>> we are the backbone behind

global business. when they need capital, we fund it. francine: it's one of the world's largest alternative investment companies. brookfield holds cell phone towers, powerlines, windfarms, ports and even city skylines. bruce flat has been at the helm for more than two decades. overseeing more than $900 billion of assets under management. the veteran chief executive is considered a visionary investor with a golden touch. but for him, it's all about patience and funding the right investments. >> what you might think of as risky, to us it's not risky because we have been in these businesses for a long time. francine: in this episode with leaders with laqua, i speak with blue josh bruce flat about the secrets of his success, the outlook for commercial real estate in his own future. thank you so much for coming on

leaders. bruce: how are you? francine: i'm great, brookfield has gone from strength to strength. if i was a martian meeting you for the first time, how would you describe your company? bruce: we invest in, buy and own the backbone of the local economy. when the water gets delivered to your house, the road to drive on, the pipeline that brings different things to your community, the telecom towers that transmit your phone, the data center, the real estate that you live in. it's what we own and built. it's really what drives the economy, and you don't often see our name. francine: is that a good or a bad thing? bruce: it's because we are behind the scenes. it's big, worth a trillion dollars of assets almost. we are behind a lot of things of the global economy. francine: do you think it gives you strength? bruce: we try to be quiet and do our thing. sometimes it helps, sometimes it

doesn't. on balance, it has been good for us. francine: you have been in charge for 22 years. bruce: it seems like a long time when you see it that way -- say it that way. francine: over two decades. you have grown the business by so much, what was the most difficult question about how to grow it? bruce: the amazing thing about this business is you learning every day in the world is changing every time, but if i went back 22 years were 32 years, what we invested and then are now are varies different. data centers did not exist then. telecom towers were owned by companies. the business evolves in the backbone evolves of the economy so it's a really interesting business to be in because you're always learning. francine: you don't want to invest in something that goes nowhere. bruce: we are always trying to understand where is the future going how do we invest with that

and often it's listening to your counterparties, your clients, your partners and hearing what they are saying and what they want to do, and we are going with them. and we are the backbone behind global business and when they need capital, we fund it. francine: northstar, as it was three days, right? bruce: over time we are trying to figure out what are the themes that will drive the world. today the digitalization of everything, the decarbonization of everything in the deglobalization of everything are three megatrend themes that are going to be very dominant in investing for the next, not the next two or three years, the

next 20 to 30 years. francine: geopolitics is taking a turn for the worse, how do you keep that trajectory would saying we will digitize interest rates or how do you stay the course? bruce: we try to find good countries, go there and stay there, invest in these things and whether governments, or go or interest rates go up a little bit or down a little bit aren't really relevant to these themes in the long term. you need to make sure you have liquidity. you can find yourself in iran could businesses. that's more important than those general trends. we are investing for 10, 20, 30, 40, 50 years. francine: is digitalization the harness because of ai because we don't really know where we will end up? bruce: digitalization was happening because of cloud computing and the super tech companies getting into cloud computing.

that was the whole thing going on. the amount of things that go to your ipad every day, today in your phone, it's amazing what's happening in the past 20 years. now with ai, it's almost exponentially taking it up. and so, that's just another tailwind behind this whole sector. it was very strong before that and for the last 5, 7, 10 years, we have been pushing into it, but the ai, what's going on with ai is even more dramatic. the digitalization of everything is being driven by data centers and just the connectivity of everything. remember, everyone in the world has, in some way committed to, let's have less carbon. and it's just transitioning the economy. it's not good or bad or green or black, it's just, let's transition the economy to have less carbon. so we are finding that in the

leaders in that today are the technology companies, so a lot of this is being driven by technology companies to go green, so we are one of the largest builders of solar and wind, now batteries, to be able to get carbon out of the system. years ago we would sell power to the grid. today, our powers mostly sold to global corporate's. francine: you have to take a bit on what kind of technology or do you have to take a bet on just the infrastructure that supports it? bruce: we were doing wind 15, 18, 20 years ago, we did solar 10 years ago, but very small. only when the cost curves made solar and wind at the point where the -- they are the most economic way to generate electricity. and at the point of that, you know if they are the most economic way to do it, and they have less carbon and they are going to win.

that is why we are decarbonizing today because in most countries this is the lowest cost energy. francine: geopolitics must get in the way. politicians have to be reelected, pro-climate change against climate change, how do not waiver? bruce: remember, just to the important point, in most countries, the lowest cost energy today for electricity is solar and wind. you don't need subsidies. and when you did need subsidies, politics mattered. today you don't. francine: deglobalization is back on shoring. bruce calling all it is is, i think in covid, i would say it's always been happening in inchoate people just learned we should have production capacity located in many things, located in many things where you use them. increasingly, for example, batteries, for cars for example. they are being used in america and there battery plants getting

built in america and there is an enormous need for capital to fund battery plants. there's enormous need for semiconductors, enormous need for manufacturing capacity in various locations around the world. and it's just natural that everyone doesn't want to have all of their manufacturing capacity in one country or place. let's diverse funds. that is a big theme, which means it's a lot of capital. francine: you make it sound easy, but this has got you more than 900 billion in assets under management. bruce: it's not easy, but if you have operating people and you keep repeatable -- do repeatable things around the world, it gets simpler. it's not easy but it simpler. we have been doing this a long time and everything is not the same, but there are a lot of things that rhyme, and therefore

you can learn and continue to grow over time. francine: he plans to invest in the financial backbone of the global economy. bruce: we think that's the next phase of infrture investing. ♪

francine: infrastructure has been a bright spot for brookfield. the company is targeting buyout opportunities in the middle east and it plans to start a pool that invests in financial infrastructure. such as payment systems as demand grows. i continue the conversation with bruce flat. did you know in 2002 you wanted to be at 900 billion under asset management? bruce: we are trying to make money for our clients in a thoughtful way. the reason why we are at the scale we are is because we have been thoughtful with their money and we have earned them a good

return. and we have not taken a lot of risk. if you can do that over a long time, you can compound their investment will -- investment wealth to very large sums of money. you can say very long durations, they need these types of assets to earn their returns over the longer term. francine: you have also gone to credit. how much are you expecting that to grow? bruce: what has happened with regulations in the banking system is it has pushed out credit off the balance sheets in the banks on the right place where that is being funded from his institutional investors. investors like ourselves continue to grow our businesses where we are funding these type of products, but our business is not in competition with the

banks, it's in partnership with the banks. as a result, i would say it's facilitating the growth of the global financial markets as opposed to something often people talk about at the wrong time in the cycle or whatever it is. this will be growing in happening for a long time. bruce: this is where most of the capital is in the world, and sovereign institutional funds and pensions. these funds used to be 20 and 30 billion, today they are 300 billion, five hundred billion, trillion, a trillion and a half billion dollars. these are large sums of money. they need to put it to work and it will continue to grow for a long time. francine: is it mainly the gcc countries? bruce: we try to earn them good returns by taking moderate risk. if we can do that it's all around the world.

what you want to do in your own portfolios take moderate risk. francine: what is moderate risk. you make it sound easy but this is in a know-how. you are also quite inquisitive. bruce: i would say, in the businesses we are in we have more information than most people about what we do. therefore, what you might think of as risky, to us it's not risky because we have been in these businesses for a long time. we know what's getting shipped across the ocean in our containers. we know what's getting booked into the ports in different countries. how many people are going into the shopping mall and it just informs us. we have better information and base our decisions and most people, but we are trying to

lower the risks by doing that. investing is tough, it's not easy. therefore you always take some form of risk. francine: how do you choose what company to buy? bruce: proper pricing, when things are up a lot, just wait, most people invest at the wrong time because they get excited about what the markets are telling them about a business, therefore that's usually when we are not investing in just wait for the time when it will be a little better to invest. francine: i think you have spoken in the past about possible big affirmation that will be possible for brookfield. bruce: we are always looking for additions to the business in 2018 we brought oak tree our fold then we have a partnership with the management there.

that has been transformative to our credit business and we are always looking for things like that to continue to build the business and just grow over time. but if not we keep plugging away every day. francine: it's more partnerships, this is a different kind of carbon fund. >> our transition business we split off from our main infrastructure business for a half, four or five years ago. we have raged a large first-time fund. we just did first close of our second fund for $10 billion. we started in emerging markets business. all we are trying to do is, we informed ourselves about transition, we built a team over a long time, now some people said to us, can you solve

emerging markets as opposed to developed markets. we did not feel it appropriate to put the two in the funds, so we create another fun for that. some of our clients will come along with us. francine: is that a template for future possible spinoffs? bruce: we have a buyout sponsor business but we are in the midst of creating a strategy which will be a separate pool of money. we create a strategy for financial infrastructure. because we think that's the next phase of infrastructure investing in the financial backbone of the global economy. a lot of world's first true financial infrastructure and it's not appropriate for our infrastructure fund, so we are creating a new pool of money to

do that. there is a fine line between having too many things and making sure your clients you want to be invested with you and that type of area have a pool to be able to do it with us. francine: when you look at infrastructure, consolidation was the name for the last six months, does that make your job easier or tougher? bruce: we were one of the pioneers of infrastructure. going into institutional clients. we were in industrial businesses and how we got into it we decided we did not like the up and down of the industrial businesses we had, but we really like the backbone infrastructure that was in these businesses. 20 years ago we started doing it. we would listen to it so nobody

would invest with us. it's quite -- it's great that this has become mainstream today. the good news i'd say we are still a leader in it. we have very large funds, in fact, the largest in the world. therefore we just continue to try to differentiate our investment strategies and with size, scale and operating people and the ability to grow in the places that we are, i think -- to others getting stronger help us, probably not, but it doesn't really bother us. i think there's a place for us to continue to grow in business. francine: coming up, why bruce flatt has faith in the future of commercial real estate. bruce: there is opportunity coming. if you know what you are doing, you can pick the right assets. there is great opportunity here. ♪

francine calling plunge in office valuation or spooking investors raising fears. as one of the world's biggest owners of commercial real estate, brookfield is at the center of the global shakedown. the chief executive, bruce flatt who made his name and real estate, seize opportunities where others see risk. we continue the conversation.

commercial real estate. a lot of people say, this is not the right time we see a shakeout in commercial real estate. there are opportunities that you see. bruce: the next story is that interest rates are coming down, fundamentals are good with a lot of commercial real estate. there is a tale of some investors that have properties for this environment, the fundamentals don't support it in the financing they have can support it and they have to get dealt with. that's a tale getting dealt with within the financial system, fundamentals are getting better, interest rates are coming down, which means the values are going to improve, but that tale, there opportunity coming. if you know what you are doing, you can pick the right assets. there's a great opportunity here. we have done this for a long

time and we have seen these cycles before real estate cyclical, and you can make a lot of money when you pick the inflection point of markets, i remember it in the early 1990's. i remember it in the early 2000's, i remembered and in 2009, 2 thousand 10, 2000 11, 2012. there are points when there is an inflection point. we are at one of those inflection points. francine: so you are buying? bruce: we foreclosed on loans for multifamily in the u.s. recently. we are very excited about that. we continue to look at a bunch of things. francine: do you see anything in europe? bruce: absolutely, the biggest, most liquid markets are in the united states, that doesn't mean -- because they are the most liquid, you find the most

opportunities, but you're up there is less capital and therefore there will be opportunities here. francine: how do you make a difference between the ones that will get better and the ones that you should forget? bruce: i would just say it depends on the types of real estate. quality wins, always. it always has, it always will. francine coles link -- francine: what he spent most of your time thinking about? bruce: sometimes helping my teams with business, say a period of that, at third with clients, helping them understand what we are doing and where we are going. and a third is, just internal people running the organization, i will call it. and with that, we spend an enormous amount of time building our people, transitioning our people within all of our

businesses, and it's not something that happens once, it's happening all the time, and our whole goal, the culture of our places, bring people up that are very young, give them opportunities that they would never get anywhere else, grow them throughout the organization, make sure they are entrepreneurial, hard-working and want to win, and if you have that, you have great culture in a company, that's where we spend a huge amount of our time trying to build within the organization. francine: bring them up to test them or just to make them learn? bruce: we can bring them up to take on roles, and eventually, eventually i will become an executive chairman and still be around. francine: will you ever retire? bruce: i will become an executive chairman at some point in time. what that means is, i'm here to help mentor young people, help

with business development, look after clients that can be helpful to the overall organization. but at some point in time, this is a hard business. we are in 30 countries, we have lots of people. it's better to have younger people grow the business. i took over in my early 30's and i'm probably slower today than i was then. not that i have slowed down, but i'm slower today and at some point in time it's the right thing to give the people those roles. we are continually evolving the organization. francine: are you going anywhere anytime soon? bruce: no. francine: this is the biggest mistake for politicians and chief executives, staying on for too long, or is leadership in 2024 different to what it was in the early 2000's? bruce: i think it depends on the organization. i'm not suggesting our culture

is what works for everybody else, but we have a culture where our elders stay around for a long time to help, and our young people get opportunities which they wouldn't otherwise get if the elders stayed in place in a full-time role. and that's what we do. but maybe it doesn't work for everyone, and that's ok. francine: bruce flatt, thank you for joining us today. ♪ when i was your age, we never had anything like this. what? wifi? wifi that works all over the house, even the basement. the basement. so i can finally throw that party... and invite shannon barnes. dream do come true. xfinity gives you reliable wifi with wall-to-wall coverage on all your devices, even when everyone is online. maybe we'll even get married one day.

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