WEBVTT - Brookfield CEO Bruce Flatt Talks Tariff Impact & Deal Making

0:00:02.520 --> 0:00:06.279
<v Speaker 1>Bloomberg Audio Studios Podcasts Radio.

0:00:06.880 --> 0:00:09.080
<v Speaker 2>We want to go now to the Bloomberg invest conference

0:00:09.080 --> 0:00:11.560
<v Speaker 2>taking place in downtown New York, where the Brookfield CEO

0:00:11.560 --> 0:00:13.280
<v Speaker 2>Bruce Lass is currently speaking.

0:00:13.400 --> 0:00:16.560
<v Speaker 1>Take a listen, mantage of opportunities, and.

0:00:17.840 --> 0:00:20.959
<v Speaker 3>As long as you keep your eye on twenty years

0:00:20.960 --> 0:00:24.800
<v Speaker 3>from now and the businesses that you're running, all of

0:00:24.840 --> 0:00:28.920
<v Speaker 3>these things will be looked back upon as very short

0:00:29.040 --> 0:00:33.720
<v Speaker 3>term items. This will not be what we're going through today,

0:00:33.760 --> 0:00:36.840
<v Speaker 3>will not be relevant twenty five years from today.

0:00:37.159 --> 0:00:40.600
<v Speaker 4>It might not be relevant beyond this presidential term.

0:00:41.200 --> 0:00:43.239
<v Speaker 3>I'm just telling you twenty five years from now, we're

0:00:43.240 --> 0:00:45.080
<v Speaker 3>going to look back and it won't be relevant.

0:00:45.200 --> 0:00:47.400
<v Speaker 5>You're thinking, and I did that time horizon.

0:00:47.760 --> 0:00:50.440
<v Speaker 1>We always think on those time horizons. Everything we do.

0:00:51.080 --> 0:00:52.879
<v Speaker 5>Not everybody here can afford to think like that.

0:00:52.960 --> 0:00:55.840
<v Speaker 3>Everything we do, or why we're in private markets is

0:00:55.880 --> 0:00:58.320
<v Speaker 3>because we buy things for long periods of time and

0:00:58.360 --> 0:01:00.680
<v Speaker 3>either we're going to hold them or it's in a

0:01:00.720 --> 0:01:02.560
<v Speaker 3>fund where we may have to sell.

0:01:02.960 --> 0:01:05.440
<v Speaker 1>But what we need to do is to prepare.

0:01:05.040 --> 0:01:08.800
<v Speaker 3>The investment for the next owner that they will accept

0:01:08.840 --> 0:01:09.960
<v Speaker 3>the next twenty five years.

0:01:10.600 --> 0:01:12.679
<v Speaker 1>And that's really really important.

0:01:12.720 --> 0:01:15.080
<v Speaker 3>To keep your eye on the long Ball.

0:01:15.200 --> 0:01:19.720
<v Speaker 4>I know that you are certainly competitive, competitive in your industry,

0:01:20.440 --> 0:01:25.360
<v Speaker 4>competitive as an individual. Sometimes the how of the deal

0:01:25.400 --> 0:01:29.479
<v Speaker 4>making process is important. The deal that I just mentioned,

0:01:29.480 --> 0:01:33.520
<v Speaker 4>this nineteen billion dollar deal for these global ports, originated,

0:01:34.560 --> 0:01:38.760
<v Speaker 4>as we understand it, with a pitch by Larry Fink,

0:01:38.800 --> 0:01:41.679
<v Speaker 4>of course, who is a peer of yours, runs Blackrock

0:01:42.600 --> 0:01:46.319
<v Speaker 4>directly to the White House and again thinking only in

0:01:46.400 --> 0:01:49.600
<v Speaker 4>terms of the next four years, not necessarily twenty five.

0:01:50.400 --> 0:01:53.000
<v Speaker 4>From a competitive standpoint, is that the kind of thinking

0:01:53.040 --> 0:01:55.840
<v Speaker 4>that you have to be operating with in.

0:01:55.840 --> 0:01:58.960
<v Speaker 5>Order to be competitive, in order to win, you know.

0:01:59.000 --> 0:02:02.280
<v Speaker 4>That kind of of access and that kind of I

0:02:02.280 --> 0:02:07.280
<v Speaker 4>think under the circumstances deal making creativity.

0:02:07.440 --> 0:02:11.240
<v Speaker 3>You know, we're building the Intel fabrication plan for thirty

0:02:11.240 --> 0:02:15.040
<v Speaker 3>two billion dollars in Arizona. We just signed a twelve

0:02:15.040 --> 0:02:20.520
<v Speaker 3>billion dollars Microsoft Power contract to build renewables for them,

0:02:21.120 --> 0:02:23.640
<v Speaker 3>largely in the United States. We just did a large

0:02:23.680 --> 0:02:28.120
<v Speaker 3>deal in Germany with Deutsche Telecom with their telecom towers.

0:02:28.120 --> 0:02:30.720
<v Speaker 1>We just signed AI deployment.

0:02:30.360 --> 0:02:33.840
<v Speaker 3>Data center business in France with the French government for

0:02:33.880 --> 0:02:42.280
<v Speaker 3>twenty billion. Our business is about facilitating our operating skills

0:02:42.400 --> 0:02:44.240
<v Speaker 3>and amassing the large.

0:02:44.080 --> 0:02:44.720
<v Speaker 1>Sums of money.

0:02:44.760 --> 0:02:49.400
<v Speaker 3>We have to take on opportunities that are significant, and

0:02:49.600 --> 0:02:52.400
<v Speaker 3>increasingly there aren't that many people that can compete with

0:02:52.480 --> 0:02:54.080
<v Speaker 3>us just because of the.

0:02:54.680 --> 0:02:56.520
<v Speaker 1>Access to capital that we have.

0:02:58.320 --> 0:03:00.680
<v Speaker 4>You're right, there aren't many people who can compete with you.

0:03:00.720 --> 0:03:04.440
<v Speaker 4>There were few, however, right, Some of them started in

0:03:04.480 --> 0:03:09.240
<v Speaker 4>different places. Brookfield for many years was known as a

0:03:09.320 --> 0:03:11.720
<v Speaker 4>huge player and real estate and infrastructure, and now, of

0:03:11.760 --> 0:03:15.240
<v Speaker 4>course you're also huge in private equity and credit and renewable.

0:03:14.840 --> 0:03:15.840
<v Speaker 5>Energy and insurance.

0:03:17.440 --> 0:03:20.840
<v Speaker 4>But the others, I could name some of them, you

0:03:20.880 --> 0:03:24.880
<v Speaker 4>know who they are, are following a similar playbook, right,

0:03:25.200 --> 0:03:27.680
<v Speaker 4>trying to give clients everything that could possibly want under

0:03:27.680 --> 0:03:30.799
<v Speaker 4>one roof concentrating more and more LP assets. It's been

0:03:30.919 --> 0:03:33.440
<v Speaker 4>great for your stock price and for.

0:03:33.440 --> 0:03:34.480
<v Speaker 5>Their stock prices.

0:03:35.160 --> 0:03:37.720
<v Speaker 4>Is the future more of the same, which is to say,

0:03:37.840 --> 0:03:42.600
<v Speaker 4>more concentration and more convergence, the biggest firms getting not

0:03:42.720 --> 0:03:47.600
<v Speaker 4>just bigger, but more alike one another. Or will there

0:03:47.640 --> 0:03:51.280
<v Speaker 4>be a divergence at some point with say a brook

0:03:51.320 --> 0:03:54.800
<v Speaker 4>Field and perhaps another firm or two going in one

0:03:54.840 --> 0:03:56.680
<v Speaker 4>direction and everybody else going in another.

0:03:58.240 --> 0:04:00.760
<v Speaker 3>I think over time, if you look at financial services,

0:04:02.280 --> 0:04:05.640
<v Speaker 3>there's always opportunity for niche players, and there will be

0:04:05.800 --> 0:04:12.520
<v Speaker 3>always that around the world, but there's increasingly concentration within

0:04:12.680 --> 0:04:15.760
<v Speaker 3>large scale players, which as you note, are probably five

0:04:15.840 --> 0:04:18.560
<v Speaker 3>or six today, maybe at seven or eight over time.

0:04:19.720 --> 0:04:25.960
<v Speaker 3>And those large players look similar, but they're not exactly

0:04:26.000 --> 0:04:29.360
<v Speaker 3>the same, and it's how they developed the access the

0:04:29.400 --> 0:04:30.360
<v Speaker 3>capital that they have.

0:04:30.360 --> 0:04:33.520
<v Speaker 1>Available to be able to deploy their businesses.

0:04:33.560 --> 0:04:36.279
<v Speaker 3>So they're similar, but then they're not exactly the same.

0:04:36.760 --> 0:04:38.560
<v Speaker 3>And it's not that one is better than the other,

0:04:38.600 --> 0:04:41.600
<v Speaker 3>it's just they're a little bit different for various reasons,

0:04:42.279 --> 0:04:45.680
<v Speaker 3>probably developed over twenty five thirty years.

0:04:46.240 --> 0:04:50.280
<v Speaker 4>One of the big differentiators in your industry now is insurance,

0:04:50.680 --> 0:04:54.680
<v Speaker 4>a huge growth engine for alternative asset managers as a

0:04:54.720 --> 0:04:58.240
<v Speaker 4>group of Brookfield of course included why is that business

0:04:58.320 --> 0:05:01.000
<v Speaker 4>so appealing growing so quickly?

0:05:02.880 --> 0:05:06.680
<v Speaker 3>One of the last businesses in the financial services industry.

0:05:06.240 --> 0:05:09.960
<v Speaker 1>That had not almost it's now turned on its head.

0:05:12.000 --> 0:05:14.560
<v Speaker 3>We're in the business of in our insurance business is

0:05:14.600 --> 0:05:19.560
<v Speaker 3>finding low risk liabilities and maximizing the asset value that

0:05:19.600 --> 0:05:24.160
<v Speaker 3>we can generate on the asset side of the balance sheet. Historically,

0:05:24.200 --> 0:05:28.400
<v Speaker 3>insurance companies made money from insurance and found somebody to

0:05:28.480 --> 0:05:32.600
<v Speaker 3>invest their money, so the model's almost been turned like this.

0:05:33.640 --> 0:05:40.840
<v Speaker 3>And our special ingredient to all of this is we

0:05:40.880 --> 0:05:44.000
<v Speaker 3>have one hundred and fifty billion dollars of capital at

0:05:44.000 --> 0:05:48.920
<v Speaker 3>our parent company. We put almost twenty billion dollars into

0:05:48.960 --> 0:05:54.839
<v Speaker 3>the equity of our insurance business, which we've just sold assets.

0:05:54.640 --> 0:05:57.760
<v Speaker 1>And put that money into the company, and.

0:05:57.800 --> 0:05:59.919
<v Speaker 3>We will continue to do that to build out the

0:06:00.000 --> 0:06:03.200
<v Speaker 3>business over the next ten years. So because we have

0:06:03.720 --> 0:06:06.320
<v Speaker 3>one hundred and fifty billion dollars of tangible capital, we

0:06:06.360 --> 0:06:11.800
<v Speaker 3>can grow that business very significantly, and it both helps facilitate,

0:06:12.000 --> 0:06:14.800
<v Speaker 3>of course, earnings in the insurance business, but drives our

0:06:14.800 --> 0:06:17.039
<v Speaker 3>whole asset management franchise as well.

0:06:17.160 --> 0:06:19.880
<v Speaker 4>So if you were to take the twenty plus billion

0:06:19.920 --> 0:06:22.440
<v Speaker 4>dollars of equity that you have in that insurance business

0:06:22.520 --> 0:06:26.479
<v Speaker 4>now and add one hundred plus.

0:06:26.360 --> 0:06:29.359
<v Speaker 3>You know it ultimately could be all the capital we

0:06:29.400 --> 0:06:32.560
<v Speaker 3>have up top, which is one hundred and fifty billion dollars.

0:06:32.720 --> 0:06:35.680
<v Speaker 4>That turned it into an insurance business with what in

0:06:35.720 --> 0:06:36.680
<v Speaker 4>the way of assets.

0:06:36.880 --> 0:06:38.600
<v Speaker 1>It would just be turned up this way.

0:06:39.080 --> 0:06:41.480
<v Speaker 3>It would be an insurance business owning or asset management

0:06:41.640 --> 0:06:45.880
<v Speaker 3>and our investment operations, which is really what Berkshire Hathaway is.

0:06:47.120 --> 0:06:50.360
<v Speaker 3>It's an insurance company that owns investments intially.

0:06:50.040 --> 0:06:51.719
<v Speaker 5>Also what apollows has become.

0:06:52.600 --> 0:06:54.400
<v Speaker 3>Yes, they don't have an extra one hundred and fifty

0:06:54.440 --> 0:06:56.400
<v Speaker 3>billion dollars in capital up top, but.

0:06:58.320 --> 0:06:59.040
<v Speaker 1>Yes, exactly.

0:06:59.200 --> 0:07:01.960
<v Speaker 4>So if you secute on that plan and we compare

0:07:03.640 --> 0:07:07.760
<v Speaker 4>Brookfield with Apollo, because sounds to me like it's at

0:07:07.760 --> 0:07:10.320
<v Speaker 4>this point or going to be a very useful comparison,

0:07:11.240 --> 0:07:13.600
<v Speaker 4>what do the two look like at the end.

0:07:13.520 --> 0:07:13.960
<v Speaker 5>Of the day.

0:07:14.400 --> 0:07:18.080
<v Speaker 3>Look, our business has a very large asset management business,

0:07:19.240 --> 0:07:22.320
<v Speaker 3>which is a trillion dollars of assets under management, a

0:07:22.440 --> 0:07:28.840
<v Speaker 3>large insurance company that's getting bigger, and a very significant

0:07:28.840 --> 0:07:31.600
<v Speaker 3>pool of cash, cash and assets.

0:07:31.120 --> 0:07:32.400
<v Speaker 1>That can be turned into cash.

0:07:33.000 --> 0:07:35.520
<v Speaker 3>What we do with those assets that can be turned

0:07:35.560 --> 0:07:38.520
<v Speaker 3>into cash will decide over time. They may go in

0:07:38.600 --> 0:07:41.360
<v Speaker 3>to we're insurance company if we can find opportunities, or

0:07:42.760 --> 0:07:45.600
<v Speaker 3>we will redeploy them into some other financial services business,

0:07:45.640 --> 0:07:47.880
<v Speaker 3>or we'll just keep buying stock back over the next

0:07:47.920 --> 0:07:50.640
<v Speaker 3>twenty years. We'll have to see where it goes, and

0:07:50.640 --> 0:07:52.200
<v Speaker 3>it'll all depend on opportunities.

0:07:52.840 --> 0:07:56.400
<v Speaker 4>Brucey recently predicted that there will be more consolidation in

0:07:56.440 --> 0:07:58.400
<v Speaker 4>the alternatives industry.

0:08:00.400 --> 0:08:01.720
<v Speaker 5>Will Brickfield be a buyer.

0:08:01.520 --> 0:08:06.760
<v Speaker 3>As well, we are at the point where we almost

0:08:06.920 --> 0:08:11.760
<v Speaker 3>have everything that we want. We have a few very

0:08:11.800 --> 0:08:15.760
<v Speaker 3>simple metrics for things that could be additive to us.

0:08:15.800 --> 0:08:18.480
<v Speaker 3>But if something can be additive to us, that we

0:08:18.520 --> 0:08:22.480
<v Speaker 3>can bring something to a group and that culturally we

0:08:22.520 --> 0:08:26.480
<v Speaker 3>can see eye to eye and be partners, we might

0:08:26.560 --> 0:08:32.000
<v Speaker 3>add in other businesses into Brickfield asset management, but we

0:08:32.040 --> 0:08:36.680
<v Speaker 3>see no real need to pay up for anything at

0:08:37.160 --> 0:08:39.920
<v Speaker 3>this point in time, just because we're a pretty broad

0:08:40.040 --> 0:08:42.800
<v Speaker 3>We have a pretty broad array of products for our.

0:08:42.679 --> 0:08:46.920
<v Speaker 1>Clients and we continue to build those out.

0:08:47.400 --> 0:08:48.839
<v Speaker 4>I do want to take a minute and talk to

0:08:48.880 --> 0:08:56.400
<v Speaker 4>you about AI in particular, because infrastructure is quite obviously

0:08:56.440 --> 0:08:59.240
<v Speaker 4>to all of us becoming one of the gating factors

0:08:59.640 --> 0:09:02.680
<v Speaker 4>in the ros of AI. Hundreds and hundreds of billion

0:09:02.720 --> 0:09:04.560
<v Speaker 4>dollars being committed to AI infrastructure.

0:09:04.559 --> 0:09:06.800
<v Speaker 5>Brookfield as a player, what's.

0:09:06.640 --> 0:09:09.560
<v Speaker 4>Your commitment to date and what role do you see

0:09:09.559 --> 0:09:10.800
<v Speaker 4>yourselves playing over time.

0:09:12.160 --> 0:09:16.960
<v Speaker 3>So we are the largest private builder of renewable power

0:09:17.000 --> 0:09:21.600
<v Speaker 3>in the world, we're among the top three largest builders

0:09:21.600 --> 0:09:25.200
<v Speaker 3>of data centers in the world, and we're continuing to

0:09:25.679 --> 0:09:33.720
<v Speaker 3>morph the model into funding compute capacity for the technology groups.

0:09:34.040 --> 0:09:37.920
<v Speaker 1>That the number one the number one things.

0:09:38.520 --> 0:09:43.280
<v Speaker 3>Thing that stands between us achieving all of the models

0:09:44.280 --> 0:09:50.319
<v Speaker 3>that will drive the AI revolution and productivity advances is

0:09:50.480 --> 0:09:52.559
<v Speaker 3>the backbone of infrastructure around the world.

0:09:52.760 --> 0:09:54.240
<v Speaker 1>It's the singular one thing.

0:09:54.960 --> 0:09:58.920
<v Speaker 3>And so we continue to put enormous amounts of money

0:09:59.200 --> 0:10:03.080
<v Speaker 3>behind these big businesses, and it's largely because our view

0:10:03.240 --> 0:10:05.600
<v Speaker 3>is that the productivity advances that are going to come

0:10:05.600 --> 0:10:11.439
<v Speaker 3>out of AI models in advanced robotics and services are

0:10:11.600 --> 0:10:15.360
<v Speaker 3>going to be unprecedented over the next twenty years. And

0:10:15.440 --> 0:10:18.959
<v Speaker 3>what that means is we're in the midst in the

0:10:19.080 --> 0:10:21.720
<v Speaker 3>United States, but also globally, we'll in the midst of

0:10:21.760 --> 0:10:27.800
<v Speaker 3>this enormous investment era, but it's going into highly productive,

0:10:28.280 --> 0:10:28.640
<v Speaker 3>all right.

0:10:28.720 --> 0:10:30.640
<v Speaker 2>That is the Bloomberg invest Conference. If you want to

0:10:30.640 --> 0:10:33.360
<v Speaker 2>continue to listen to the conversation between Eric Shasker and

0:10:33.400 --> 0:10:35.960
<v Speaker 2>Bruce Latt, you can check it out on the Bloomberg

0:10:36.040 --> 0:10:40.600
<v Speaker 2>terminal by typing live go and tune into the developments

0:10:40.640 --> 0:10:41.640
<v Speaker 2>at Bloomberg Live