00:00Brookfields have a significant amount of investments in the region already. Let me just start off by asking you since you sort of also have this global lens as well. How deal making this part of the world differs from other regions. Well first of all it's changing all over the world. That era of passive investing and passive capital is over. And the future belongs to those who roll up their sleeves and are really going to build value in the businesses they own. And that's no different here in the Middle East. I think decades of easy money made
00:30investors forget what real investing is and now they have to create build and operate businesses better. In the Middle East exactly the same. You have to be able to bring some experience or some value creation to investments. So where are companies and founders rolling up their sleeves then. Where are those opportunities here in the region. It's all across geographically it's all across the Gulf and I'd say the broader Middle East. In specific sectors. The specific sectors. I would I would say that for us we have found to be quite exciting as financial
00:59services education and industrials broader business services. The thing is that the unique the great thing about this market is it provides an opportunity to earn emerging markets returns with developed market risk. And so you have this unique opportunity to invest in almost a broad array of sectors where they just haven't had private capital in the past in the same way that they do today. Yeah. So last year around this time the PIF signed an MOU with Brookfield to act as an anchor investor for a new
01:29vehicle called the Brookfield Middle East partners. The fund was targeting two billion dollars with 50 percent of its capital allocated to Saudi Arabia. Can you give us an update on this fund. Yes. So we've well first stepping back we've invested
01:41about 18 billion dollars in the Middle East so far. And so we've been investing here for a long time. We're very excited about it. We keep growing. The fund is going very well. And we we hope to we are continuing to invest in that fund and hope to do a lot more in the near term. Yeah. We've been talking about how
01:57in in the kingdom that's sort of been I would say like a maturity of the Saudi 2030 vision and a shift towards some of the forward looking sectors you know AI technology when you see it this
02:09year at FII. Some of the conversations are around that about smart manufacturing and perhaps less so on some of those giga mega construction projects. How do you see that opening up opportunities.
02:20Well we really welcome it. AI infrastructure we think globally is an amazing opportunity and people are thinking about AI the technology but they're often not thinking about the supply chain resilience that's required the opportunities to power AI the opportunity to build the compute that's required for it or the opportunity to use AI to make manufacturing businesses or old world analog businesses far more productive. And that opportunity we think there's seven trillion dollars of investment opportunity globally. A big chunk of that will be here in the Middle East.
02:48Because I think what's great about this market is the governments are quite forward looking and quite partnership oriented when it comes to AI in particular.
02:56Yeah. And how do you see the opportunity for exit in this part of the world as well. You know again we've been covering a big pickup and IPO activity looks like that's going to trade a little bit going into the last quarter of the year at least here in Saudi Arabia quite intentional on their part.
03:11What does that do to exit. Yeah look I think all markets have these cycles that move a little bit. Actually what's happening with the public markets softening a little bit probably due to an anticipation of certain very selective pullback of government spending.
03:26You know the truth is that opens up a huge opportunity for private capital. So we actually look at it as a great time for us to be a partner of choice to governments or to corporates or to families in building out their businesses rather than only the public markets.
03:39Yeah you say private capital. Let me ask you. So private credit. And this is you know there's been an explosion of interest in private credit just over the last year or so. Do you see that as perhaps a competitor somehow in terms of you know a company's options to raise capital. Has it edged out some of the private equity guys.
04:00I wouldn't say it's edged out the private equity capital and what we bring in terms of expertise in terms of value creation opportunities. And that's why I think in this era where your capital has to do more than just be a source of cheap funding.
04:13You know that that's very important for private equity. But private credit I think there are still many high quality companies that need capital that's flexible and long term in nature and they need that partnership orientation.
04:26And there's a lot of investors who want that exposure. And so this opportunity I think is it is already large and I think it's going to continue to grow.
04:33OK. So private credit and private equity can continue to grow side by side. Absolutely. OK. So I thought this was interesting. You're launching a private equity retail fund.
04:42It launched in Canada a couple of days ago. How much do you expect that to contribute to to Brookfield's overall business. And can you imagine bringing something like that to the Middle East as well.
04:52Look we've we launched on November 1st officially. So it's very early. About to launch. About to launch. But but we're very excited about it.
05:00And we think that if you look at what's happened in the universe of private companies 85 percent of companies with an EBITDA of over 100 million dollars are private.
05:09Companies stay private. Companies stay private far longer than they did 20 25 years ago.
05:13And the number of private companies out numbers a number of public companies by by multiples.
05:18And so this opportunity to to attract you know high net worth wealth investors into a product that can invest in private equity making those companies available to the broader wealth marketplace is very exciting.
05:31We're today focused on Canada and the United States. I'm sure in some time given our presence here in the region. We would love to bring that opportunity to the Middle East. Yeah.
05:40You know we're here and again at an investment conference. There are so many LPs also participating in this conference.
05:47And I wonder whether there is a lot. You've been having conversations or will be having conversations about the rise of continuation vehicles.
05:54You know around this general theme that the struggle for fundraising. What does mean the feedback.
05:59Look I'd say everyone views continuation vehicles I think in the same way now in a very mature way which is for your best and greatest businesses.
06:07There sometimes are these businesses that compound cash in a matter which is very exciting for the long term.
06:13And you'd rather own those businesses longer. Most people are very supportive of that approach.
06:19I think obviously if it's taking away from more natural exits because evaluation mismatch that's probably not the right way to use a continuation vehicle.
06:28We've generally shied away unless we think that it's a great business. OK. Let me round up just asking you maybe you know looking ahead to 2026.
06:37What what are you seeing for deal making. Are you feeling good about the year ahead. I feel like the deal activity is picked up dramatically.
06:43I think the valuation gap has started to really shrink and make deal markets more viable. At the same time the financing markets have been very strong.
06:52And I think we as groups most of us have thought about areas that we want to focus on where we can add real value power AI infrastructure industrial companies payments.
07:02These are areas that we know that we have an expertise and we can do more than the other owner could. And that gets us very excited about investing in this market.
07:09Yeah. And when do you expect fundraising to pick up again.
07:12You know it's funny for the fundraising is a broad brush has been muted for the industry. But I think when you are a strong sponsor with strong relationships and you have a deep expertise in something.
07:23It's been just fine. And for us we've actually continued to raise increasing amounts of capital from our best partners and supporters.
07:31So I think that trend will continue. I think that LP is wanting to do more with less will continue.
07:38And I think we're very pleased to in our sectors that we know the best be a beneficiary of that trend.
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