a permanent consideration of allocation of capital. And it's a separate and distinct allocation to what the BAM management team is focused on. They independently of BN believed that, and maybe it comes back to the volatility that's been created in the market by some of the negative perception around credit and software, which really was applied to every manager without distinguishing who didn't cause some irrational behavior in the BAM share price, and they opportunistically bought five shares inside in that period of time. That was an independent capital allocation decision, but given our significant ownership in BAM, we benefit capital allocation at BN.

Back at BM, yeah, okay. I mean, it's very reminiscent of kind of thought real estate was going to die a couple years ago and, well, didn't really. Yeah. Yeah. Okay, thanks for that, Nick.

Showing no further questions in the queue at this time, I would now like to turn the call back over to Ms. Katie Battaglia for any closing remarks.

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

This concludes today's program. Thank you all for participating. You may now disconnect.