The Alts Institute

The Case for

Infrastructure
The Alts Institute

What is infrastructure?
You might not think about it much – but you use it every day

Infrastructure is physical assets that come in many forms: utilities that bring power and water to our homes,
ports that move our goods, pipelines moving gas, cell towers keeping us connected—and more.

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Long story short:
Infrastructure is everywhere, moving people,
goods, data and commodities to where they
are needed most.

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The Alts Institute

Infrastructure is the backbone of the global economy

5 Key Sectors
Transportation Renewable Power & Utilities Midstream Data
Railways Transition Energy transmission & Pipelines Data centers
Ports Large-scale renewables distribution Processing Fiber networks
Toll roads Distributed generation Residential energy Storage Telecommunication
Airports Carbon capture & storage networks networks

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 The Alts Institute

What has made infrastructure an attractive investment?

Provide essential services High barriers to entry Long operational lives

Delivery of electricity, gas, goods, data, Operate like monopolies as assets are expensive Typically serve as the foundation of a local
etc. to consumers to build and must be in specific locations economy and are constructed to last decades

Long-term contracted Inflation-linked revenues High operating margins

and/or regulated revenues Contractual escalators and strong market Stable revenues and relatively low
Significant visibility into what cash flow these positions protect earnings power operating costs drives profitability
assets will produce

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The Alts Institute

Case Study: How do infrastructure assets make money?

Revenues are often predictable, with price and usage terms stated either in the contract or by the regulator

Tower Company Mobile Network Operators

(“MNOs”)
• Owns the physical structure • Pay for space on the tower
to hang their equipment
• Leases space on its (antennas, receivers, etc.)
towers to MNOs (e.g., Verizon,
AT&T) under long-term ‘take-or- • Responsible for upkeep
pay’ contracts 5G of equipment
Coverage
• Often receive payment • Often signs a ‘take-or-pay’
regardless of usage contract, agreeing to pay a
predetermined amount
• Payments often grow with regardless of usage
inflation

There is no assurance that similar investments or results will occur in the future. The companies mentioned should not be considered recommendations to purchase or sell a particular security.

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The state of the infrastructure market
Harnessing a super-cycle of opportunities

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The Alts Institute

The infrastructure super-cycle

The need for infrastructure investment has perhaps never been greater

Historical providers Private capital from asset 'The Three Ds' -

of infrastructure capital (e.g., managers, institutional and Digitalization,
governments and private wealth investors is Decarbonization,
corporations) can’t invest stepping in to fill the funding Deglobalization are
given budget constraints gap expected to drive multi-
decade opportunities

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The Alts Institute

“The Three Ds” at the epicenter of infrastructure’s growth

Digitalization Decarbonization Deglobalization

Every 18 months the amount Net zero goals require a 5x The world is investing to re-shape
of data produced doubles, requiring increase in annual investment manufacturing, supply chains
an overhaul of data infrastructure to decarbonize global energy systems and sources of energy

$150 trillion+
INVESTMENT OPPORTUNITY

As of December 31, 2022. Reflects latest data available. Sources: Cisco, EIA, Markets & Markets, DOT, OECD, Statista, International Energy Agency, Kalsing and Millionis (2014), Penn World Tables (9.0).

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Accessing the opportunity
A range of strategies to help meet client objectives

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The Alts Institute

A range of infrastructure investment strategies to meet varying needs

MORE CASH FLOW STABILITY LESS

OPPORTUNISTIC

• Assets require
CO RE- PLUS/ significant
VALU E- A D D development or
Return

restructuring needs
• Assets require • Seeks to provide
CO RE enhancements capital appreciation
• Seeks to provide capital
• Investments in appreciation;
DEBT mature assets some income

• Seeks to provide a
• Loans to infrastructure consistent source of
asset owners income; some capital
appreciation
• Seeks to provide a
consistent source of
income

Risk

This material is provided for educational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or
solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are subject to change. References to specific securities, asset classes and
financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations. Reliance upon information in this material is at
the sole risk and discretion of the reader. The material was prepared without regard to specific objectives, financial situation or needs of any investor. 11
Historical investment benefits
An attractive diversifier for a portfolio

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 The Alts Institute

1: Attractive risk-adjusted returns

Annualized returns and standard deviations
Fixed Private Real Private Private Private
SHARPE Equities
Income Estate Equity Infrastructure Credit
RATIO
20% 0.06 0.30 0.40 1.19 1.32 2.19
How?
• Ability to produce stable and
16% predictable cash flows has
resulted in attractive returns
12% with less risk versus other
Private Equity
asset classes
Private Infrastructure
Return

8% Private Credit
Equities
4% Private Real Estate

Fixed Income
0%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Risk (Standard Deviation)

Past performance is not indicative of future results. For the period January 1, 2008 through March 31, 2023. Global Equities represented by MSCI World Index, Global Bonds by Bloomberg Global Aggregate Bond Index, Private Equity by Preqin
Private Equity Index, Private Credit by Preqin Private Credit Index, Private Infrastructure by Preqin Infrastructure Index, Private Real Estate by Preqin Real Estate Index. See disclosures for full index definitions. The indexes are unmanaged and cannot
be purchased directly by investors. Index performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. There may be limitations to the data provided given limited coverage, reporting lag and
different valuation methodologies. Further, private infrastructure funds that are included in the index choose to self-report. Thus, the index is not representative of the entire private infrastructure universe and may be skewed towards those funds that
generally have higher performance. Over time, funds included and excluded based on performance, may result a “survivorship bias” that can result in a further misrepresentation of performance. Please see disclosures for additional information.

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The Alts Institute

2: A hedge against inflation

Average quarterly returns during periods of above-average inflation2

3.95% How?
• Contracts often have features
that automatically increase
prices or pass through rising
costs when inflation rises
0.21% • Ability to increase prices
due to strong market position

-1.00%
Equities Fixed Income Private Infrastructure

Past performance is not indicative of future results. For the period January 1, 2008 through September 30, 2023. Source: Bloomberg; Preqin. Equities refers to MSCI World Index; Fixed Income refers to the Bloomberg Global
Aggregate Index; Private Infrastructure refers to the Preqin Infrastructure Index. See disclosures for full index definitions. The indexes are unmanaged and cannot be purchased directly by investors. Index performance is shown for
illustrative purposes only and does not predict or depict the performance of any investment. There may be limitations to the data provided given limited coverage, reporting lag and different valuation methodologies. Further, private
infrastructure funds that are included in the index choose to self-report. Thus, the index is not representative of the entire private infrastructure universe and may be skewed towards those funds that generally have higher performance.
Over time, funds included and excluded based on performance, may result a “survivorship bias” that can result in a further misrepresentation of performance. 1. Risk is defined as annualized standard deviation. 2. Inflation is defined as
Seasonally Adjusted CPI-U. Periods of Above-Average Inflation are defined as quarters where CPI was above its historical average. During the time period analyzed, average CPI was 2.63% and there were 13 such quarters. Please see
disclosures for additional information.

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The Alts Institute

3: Mitigation of downside risk

Average quarterly returns during 10 worst quarters for equity markets

0.78%
How?
-0.08%
• Even when the economy may
not be doing well, infrastructure
assets can still grow their
revenues as they provide
essential services

• Further, the long-term contracted

-14.52% or regulated revenues provide
Equities Fixed Income Private visibility
Infrastructure

Past performance is not indicative of future results. For the period January 1, 2008 through September 30, 2023. Source: Bloomberg; Preqin. Equities refers to MSCI World Index; Fixed Income refers to the Bloomberg Global
Aggregate Index; Private Infrastructure refers to the Preqin Infrastructure Index. See disclosures for full index definitions. The indexes are unmanaged and cannot be purchased directly by investors. Index performance is shown for
illustrative purposes only and does not predict or depict the performance of any investment. There may be limitations to the data provided given limited coverage, reporting lag and different valuation methodologies. Further, private
infrastructure funds that are included in the index choose to self-report. Thus, the index is not representative of the entire private infrastructure universe and may be skewed towards those funds that generally have higher performance.
Over time, funds included and excluded based on performance, may result a “survivorship bias” that can result in a further misrepresentation of performance. Please see disclosures for additional information.

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The Alts Institute

4: Diversification
Seeks to provide viable alternatives PRIVATE INFRASTRUCTURE CORRELATIONS
to equities and fixed income

0.04 -0.09 0.39

GLOBAL FIXED PRIVATE REAL
EQUITIES INCOME ESTATE

Correlation is a statistic that measures the degree to which two investments move in relation
to each other.

‒ A correlation coefficient of 1 indicates a perfect positive correlation, meaning that they

move in the same direction by the same amount.

‒ A coefficient of -1 indicates a perfect negative correlation, meaning that they have

Growth-oriented infrastructure assets historically moved in the opposite direction.

More mature infrastructure assets ‒ Therefore, the lower the number, the better the diversification.

Past performance is not indicative of future results. For the period January 1, 2013 through March 31, 2023. Global Equities represented by MSCI World Index, Global Bonds by Bloomberg Global Aggregate Bond Index, Private Equity
by Preqin Private Equity Index, Private Credit by Preqin Private Credit Index, Private Infrastructure by Preqin Infrastructure Index, Private Real Estate by Preqin Real Estate Index. See disclosures for full index definitions. The indexes are
unmanaged and cannot be purchased directly by investors. Index performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. There may be limitations to the data provided given
limited coverage, reporting lag and different valuation methodologies. Further, private infrastructure funds that are included in the index choose to self-report. Thus, the index is not representative of the entire private infrastructure universe
and may be skewed towards those funds that generally have higher performance. Over time, funds included and excluded based on performance, may result a “survivorship bias” that can result in a further misrepresentation of performance.
Please see disclosures for additional information.

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The Alts Institute

Recap
• Infrastructure assets play an essential role in the global economy
• Investors can harness a super-cycle of investment opportunities, driven by 3 multi-decade trends
• Infrastructure’s characteristics have made it an attractive investment, historically providing attractive risk-
adjusted returns, a hedge against inflation, mitigation of downside risk and diversification

All investing involves risk. The value of an investment will fluctuate over time, and an investor may gain or lose money, or the entire investment. Past performance is no guarantee of future results.

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Thank You

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brookfieldoaktree.com

[email protected]

855-777-8001
The Alts Institute

Appendix: Key terms

Data Infrastructure: Assets that make it possible to Utility Infrastructure: Assets that provider water, gas community already served by an established utility or
store, transmit and process ever-growing amounts of and electricity. Utilities own and operate power plants, build a new hydroelectric dam beside one in operation.
data. A newer part of the infrastructure universe, data electricity transmission and distribution lines, gas and These circumstances effectively restrict competition.
infrastructure is the backbone of the digital economy water transmission lines, as well as water treatment Inflation-linkage: Many infrastructure assets have
and includes data centers, fiber networks, cell towers facilities and distribution networks (including pipes, contracts or regulatory frameworks features pricing
and distributed antenna systems. pumps and storage facilities). The sector also includes that is explicitly linked to inflation. The price charged
residential infrastructure, including HVACs, heat pumps,
Midstream Infrastructure: Assets that facilitate the will automatically increase, and as a result revenues
smart meters, etc. Utilities are often the most regulated
transportation, storage and processing of crude oil, are able to grow alongside inflation. Inflation-linkage
of infrastructure assets.
natural gas and natural gas liquids. Assets include could also come in the form of the ability to pass
gathering and processing systems, pipelines, storage and Contracted Revenues: Asset revenues are backed through rising expenses to customers. All of these
export facilities. by long-term agreements with counterparties. Many methods help to protect the profits infrastructure
contracts are often linked to inflation, with CPI-based assets are able to generate.
Renewable Power Infrastructure: Assets that derive
price adjustments. Regulated Revenues: A regulator establishes an allowed
energy from natural, replenishable sources. These assets
include wind and solar farms, hydro dams, residential High Barriers to Entry: Physical infrastructure assets are rate of return that a company can earn. This allowed
solar, and storage, such as large-scale batteries. often expensive to build and must be situated in specific rate of return typically reflects the size of a company’s
locations, making the underlying businesses difficult to asset base, the cost of capital, operating and tax
Transport Infrastructure: Assets related to the
replicate. This greatly reduces competition risk, and as a expenses, as well as an allowance for depreciation
movement of people and goods, including rail and mass
result many assets have dominant market positions. For
transit, ports, containers, toll roads, bridges, tunnels and
example, no would-be competitor could readily
airports.
construct an electric power transmission network for a

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The Alts Institute

Disclosures
©2024 Brookfield Oaktree Wealth Solutions LLC is a wholly owned assumes no responsibility to update such information or to notify operate, including nationalization or the imposition of new taxes; (vii)
subsidiary of Brookfield. Brookfield Oaktree Wealth Solutions LLC is clients of any changes. Any outlooks, forecasts or portfolio supply chain disruptions; and (viii) adverse claims or governmental
registered as a broker-dealer with the U.S. Securities & Exchange weightings presented herein are as of the date appearing on this rights or governmental rights asserted against the lands used for our
Commission (SEC) and is a member of FINRA and the Securities material only and are also subject to change without notice. Past infrastructure assets.
Investor Protection Corporation (SIPC). performance is not indicative of future performance, and the value of
Forward-Looking Statements
investments and the income derived from those investments can
The information contained herein is for educational and informational
fluctuate. Information herein contains, includes or is based on forward-looking
purposes only and does not constitute, and should not be construed
statements within the meaning of the federal securities laws,
as, an offer to sell, or a solicitation of an offer to buy, any securities or Private Infrastructure Risks
specifically Section 21E of the Securities Exchange Act of 1934, as
related financial instruments. This material discusses broad market,
All investing involves risk. The value of an investment will fluctuate amended, and Canadian securities laws. Forward-looking statements
industry or sector trends, or other general economic or market
over time, and an investor may gain or lose money, or the entire include all statements, other than statements of historical fact, that
conditions, and it is being provided on a confidential basis.
investment. Past performance is no guarantee of future results. address future activities, events or developments, including, without
It is not intended to provide an overview of the terms applicable to limitation, business or investment strategy or measures to implement
Private infrastructure investments are subject to the risks incidental to
any products sponsored by Brookfield Corporation and its affiliates strategy, competitive strengths, goals, expansion and growth of our
the ownership and operation of infrastructure projects, including risks
(together, “Brookfield”). Information and views are subject to change business, plans, prospects and references to our future success. You
associated with the general economic climate, geographic or market
without notice. Some of the information provided herein has been can identify these statements by the fact that they do not relate
concentration, government regulations and fluctuations in interest
prepared based on Brookfield’s internal research, and certain strictly to historical or current facts. Words such as “anticipate,”
rates. Since investments in infrastructure securities, like many other
information is based on various assumptions made by Brookfield, any “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other
types of long-term investments, have historically experienced
of which may prove to be incorrect. Brookfield may not have verified similar words are intended to identify these forward-looking
significant fluctuations and cycles in value, specific market conditions
(and disclaims any obligation to verify) the accuracy or completeness statements. Forward-looking statements can be affected by
may result in occasional or permanent reductions in the value of the
of any information included herein, including information that has inaccurate assumptions or by known or unknown risks and
these investments. Such specific market conditions could include, but
been provided by third parties, and you cannot rely on Brookfield as uncertainties. Many such factors will be important in determining our
are not limited to, the following: (i) demand for commodities, such as
having verified any of the information. The information provided actual future results or outcomes. Consequently, no forward-looking
natural gas or minerals; (ii) impact of alternative technologies on our
herein reflects Brookfield’s perspectives and beliefs as of the date of statement can be guaranteed. Our actual results or outcomes may
business and cyber security attacks; (iii) ability to successfully
this material. vary materially. Given these uncertainties, you should not place
identify, complete and integrate acquisitions; (iv) competition with
undue reliance on these forward-looking statements.
Opinions expressed herein are current opinions of Brookfield, other market participants; (v) construction or expansion or projects,
including its subsidiaries and affiliates, and are subject to change environmental damage and future capital expenditures; (vi) economic
without notice. Brookfield, including its subsidiaries and affiliates, regulation and adverse regulatory decisions in the countries we

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Disclosures
Index Provider Disclaimer incidental, punitive, consequential or other damages (including loss passes, except for the latest two-quarters available, which are
of profits). The index sponsors do not sponsor, endorse or preliminary. The preliminary quarters are finalized at a three-quarter
The quoted indexes within this publication are unmanaged and
recommend Brookfield or any of its products or services. Unless lag coinciding with the full constituency for the as-at date being met.
cannot be purchased directly by investors. Index performance is
otherwise noted, all indexes are total-return indexes. The universe of funds for each quarterly point in the index may
shown for illustrative purposes only and does not predict or depict the
change over time depending on data availability.
performance of any investment. There may be material factors Index Definitions
relevant to any such comparison such as differences in volatility and The Preqin Private Credit Index captures in an index the return
Bloomberg Global Aggregate Index is a market capitalization-
regulatory and legal restrictions between the indexes shown and any earned by investors on average in their private credit portfolios,
weighted index, comprising globally traded investment grade bonds.
investment in a Brookfield strategy, composite or fund. Brookfield based on the actual amount of money invested in private capital
The index includes government securities, mortgage backed
obtained all index data from third-party index sponsors and believes partnerships. Historical data points are not recalculated as time
securities, asset-backed securities and corporate securities to
the data to be accurate; however, Brookfield makes no passes, except for the latest two-quarters available, which are
simulate the universe of bonds in the market. The maturities of the
representation regarding its accuracy. Indexes are unmanaged and preliminary. The preliminary quarters are finalized at a 3-quarter lag
bonds in the index are more than one year.
cannot be purchased directly by investors. coinciding with the full constituency for the as-at date being met. The
The Preqin Private Real Estate Index captures in an index the return universe of funds for each quarterly point in the index may change
Brookfield does not own or participate in the construction or day-to-
earned by investors on average in their private real estate portfolios, over time depending on data availability.
day management of the indexes referenced in this document. The
based on the actual amount of money invested in private capital
index information provided is for your information only and does not The Preqin Infrastructure Index captures the average returns earned
partnerships. Historical data points are not recalculated as time
imply or predict that a Brookfield product will achieve similar results. by investors in their infrastructure portfolios, based on the actual
passes, except for the latest two-quarters available, which are
This information is subject to change without notice. The indexes amount of money invested.
preliminary. The preliminary quarters are finalized at a three-quarter
referenced in this document do not reflect any fees, expenses, sales
lag coinciding with the full constituency for the as-at date being met. The Consumer Price Index (CPI) is a measure of the average change
charges or taxes. It is not possible to invest directly in an index. The
The universe of funds for each quarterly point in the index may in prices over time in a fixed market basket of goods and services.
index sponsors permit use of their indexes and related data on an "as
change over time depending on data availability.
is" basis, make no warranties regarding same, do not guarantee the MSCI World Index captures large and mid cap representation across
suitability, quality, accuracy, timeliness and/or completeness of their The Preqin Private Equity Index captures in an index the return 23 Developed Markets. The index covers approximately 85% of the
index or any data included in, related to or derived therefrom, and earned by investors on average in their private equity portfolios, free float-adjusted market capitalization in each country.
assume no liability in connection with the use of the foregoing. The based on the actual amount of money invested in private capital
index sponsors have no liability for any direct, indirect, special, ID #1347
partnerships. Historical data points are not recalculated as time

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