Speaker 1: Bloomberg Audio Studios Podcasts Radio.
Speaker 2: We want to go now to the Bloomberg invest conference
Speaker 2: taking place in downtown New York, where the Brookfield CEO
Speaker 2: Bruce Lass is currently speaking.
Speaker 1: Take a listen, mantage of opportunities, and.
Speaker 3: As long as you keep your eye on twenty years
Speaker 3: from now and the businesses that you're running, all of
Speaker 3: these things will be looked back upon as very short
Speaker 3: term items. This will not be what we're going through today,
Speaker 3: will not be relevant twenty five years from today.
Speaker 4: It might not be relevant beyond this presidential term.
Speaker 3: I'm just telling you twenty five years from now, we're
Speaker 3: going to look back and it won't be relevant.
Speaker 5: You're thinking, and I did that time horizon.
Speaker 1: We always think on those time horizons. Everything we do.
Speaker 5: Not everybody here can afford to think like that.
Speaker 3: Everything we do, or why we're in private markets is
Speaker 3: because we buy things for long periods of time and
Speaker 3: either we're going to hold them or it's in a
Speaker 3: fund where we may have to sell.
Speaker 1: But what we need to do is to prepare.
Speaker 3: The investment for the next owner that they will accept
Speaker 3: the next twenty five years.
Speaker 1: And that's really really important.
Speaker 3: To keep your eye on the long Ball.
Speaker 4: I know that you are certainly competitive, competitive in your industry,
Speaker 4: competitive as an individual. Sometimes the how of the deal
Speaker 4: making process is important. The deal that I just mentioned,
Speaker 4: this nineteen billion dollar deal for these global ports, originated,
Speaker 4: as we understand it, with a pitch by Larry Fink,
Speaker 4: of course, who is a peer of yours, runs Blackrock
Speaker 4: directly to the White House and again thinking only in
Speaker 4: terms of the next four years, not necessarily twenty five.
Speaker 4: From a competitive standpoint, is that the kind of thinking
Speaker 4: that you have to be operating with in.
Speaker 5: Order to be competitive, in order to win, you know.
Speaker 4: That kind of of access and that kind of I
Speaker 4: think under the circumstances deal making creativity.
Speaker 3: You know, we're building the Intel fabrication plan for thirty
Speaker 3: two billion dollars in Arizona. We just signed a twelve
Speaker 3: billion dollars Microsoft Power contract to build renewables for them,
Speaker 3: largely in the United States. We just did a large
Speaker 3: deal in Germany with Deutsche Telecom with their telecom towers.
Speaker 1: We just signed AI deployment.
Speaker 3: Data center business in France with the French government for
Speaker 3: twenty billion. Our business is about facilitating our operating skills
Speaker 3: and amassing the large.
Speaker 1: Sums of money.
Speaker 3: We have to take on opportunities that are significant, and
Speaker 3: increasingly there aren't that many people that can compete with
Speaker 3: us just because of the.
Speaker 1: Access to capital that we have.
Speaker 4: You're right, there aren't many people who can compete with you.
Speaker 4: There were few, however, right, Some of them started in
Speaker 4: different places. Brookfield for many years was known as a
Speaker 4: huge player and real estate and infrastructure, and now, of
Speaker 4: course you're also huge in private equity and credit and renewable.
Speaker 5: Energy and insurance.
Speaker 4: But the others, I could name some of them, you
Speaker 4: know who they are, are following a similar playbook, right,
Speaker 4: trying to give clients everything that could possibly want under
Speaker 4: one roof concentrating more and more LP assets. It's been
Speaker 4: great for your stock price and for.
Speaker 5: Their stock prices.
Speaker 4: Is the future more of the same, which is to say,
Speaker 4: more concentration and more convergence, the biggest firms getting not
Speaker 4: just bigger, but more alike one another. Or will there
Speaker 4: be a divergence at some point with say a brook
Speaker 4: Field and perhaps another firm or two going in one
Speaker 4: direction and everybody else going in another.
Speaker 3: I think over time, if you look at financial services,
Speaker 3: there's always opportunity for niche players, and there will be
Speaker 3: always that around the world, but there's increasingly concentration within
Speaker 3: large scale players, which as you note, are probably five
Speaker 3: or six today, maybe at seven or eight over time.
Speaker 3: And those large players look similar, but they're not exactly
Speaker 3: the same, and it's how they developed the access the
Speaker 3: capital that they have.
Speaker 1: Available to be able to deploy their businesses.
Speaker 3: So they're similar, but then they're not exactly the same.
Speaker 3: And it's not that one is better than the other,
Speaker 3: it's just they're a little bit different for various reasons,
Speaker 3: probably developed over twenty five thirty years.
Speaker 4: One of the big differentiators in your industry now is insurance,
Speaker 4: a huge growth engine for alternative asset managers as a
Speaker 4: group of Brookfield of course included why is that business
Speaker 4: so appealing growing so quickly?
Speaker 3: One of the last businesses in the financial services industry.
Speaker 1: That had not almost it's now turned on its head.
Speaker 3: We're in the business of in our insurance business is
Speaker 3: finding low risk liabilities and maximizing the asset value that
Speaker 3: we can generate on the asset side of the balance sheet. Historically,
Speaker 3: insurance companies made money from insurance and found somebody to
Speaker 3: invest their money, so the model's almost been turned like this.
Speaker 3: And our special ingredient to all of this is we
Speaker 3: have one hundred and fifty billion dollars of capital at
Speaker 3: our parent company. We put almost twenty billion dollars into
Speaker 3: the equity of our insurance business, which we've just sold assets.
Speaker 1: And put that money into the company, and.
Speaker 3: We will continue to do that to build out the
Speaker 3: business over the next ten years. So because we have
Speaker 3: one hundred and fifty billion dollars of tangible capital, we
Speaker 3: can grow that business very significantly, and it both helps facilitate,
Speaker 3: of course, earnings in the insurance business, but drives our
Speaker 3: whole asset management franchise as well.
Speaker 4: So if you were to take the twenty plus billion
Speaker 4: dollars of equity that you have in that insurance business
Speaker 4: now and add one hundred plus.
Speaker 3: You know it ultimately could be all the capital we
Speaker 3: have up top, which is one hundred and fifty billion dollars.
Speaker 4: That turned it into an insurance business with what in
Speaker 4: the way of assets.
Speaker 1: It would just be turned up this way.
Speaker 3: It would be an insurance business owning or asset management
Speaker 3: and our investment operations, which is really what Berkshire Hathaway is.
Speaker 3: It's an insurance company that owns investments intially.
Speaker 5: Also what apollows has become.
Speaker 3: Yes, they don't have an extra one hundred and fifty
Speaker 3: billion dollars in capital up top, but.
Speaker 1: Yes, exactly.
Speaker 4: So if you secute on that plan and we compare
Speaker 4: Brookfield with Apollo, because sounds to me like it's at
Speaker 4: this point or going to be a very useful comparison,
Speaker 4: what do the two look like at the end.
Speaker 5: Of the day.
Speaker 3: Look, our business has a very large asset management business,
Speaker 3: which is a trillion dollars of assets under management, a
Speaker 3: large insurance company that's getting bigger, and a very significant
Speaker 3: pool of cash, cash and assets.
Speaker 1: That can be turned into cash.
Speaker 3: What we do with those assets that can be turned
Speaker 3: into cash will decide over time. They may go in
Speaker 3: to we're insurance company if we can find opportunities, or
Speaker 3: we will redeploy them into some other financial services business,
Speaker 3: or we'll just keep buying stock back over the next
Speaker 3: twenty years. We'll have to see where it goes, and
Speaker 3: it'll all depend on opportunities.
Speaker 4: Brucey recently predicted that there will be more consolidation in
Speaker 4: the alternatives industry.
Speaker 5: Will Brickfield be a buyer.
Speaker 3: As well, we are at the point where we almost
Speaker 3: have everything that we want. We have a few very
Speaker 3: simple metrics for things that could be additive to us.
Speaker 3: But if something can be additive to us, that we
Speaker 3: can bring something to a group and that culturally we
Speaker 3: can see eye to eye and be partners, we might
Speaker 3: add in other businesses into Brickfield asset management, but we
Speaker 3: see no real need to pay up for anything at
Speaker 3: this point in time, just because we're a pretty broad
Speaker 3: We have a pretty broad array of products for our.
Speaker 1: Clients and we continue to build those out.
Speaker 4: I do want to take a minute and talk to
Speaker 4: you about AI in particular, because infrastructure is quite obviously
Speaker 4: to all of us becoming one of the gating factors
Speaker 4: in the ros of AI. Hundreds and hundreds of billion
Speaker 4: dollars being committed to AI infrastructure.
Speaker 5: Brookfield as a player, what's.
Speaker 4: Your commitment to date and what role do you see
Speaker 4: yourselves playing over time.
Speaker 3: So we are the largest private builder of renewable power
Speaker 3: in the world, we're among the top three largest builders
Speaker 3: of data centers in the world, and we're continuing to
Speaker 3: morph the model into funding compute capacity for the technology groups.
Speaker 1: That the number one the number one things.
Speaker 3: Thing that stands between us achieving all of the models
Speaker 3: that will drive the AI revolution and productivity advances is
Speaker 3: the backbone of infrastructure around the world.
Speaker 1: It's the singular one thing.
Speaker 3: And so we continue to put enormous amounts of money
Speaker 3: behind these big businesses, and it's largely because our view
Speaker 3: is that the productivity advances that are going to come
Speaker 3: out of AI models in advanced robotics and services are
Speaker 3: going to be unprecedented over the next twenty years. And
Speaker 3: what that means is we're in the midst in the
Speaker 3: United States, but also globally, we'll in the midst of
Speaker 3: this enormous investment era, but it's going into highly productive,
Speaker 3: all right.
Speaker 2: That is the Bloomberg invest Conference. If you want to
Speaker 2: continue to listen to the conversation between Eric Shasker and
Speaker 2: Bruce Latt, you can check it out on the Bloomberg
Speaker 2: terminal by typing live go and tune into the developments
Speaker 2: at Bloomberg Live