Subject: Re: BN versus BAM
all of us are lucky to have Manlobbi! Couldn't have asked for a better Christmas gift!

Couldn't agree more. I would add that you have already made some valuable contributions in the very early days of this board and I hope you will continue to contribute. You have a gift for concision that I, alas, lack. Brookfield's combination of complexity and historical returns makes it endlessly fascinating and I hope we get enough participation here to make this board a little livelier than its TMF predecessor.

Can you please clarify why you are calling above realized carry. I am assuming you are referring to 'annualized target carried interest, net' which was 2,657 at 3q end. Times 8 is 21.3 billion. SI Asset Management, page 6.

Yes, you are quite right that I should have called it target carry, not realized. I think I do this subconsciously in order to distinguish it in my mind from accumulated unrealized carry, which Brookfield breaks out separately and adds to a plan value calculation that already includes 10x target carry. If target carry is not yet realized, then what distinguishes it from accumulated unrealized carry, and why is it not double-counting to add one to the other?

The language in the glossary of terms might hold the answer, but even if you accept that 'unrealized carried interest' represents only the change in that metric since the last report, that doesn't explain how 'accumulated unrealized carried interest,' the metric they use in the plan value calc, would not be at least a subset of target carry. I can't tell if I'm too dense to get this or if the language is actually as unhelpful as I find it. From page 40:

Carried interest is a contractual arrangement whereby we receive a fixed percentage of investment gains generated
within a private fund provided that the investors receive a pre-determined minimum return. Carried interest is typically
paid towards the end of the life of a fund after the capital has been returned to investors and may be subject to
'clawback' until all investments have been monetized and minimum investment returns are sufficiently assured. This is
referred to as realized carried interest. We defer recognition of carried interest in our financial statements until they are
no longer subject to adjustment based on future events. Unlike fees and incentive distributions, we only include carried
interest earned in respect of third-party capital when determining our segment results.

' Unrealized carried interest is the change in accumulated unrealized carried interest from prior period and
represents the amount of carried interest generated during the period. We use this measure to provide insight into
the value our investments have created in the period.

' Accumulated unrealized carried interest is based on carried interest that would be receivable under the
contractual formula at the period end date as if a fund was liquidated and all investments had been monetized at
the values recorded on that date. Unrealized carry refers to the change in unrealized carry during a specified period,
adjusted for realized carry.

' Accumulated unrealized carried interest, net is after direct costs, which include employee expenses and taxes.

' Annualized target carried interest represents the annualized carried interest we would earn on third-party private
fund capital subject to carried interest based on the assumption that we achieve the targeted returns on the
private funds. It is determined by multiplying the target gross return of a fund by the percentage carried interest and
by the amount of third-party capital, and discounted by a utilization factor representing the average invested capital
over the fund life.

I resolve my confusion by punting. I do not include accumulated unrealized carry in any of my valuation exercises, and I eliminate all carry when determining a margin of safety.