It is a common question that asset managers are constantly asked about that whether investors in asset managers’ common shares or in its funds would do better. Both generally do fine, but the fund/common shares question would depend on investors' allocation. Some of investors in BN’s funds are institutional investors including pension, endowment, insurance companies, etc. and their mandates require these investors to get exposure to various strategies such as real estate, private equity, infrastructure and so on. BN/BAM manages this money for a fee and may not take a direct interest in a fund itself. Usually, there is a term to maturity on the duration of money being committed to these funds (5-10 years) for private investors. If they want money back, they would need to arrange a sale to another investor in the fund or a third party. In addition, redemption limits are also there which only allows a certain limit of AUM to be withdrawn in a quarter. In addition, debt used in these funds are non-recourse, which means it does not directly impact the parent company BN if these funds don’t work out as expected (other than lower fees if a fund fails).
5i Research Answer: