00:00It's been a while and you now officially are CEO of Brookfield Asset Management. What's changed
00:05in your life? Very little. At Brookfield, we run a lot of businesses around the world. We like to
00:12run those businesses well. We like to run our own business quite well. And full credit to Bruce and
00:17the other senior leadership team. This was a very thoughtful, methodical, incremental transition.
00:23Well telegraphed. Nice to get the announcement out of the way and just back to business as usual.
00:27All right. So that went as expected. But the world is kind of crazy, to say the least. And I
00:33think
00:33about the volatility we see as a result. We see it playing out to some extent in the markets today.
00:39But we do have an environment macro where things can change pretty dramatically, as we saw this
00:44this past weekend with U.S. and Israel, the attacks on Iran. So I'm just curious for you, is it
00:50too soon
00:51to rethink kind of strategies at this point? Like what will it take to maybe say we've got to start
00:56with thinking differently about the macro? We're very long-term investors. We focus on
01:01long-duration assets that are essential and critical in the communities and businesses that
01:08they operate in around the world. And these are assets that produce cash across a cycle. They're
01:13downside protected. They're inflation linked. So we will take a very, very long-term view. And despite
01:19the headlines over the last weekend, our focus is on our people who are safe and our assets that are
01:24operating. So we continue to look forward. And the fundamentals for the key themes we're investing
01:30in continue to be positive. Does the geography change at all? And I bring that up because data
01:35centers, energy, infrastructure, big investment play for you guys. You teamed up with Qatar Investment
01:42Authority on a $20 billion venture to invest in AI infrastructure. How does the war with Iran,
01:48on the instability in the region, does it change that specific investment at all?
01:51It does not. And again, when something like the past weekend happens, the focus is on our people
01:57who are safe, both at Brookfield and our portfolio companies. And then our focuses are on the assets.
02:02And those are all performing. When you think longer term about our focus on the region,
02:07it's an incredible region. It's got very significant growth. It's got an increasing presence on the
02:12world scene. Those are the types of asset classes and geographies that we want to be investing in
02:18long term. Could this make the region even more attractive? Is there an idea? I mean, look,
02:24the president spoke from the Oval Office today. It's obvious that there's not a clear person who is
02:29going to take over for the supreme leader or with regard to Iran's leadership at all. Nobody knows
02:36what's going to happen. But is there a chance that Iran becomes a more stable force in the world and
02:42that opens up opportunities for you in the region? I would say when we think at Brookfield and the
02:47types of things we invest in, they tend to have durations far beyond single administrations, political
02:55parties, individual leaders. And therefore, we focus on the fundamentals. And when you think about
03:00things like data centers, like energy, the two you just mentioned, the fundamentals today,
03:06are better than ever before. And that's what's going to drive our investment decisions.
03:10One of the things that we love talking with you guys specifically is, I mean, I think about
03:15Brookfield Asset Management. You've got $273 billion in assets under management when it comes to real
03:20estate. Infrastructure, $247 billion. Renewable power transition, this is something that you have been
03:26overseeing for a while at the company, $143 billion in assets under management. Credit, $363 billion.
03:34Where are you seeing, though, any signs of stress? Are you going to tell me the whole portfolio is
03:38fine? So I think the topical one today is credit. And the first thing we would say is everyone needs
03:46to take a step back. Credit, private credit, and direct lending are almost used synonymously in
03:52today's market. And they represent very different things. Our view is credit markets are actually in
03:57very good shape. Corporate balance sheets are strong. Banks are great. Capital markets are
04:02incredibly liquid today. Then you can move to private credit. Our private credit focus is on
04:09three things. Asset-backed lending, real asset lending, and opportunistic credit. All of those are
04:15seeing very strong fundamentals. And then there are some concerns in direct lending today. And there are
04:21concerns about tightening credit spreads, corporate credit quality deterioration, maybe some concerns
04:28about liquidity. It's important to recognize that direct lending is a very small component of the
04:33broader credit market. So, but are there any situations that your guys are concerned about or
04:37no? I understand it's a small in proportion, but... We've positioned the business really well over the
04:43last few years. And we've been very cautious and incremental about our exposure to the headlines,
04:49the themes that are dominating headlines today, whether it be software or retail funds.
04:54Well, we have some, it's de minimis. What's more important is we've positioned our entire business
05:00to be a net beneficiary from AI penetration. And then the other exciting thing for us is we've
05:05recently announced our full partnership with OakTree, a very contrarian credit investor that's
05:11extremely well-placed to go to work in this environment. We'll get to OakTree in just a second.
05:16One more on credit though, outside of your portfolio. And when you look across the credit
05:21landscape, what gives you pause? Not Brookfield's assets, but out there in the environment.
05:27In the environment today, I think the thing that we look at is sometimes there is issues with
05:33underlying credit quality. And sometimes there is issues about liquidity in which these credit
05:39investments are held. And those two things are very different. And in today's environment,
05:44they're sometimes being conflated. There's a lot of talk about perpetual credit vehicles.
05:49We think these vehicles long-term are great. They offer a unique private market exposure to a wider
05:56spectrum of investors that can offer diversification, that can offer growth.
06:02But those vehicles are perpetual in nature. They need to be managed. They need to be invested
06:07appropriately. And they need to be executed in a way that is thoughtful given the liquidity
06:12requirements they will have over time.
06:15Your understanding and Brookfield's understanding of the financial markets, this push to spread those
06:21things like private credit to a wider investment pool, if you will, do you think that still makes
06:26sense?
06:27Absolutely. Absolutely. Private markets offer an incredible opportunity for investors of all
06:33type. It gives them diversification versus what they can get in the public markets.
06:36It can give them exposure to some of the most exciting growth themes that are sometimes difficult
06:42to get in public stocks and bonds. And historically, private markets have offered a premium return.
06:48It comes down to a very simple fact that when they are offered to the individual investor,
06:53it needs to be through a structure that is well understood on both sides and is managed appropriately
06:58from both an investment and a liquidity standpoint.
07:01So understand it's not liquid. So understand what you're investing in.
07:04Understand, and there is an onus on the manager to appropriately manage those vehicles. I'll tell
07:12you from the Brookfield standpoint, we've been very incremental and thoughtful of our growth in
07:17this space, at times restricting capital to avoid any situations that there could be a liquidity crunch.
07:24Can we squeeze in one real quick one, about 45 seconds or 60 seconds? On AI, in terms of the
07:29data
07:29center build, what do you continue to see? And has anything changed versus what we've seen in the last
07:33six to 12 months? No. You're starting to smile, so I'm assuming no.
07:36It's exciting. And the reality here is the demand is being driven by the largest, highest quality
07:43credit counterparties, the best corporates in the world, and the best sovereigns in the world.
07:48And this is creating what is going to be a productivity enhancement for economies and businesses
07:53going forward. It needs large-scale capital. It needs operating expertise across energy,
07:59real estate, and digital infrastructure. We're excited because we think there's a big role
08:03for us to play.
08:04So nothing's slowing down.
08:05Nothing's slowing down.
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