Lessons from a lifetime of investing and outperforming | Bruce Flatt

Brookfield practices continuous learning through osmosis rather than formal training programs; open-plan offices (including no private offices for executives) facilitate organic knowledge transfer and lateral communication across the organization.

“in general we don't do training quote unquote but every day every single person in this organization is learning and it's a it's a learn by osmosis this process. We have open plan uh in the place including myself never had an office and uh and people talk to one another and it's very interactive and therefore well I started off by saying we don't train anybody uh we train them every single day and uh it's just different than sending people to school.”

Battery storage technology is increasingly important for grid stabilization as wind and solar penetration increases, helping address transmission bottlenecks and offsetting mismatch between generation timing and consumption patterns.

“what's happening uh in in grids is that you need something to stabilize the grids and to store when because remember solar the sun only shines during the day. It's usually dark at night and wind actually usually only blows at night, but you normally don't have the the um incidents of both together are not always the case. And you have to have something to bridge one of those. And uh increasingly in past, nuclear's done that and gas has done that. Increasingly battery storage uh at scale distributed will help both with trans transmission bottlenecks but also with the um the two offsetting uh uh amounts.”

Brookfield's investment returns have averaged 19% annualized over 30 years, demonstrating that modest percentage returns compounded over long periods create extraordinary cumulative wealth (1M becomes ~$200M), proving investment success is not about short-term outperformance but consistent long-duration returns.

“the point is we've earned our parent companies earned 19% return annualized returns for 30 years. uh when you compound up which doesn't sound like very much 19% returns annualized for 30 years like it just when you say that in that line doesn't sound like that much but I think that's a million dollars became almost $200 million over that period of time or $1,000 became $200,000 it's a lot”

The clear winners in the AI revolution are major technology companies with large balance sheets, developed models, and enormous proprietary data, while unknown winners will be traditional businesses that successfully apply AI to make operations more efficient and profitable.

“The clear winners uh in this um AI revolution are going to be the major uh technology companies. That that's sort of easy. They're very sophisticated. They have large balance sheets and capital to deploy. um they they've already developed models and they're going to be very very u they're going to win.”

Natural gas serves as critical bridge fuel for energy grids with high renewable penetration, and will remain essential infrastructure fuel for decades as battery storage scales up, particularly given US natural gas export importance and global coal replacement needs.

“natural gas is one of the great assets the United States has. Um, it's going to export it for a long time. It's going to use a lot of it in America. Eventually, batteries and nuclear will be the base load and it won't be natural gas, but it's being shipped elsewhere in the world.”

COVID period demonstrated that lenders respond to lower risk-free rates not by lowering spreads but by widening them, so borrowers did not benefit from near-zero treasury rates—spreads simply expanded to maintain comparable all-in rates, negating apparent rate benefit.

“when co when COVID hit interest rate uh the Treasury rate went to zero. Yeah. And what the borrow most of the lenders said to us is I'm not going to lend you at 200 over and give you three. I'm widening that out to to uh 350. So I'll give you five and or four and a half and uh therefore before we were boring at five and in CO we were boring at four and a half.”

Brookfield is applying AI across its industrial businesses to improve operational efficiency, exemplified by the battery manufacturing business with 25,000 employees across 20 plants with $9 billion annual costs, where even 30% efficiency improvements yield significant bottom-line impact.

“we're applying artificial intelligence into all our businesses including that battery business which is and why it's a perfect one for these type of applications is we have 25,000 people in 20 plants. We do very repetitive process and as a result and we have $9 billion of costs within the business. If you can uh improve those by 30% that's a lot of money to the bottom line.”

Productivity advances over the next 20 years will likely be unprecedented, driven by widespread deployment of AI-enabled robotics in labor-intensive industries, particularly manufacturing sectors that relocated to Asia due to labor costs but can now return to primary demand markets as robotics reduce labor dependency.

“the productivity advances we see over the next 20 years probably will be unprecedented for a period of time. Um certainly one we haven't seen it for a long time uh in business uh across America.”

US long-term growth story is exceptionally strong due to dominance across five dimensions: energy dominance (oil, gas, solar, wind, nuclear), capital market sophistication, technology business ecosystem, entrepreneurial culture, and repatriated manufacturing base, creating sustained GDP growth from multiple sources.

“the long-term story of America is extremely strong because um the US today has uh energy capital and technology dominance. Energy capital and technology dominance. There's nobody in the world that has a technology businesses that the US has. There's nothing in the world that has the capital markets the US has.”

Brookfield focuses investment models on trend prediction rather than point accuracy because models never perfectly predict outcomes, and getting directional trends correct is more important than modeling precision.

“the only thing I tell you about a model is produced in an investment committee is it will never be exactly what happens. Um, but uh I'd say if you get the we're trying to get the trends right is is really what it is is in investing it's can you get the trend right”

Historically, governments built the infrastructure backbone (railroads, utilities, telecommunications). Today, private enterprise builds it (data centers, fiber, renewable plants), funded by private capital.

“before historically that was built out by governments. Today it's being built out by um private enterprise.”

Brookfield seeks to acquire assets at discounts to intrinsic value, not at model price targets, using value-buying discipline to create margin of safety within investment thesis.

“we're trying to get the trends right is is really what it is is in investing it's can you get the trend right and and I would say most of our investing is uh we're trying to get the price right for value and therefore often we're buying at a discount to what we think is the value of something”

Brookfield's investment process focuses almost entirely on downside protection and risk analysis during investment committees, not upside modeling; the rationale is that upside takes care of itself while understanding what can go wrong and how to survive it determines success.

“our investment committees are normally only focused on downside protection. upside will always take care of itself. And whether you shoot for 16%, 22, 29, 18, none of those matter. They're all great. What's really important is what are the risks, how what can go wrong, how bad could it get, and um and how do we deal with it if that happens? And so we spend virtually all of our time on townside protection at our investment committees”

We are in the early stages of productivity advancement driven by AI and robotics; productivity gains will not happen suddenly or all at once, but will occur incrementally over very long periods of time, following natural patterns of technological adoption and implementation.

“I I would say we're in the early stages of all of this. Uh we're seeing going to see productivity advances and nobody just flips a switch. Thing is, nobody ever flips a switch. These are incremental changes over very long periods of time.”

Markets are rarely efficient; they very seldom trade at the actual value of securities—most of the time they trade either above or below intrinsic value, which contradicts efficient market hypothesis assumptions.

“The markets are never efficient. In fact, very seldom do they ever trade at the at the actual um value of securities. Either most of the most of the time they trade above or below. Very seldom do they trade at the at the value.”

Brookfield entered the insurance business 5 years ago specifically to serve as a permanent long-term investor in its own infrastructure and asset products; insurance companies with long-duration liabilities are ideal structural holders of illiquid infrastructure assets, creating a natural synergy.

“our goal was get in the insurance business, not not because we wanted to be in insurance. What our goal is is our clients come to us because they um they want our investment skills. What we have is a very unique offering is a bunch of investment skills that can create products um for long-term investors. uh our insurance company now being $120 billion of assets is a perfect long-term uh investor into all of the things we do from our asset management business.”

Governments are not actively privatizing infrastructure assets they own; rather, they are simply not investing in maintenance and expansion, leaving private enterprise to fill the void through greenfield development and upgrade of critical infrastructure.

“When we started uh in infrastructure 25 years ago, we were among the first. Um we thought that it would be governments privatizing and to some extent it is and it's not they're not privatizing because they have a hard time selling assets. um what they do is they're just not investing. Therefore, private enterprise takes it up.”

Battery manufacturing represents a significant industrial application where AI can drive productivity improvements; Brookfield's battery business operates 25,000 employees across 20 plants with $9 billion in costs, and 30% efficiency improvement would translate to substantial bottom-line impact.

“we make just under half of the car batteries so we we make the little car battery that starts your car...we have 25,000 people in 20 plants. We do very repetitive process and as a result and we have $9 billion of costs within the business. If you can uh improve those by 30% that's a lot of money to the bottom line. and um and it can be very significant for the company.”

China's economy has matured sufficiently that it is transitioning from manufacturing-export-dependent economy to consumer/service-based economy, meaning manufacturing-dependent countries (that relied on China outsourcing) will face challenges while China itself will thrive.

“Look, I think China, it's a it's an economy in itself today. It's 1.5 billion people. They're getting richer every day. They're turning into a consumer service society. There's not that much of manufacturing that's relevant to them. I think they will they will do extremely well as a country uh on their own. But there are some countries in the world where they haven't yet transformed themselves to be service economies and they're reliant on jobs that were from outsourced manufacturing.”

Data center investment risk is manageable because long permitting timelines mean supply can't oversupply; demand from tech companies (especially AI) is committed through 20-year contracts; Brookfield only builds pre-contracted capacity, eliminating demand risk.

“one of your questions earlier which I really didn't answer was um are data centers are we like are we going to get in trouble with the amount of money that's going into data centers and the answer is no and it's largely because it takes a long time to permit a data center. You need to find power to power the data center and the needs of the technology companies are very significant and on top of that energy usage everywhere is going up and as a result of that it just takes time to bring sites on and most sites today that are available to be built are already contracted to somebody for the next 20 years.”

Data center buildout will not face capacity-driven distress because permitting and power connection requirements create long lead times (often years), and most available sites are already contracted 20-year agreements, naturally limiting competitive overbuild and protecting investor returns.

“one of your questions earlier which I really didn't answer was um are data centers are we like are we going to get in trouble with the amount of money that's going into data centers and the answer is no and it's largely because it takes a long time to permit a data center. You need to find power to power the data center”

Successful navigation of recessions requires three-stage approach: first, prepare during booms by building financial resilience; second, protect everything during downturns by maintaining asset quality; third, invest during early recovery when others are impaired—this sequencing differentiates great investors from average ones.

“the first thing one has to do when there are dislocations in the market is make sure that you have been you were prepared for it. So the one thing you should do always when times are really good is ensure that you're preparing for the down market that's coming uh the ones that don't uh usually aren't successful in the fullness of time.”

Small mistakes should be encouraged in organizations because avoiding any mistakes prevents growth and learning, but avoiding large mistakes is paramount—creating culture of experimentation with bounded losses rather than risk aversion.

“and we encourage people to keep learning and and growing because if you don't make some mistakes you never advance but do not make big mistakes and that's I'd say that's the biggest thing we try um to impress across the organization.”

Brookfield's competitive advantage in talent comes from extreme meritocratic structure (no family influence, pure performance-based advancement), combination of experienced leaders with young technologically-native talent, and learning-by-osmosis culture with open office environments enabling daily knowledge transfer.

“we've always had the view that um well, firstly, we're an extreme meritocracy. Uh this is a partnership. It's partnership of individuals. Uh when when we leave the partnership are sharers that if you're an owner or controller of the partnership, they go away. They go on to somebody else. So um nobody's family will ever uh will ever be part of this partnership.”

Brookfield's financing approach is to place prudent amounts of debt on assets that can withstand market stress, fix interest rates, and maintain asset-by-asset financing rather than consolidated borrowing, allowing flexibility to manage each asset independently.

“our fundamental thesis of investing is that you should put a prudent amount of debt on assets that can withstand markets. Um if you can, then you should fix it because you know your cost and um and from time to time if you got it wrong, you put a little make sure you have a little more money around to put it in and and support your asset. So, um, we've always conservatively financed our businesses and assets. All of our financing is asset by asset by asset by asset or business by business by business by business.”

Brookfield started 25 years ago with a three-phase strategy: (1) operate businesses for itself (infrastructure, real estate, renewables, private equity, credit), (2) offer these skills to external clients in asset management (grew from zero to $1T in 25 years), (3) now opening to retail clients via 401k access and alternatives products.

“So, we started as an operating business. We just invested for ourselves. Um we had the businesses that we basically have today. uh infrastructure, real estate, renewables, and industrial service, we call private equity today. Businesses and credit lending. Those were our five businesses. We did it for ourselves and we lent money. And um 25 years ago, we decided that we could take those skills we had and turn them into a business to be able to um manage some of our money and some of our institutional or other clients money.”

Brookfield's investment failures typically stem from three categories: execution failures (didn't run the business properly), market timing errors (acceptable), or fundamental mistakes in understanding the business/competitive dynamics (worst category because they're preventable with proper analysis).

“The unsuccessful ones are harder to identify what happened. Um but often there are there are reasons why and it either comes down to execution. Uh you didn't you didn't execute properly. um you had um you mistimed the market or you just made a bad bad flawed investment decision and those are the worst.”

Brookfield's definition of success is being bigger, broader, more relevant to clients, and earning reasonable returns with downside risk protected in 20 years, continuing to do exactly what it does today for everybody.

“Brookfield uh is one of the great investment uh management groups in the world today and 20 years from today. success is that it is um bigger, broader, um more relevant to clients uh and continues to do exactly what it does today for everybody and earn reason earn reasonable returns with with downside risk protected.”

Brookfield's meritocratic culture prioritizes mixing 'wise older people' with 'smart, aggressive young people' to balance passionate risk-taking with historical knowledge and risk awareness, creating better organizations and faster adaptation to new trends.

“we've always had the view that um a cross between uh uh wise older people and smart, aggressive young people. both um give you the gravitas to deal with situations which you need a little history but also allow you to be um allow you to know more about what's going on today. I'm positive our 30-year-olds today in the business know more about technology than I do because they've grown up with it differently.”

Market cycles are never identical but share recurring rhyming patterns, and having experienced leadership familiar with past cycles provides pattern recognition advantage for identifying cycle stage and appropriate positioning, though experience can sometimes be hindrance.

“cycles are never the same, but they sort of rhyme and they look similar. So, um, the one thing of having wise older guys around, I'll consider myself that today. Uh, uh, I used to be a young unwise individual. Uh, I'll try to consider I know I'm old, just not sure I'm wise. But uh I um some of the reason for having the the wiser individuals around is is having the um elongated knowledge of what goes on in cycles and what goes on in periods and and we've seen this before is helpful. Sometimes it's a hindrance, but sometimes it's very helpful for context.”

Institutional investors have increased alternative asset allocations from 0% to 30-50% of portfolios, creating growth ceiling because investors cannot allocate to 100%, whereas retail investors remain largely unallocated to alternatives, representing next growth frontier for private asset management.

“In the past 25 years has been about institutional and and this comment is not meant to say that they won't be investing but their their increase from going from zero to some of them are at 30 40 50% alternatives. Um when you go from zero to 50 you can't go to 100. So a lot of them are at their numbers.”

Brookfield invests primarily in backbone infrastructure in large countries with good governance, stable rule of law, and stable currencies, avoiding pure geopolitical risk because assets are consumed locally (not exported) and borders don't matter.

“we invest in backbone infrastructure largely and even our private equity businesses are backbone infrastructure type businesses. Therefore, what's important for us is to go to good countries with good people that you can operate with the standards we operate with and that those countries respect rule of law and will over time be good places to invest. We don't really sell over borders.”

Country selection criteria for investment prioritize: large economy size, stable rule of law, ability to execute standards-compliant operations, GDP growth trajectory, currency stability (neither volatile nor long-term depreciation), and sufficient scale to justify investment amounts required.

“good means um, for us, it has to be large enough to be able to invest. Like we can't have small countries just not because they're not good. They're not good place to invest. It's just not meaningful to us...we need large places. We'd like them to have uh we need to operate with the standards that we operate globally with. Um, we need to be we we'd like to have large GDP. We'd like to have it growing. Uh, and we'd like to have a currency that's relatively it doesn't have to doesn't have to grow better than everyone else. It just has to stay consistent. If it's highly volatile, not good. If it goes down over the long periods of time, bad.”

Healthcare authorization services provide another example of AI productivity enhancement; Brookfield's healthcare business handles authorization for back surgeries, manages information presentation to approvers, improving decision speed and quality.

“You know, every single business we have um we have a healthc are uh business where we have um we approve your health care uh in the United States. If you need a back surgery and you need to authorization from your insurance company to do it, we take the phone call. uh from you and we approve it online. Uh we approve your $150,000 operation uh or not. And uh our agents do that and today the amount of information we can put up when you call in is incredible. Uh even from two years ago is incredible. And that just helps us make better decisions quicker and serve our clients who are the the healthcare companies better.”

Manufacturing repatriation to the US will likely not restore as many jobs as were lost to outsourcing, but will still result in net job creation and economic growth because products will be made domestically, creating employment at manufacturing sites, in logistics, and in supply chains.

“You're bringing some jobs back maybe not as many as left before to make the product but if that product comes back you've actually added jobs and uh and that's very positive”

Brookfield's multi-entity structure has been deliberately designed and contributes significant value despite appearing complex to outside observers, enabling company to serve different investor audiences, maintain flexibility for strategic combinations, and avoid dilution from unified structure.

“each one of the pieces we've set up has been highly thought through and contributes a lot to the business. These are not random things we've done. They're very specific and they contribute enormous value in the long term to the company”

Spinning off Brookfield Asset Management as separate entity was strategically valuable because specific investor cohorts prefer pure-play asset management businesses, allowing BAMHC to serve asset management investors without exposure to operating business and real estate ownership.

“For example, we spun off our asset management business uh two years ago. There's a whole group of US investors largely that buy asset management businesses that only want to be invested in asset management. They don't want to own assets that we own. They don't want to be invested in insurance.”

Brookfield uses multi-layer investment approval with business-level committees approving individual transactions and top-level allocation committee monitoring portfolio-wide concentration to prevent synchronized large bets across organization that could amplify cycle risk.

“usually what happens is some transaction came into the company some way or we had an idea and we went out and talked to somebody and a transaction came about. Uh it's then approved by today because we have these vast businesses. it's approved in the business. But then we have one committee that it's almost like an allocation committee up top”

Brookfield invests only in large stable countries with rule of law, excluding geopolitical risk by investing primarily in North America where investments serve domestic markets, not cross-border transactions vulnerable to political disruption.

“How do you think about the geopolitical risk? We we invest in backbone infrastructure largely and even our private equity businesses are backbone infrastructure type businesses. Therefore, what's important for us is to go to good countries with good people that you can operate with the standards we operate with and that those countries respect rule of law and will over time be good places to invest.”

Brookfield maintains permanent on-ground presence in target countries and only acts on opportunities that arise within those established networks, explicitly declining opportunities in countries where Brookfield has not pre-positioned personnel and infrastructure.

“Therefore, we have to be in country, be able to action, an opportunity when it comes. And therefore, if we're not in a country and somebody calls us with an opportunity, we just say, "Sorry, we're not set up to do that. Can't no can do."”

Brookfield proves business models with its own capital first before introducing third-party investors, protecting client reputation and relationships by avoiding losses on unproven concepts through gradual expansion from core competency.

“We have a large amount of capital ourself. We've always invested ourself. We want to make mistakes with our own money first, not with others. Our reputation with our clients is the only thing we have. And that's really important to us.”

Brookfield builds data centers for technology customers only on fully contracted basis, not on spec, so it never takes demand risk—this is exactly like office building development where tenants are pre-committed before construction begins.

“We're not uh we don't we've we've ne in past we never have and uh I don't think we um we need to take risk on that and therefore it's like when we build an office building you know you're you you let it to a bunch of tenants and then you build it for them and uh you don't have to take the risk on that”

Brookfield's organizational culture operates as an extreme meritocracy where no family members will ever become partners or leaders because ownership transfers to other individuals when current owners leave, ensuring that advancement is based purely on performance and capability rather than family relationships.

“We've always had the view that um well, firstly, we're an extreme meritocracy. Uh this is a partnership. It's partnership of individuals. Uh when when we leave the partnership are sharers that if you're an owner or controller of the partnership, they go away. They go on to somebody else. So um nobody's family will ever uh will ever be part of this partnership. It's a meritocracy.”

Brookfield's investment decision process focuses almost exclusively on downside risk analysis and loss avoidance rather than upside projection, with investment committees spending 90%+ time identifying what could go wrong, how bad scenarios evolve, and mitigation plans rather than modeling upside.

“Our uh our investment process is we only invest in things that we deal with and know. Um we have people on the ground and our knowledge of the business and um and we're our investment committees are normally only focused on downside protection. upside will always take care of itself.”

Most publicly listed large companies do not need access to capital and therefore the trading price of their securities is irrelevant to their operations, making public market listings a distraction rather than a necessity.

“most businesses that are listed don't need access to capital. They're only listed because they're large and they happen to be just they need owners and therefore they're in the public markets. they're never issuing equity and therefore the price of the security in the market really doesn't matter”

Real estate disruption from COVID, interest rate increases of 400-500 basis points, and capital structure pressures have been largely worked through; the worst is behind us and fundamentals are actually pretty good in most assets today.

“look over the last 5 years because of COVID and because other things and because interest rates went up by 400 500 base points um all of that disrupted the real estate market. But the the worst is uh behind us by far. We're looking in the rear view mirror by by um uh what happened in real estate. And in fact this time the fundamentals are actually pretty good in most things.”

Conor Teskey, age 37, has been promoted to serve as the next CEO of Brookfield Asset Management, representing internal succession planning and the transfer of leadership to younger generation trained in contemporary technology environments.

“we brought Connor Tesy forward as the next person that will be the CEO of the asset management business. Um that was internally uh vetted. It was then externally vetted. And today we're in the process of him uh continuing to meet clients and investors and all those kind of things. And I think he's 37 years old today. Um he's incredibly passionate, talented, and uh and he'll bring through a whole new group of people within the company and re-energizing businesses is what makes them better and different.”

Real estate market worst effects from COVID, interest rate increases, and market disruption are behind investors, and despite prior capital structure distress, fundamentals are actually healthy in most segments with adjustment occurring through asset transfers rather than systemic collapse.

“over the last 5 years because of COVID and because other things and because interest rates went up by 400 500 base points um all of that disrupted the real estate market. But the the worst is uh behind us by far.”

Retail investors are ideally suited for alternatives because they are saving for retirement (long time horizons) and benefit from products that earn reasonable returns and compound over decades, making alternatives better suited to retirement savings than traditional public equity portfolios.

“Alternatives are ideal products for retail as well. In fact, they're almost more ideal because you're saving for your retirement and uh what better to have in there than a product that earns a reasonable return over a very long term long period of time and can compound.”

Pension risk transfer annuities (where corporations transfer their defined benefit plan liabilities to insurance companies to remove the risk from their balance sheets) represent a major expansion opportunity for Brookfield's insurance business, particularly in the US, Canada, and UK markets where this product is well-established.

“First we're expanding internationally writing annuities or pension risk transfer annuities which are both are very similar. Uh so instead of instead of going out of our uh comfort zone on the type of liability what we're doing today is we're expanding to the UK and which is a big uh pension risk transfer market”

Brookfield spun off its asset management business 2 years ago because there is a large investor audience (particularly US investors) that wants to invest in pure-play asset management without exposure to Brookfield's operating assets or insurance business, and the separation created value for both the parent and spin-off.

“For example, we spun off our asset management business uh two years ago. There's a whole group of US investors largely that buy asset management businesses that only want to be invested in asset management. They don't want to own assets that we own. They don't want to be invested in insurance. They don't want to do all the other things we do.”

Investment decisions at Brookfield go through multiple layers: initial approval at the business unit level, then review by a higher-level allocation committee to ensure the organization isn't concentrating too much risk in one cycle, and finally an oversight committee of 6-8 senior leaders that serves as a final governance layer.

“Usually what happens is some transaction came into the company some way or we had an idea and we went out and talked to somebody and a transaction came about. Uh it's then approved by today because we have these vast businesses. it's approved in the business. But then we have one committee that it's almost like an allocation committee up top because we want to know how many across the organization. We want to know how many transactions are happening at any one point in time.”

Brookfield maintains substantial teams on the ground in target countries; this presence is necessary because the company doesn't make random investments—it requires local knowledge and the ability to act opportunistically when investments become available.

“We have to have people on the ground. So we pick those countries very methodically. We put people on the ground. We invest from time to time new investments when we find the opportunities. But we don't randomly go to countries like this is not a random business. This is hard work. Therefore, we have to be in country, be able to action, an opportunity when it comes.”

Consolidating Brookfield's complex structure into a single umbrella would reduce long-term shareholder returns and increase financial risk by eliminating the flexibility to serve different investor audiences (asset management vs operating assets vs insurance) and preventing the company from making strategic spin-offs.

“It would just mean dilution to some shareholder and and and for example, we spun off our asset management business uh two years ago. There's a whole group of US investors largely that buy asset management businesses that only want to be invested in asset management. They don't want to own assets that we own. They don't want to be invested in insurance.”

Today's interest rates are actually normal and historically still well below average; rates will likely fall another 50-100bp from current levels and settle into a regular range, not a persistently low regime, making current financing conditions relatively constructive for asset-based businesses.

“interest rates aren't that high. They're they're higher than they were because interest rates went to zero and for a number of years after the financial crisis, they were close to zero and uh now they're actually in a normal a relatively normal range. I'm sure we're going to see another few hund few few another 50 100 basis points off of the short rates and we're going to settle into just a regular range of rates.”

Brookfield manages over $1 trillion in assets, but this is not excessive for the scale of transactions they execute (Deutsche Telecom tower business: $20B, Microsoft power plants: $13B, Intel fab: $32B), and capital deployment pressure is manageable when capital is deployed thoughtfully.

“You have almost well, you have over a trillion dollars in management now. How do you fend off the pressure to deploy that money? It sounds like a lot of money. It is a lot of money. It sounds like a lot of money. It's a trillion dollars, but it's not that much when you do what we do. A couple years ago, we bought Deutsche Telecom's half a Delich Telecom's telecom tower business in Germany. Uh, and Austria is $20 billion transaction.”

Brookfield conducts post-mortems particularly on failed investments to identify root causes (execution failure, market timing, or flawed investment thesis), with flawed investment thesis being worst category and execution/timing failures being more recoverable.

“Oh yeah, especially the bad ones. What goes into those? Like walk me through that. Take me behind the scenes. And we try to look at look the the uh successful ones you can usually identify and know what happened. The unsuccessful ones are harder to identify what happened. Um but often there are there are reasons why and it either comes down to execution. Uh you didn't you didn't execute properly. um you had um you mistimed the market or you just made a bad bad flawed investment decision and those are the worst.”

Brookfield makes only small incremental mistakes over 35-year operating history without material irreparable harm, demonstrating that disciplined downside-focused process prevents catastrophic losses while enabling learning and adaptation from smaller errors.

“Look, we make mistakes. We try to make small mistakes...When we're wrong, we were wrong in increment in small ways. um which aren't have you you don't know about them very much because in the last 35 years we've been right generally on the large things and nothing has been uh irreparably harm uh harmful”

Brookfield brought Connor Teskey forward as the next CEO of the asset management business 3 years ago at age 37, demonstrating the culture where talented individuals can rise rapidly and will re-energize the business with fresh leadership.

“we brought Connor Tesy forward as the next person that will be the CEO of the asset management business. Um that was internally uh vetted. It was then externally vetted. And today we're in the process of him uh continuing to meet clients and investors and all those kind of things. And I think he's 37 years old today. Um he's incredibly passionate, talented, and uh and he'll bring through a whole new group of people within the company and re-energizing businesses is what makes them better and different.”