renewable power and sustainable infrastructure – the .../media... · percent of retail...

BROOKFIELD PUBLIC SECURITIES GROUP i | INFR ASTRUC TURE4Q 2019

1FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC.

Renewable Power and Sustainable Infrastructure – the Investment Opportunity

The world is at the beginning of a decades-long transition to electricity generated from clean, renewable sources of power. Initially at the heart of this shift were government policies in response to demands which address the impacts of climate change. These policies have spurred greater research and development in renewable innovation, which have ultimately driven the investment cost to historic lows and made renewables competitive with traditional sources of power generation without subsidies.

Renewable sources of power generation, primarily wind and solar, have been the fastest growing inputs of new power capacity over the past decade. We believe the sector has hit an inflection point, where further adoption rates will be driven by lower costs from technological improvements, eliminating the need for subsidies.

At the same time, drinking water and wastewater infrastructure is in dire need of meaningful investment around the world. Developed markets (including the U.S.) are grappling with aging underground pipes, some of which were installed prior to World War II. Emerging markets are facing environmental challenges related to water infrastructure that has not kept pace with economic and population growth.

We see powerful return potential stemming from these two mega-trends—as power generation and resource consumption undergo widespread change to promote a cleaner global footprint, and we expect significant acceleration in adoption worldwide.

In this paper we will discuss the following:

■■ A brief introduction to our defined Renewable Power and Sustainable Infrastructure universe

■■ Historical growth drivers

■■ Future growth catalysts

■■ The primary classifications within the investable universe of publicly traded companies; highlighting our views on the investment opportunities

2BROOKFIELD OVERVIEW FACT SHEET

RENEWABLE POWER AND SUSTAINABLE INFRASTRUCTURE – THE INVESTMENT OPPORTUNITY

FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC.

W H AT I S G L O B A L R E N E W A B L E P O W E R A N D S U S TA I N A B L E I N F R A S T R U C T U R E ? The global renewables and sustainable infrastructure universe consists of companies whose infrastructure, products and services are facilitating the multi-decade transition toward greater renewable power generation and sustainable consumption of natural resources. The majority of the universe is focused within the power and utilities sectors, but it also includes water technology and water utility companies.

These companies operate throughout the power and utilities value chain; from the generation, transmission and distribution of power from renewable sources (primarily from wind, solar and hydro) to the burgeoning sectors of distributed generation, energy storage and grid modernization.

Water companies include utilities that are spending meaningful amounts of capital updating water mains and treatment infrastructure. This group also includes firms providing innovation and products to increase efficiency and water conservation among end users. Both groups within this universe have seen positive demand drivers in recent years and are primed for future growth.

H O W D I D W E G E T H E R E ? R E N E W A B L E P O W E RDemand for electricity generated by renewable sources and the required investment in the necessary equipment and infrastructure have been driven by two primary sources. Initially, regulatory and policy initiatives aimed at reducing GHG emissions and mitigating the negative impact of global warming spurred demand. Now, technology improvements have made renewable power cost competitive with traditional sources of power generation. As a result, economics are becoming the primary catalyst for new capacity.

Regulatory and policy initiatives

Policy tools to increase the adoption of renewable energy technologies are primarily focused around regulations and standards, as well as financial incentives geared toward modifying behavior and developing new technologies, replacing older, inefficient and more pollutive sources

of power generation with clean alternatives. Highlighted below are selected policies that have driven increases in renewable power adoption to date.

Key global initiatives ■■ In the U.S., the main policy driver for renewable adoption has been renewable portfolio standards (RPS), which require utilities to sell a specified amount of electricity generated by renewable inputs. These standards can be mandated by law or be goal-driven (and voluntary).

■■ The Paris Agreement is an accord originally adopted by 196 countries to pursue green energy sources, reduce carbon emissions and limit the global temperature increase.

■■ The European Union’s renewable energy directive requires member states to generate at least 32% from renewable sources by 2030.ii

■■ United Nations Sustainable Development Goals is a framework that seeks to address the world’s greatest challenges, including climate change. The framework calls for an substantial increase in the share of renewable energy by 2030 as well as expanding the necessary infrastructure and technology in developing countries to bring sustainable energy services for all.

Tax credits/revenue subsidies: ■■ In the U.S., tax credits have been the predominant mechanism to incentivize investment and promote adoption.

■■ Feed-in-Tariffs and related Contract for Difference policies are largely used outside of the U.S., and they provide revenue certainty for low-carbon electricity generation.

Technology and cost drivers

Policy initiatives resulted in technological advancements across the renewables value chain, including wind turbines, solar panels and transmission equipment, among many others. The result has been a steady decline in the levelized cost of electricity (LCOE) for renewables, which has fallen to a point where wind and solar are now cost-competitive (without subsidies/tax credits) in several developed electricity markets.




As of March 31, 2019. Source: Bloomberg New Energy Finance, Brookfield Public Securities Group LLC.

In the wind sector, technology advancements have allowed for bigger, lighter and stronger turbines, translating to greater and more reliable output. These utility-scale turbines have yielded low-cost power for utilities and other power purchasers. As an example from a cost perspective, the LCOE for wind was below natural gas in certain key parts of the U.S. market at the end of 2018.

Utilities are investing heavily in wind, solar and other clean sources of power generation to replace coal-fired power plants, as prices for renewable energy have declined. Investment in renewable power generation has steadily increased, with approximately $3 trillion spent on new renewable generation since 2010.

E X H I B I T 1 : AV E R A G E L E V E L I Z E D CO S T O F E L E C T R I C I T Y E X A M P L E CO M PA R I S O N ( U S D/ M E G A WAT T- H O U R)

E X H I B I T 2 : A N N U A L G L O B A L I N V E S T M E N T I N R E N E WA B L E G E N E R AT I O N ($ B I L L I O N S )

As of March 31, 2019. Source: Lazard, Bloomberg New Energy Finance, Brookfield Public Securities Group LLC. Data example represents the U.S. market. .

Wind Solar Gas Coal Nuclear

Wind Solar Other Clean Power Sources

$43$42

$58$102

$151

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018$0

$50

$100

$150

$200

$250

$300

$350

$400

$0

$100

$200

$300

$400

201820172016201520142013201220112010200920082007200620052004

W H AT I S T H E L E V E L I Z E D C O S T O F E N E R G Y ? By definition, the levelized cost of electricity (LCOE) is defined as the net present value of the unit-cost of electricity over the lifetime of a generating asset. In practice, this is generally the average market price that the generating asset must receive to break even over its lifetime.




As a result, the global share of renewables as a percentage of installed capacity has grown and become more diverse. In 2000, wind, solar and other renewable sources of generation accounted for about 0.5% of the global total, compared with approximately 9% seen in 2018.

W AT E RDrinking water and wastewater systems in developed economies (especially the U.S.) are in a state of disrepair due to decades of underinvestment in aging infrastructure. Meanwhile, emerging economy water systems have not scaled accordingly with the pace of economic and population growth, shifting agricultural needs and the rate of urbanization.

The average age of the 1.6 million miles of sewer and water pipes in the U.S. is 45 years; and some systems are more than 100 years old.iii U.S. water systems experience nearly a quarter of a million water main breaks every year, resulting in trillions of gallons in wasted drinking water.iv

The obvious implications of chronic underinvestment are the risks to public health. One has to look no further than Flint, Michigan, where tainted drinking water resulted in dangerously high levels of lead consumption and a Legionnaire’s disease outbreak.v Beyond public health, upgrades to water infrastructure systems can improve overall energy efficiency. According to the U.S. Environmental Protection

Agency, water and wastewater utilities are typically the biggest consumers of energy in municipalities, with up to 4% of national electricity consumption dedicated to the collection, treatment and delivery of water services each year.

W H E R E D O W E G O F R O M H E R E ? R E N E W A B L E P O W E R

Regulatory and policy initiatives

Global policy support will continue to drive the decarbonization of utilities. In the U.S., many states have revised their renewable portfolio standards higher. This is largely the result of the attractive economics.vi The EU recently increased its renewable power targets, with a clause for an additional upward revision by 2023.

Corporates and end-consumers

Several global corporations and broader retail consumers, in an effort to set clear commitment targets to reduce their carbon footprints, have been focused on all clean power as the primary means for energy consumption.

E X H I B I T 3 : G LO B A L S H A R E O F R E N E WA B L E S A S A P E R C E N TA G E O F G L O B A L I N S TA L L E D C A PA C I T Y

As of March 31, 2019. Source: Bloomberg New Energy Finance, Brookfield Public Securities Group LLC. Numbers may not sum to 100% due to rounding.

WIND, SOLAR & OTHER0.5%

HYDROELECTRIC22%

CONVENTIONALGENERATION

77%

WIND, SOLAR & OTHER9%

HYDROELECTRIC17%

CONVENTIONALGENERATION

74%

YEAR2018

YEAR2000




S P O T L I G H T O N U . S . O F F S H O R E W I N D Amid falling costs and commercial success in the U.K. and Continental Europe, the pipeline for U.S. offshore wind projects has grown steadily in recent years. At the time of publication, the U.S. had just one operational offshore wind farm—the 30 megawatt (MW) project off the coast of Block Island, Rhode Island.

The pipeline of pending projects, however, includes approximately 5,000MW of project-specific capacity that is expected to be operational by 2024. It also includes roughly 21,000MW of potential capacity on federal lease areas.vii

Technology and cost drivers

Policy initiatives will continue to play a role, but we believe cost reductions and technology advancements will be the primary drivers of renewable power growth

moving forward. Average LCOEs for wind and solar, for example, are forecast to be at least 60% lower than gas in 2030.

E X H I B I T 4 : R E N E WA B L E P O R T F O L I O S TA N DA R D S TA R G E T S F O R S E L E C T E D S TAT E S ( 2 0 10 -2 0 5 0) PERC EN T O F R E TA I L EL EC T R I C I T Y S A L E S

Source: U.S. Energy Information Administration, based on states’ renewable portfolio standards.

100%90%

80%70%

60%50%

40%30%

20%

10%0%

CONNECTICUT NEW JERSEY MASSACHUSETTS CALIFORNIA WASHINGTON, D.C.

20502010 20502010 20502010 20502010 20502010

48%by 2030

27%by 2020

50%by 2030

24%by 2024

55%by 2050

46%by 2050

100%by 2045

50%by 2030

100%by 2032

50%by 2032

E X H I B I T 5 : T E C H N O L O G Y I M P R O V E M E N T S CO N T I N U E T O F U R T H E R D R I V E L CO E

As of March 31, 2019. Source: Bloomberg New Energy Finance, Company Materials, Brookfield Public Securities Group LLC. Images not to scale. Projections per Bloomberg New Energy Finance. See Appendix for additional disclosure.

YEAR: 1991H: 35mD: 35m0.45MW

YEAR: 2000H: 64mD: 76m2.00MW

YEAR: 2003H: 69mD: 82m2.30 MW

YEAR 2009H: 68mD: 93m2.30 MW

YEAR 2012H: 82mD: 120m3.60 MW

YEAR 2016H: 113mD: 164m8.00 MW

YEAR 2020+H: >120mD: >190m

>10 MW

Boeing 747-8Length: 76m

Updated target Previous target




We expect renewables to account for more than 60% of power generation capacity by 2050—a staggering growth rate of approximately 450% over today’s levels.

The entire U.S. infrastructure complex related to the transmission, storage and distribution of power will require modernization as a result of the growth in renewables.

Modernizing the electric grid requires upgraded networking infrastructure and software systems to allow distribution systems, substations, smart meters and end-user devices to communicate with one another. Advanced metering

devices enable the effective monitoring of real-time power usage, which allows for greater demand response management (balancing electricity supply and demand by incentivizing end users to reduce usage during peak times).

A modernized grid powered by renewable sources of energy will result in cleaner, safer, “smarter” and more reliable utilities and power systems. Outlined below is an illustration of today’s electric grid in the U.S., with a comparison of how the grid of the future is evolving.

FORECAST: IN 2050, 63% OF THE WORLD’S POWER GENERATION MIX WILL BE FROM RENEWABLE SOURCES OF ENERGY.

E X H I B I T 6 : H I S T O R I C A L A N D F O R E C A S T P O W E R G E N E R AT I O N M I X G L O B A L LY T H R O U G H 2 0 5 0

As of April 30, 2019. Source: Bloomberg New Energy Finance, Brookfield Public Securities Group LLC.

0%

25%

50%

75%

100%

205020402030202020102000199019801970

Solar

Wind

Coal

Oil

Gas

Nuclear

Hydro

Other

63% renewables

HISTORICAL WORLDPOWER GENERATION MIX

FORECAST WORLD POWER GENERATION MIX




E X H I B I T 7 : H O W T H E U . S . E L E C T R I C G R I D I S E V O LV I N G

G E N E R AT I O N ■ Most electricity is produced

at centralized power plants from conventional sources like coal, natural gas, oil and nuclear power.

■ To a lesser extent, generation comes from renewable sources like solar, wind and hydro.

T R A N S M I S S I O N ■ Electricity is transmitted

over long distances using a network of high-voltage transmission lines.

S T O R A G E ■ Today, less than 3% of delivered

electric power in the U.S. is cycled through a storage facility.

D I S T R I B U T I O N ■ Electricity is distributed over a network

of lower-voltage lines to commercial and residential end users.

G E N E R AT I O N ■ A greater portion of electric generation will

come from renewable sources as fossil fuel-powered plants are decommissioned in favor of utility-scale wind and solar generation.

■ Additionally, distributed generation (DG) systems, such as a solar panels or small-scale wind turbines will be installed at or near the location where energy will be used.

T R A N S M I S S I O N ■ Existing high-voltage transmission

lines will also include smaller-scale transmission networks, incorporating new technologies to increase efficiency and reduce energy losses.

S T O R A G E ■ Investment in battery technology is critical

to the ability to store and reliably use renewable power.

■ Advancements in batteries, fuel cells and other grid-scale storage technologies are ongoing to solve for the storage and delivery of renewable electricity.

D I S T R I B U T I O N ■ Distribution systems will be upgraded to

conserve energy loss and equipped to integrate more sources of renewable energy through technologies like storage and demand response.

E N D U S E R S E N D U S E R S

■ One-way distribution to the commercial or residential end user, who pays for the consumption.

■ Two-way distribution to the end user will become the new module. The end user will pay for consumption, but through their DG systems they can sell excess energy generated back to the grid.

■ Electric vehicle batteries can help balance energy demand on the grid—acting as distributed sources of stored energy.

■ Two-way communication systems will allow for demand response and advanced metering, which results in end users reducing or shifting electricity usage during peak periods in response to real-time pricing and incentives.

G R I D O F T O D AY G R I D O F T O M O R R O W

COMMERCIAL & INDUSTRIAL COMMERCIAL & INDUSTRIAL RESIDENTIAL RESIDENTIAL




W AT E RTo address the shortcomings related to water and wastewater infrastructure around the world, countries are spending significant amounts of capital for upgrades. Beyond replacement of “pipes and pumps,” utilities are spending on “smart water technology” to address challenges related to water loss, stormwater overflow and overall efficiency.

The U.S. Environmental Protection Agency (EPA) estimates that more than $650 billion of spending is required to upgrade necessary infrastructure. In Europe, utilities are expected to increase annual capital expenditures related to wastewater and pipes to $57 billion annually by 2025, a 23% increase from 10 years prior.viii These projected expenditures create tremendous potential to invest throughout the broader value chain as global water infrastructure is modernized.

E X H I B I T 8 : E S T I M AT E D S P E N DI N G R E Q U I R E D T O U P G R A D E U . S . WAT E R A N D WA S T E WAT E R I N F R A S T R U C T U R E

As of December 31, 2018. Source: ASCE 2017 Infrastructure Report Card, EPA, select company materials, Brookfield Public Securities Group LLC.

TREATMENT$105

OTHER$68

STORMWATER MANAGEMENT$42

COLLECTION SYSTEMS

$83

OTHER$4

SOURCE$21

TREATMENT $73

STORAGE$40

TRANSMISSIONAND DISTRIBUTION

$248

WASTEWATER$298bn

WATER$384bn

TREATMENT$105

OTHER$68

STORMWATER MANAGEMENT$42

COLLECTION SYSTEMS

$83

OTHER$4

SOURCE$21

TREATMENT $73

STORAGE$40

TRANSMISSIONAND DISTRIBUTION

$248

WASTEWATER$298bn

WATER$384bn

T H E I N V E S T M E N T O P P O R T U N I T Y New companies are forming and existing entities are adapting to meet the resource needs of tomorrow. From renewable electricity generation to the transformative power delivery and storage systems, to the wide-scale transformation of water infrastructure; we believe tremendous opportunity exists for investors as firms seek to access capital from both public and private markets.

Our work in the Public Securities Group focuses on the public markets, where the opportunity set to invest in this decades-long transition continues to expand. Today, many investors access the renewable power investment theme through the private market, largely due to the historically higher costs of capital among public companies. This was primarily a result of research and development investments to achieve cost competitiveness with traditional sources of power generation.

But as we stand today, lower costs of capital enable public companies to make accretive investments in this sector.

PUBLIC MARKETS HAVE BECOME MORE RECEPTIVE TO RENEWABLES BECAUSE “DEMAND PULL” ECONOMICS ARE PLAYING A GREATER ROLE TOWARD ADOPTION, R ATHER THAN THE INITIAL “SUPPLY-PUSH” PROVIDED BY POLICY INITIATIVES.

Additionally, allocating capital toward public markets at this juncture provides investors an opportunity to diversify exposure to this long-term mega-trend. Private capital tends to be locked up for longer periods in fewer, concentrated projects. Our approach allows us to effectively invest across the broader identified universe and provides exposure to the entire value chain, with the flexibility of liquid portfolio allocation.




Our investable universe

Within the public markets, we have identified a global renewables and sustainable infrastructure investable universe with a market capitalization that exceeds $1 trillion. As previously noted, we are focused largely within the power, utilities and water sectors. Also important is the distinction we have drawn between what we deem to be more infrastructure-like securities and those that are more cyclical in nature.

Among the infrastructure-like companies are asset owners and operators (regulated and non-regulated utilities), as well as integrated developers of utility-scale solar and wind projects. Water utilities are also included in this category.

We consider these to be infrastructure-like, given the long-term, high-visibility nature of the cash flows generated by these assets, alongside fundamentally higher barriers to entry. A wind farm, for example, exhibits high visibility on the cash flows and earnings its assets can generate because of the multi-year contracts with power off-takers (either utilities or corporations) and has no commodity price exposure.

The remaining part of our investable universe consists of companies we consider to be more cyclical, but play a critical role in this multi-decade growth story. These companies operate in various markets throughout the renewable power and sustainable infrastructure value chain, but they essentially provide the goods, services, manufacturing and technologies necessary for the transition to a cleaner, more sustainable consumption of energy and water resources.

We believe this is a powerful combination, allowing investors to access long-term, high-visibility cash flows generated from the delivery of essential services, as well as long-term growth potential from more cyclical companies.

Across the spectrum of companies, we have identified five distinct classifications. Four of them (Wind and Solar; Clean Power; Clean Technology; and Water Sustainability) comprise our core universe. Companies within our Transitioning Opportunities category are deemed opportunistic in nature.

E X H I B I T 9 : U N I V E R S E C L A S S I F I C AT I O N S , M A R K E T C A P I TA L I Z AT I O N W E IG H T E D

Source: Brookfield Public Securities Group LLC and Bloomberg. As of September 30, 2019.

74%

26%

INFR

ASTR

UCTU

RE-L

IKE

BROA

DER

VALU

E CH

AIN

COM

PANI

ES

42%

13%

2%

24%

11%

7%

Wind & Solar Clean Power Clean Technology Water Sustainability

I N F R A S T R U C T U R E - L I K E CO M PA N I E S

B R O A D E R VA L U E C H A I N CO M PA N I E S

■■ Power asset owners and operators

■■ Integrated developers■■ Clean utilities ■■ Water utilities■■ Transitioning utilities

■■ Manufacturing (wind, solar, water)

■■ Grid modernization/Internet of Things

■■ Energy efficiency■■ Storage■■ Electric vehicles




E X H I B I T 10 : G L O B A L R E N E WA B L E S & S U S TA I N A B L E I N F R A S T R U C T U R E U N I V E R S E

Source: Brookfield Public Securities Group LLC.

CLEAN POWERCLEAN TECHNOLOGY

WATERSUSTAINABILITY

More Regulated More Cyclical

Broa

der

Valu

e Ch

ain

Infr

astr

uctu

re-

Like Clean power

Wind and solar power

Wind and solar manufacturers

Integrated developers

Electric vehicles

Distributed generation

Waste and water treatmentGrid

modernization

Transitioning utilities

Energyefficiency

I

TRANSITIONING OPPORTUNITIESWIND & SOLAR

Power asset owners and operatorsIntegrated developersManufacturingDistributed generation

•

•••

Clean utilitiesPower asset owners and operators- Hydroelectric- Geothermal- Biomass

••

Water utilitiesWaste and water treatment technology

••

Utilities (both generation and T&D) with evolving fleetsFuture automobile EV manufacturers

•

•

Electric vehiclesGrid modernization/internet of things- Energy efficiency- Demand response- Storage

••

1 2 3 4 5

Automobile EV manufacturers

CORE INVESTMENT UNIVERSE OPPORTUNISTIC

1

1 3 4

2

3

3

12Clean utilities

24 5

1Water utilities

W I N D A N D S O L A RWithin this group we include owners and operators of wind and solar farms, integrated developers (those that develop, construct and operate wind and solar assets), and manufacturers of wind turbines and photovoltaic (solar panel) technologies. Also included in this group are companies focused on distributed generation systems—which consist of technologies that generate power at or near where energy will be used.

Example: A Denmark-based renewable-power company focused on offshore and onshore wind-farms, as well as bio-energy plants.

C L E A N P O W E RThis segment currently includes clean utilities (those utilities that have led the transition of green energy versus conventional fossil fuel generation) as well as asset owners and operators that are focused primarily on power generation from hydroelectric, geothermal and biomass assets. As further transitions occur within global utilities, additional companies may be included depending on the rate of transition within their generation fleets.

Example: A major U.S. regulated electric and natural gas delivery company based in the Western and Midwestern parts of the country. The company has stated its intention to serve customers with 100% carbon-free electricity by 2050.




C L E A N T E C H N O L O G YThese technology and service companies primarily operate within the grid modernization and “Internet of Things” segment. Clean technology companies are creating the tools and solutions to help alleviate the inefficiencies and lack of storage in the current, archaic global power grid. Also included in this segment are companies that produce storage solutions, demand response technologies, and fuel cells. Additionally, as the electrification of the grid evolves, which includes higher adoption of electric vehicles, and we believe that these companies can play a key role to achieve the desired decentralization of the grid.

Example: A U.S.-based designer, developer, manufacturer and distributor of high-performance fully electric vehicles (EVs) and energy generation and storage systems.

W AT E R S U S TA I N A B I L I T YAs water and wastewater treatment processes are brought into the 21st century, a tremendous amount of investment needs to be made throughout the value chain, including pumps, valves and meters, among other equipment. As a result, water utility capital spending forecasts are expected to surge in the coming decades, increasing the rate base for these companies.

Example: A U.S. water and wastewater utility working to modernize its aging infrastructure through significant investments to replace pipes and upgrade its antiquated water and wastewater treatment facilities.

T R A N S I T I O N I N G O P P O R T U N I T I E SThis opportunistic vertical consists of utilities with evolving generation mixes. Also within this group are companies in the electric vehicle sector, based on the renewable energy synergies they present, both from a transportation perspective, but also the potential impacts they could have on the overall electric grid.

We believe the global renewables and sustainable infrastructure universe outlined here has hit an inflection point, with the largest opportunities for investors ahead. Demand drivers like policy initiatives, but more importantly economics, will continue to expand markets and advance technological improvements.

While a great deal of progress has been made toward cleaner power generation and more sustainable consumption of natural resources, tremendous growth opportunities exist in this multi-generational, multi-sector transition and growth story. Our investable universe within the public markets continues to expand to address the power and sustainable infrastructure needs of tomorrow. The combination of infrastructure-like and more growth-oriented companies across these verticals offers the potential for favorable returns stemming from this generational mega-trend.

Conclusion




I M P O R T A N T D I S C L O S U R E S Brookfield Public Securities Group LLC is not making any representation with respect to the eligibility of any recipients of this email or via the attached links to acquire any strategy referenced herein under laws of the jurisdiction in which the recipient is located. The information is being provided for informational purposes only.The information in this email is not investment advice, and it is not intended as investment advice, and it is not an indication of trading intent or holdings or the prediction of investment performance. Views and information expressed herein are subject to change at any time. Brookfield Public Securities Group LLC disclaims any responsibility to update such views and/or information. This information is deemed to be from reliable sources; however, Brookfield Public Securities Group LLC does not warrant its completeness or accuracy. This email does not constitute, and it is not intended to constitute, an offer or solicitation to sell or a solicitation of an offer to buy any security, product, investment advice or service. Nor shall any security, product, investment advice or service be offered or sold in any jurisdiction in which Brookfield Public Securities Group LLC is not licensed to conduct business and/or an offer, solicitation, purchase or sale would be unavailable or unlawful.Any outlooks, forecasts or portfolio weightings presented herein are as of the date appearing on this material only and are also subject to change without notice.©2019 Brookfield Public Securities Group LLC (“PSG” or “the Firm”) is an SEC-registered investment adviser and represents the Public Securities Group of Brookfield Asset Management Inc., providing global listed real assets strategies including real estate equities, infrastructure equities, multi-strategy real asset solutions and real asset debt. PSG manages separate accounts, registered funds and opportunistic strategies for institutional and individual clients, including financial institutions, public and private pension plans, insurance companies, endowments and foundations, sovereign wealth funds and high net worth investors. PSG is an indirect, wholly-owned subsidiary of Brookfield Asset Management Inc., a leading global alternative asset manager. Past performance is not indicative of future performance, and the value of investments and the income derived from those investments can fluctuate. This communication is for financial professionals only. Not for redistribution to the retail public.

I N D E X P R O V I D E R D I S C L A I M E RBrookfield Public Securities Group LLC, formerly Brookfield Investment Management Inc., does not own or participate in the construction or day-to-day management of the indices referenced in this document. The index information provided is for your information only and does not imply or predict that a Brookfield Investment Management Inc. product will achieve similar results. This information is subject to change without notice. The indices referenced in this document do not reflect any fees, expenses, sales charges, or taxes. It is not possible to invest directly in an index. The index sponsors permit use of their indices and related data on an “As Is” basis, make no warranties regarding same, do not guarantee the suitability, quality, accuracy, timeliness, and/or completeness of their index or any data included in, related to or derived therefrom, and assumes no liability in connection with the use of the foregoing. The index sponsors have no liability for any direct, indirect, special, incidental, punitive, consequential or other damages (including loss of profits). The index sponsors do not sponsor, endorse or recommend Brookfield Investment Management Inc. or any of its products or services.

E N D N O T E S :i. Brookfield Public Securities Group LLC (“PSG” or “the Firm”) is an

indirect, wholly owned subsidiary of Brookfield Asset Management. ii. https://ec.europa.eu/energy/en/topics/renewable-energy/overviewiii. www.nytimes.com/2017/11/10/climate/water-pipes-plastic-lead.htmliv. https://infrastructureweek.org/failing-water-infrastructure-

threatens-american-manufacturing/v. www.cnn.com/2016/03/04/us/flint-water-crisis-fast-facts/index.htmlvi. www.eia.gov/todayinenergy/detail.php?id=38492vii. Source: American Wind Energy Associationviii. www.bluefieldresearch.com/europe-increase-water-infrastructure-

spend-23-2025-526-billion-total-capex/

C O N T A C T U STelephone: 1-855-777-8001 Email: [email protected] Or visit our website at www.brookfield.com © 2019 Brookfield Public Securities Group LLC

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