Bart Dziarski

Bart Dziarski with RBC Capital Markets asked Wade Burton about the investment book, specifically how Hamblin Watsa is considering shifting positions and being opportunistic in the current market dislocation, seeking insights into their strategy for taking advantage of the environment.

Answer

Wade Burton, President and CIO of Hamblin Watsa, stated that their robust and skilled investment team constantly evaluates all securities, underwriting for a 15% return. He affirmed that they are actively watching the markets, including areas like software and AI, and will act on any opportunities they uncover.

Bart Dziarski inquired about Fairfax's investment book strategy, asking if the company is considering shifting positions and being opportunistic to take advantage of current market dislocations, particularly in areas like software and AI.

Answer

Wade Burton, President and CIO of Hamblin Watsa, affirmed that their robust and skilled investment team constantly evaluates all securities, underwriting for a 15% return. He confirmed that they are actively looking for opportunities, including in sectors like software and AI, and are prepared to act when suitable investments are identified.

Bart Dziarski asked about the rationale and timeline for simplifying Brookfield's structure by merging BN and BNT, and later inquired about the drivers of Brookfield Wealth Solutions' strong ROE, particularly on the liability side.

Answer

Nick Goodman, President of Brookfield Corporation, explained the structural simplification aims to streamline investor access and leverage Brookfield's full capital base for the scaled insurance business, targeting completion within 12 months. Sachin Shah, CEO of Brookfield Wealth Solutions, attributed the strong ROE to diversified product types and geographic expansion, enabling capital allocation to the lowest cost of funding.

Bart Dziarski asked about the drivers of Brookfield Wealth Solutions' strong mid-teens ROE, particularly contributions from the liability side, and the outlook for sustaining this return.

Answer

Sachin Shah (CEO, Brookfield Wealth Solutions) attributed the robust ROE to diversified product types and geographic expansion, enabling capital allocation to the lowest funding cost areas. This, combined with Brookfield's investment franchise, ensures strong spreads and total returns.

Bart Dziarski asked about the significant increase in the real estate LP's Net Operating Income (NOI) this quarter, which rose to $465 million from approximately $80 million last year, seeking clarification on the drivers behind this step-up. He also inquired whether the Target Carry Framework would increase after the Oaktree acquisition closes and, if so, by how much.

Answer

Nick Goodman, President of Brookfield Corporation, explained that the increase in the real estate LP's FFO (which includes NOI) was primarily driven by disposition gains from monetizations during the quarter. Regarding the Oaktree acquisition, he confirmed that the Target Carry Framework would pick up due to increased carry-eligible capital, but stated that the adjustment would not be material or a significant change to the current numbers.

Bart Dziarski asked about the significant increase in NOI within the real estate LP this quarter (465 million versus 80 million last year) and its drivers. He also inquired if the Target Carry Framework would increase once the Oaktree acquisition closes and by how much.

Answer

President and CFO Nick Goodman explained that the increase in NOI was driven by disposition gains from monetizations during the quarter, benefiting the FFO. He confirmed that the Target Carry Framework would pick up due to increased carry-eligible capital from Oaktree, but it would not be a material adjustment to current numbers.

Bart Dziarski of RBC Capital Markets inquired about Brookfield's strategy to scale its P&C insurance business to $30-50 billion in equity and the source of its perceived competitive advantage in pricing risk.

Answer

Nicholas Goodman, President & CFO of Brookfield, explained that growth will initially be organic, focusing on specific product lines where Brookfield's operational expertise provides a competitive edge. He stated this deep understanding of underlying assets allows for better risk pricing without increasing the overall risk profile, leveraging their long-standing operator experience.

Bart Dziarski of RBC Capital Markets inquired about Brookfield's strategy to scale its P&C insurance business to $30-50 billion of equity and the nature of its competitive pricing advantage in that sector.

Answer

Nicholas Goodman, President & CFO of Brookfield, explained that the growth will initially be organic, focusing on specific P&C lines where Brookfield's deep operational expertise in underlying assets provides a competitive advantage. This expertise allows for better risk assessment and pricing, leading to a sub-100 combined ratio and attractive float, without increasing the overall risk profile. Inorganic opportunities may be considered in the future.

Bart Dziarski inquired about Brookfield Asset Management's liquidity position, whether the business is fully funded given its $2.5 billion debt outstanding, and the expected duration over which the $130 billion of uncalled commitments could be called.

Answer

Hadley Peer Marshall, CFO, confirmed that Brookfield Asset Management is in a strong liquidity position with over $3 billion, which includes funding for the remaining 26% stake in Oaktree. She noted that the company anticipates being less active in the bond market in 2026 compared to 2025. Regarding the $130 billion in uncalled capital, she explained it's a significant amount that will convert to fee-bearing capital over a few years, providing ample liquidity for future opportunities, particularly for flagships like BSRIP and credit strategies.

Bart Dziarski from RBC Capital Markets asked about Brookfield Asset Management's liquidity position, specifically if the business is fully funded with $2.5 billion of debt outstanding, and the expected duration for calling the $130 billion of uncalled commitments.

Answer

Hadley Peer Marshall, Chief Financial Officer of Brookfield Asset Management, confirmed a strong liquidity position with over $3 billion, including funds for the remaining Oaktree stake. She noted that the $130 billion of uncalled capital, a significant amount for future fee-bearing capital, would be deployed over a few years, providing ample flexibility to capitalize on market opportunities.

Bart Dziarski inquired about the momentum and early indications for Brookfield's retail-focused products, specifically the infrastructure wealth product and the newly launched private equity evergreen strategy, along with the company's distribution strategy for these offerings.

Answer

Connor Teskey, President, noted robust momentum in the individual market, viewing it as a significant, long-term opportunity across high net worth, retail, annuity/insurance, and 401(k) segments. He expects the new private equity product for the retail channel to scale even faster than the infrastructure product. For distribution, he highlighted getting products placed on leading bank distribution platforms for the near-term retail market and preparing for the 401(k) and retiree markets by building relationships with advisors, plan administrators, consultants, and record keepers, leveraging Brookfield's real asset focus.

Bart Dziarski asked for insights into the early indications and momentum of Brookfield's retail-focused products, specifically the infrastructure wealth product and the newly launched private equity evergreen strategy, along with an overview of the distribution strategy for these offerings.

Answer

Connor Teskey, President, noted robust momentum in the individual market, viewing it as a significant, long-term growth opportunity. He expects the new private equity product for the retail channel to scale even faster than the successful infrastructure product. The distribution strategy focuses on placing products on leading bank distribution platforms globally for the near-term retail market, and preparing for the 401(k) and retiree markets by building relationships with advisors, plan administrators, consultants, and record keepers.

Bart Dziarski from RBC Capital Markets followed up on fundraising, asking about the new evergreen private equity strategy and what its success might imply for the structure of Brookfield Business Partners (BBU) in the future.

Answer

President Connor Teskey positioned the new semi-liquid private equity fund as a complementary product that broadens their investor base. He emphasized that Brookfield's PE strategy, focused on high-quality, cash-generative businesses, is well-suited for retail investors and the current market. He did not comment on potential structural changes for BBU.

Bart Dziarski requested an update on CDK's operations, including retention and new bookings. He also asked about the expected pacing of capital deployment in 2026, given the attractive market backdrop and $700 million in acquisitions in 2025.

Answer

Head of Global Business Operations Adrian Letts detailed CDK's ongoing tech stack modernization, strong renewal activity including a large multi-site dealership extension, and efforts to extend contract durations. CEO Anuj Ranjan anticipated continued momentum and a "very active year" for capital deployment in 2026, focusing on similar, "right down the fairway" acquisition opportunities.

Bart Dziarski asked about the expected pacing of capital deployment in 2026, considering the attractive market backdrop and the healthy $700 million deployed in 2025.

Answer

Anuj Ranjan, CEO, reflected on 2025 as a strong year for acquisitions of desired businesses at favorable values, with early performance being robust. He expressed anticipation for continued momentum in 2026, with the team actively pursuing many 'right down the fairway' opportunities, expecting a very active year for deployments.

Bart Dziarski asked for specific examples of AI benefits across other large investments like CDK, Dexco, and Scientific Games, beyond those highlighted for Clarios and Sagen. He also sought clarification on capital allocation, specifically if the next $2 billion in proceeds would primarily be directed towards capital deployment and buybacks, rather than debt reduction, unlike previous allocations.

Answer

Adrian Letts, Head of Global Business Operations Team, detailed AI benefits: for Clarios, sensors and data improve manufacturing throughput and inventory; for CDK, data opportunity enhances workflow and product propositions; for Scientific Games, understanding lottery behavior supports licensees; and for Dexco, AI aids sales patterns, inventory management, and operational performance. CFO Jaspreet Dehl clarified that corporate leverage is comfortable, and while proceeds will pay down debt, sufficient liquidity exists for new investments. She confirmed the continuation of the $250 million buyback program due to the unit's discount to intrinsic value, indicating all facets of capital allocation remain in play.

Bart Dziarski asked for insights into AI benefits across large investments like CDK Global, DexKo Global, and Scientific Games, and sought clarification on the capital allocation strategy for future proceeds, specifically if it would prioritize capital deployment and buybacks over debt reduction.

Answer

Adrian Letts, Head of Global Business Operations Team, highlighted AI benefits, including data opportunity for workflow improvement at CDK Global, understanding lottery behavior at Scientific Games, and improving sales patterns, inventory management, and operational performance at DexKo Global. Jaspreet Dehl, Chief Financial Officer, stated that corporate leverage is comfortable, and while proceeds will be used to pay down the line, sufficient liquidity exists for new investments and acquisitions. She confirmed that the buyback program will continue given the unit and share discount to intrinsic value.

Bart Dziarski from RBC Capital Markets questioned the secondary transaction, asking how the three specific assets were selected and how the approximately 9% discount to NAV was determined in the context of current market pricing.

Answer

CFO Jaspreet Dehl explained that the assets were chosen based on BBU's outsized ownership, with the process overseen by an independent board committee that hired financial advisors to ensure fairness. She noted the 8.6% discount is highly accretive given BBU's own trading discount and stated that while secondary market discounts fluctuate, a 10% average is historically normal, making the transaction favorable.