Cherilyn Radbourne

Cherilyn Radbourne with TD Cowen inquired about Brookfield Asset Management's strategic view on manager consolidation, particularly in private credit and secondaries, and whether secondaries represent a strategic gap the company might look to fill.

Answer

Hadley Peer Marshall, Chief Financial Officer of Brookfield Asset Management, stated that while the company has made complementary acquisitions, future activity would be less active, focusing on existing partner fund managers. She confirmed that secondaries are tracked closely as a rapidly growing segment where Brookfield's expertise could be differentiating, positioning it near the top of the list for highly additive and complementary opportunistic acquisitions.

Cherilyn Radbourne asked about the ongoing manager consolidation trend, specifically inquiring if secondaries are considered a strategically important area for Brookfield Asset Management to potentially fill a gap.

Answer

Hadley Peer Marshall, CFO, explained that Brookfield expects to be less active in future acquisitions, focusing on existing partner fund managers. She noted that secondaries are closely tracked as a rapidly growing segment where Brookfield's expertise could be differentiating and additive, placing it near the top of the list for highly selective, opportunistic acquisitions that would grow significantly within the Brookfield ecosystem.

Cherilyn Radbourne asked about the strategic advantages and new capabilities Brookfield Asset Management expects to gain from fully acquiring the remaining 26% stake in Oaktree Capital Management, beyond what was possible as a majority owner.

Answer

Connor Teskey, President, highlighted three key upsides: immediate balance sheet efficiency by collapsing Oaktree's subsidiary balance sheet and monetizing securities to fund the purchase, significant operating leverage and synergies in back-office functions, and enhanced marketing, client service, and product development capabilities. He emphasized the unmatched ability to offer combined products and solutions, particularly for insurance companies and individual investors, and expressed optimism about the integration with Oaktree's leadership.

Cherilyn Radbourne inquired about the strategic advantages and new capabilities Brookfield Asset Management expects to unlock by fully acquiring the remaining minority stake in Oaktree Capital Management, beyond what was possible as a majority owner.

Answer

Connor Teskey, President, highlighted three key upsides: immediate balance sheet efficiency by collapsing Oaktree's subsidiary balance sheet and monetizing securities to fund the purchase, significant operating leverage and synergies in fund operations and back office, and enhanced marketing, client service, and product development capabilities by combining the organizations' strengths, particularly for insurance companies and individual investors.

Cherilyn Radbourne from TD Cowen asked for elaboration on the potential for alternative investments in the broader retirement market, specifically why product offerings are considered more critical than distribution for long-term success and the expected timing.

Answer

President Connor Teskey affirmed this is a significant, multi-decade growth opportunity. He explained that while brand and scale are important, the ultimate winners will be firms with the right products. He emphasized Brookfield's leadership in real assets like infrastructure and power, which offer the long-duration, inflation-protected cash flows ideal for retirement portfolios.

Cherilyn Radbourne asked for Brookfield's perspective on new products that blend public and private assets and questioned the status and strategic differentiation of the next flagship private equity fund, expected to launch in 2025.

Answer

An Unknown Executive responded that the trend of blending asset classes highlights the growing importance of alternatives in standard portfolios, a space Brookfield is monitoring for future opportunities. They expressed high confidence in their differentiated, operationally-focused private equity strategy, which is well-suited for the current market, and confirmed plans to launch the next vintage this year, with a first close possible around year-end.

Cherilyn Radbourne asked about the expected duration of the current market environment, which is favorable for both capital deployment and asset monetization, and inquired about the potential timeline for the 401(k) market opening up to alternative strategies.

Answer

President Connor Teskey explained that the beneficial market dynamic, characterized by high liquidity and significant capital needs, is expected to last through 2025 and potentially longer. Regarding the 401(k) market, he noted that while the timing is uncertain, the trend is increasingly positive, and Brookfield is well-positioned with its long-duration, inflation-indexed asset classes should regulations change.

Cherilyn Radbourne asked if AI infrastructure could become a discrete investment strategy for BAM and how its credit business margins compare to the corporate average given recent inflows.

Answer

CEO James Flatt confirmed that an AI infrastructure-focused product is a top priority and would align with their existing infrastructure strategies. CFO Hadley Peer Marshall explained that the credit business maintains attractive margins due to a mix of fee structures, including full fees on capital allocated to their funds and the operating leverage from their built-out platform, which will support new third-party mandates without significant margin compression.

Cherilyn Radbourne asked Janet Drysdale for additional color on CN's new revenue opportunities and an update on the incremental revenue target, which was $35 million in Q3 and approaching $100 million in Q4.

Answer

Janet Drysdale, Chief Commercial Officer, confirmed closing Q4 with $100 million in incremental revenue and an additional $100 million in the January pipeline. She explained these gains are helping offset weaknesses in forest products and metals, highlighting new moves in metals, optimism around aluminum, service-related wins in domestic intermodal, and leveraging the Western Canada franchise for NGLs and frac sand.

Cherilyn Radbourne asked Janet Drysdale for additional color on CN's efforts to generate incremental revenue, specifically inquiring about the progress on the incremental revenue target, which was CAD 35 million in Q3 and approaching CAD 100 million in Q4.

Answer

Janet Drysdale, Chief Commercial Officer, confirmed closing Q4 with CAD 100 million in incremental revenue and noted another CAD 100 million tracked in January. She explained these gains help offset weaknesses in markets like forest products and metals/minerals, highlighting new metal moves, optimism for aluminum, service-driven domestic intermodal wins, and leveraging the Western Canada franchise for NGLs and frac sand.

Cherilyn Radbourne asked about the progress in recovering U.S.-bound international intermodal traffic via Prince Rupert and the potential impact of hypothetical transcontinental mergers on this business.

Answer

Interim Chief Commercial Officer Janet Drysdale noted that U.S.-bound traffic via Canada is less than 5% of total revenue and has seen good progress at Prince Rupert. CEO Tracy Robinson added that while CN is monitoring merger chatter, the company's resilient network, with 85% of volume originating on its lines, ensures the Prince Rupert advantage would persist. She emphasized that CN believes commercial arrangements offer similar benefits to mergers without the disruption.

Cherilyn Radbourne asked about discussions with other rail partners regarding new alliances as trade flows reconfigure and whether new trade terms could reopen conversations about industry consolidation.

Answer

CEO Tracy Robinson emphasized CN's preference for partnerships, citing examples like the Falcon service with UP and FXE, to gain benefits without the significant regulatory and capital risks of mergers. She acknowledged the chatter around consolidation but stated that the high bar set by 2001 rules makes Class 1 mergers difficult, keeping CN's focus on leveraging its network and partnerships.

Cherilyn Radbourne asked for details on the 2025 volume outlook, specifically the recovery of volumes lost from 2024 labor disruptions and the status of market share recovery on the Canadian West Coast.

Answer

Chief Commercial Officer Remi Lalonde explained that recovery was hindered by a November port strike but is off to a good start in January. He anticipates the majority of the recovery will occur after Q1 and Chinese Lunar New Year, aiming to normalize performance back to the strong levels seen in the first half of 2024.

Cherilyn Radbourne of TD Cowen inquired about how CN is factoring geopolitical and environmental events into its planning process compared to the past and if this might alter future guidance practices.

Answer

President and CEO Tracy Robinson explained that the company now conducts more extensive analysis on these issues to understand a range of potential outcomes for resource planning. She stated that while they may guide differently in the future, the primary focus remains on maintaining a resilient operating plan and high levels of customer service.

Cherilyn Radbourne inquired about Brookfield Infrastructure Partners' perspective on sovereign nations versus hyperscalers as data center counterparties and the expected mix. She also asked for an outlook on inflation indexation across various geographies for 2026.

Answer

CEO Sam Pollock noted that both hyperscalers and sovereign nations are valued for diversity, with sovereign AI factories offering a differentiated strategy despite slower government processes. He couldn't predict the exact mix but aims for a broad base. CFO David Krant projected 2-3% inflation indexation in OECD markets and 2-4% in emerging markets (India, Brazil) for 2026, slightly above historical averages but less elevated than 2022.

Cherilyn Radbourne inquired about Brookfield Infrastructure Partners' perspective on sovereign nations versus hyperscalers as data center counterparties, the potential mix, and the expected inflation indexation across various geographies for 2026.

Answer

Sam Pollock, CEO, noted that both counterparties offer diversity, with sovereign nations providing diversification from hyperscaler-specific risks and enabling bespoke 'AI factory' ecosystems, though with slower development timelines. David Krant, CFO, projected 2-3% inflation indexation in OECD markets and 2-4% in emerging markets (India, Brazil) for 2026, slightly above historical averages but less elevated than 2022.

Cherilyn Radbourne of TD Cowen asked about the drivers behind the accelerated deal velocity in 2025 and whether there are opportunities to monetize partial stakes in BIP's Canadian midstream assets.

Answer

CEO Sam Pollock attributed the increased transaction activity to investors re-engaging after being on the sidelines, supported by strong capital markets and BIP's strategic position in the AI infrastructure boom. Regarding Canadian midstream, he stated that while partial sales are always possible, the primary focus is on funding significant organic growth opportunities, potentially with new partners, given strong investor interest in the sector.

Cherilyn Radbourne inquired about Brookfield's flexibility to reprioritize its M&A and asset recycling pipelines amid evolving trade dynamics, and whether the current environment is creating more public-to-private transaction opportunities.

Answer

CEO Sam Pollock explained that Brookfield's global investment teams provide the flexibility to shift capital to where returns are best, noting a current focus on the U.S. market. He added that public-to-private opportunities typically arise from company-specific issues like poor liquidity, rather than general market conditions, and that current conditions are only slightly more favorable for such deals than in the past.

Cherilyn Radbourne asked about the potential compression of development premiums for hyperscale data centers and the impact of a stronger U.S. dollar on investment opportunities and capital recycling.

Answer

CEO Sam Pollock stated that Brookfield Infrastructure has successfully maintained its yield-to-cost on data center projects, citing increased contract rates and controlled costs. He also explained that while a strong U.S. dollar reflects a capital boom driving investment in the U.S., it does not directly dictate asset sale decisions, which are based on business plans and local market values. Roberto Marcogliese, Head of Telecom North America, added that the focus on power-constrained Tier 1 markets creates scarcity and supports premiums.

Cherilyn Radbourne inquired about the potential use of nuclear power, specifically SMRs, to support AI-driven data center demand and asked about the synergies between Brookfield's North American and European residential decarbonization businesses.

Answer

CEO Sam Pollock clarified that while nuclear energy is a long-term solution, the immediate focus for powering data centers remains on renewables and natural gas. Regarding the decarbonization businesses, he explained that the company follows a decentralized model where regional operations run autonomously, with Brookfield facilitating the sharing of best practices and technology rather than seeking direct operational synergies.

Cherilyn Radbourne asked about the downside protections Brookfield would seek for capital investment in U.S. nuclear project development and whether it would occur in a discrete nuclear strategy or the BGTF strategy. She also inquired about the structure of plans being evaluated in South Carolina.

Answer

President and CFO Nick Goodman clarified that the U.S. government is the equity investor in the $80 billion nuclear facilities, with Westinghouse (owned by BGTF One) delivering and providing services. He added that any involvement in the South Carolina plans would be structured to provide strong downside protection.

Cherilyn Radbourne asked about the downside protections Brookfield would seek if it were to invest capital in nuclear project development in the U.S., following the framework agreement to build new nuclear capacity. She also inquired whether such investments would occur within a discrete nuclear strategy or the BGTF (Brookfield Global Transition Fund) strategy.

Answer

Nick Goodman, President of Brookfield Corporation, clarified that the $80 billion transaction is between Westinghouse and the U.S. government, with the government acting as the equity investor. Brookfield's role, through Westinghouse (owned by BGTF One), is to deliver facilities, provide fuel rods and fuel, and service the reactors, thereby scaling Westinghouse as a global nuclear champion. Regarding plans in South Carolina, Mr. Goodman stated it's early days but emphasized that any involvement of Westinghouse services or Brookfield Capital would be structured to provide strong downside protection.

Cherilyn Radbourne from TD Securities asked about securing cornerstone investors for the new AI infrastructure strategy, mitigating technological obsolescence risk, and which funds are currently realizing or approaching carried interest.

Answer

Nicholas Goodman, President & CFO, confirmed they are engaging with large clients for the AI strategy, similar to the transition fund's launch. He explained that obsolescence risk will be mitigated through investment structures with off-takers. He then detailed that current carry comes from Oaktree and first-vintage global funds, with the next wave expected from BIF two, BSREP two and three, and Oaktree funds ten and eleven.

Cherilyn Radbourne from TD Securities asked about the new AI infrastructure strategy, focusing on the potential for cornerstone investors and the approach to mitigating technology obsolescence risk. She also requested a summary of which funds are generating carry.

Answer

Nicholas Goodman, President & CFO, confirmed Brookfield is engaging with large clients for its AI strategy, similar to the launch of its transition fund. He explained that technology risk is mitigated by structuring investments to fund the infrastructure backbone, limiting downside exposure. He noted current carry comes from Oaktree and first-vintage global funds, with BIF two, BSREP two and three, and Oaktree funds ten and eleven being the next significant contributors.

Cherilyn Radbourne inquired about Brookfield's perspective on U.S. reindustrialization beyond typical sectors and the potential to use the Intel deal as a template. She also asked for clarification on how funding agreements differ from annuities and pension risk transfers within the Wealth Solutions business.

Answer

Nicholas Goodman, an executive, confirmed that the reorientation of global supply chains is an ongoing trend presenting attractive investment opportunities where Brookfield's scale, capital, and operating expertise provide a unique advantage. Sachin Shah, CEO of Wealth Solutions, explained that funding agreements are a hybrid product, combining the finite term and fixed rate of an annuity with the no-lapse-risk feature of a pension deal, making them an attractive and growing part of their offering.

Cherilyn Radbourne asked for the major contributors to the increase in Brookfield's internal view of intrinsic value to $100 per share and questioned if the company's conservative approach to private wealth capital intake posed a competitive risk.

Answer

President Nick Goodman stated the intrinsic value increase was driven by broad-based growth, particularly the strong performance of the asset manager (BAM) and scaling earnings in the Wealth Solutions platform. He dismissed competitive concerns in private wealth, emphasizing the focus is on building sustainable, high-return products, not just maximizing intake volume.

Cherilyn Radbourne asked about improving the liquidity of BAM's public float and Brookfield's desired long-term stake in the asset manager, in relation to its efforts for U.S. index inclusion. She also requested more detail on the international expansion of the insurance business, specifically its competitiveness in the U.K. and Asia.

Answer

President Nick Goodman stated the primary focus for BAM is achieving U.S. index inclusion. While Brookfield has no specific target for its 73% stake, it intends to remain a significant long-term owner. Regarding insurance, he explained that global expansion into the U.K. and Asia provides flexibility to allocate capital to the best opportunities worldwide, noting they can find attractive returns despite competitive markets.

Asked about the company's confidence in returning to organic growth in fiscal '26, the nature of a noted internal control deficiency, details on record backlogs in consumer products and nuclear, and how the company is protecting itself against tariff-related inflation in its contracts.

Answer

Management is very positive about returning to growth in FY26, citing a 1.23 book-to-bill ratio and strong backlog. The internal control deficiency was a documentation issue under new SOX rules with no financial impact. The consumer products backlog is driven by a niche warehouse automation solution, while the nuclear backlog is supported by CANDU refurbishments, decommissioning, and new opportunities in small modular reactors and nuclear fuel. Contract terms and supply chain management are being used to mitigate tariff impacts, which have been minimal so far.

Cherilyn Radbourne of TD Securities asked about ATS's confidence in returning to organic growth in fiscal 2026, the nature of a noted internal control deficiency, drivers for record backlogs in Consumer and Nuclear, and contractual protections against tariffs.

Answer

CEO Andrew Hider expressed high confidence in returning to growth, citing a 1.23 book-to-bill ratio. CFO Ryan McLeod added the backlog is up 19.3% and clarified the control deficiency was a non-financial documentation issue found during SOX adoption. Hider detailed that Consumer backlog strength came from warehouse automation and Nuclear from refurbishments and new fuel work. McLeod noted that contracts and supply chain localization help mitigate tariff impacts.

Cherilyn Radbourne of TD Cowen asked about ATS's confidence in returning to organic growth in fiscal '26, the nature of a noted internal control deficiency, the drivers behind record backlogs in the consumer and nuclear sectors, and how the company is protecting itself contractually against tariffs.

Answer

CEO Andrew Hider expressed strong confidence in returning to growth, citing a 1.23 book-to-bill ratio and strong customer demand in niche warehouse automation and multiple nuclear sub-sectors (CANDU, decommissioning, SMRs, and fuel). CFO Ryan McLeod added that the backlog is up 19.3% YoY, providing visibility. McLeod clarified the internal control issue was a documentation matter related to SOX adoption with no financial impact. He also noted that contracts provide good protection against tariffs, with a primary focus on supply chain localization.

Cherilyn Radbourne from TD Cowen inquired about the impact of a potential new U.S. administration on customer conversations regarding tariffs and supply chain strategy, and whether certain policies could create a short-term boost for the Food and Beverage automation segment.

Answer

Andrew Hider, Chief Executive Officer, stated that while tariffs could create short-term complexity, ATS's global footprint is a long-term strategic advantage, and customer conversations are focused on ATS's ability to support regional production needs. He also noted that while labor market shifts could present mid-to-long-term opportunities in Food & Beverage automation, he would not characterize it as a short-term driver.