00:00You've been in the region for a really long time, and Brookfield is one of the largest direct
00:04investors in the region. How has it evolved as a destination for capital over the last few years?
00:11So what I would say is, first of all, we're seeing exceptional tailwinds that we haven't seen
00:15outside in history, and that's really around economic reform, capital, and demographics.
00:21If you look at where we stand today, fiscal buffers are healthy,
00:28economic diversification is accelerating, and then when you look at capital markets,
00:32it's never been deeper. Now, the key thing to keep in mind is the institutionalization of our
00:38markets are at an all-time high. Sovereign wealth funds are investing strategically with their
00:43capital. You have long-term planning by the administrations here in the region, and that
00:48combined brings a whole bunch of private capital to the region, which then helps the private sector
00:53ecosystem grow quite substantially. So overall, I would say the biggest change is the institutionalization
00:59of everything.
00:59Okay, so the rising tide lifting all boats as well, to your point. There are loads of funds
01:05that are moving here to capitalize on the opportunity. Are there enough opportunities for everyone?
01:10Look, there absolutely are, Jumana. We've been present in the region for 20 years. We've been
01:15institutionally investing for over a decade. For a very long time, there was this view that there
01:20aren't enough opportunities. And I think what we've shown with $16 billion invested over the past
01:25seven years, eight years, is that there are opportunities. And what I would say is you need
01:30to focus on where the strengths are. And for us, it's been focused on partnerships. We work very well
01:36with those that we invest in. That is a key for the region. And the second thing that I would
01:41say is
01:42we've got 100 people on the ground who just think about this day and night, and that's pretty helpful
01:47for our long term. Remember, you and I were on a panel, I think it was almost a year ago.
01:51And
01:51there's one line that struck out to me. You were saying something about the exposure that investors
01:56get to this part of the world. Obviously, GCC currency is pegged to the USD. So you're getting
02:02USD-like assets or linked assets, but not domiciled in the United States. Does that theory still hold?
02:08So what I would say is just global capital is fluid, and global capital is going to continue to go
02:14to
02:14see where it can find the best returns for the same amount of risk. And when you compare a risk
02:20in the GCC to similarly credit-rated risk, you get a better pound for that money. And that's not going
02:27to change. That is, as long as that, I would say, delta remains, that just means that, like you said,
02:34you get developed market risk, but for emerging market growth.
02:37Yeah. Okay. So long term investor, but obviously, you know, geopolitics, it's always going to be a
02:43topic in this region. Right now, we're sitting on the potential for military action in Iran.
02:49How do you navigate some of the potential turbulence to come geopolitically?
02:54Look, I think you said it best, which is there's always a little bit of that narrative going around
03:00the region. And that's been the case for 60, 70 years. And over 60, 70 years, the GCC has continued
03:05to outperform many markets globally. So the first fundamental thing I would say is there's nothing
03:10new here. But the second thing I would say is that we invest for the long term. We're not investing
03:16for
03:16the short term. We don't look at arbitraging opportunities. We're investing in sectors that
03:21have long tailwinds with them. And we're going to hold that capital over time. And that capital
03:26continues to appreciate and compound. And the last thing I would say is we continue to invest in
03:31economies and we're domestic to those economies. And so when you're doing that, you're quite
03:36protected on the downside as you look to the future. So speaking of those longer term investment
03:42themes, AI infrastructure, I know a big theme for Brookfield as a whole, where does the Middle
03:48East fit in to that AI infrastructure build out? Well, look, we most recently made an announcement
03:54with QIA and QAI about a $20 billion partnership. And what I would say is this is a global theme
04:00and we're
04:00just enacting it in the region. There's $7 trillion required to get AI up and running.
04:08Everyone's focused on which code, which LLM is going to be the best one. But the discussion is
04:13really going to be around how do we get this all up and running and keep it domestic within the
04:17countries that is required. And so that $7 trillion includes power. It includes the data centers that
04:23you need to build, the compute capacity. This is no longer something that people can do on their own.
04:29And so we're putting a lot of effort into it. We think it's $100 billion opportunity for Brookfield
04:33alone. Okay, interesting. And again, there's a lot of skepticism about whether all of the money
04:38that's going into CapEx spending will actually see a return on investment. You're taking the
04:44alternative. You think that the potential is really there and particularly also in this part of the
04:48world. Well, look, we invest, if you're looking at that strategy particularly, we're investing in
04:53long-term and CapEx that will yield long-term returns, which are contractual. And so it's a
05:00very different risk to maybe if you're looking at other parts of that value chain.
05:04Okay. What other sectors also come to mind beyond AI?
05:07We have done very well in financial services over here. We will continue to, I'll say,
05:13invest in that sector. We've done acquisitions in the payment space, which have worked out very well
05:18for us. We've invested in the education sector. We're going to continue to look for roll-up
05:22opportunities there. The one place that we do see quite a bit of opportunity is hospitality,
05:27both on the real estate side, owning the property, but then also most interestingly
05:32on the private equity side. And the reason being that we're one of the world's largest real estate
05:36owners. We do the work and live very well. And we always say that we create ecosystems.
05:42Investing in some of the hospitality concepts on the private equity side is probably a good way to go
05:46in the future, just given our positioning. And on the real estate side, I would say, look,
05:51vacancy rates are at an all-time low in our part of the world when it comes to office,
05:55when it comes to residential. We've announced a $1 billion joint venture with Lunate where we're
05:59going to focus on residential in the region. And that's because, again, the demographics are in
06:03our favor. The long-term trends are in our favor. And we think the way people are going to live
06:07over
06:07the next 30 to 50 years is going to become a lot more urban. And that's something that we know
06:11very
06:11well from our global practice.
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