Bruce Flatt, CEO of Brookfield, discusses the company's strategic focus on infrastructure investment across various global markets. Despite geopolitical tensions and potential economic adversary roles between countries like Canada and the United States, he emphasizes Brookfield's consistent strategy of investing locally, without much reliance on cross-border trade. The discussion highlights Brookfield's extensive investments in regional infrastructure like the largest battery company and its ventures into asset management since 1899.

Flatt elaborates on the opportunities presented by market volatility, suggesting it can create advantageous situations for companies like Brookfield with strong capital backing. He stresses the importance of maintaining a long-term perspective in business strategy, looking beyond immediate political changes. According to Flatt, even with policy uncertainties, the company's focus on long-term investments and infrastructure will remain unaffected.

Main takeaways from the video:

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Key Vocabularies and Common Phrases:

1. compatriots [kəmˈpeɪtriəts] - (noun) - People from the same country. - Synonyms: (fellow countrymen, nationals, citizens)

Our compatriots, Bruce, our friends, our families up north are stunned that this is happening.

2. provoked [prəˈvoʊkt] - (verb) - Stimulated or incited a reaction or emotion. - Synonyms: (induced, prompted, incited)

...wondering what it could have been, what it is that our country could have done to provoke all of these taunts and all of these tariffs.

3. adversaries [ˈædvərˌsɛriz] - (noun) - Opponents or rivals in a conflict or contest. - Synonyms: (opponents, rivals, foes)

...where countries like Canada and the United States that were allies, long time allies, may now, in fact, be economic adversaries...

4. volatility [ˌvɒləˈtɪlɪti] - (noun) - Liable to change rapidly and unpredictably, especially for the worse. - Synonyms: (instability, unpredictability, fluctuation)

A lot has been made recently and certainly here over the past two days about the amount of policy uncertainty and volatility.

5. convergence [kənˈvɜrʤəns] - (noun) - The process of coming together or becoming more similar. - Synonyms: (merging, unification, amalgamation)

...more concentration and more convergence. The biggest firms getting not just bigger, but more alike.

6. deployment [dɪˈplɔɪmənt] - (noun) - The movement of equipment or personnel for a specific purpose. - Synonyms: (utilization, application, disposition)

We just signed a deployment data center business in France with the French government for 20 billion.

7. facilitating [fəˈsɪlɪˌteɪtɪŋ] - (verb) - Making an action or process easier. - Synonyms: (assisting, aiding, enabling)

...our business is about facilitating our operating skills and amassing the large sums of money we have to take on opportunities that are significant.

8. amassing [əˈmæsɪŋ] - (verb) - Gathering or collecting a large quantity of something. - Synonyms: (accumulating, collecting, gathering)

...facilitating our operating skills and amassing the large sums of money we have to take on opportunities that are significant.

9. gating factors [ˈɡeɪtɪŋ ˈfæktərz] - (noun) - Elements that delay or determine the progress of something. - Synonyms: (obstacles, barriers, constraints)

Infrastructure is quite obviously to all of us becoming one of the gating factors in the growth of AI.

10. decarbonizing [diːˈkɑrbəˌnaɪzɪŋ] - (verb) - The process of reducing carbon emissions. - Synonyms: (carbon reduction, limiting emissions, cutting carbon)

...to transition finance, where Mark himself and Brookfield play an important role and ultimately decarbonizing the atmosphere.

Brookfield CEO Flatt on Tariff Impact & Deal Making

Hello, everyone, and good afternoon. As I think you all know, this is Bruce Flatt. He's the CEO of Brookfield. But, Bruce, I wanted to begin by telling everybody here a little bit more about who you are and who I am. Because we're just two Canadian kids sitting here on a stage in New York City wondering what it could have been, what it is that our country could have done to provoke all of these taunts and all of these tariffs.

Because Canada is a gentle place, it's a polite place, it's a beautiful place, okay? Doesn't spend 3% of GDP on defense, but otherwise it's a pretty inoffensive place. Our compatriots, Bruce, our friends, our families up north are stunned that this is happening. Are you? I have no comments.

Our business is about finding great countries in the world. America is one of them. Canada is one of them. Australia is one of them. The UK is one of them. Investing, putting people on the ground and investing into the backbone of global infrastructure. So we don't trade. We actually own major backbones in every country in the world, and we sell those services and products in local places.

So I guess the real point is our business is unaffected because we're a local Investor. We're a $500 billion investor in the United States, we're a $100 billion investor in the U.K. we're a $75 billion investor in Canada. We're a $75 billion Investor in Australia. What we do is go to countries. What we really need is good rule of law, good backbone infrastructure, major amounts of capital, and, and we put money in the ground.

And, and that's our business. And it has been for a long, long time. And it continues to be that 99, since. Since 1899, reformed several, several times over. And 25 years ago, we started the asset management business here to build out with institutional clients. And that's the main asset management business we have today.

There are, however, CEOs who do find themselves in a similar boat to that you find yourself in at the moment. As you just explained, you're the CEO of a company with assets, with operations and employees here in the United States, also in Canada, also in lots of other countries, but specifically. And what I'm getting at here is a shift in trade policy and in foreign policy, but something perhaps a little more fundamental.

Do you, and perhaps others as well, have to assume that we have entered, I don't know, a new normal where countries like Canada and the United States that were allies, long time allies, may now, in fact, be economic adversaries and that that new relationship has consequences that you running a company have to deal with.

I just say our business is maybe different than a lot of others. We go to countries, we invest in those countries, we sell things to their people and the products within the countries. We generally don't cross borders as a result of that. All we need is good countries with rule of law and generally positive GDP and backbone infrastructure. Nothing has changed over the past year or two years and I don't think it'll change going forward for what we do.

You do however make private equity investments into companies that have cross border exposure. You know, on balance, not really. Because what we, what are our private equity businesses are industrial and service businesses generally that operate in countries and, and sell services in those countries. So for example, we own the largest battery company in the world. We sell 160 million batteries.

We have 50 plants around the world in 35 countries. You can't ship batteries that are those car batteries. They're pretty heavy. Even though we make the little ones, they're heavy. So they don't ship. And therefore they're mostly consumed in country local market. So it's local market. So our business is about backbone. And backbone means local economy, local people, local investment. So trade really doesn't matter so much to us.

A lot has been made recently and certainly here over the past two days about the amount of policy uncertainty and volatility. Those things can create opportunities too. Just yesterday we, we saw Blackrock lead a $19 billion deal for control of a global ports business. And most notably, of course that deal includes two facilities in Pennsylvania, Panama that the Trump administration had targeted because of their Chinese ownership.

Is that going to be a trend for sales M and A driven by an urgent need, in this case an urgent need for both the Chinese owners and the Panamanian government to get out of this administration's crosshairs. Look, the price and value are two different things. The value is what you get, the price is what you pay. And volatility creates opportunity around the world for those that are strong and those that have capital to be able to take advantage of opportunities.

And as long as you keep your eye on 20 years from now in the businesses that you're running, all of these things will be looked back upon as very short term items. This will not, what we're going through today will not be relevant 25 years from today. It might not be relevant beyond this presidential term. I'm just telling you 25 years from now we're going to look back and it won't be relevant.

You're thinking on that time horizon. We always think on those time horizons. Everything we do, not everybody here can afford to think like that. Everything we do or why we're in private markets is because we buy things for long periods of time. And either we're going to hold them or it's in a fund where we may have to sell. But what we need to do is to prepare the investment for the next owner that they will accept the next 25 years.

And that's really, really important to keep your eye on the long ball. I know that you are certainly competitive, competitive in your industry, competitive as an individual. Sometimes the how of the deal making process is important.

The deal that I just mentioned, this $19 billion deal for these global ports, originated, as we understand it, with a pitch by Larry Fink, of course, who is a peer of yours, runs blackrock directly to the White House. And again, thinking only in terms of the next four years, not necessarily 25 from a competitive standpoint. Is that the kind of thinking that you have to be operating with in order to be competitive, in order to win, you know, that kind of access and that kind of, I think under the circumstances, dealmaking creativity.

Our, you know, we're building the intel fabrication plan for $32 billion in Arizona. We just signed a $12 billion Microsoft power contract to build renewables for them, largely in the United States. We just did a large deal in Germany with Deutsche Telekom with their telecom towers. We just signed a deployment data center business in France with the French government for 20 billion.

Our, our business is about facilitating our operating skills and amassing the large sums of money we have to take on opportunities that are significant. And increasingly, there aren't that many people that can compete with us just because of the access to capital that we have. You're right. There aren't many people who can compete with you. There are a few, however. Right.

Some of them started in different places. Brookfield for many years was known as a huge player in real estate and infrastructure. And now, of course, you're also huge in private equity and credit and renewable energy and insurance. But the others, I could name some of them, you know who they are, are following a similar playbook.

Right? Trying to give clients everything they could possibly want under one roof, concentrating more and more LP assets. It's been great for your stock price and for their stock prices. Is the future more of the same, which is to say more concentration and more convergence. The biggest firms getting not just bigger, but more alike.

One another or will there be a divergence at some point with say, Brookfield and perhaps another firm or two going in one direction and everybody else going in another? I think over time, if you look at financial services, there's always opportunity for niche players and there will be always that around the world. But there's increasingly concentration within large scale players, which as you note, are probably five or six today, maybe it's seven or eight over time.

And those large players look similar, but they're not exactly the same. And it's how they developed the access, the capital that they have available to be able to deploy their businesses. So they're similar, but they're not exactly the same. And it's not that one is better than the other, it's just they're a little bit different for various reasons. Probably, probably developed over 25, 30 years.

One of the big differentiators in your industry now is insurance. A huge growth engine for alternative asset managers as a group, Brookfield of course, included. Why is that business so appealing? Why is it growing so quickly? The one of the last businesses in the financial services industry that had not almost, it's now turned on its head.

We're in the business of, in our insurance business is finding low risk liabilities and maximizing the asset value that we can generate on the asset side of the balance sheet. Historically, insurance companies made money from insurance and found somebody to invest their money. So the model's almost been turned like this. And our special ingredient to all of this is that we have $150 billion of capital at our parent company.

We put almost $20 billion into the equity of our insurance business, which we've just sold assets and put that money into the company. And we will continue to do that to build out the business over the next 10 years. So because we have $150 billion of tangible capital, we can grow that business very significantly. And it both helps facilitate, of course, earnings in the insurance business, but drives our whole asset management franchise as well.

So if you were to take the 20 plus billion dollars of equity that you have in that insurance business now and add 100 plus, you know, it ultimately could be all the capital we have up top, which is $150 billion, that would turn it into an insurance business with, with what in the way of assets? It would just be turned up this way. It would be an insurance business owning our asset management and our investment operations, which is really what Berkshire Hathaway is.

It's an insurance company that owns investments. Increasingly also, what Apollo is has become. Yes, they don't have an extra $150 billion in capital up top. But, but, but, yes. Exactly. So if you execute on that plan and we compare Brookfield with. With Apollo, because sounds to me like it's at this point or going to be a very useful comparison. What are the two look like at the end of the day?

Look, our business has a very large asset management business which is a trillion dollars of assets under management. A large insurance company that's getting bigger and a. A very significant pool of cash. Cash and assets that can be turned into cash. What we do with those assets that can be turned into cash will decide over time. They may go into our insurance company if we can find opportunities or we will redeploy them into some other financial services business or we'll just keep buying stock back over the next 20 years. 20 years. We'll have to see where it goes.

And it'll all depend on opportunities. Bruce, you recently predicted that there will be more consolidation in the alternatives industry. Will Brookfield be a buyer as well? We are at the point where we almost have everything that we want. We have a few very simple metrics for things that could be additive to us.

But if something can be additive to us that we can bring something to a group and that culturally we can see eye to eye and be partners. We might add in other businesses into Brookfield Asset Management, but we see no real need to pay up for anything at this point in time just because we're a pretty broad. We have a pretty broad array of products for our clients and, and we continue to build those out.

I do want to take a minute and talk to you about AI in particular because infrastructure is. Is quite obviously to all of us becoming one of the gating factors in the growth of AI. Hundreds and hundreds of billion dollars being committed to AI infrastructure. Brookfield is a player. What's your commitment to date and where do you. What role do you see yourselves playing over time?

So we are the largest private builder of renewable power in the world. We're among the top three largest builders of data centers in the world. And we're continuing to morph the model into funding compute capacity for the technology groups. The number one thing that stands between us achieving all of the models that will drive the AI revolution and productivity advances is the backbone of infrastructure around the world. It's the singular one thing.

And so we continue to put enormous amounts of money behind these businesses. And it's largely because our view is that the productivity advances that are going to come out of AI models in advanced robotics and services are going to be unprecedented over the next 20 years. And what that means is we're in the midst in the United States, but also globally, we're in the midst of this enormous investment era, but it's going into highly productive investment which is going to lead to very significant productivity advances.

We're talking 50 to 100% returns on capital where we have seen deployment of some of these things on early test cases. Does it matter where you are? Does it matter who you're partnered with? Firstly, why? What's really important and why this is so exciting for our business is it's not if you have a model today, it's whether you have compute capacity which requires data centers and power. And that's what's super, super important.

And that's what's going to matter in the future. So we're spending. All of our capacity is committed for 20 years. We haven't even built some of it yet, but it's all committed for 20 years. We're entitling new sites around the world, but in particular in the US which is going to be used for artificial intelligence models and learning. And, and they'll be. This is very, very significant investment.

Much of this is being powered by renewable energy. Brookfield is a giant in renewables. Until recently you had a high profile chairman in that business named Mark Carney. He's now of course running for the leadership of Canada's Liberal Party and probably as of today will end up being, if only for a period of time, the next Prime Minister, at least until the next election.

What can you tell us about Mark? You've seen him run a business. Would he be good at running a country? He will be an excellent Prime Minister of Canada. He's passionate about what he does, he listens to people and he will do an excellent job specifically about renewables. I know you listened to the State of the Union last night. I did as well.

The President spent a fair bit of time talking about his achievements. Among them killing the federal EV mandate, bringing back drill baby drill to the oil industry. Does this in your mind pose a setback from for renewables to the energy transition to transition finance, where Mark himself and Brookfield play an important role and ultimately decarbonizing the atmosphere.

So remember, oil is used in cars and planes. It's not used in power. We were always in favor of oil. Gas is used in power. Gas is used in power and we were always in favor of gas because we need gas as a bridge fuel and we're exporting it. And countries around the world need it to get rid of coal.

Third, and this is really important in the United States and in most countries of the world, solar and wind are the lowest cost power there is. When you have the lowest cost power, people buy it from you. People just, and today people just need power. They need any power. They need power from solar, they need power from wind, they need power from gas, they need power from nuclear, they need it from everywhere.

Because we're going to double, we're going to double the electricity stack in the next 20 years and it's impossible to get there without all of these. So I think what's being done today is smart and, but it doesn't matter for renewables. It's all still getting built. There's only one thing standing between us and lunch, and that is the last word from Bruce Flatt.

Bruce, with somebody who has, who looks at the world with a 25 year investment horizon at a time when so many people, perhaps some of you in this room might be uneasy, freaking out perhaps about the state of things, what's the single most valuable piece of advice you could give them? Stay focused on the long ball. Nothing else matters. There you have it, folks. Bruce Flatt, thank you so much.

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