my kids and closed in the last for the memorial holiday and in london.

the ftse in italy is up. if we look across the more broad stocks, shares flat to the upside. phil blain said the ecb is on track to start cutting mates, but it will have to keep rates in restricted territory all year. looking at wall street open, keeping to narrow ranges. laying corporate earnings against the higher than usual rates earnings. gold a touch higher. china has set up its largest ever fund. it is the latest effort from beijing to achieve self-sufficiency as the last seeks to restrict its growth. jimmy's business outlook rose.

expectations came in lower than estimated. the latest gauge comes as they build the economic rebound. the bank of japan has signaled there is room for raising interest rate. in a speech, the deputy governor said the end of the battle with deflation is in sight. those are your top stories this morning. ♪

fencing: thank you for coming on leaders. i am great because i am speaking with you. if i was a merchant, meeting you for the first time, how would you describe your company? bruce: we invest in and by the

backbone of the economy. when water gets delivered to your house, the pipeline that brings different things to your community, the telecom towers that transmit your phone, the data center, the real estate that you live in, it is what we own and build. in is what drives the economy. it is because we are behind the scenes, but it is big. we are behind a lot of the things of the global economy. we had -- sometimes it helps and sometimes it does not, but on balance, it has been good for us. francine: you have been in charge for 20 years at brookfield, two decades, over two decades.

you have grown the business by so much. what was the most difficult question about how to buy it? bruce: the world is changing all the time. if i went back, fully invested in then and now are different. telecom towers -- the business evolves and the backbone evolves , so it is a really interesting business to be in because you are always learning. francine: you do not want to invest in something that goes nowhere. bruce: we are always trying to understand where the future is going and how we invest with that. often it is listening to your counterparties, your partners and hearing what they are saying

and what they want to do. we are the backbone behind local business. when they need capital, we find it. look, i would say we are always -- what are the themes? the digitalization of everything, the decarbonization of everything and globalization of everything are three mega trend themes that are going to be very dominant. investing for the next 20 to 30 years. francine: geopolitics is taking a turn for the use. how do you say we will digitize when rates are all over the

place? bruce: we try to find good countries, go there and stay there. invest in these things. whether they, or go, they are not really relevant. you need to make sure that you have liquidity. it is more important than the general trends. francine: is digitalization the hardest because of ai and we do not know where we will end up? bruce: it was happening because of tech companies getting into cloud computing. the amount of things that go to your ipad every day is amazing what is happening but now with ai, it is almost exponentially

taking it up. that is just another tailwind behind this whole sector. it was very strong before that and for the last 5, 7, 10 years, we have been pushing into it, but what is going on with ai is even more dramatic. the digitalization of everything is being driven by data centers and the connectivity of everything. but remember, everyone in the world has, in some way, committed to "let's have less carbon." and it's just transitioning the economy. it's not good or bad or green or black, it's just, let's just transition the economy to have less carbon. so we are funding that. and the leaders in that today are the technology companies. so a lot of this is being driven by the technology companies to go green. so we are one of the largest builders of solar and wind and, now batteries, to be able to get carbon out of the system.

and whereas years ago, we sell power to the grid. today, our power is mostly sold to global corporates. francine: but -- and again, this is, you have to take a bet on what kind of technology? or do you have to take a bet on just the infrastructure that supports it? bruce: we were doing wind 15, 18, 20 years ago. we were doing solar 10 years ago but very small. and only when the cost curves made solar and wind at the point where they were -- they are the most economic thing -- way to generate electricity. and at the point of that, you know if they're the most economic way to do it and they have less carbon, they are going to win. and that is why we are decarbonizing today. because in most countries, this is the lowest-cost energy. francine: but geopolitics must get in the way, right? politicians have to be reelected. they are pro-climate change, against climate change.

how do you not waver? bruce: remember, just to make an important point -- in most countries, the lowest cost energy today for electricity is solar or wind. you don't need subsidies. and when you did need subsidies, politics mattered. today, you don't. francine: deglobalization. so this is, what, bringing back onshoring? bruce: all it is is -- i think in covid -- i would say it has always been happening and in covid, people just learned we should have production capacity located in -- many things, located where you use them. so increasingly, for example, batteries. for cars, for example. they're being used in america and therefore, there are battery plants getting built in america. and there is an enormous need for capital to fund battery

plants. there's enormous need for semiconductors. enormous need for manufacturing capacity in various locations around the world. and it's just natural that everyone doesn't want to have all of their manufacturing capacity in one country or place. let's diversify. so that is just a big theme, which means it's just a lot of capital. francine: you make it sound very easy, but actually, this has gotten you, like, more than $900 billion in assets under management. bruce: you know, it's not easy. but if you have operating people and you keep repeatable -- do repeatable things around the world, it gets simpler. it's not easy, but it is simpler. and i guess that's why we are in business, right? we have been doing this a long time. and everything is not the same, but it's -- there are a lot of things that rhyme and therefore, you can learn and continue to grow over time. francine: coming up, bruce flatt on plans to invest in the financial backbone of the global economy. bruce: we think that's the next phase of infrastructure investing. ♪

francine: infrastructure has been a bright spot for brookfield. the company is gathering cash for a new fund targeting buyout opportunities in the middle east. and it plans to start a pool that invests in financial infrastructure, such as payment systems as demand grows. i continue the conversation with bruce flatt.

did you know in 2002 that you wanted to be at $900 billion asset under management? or $1 trillion? bruce: we are just trying to make money for our clients in a thoughtful way. and we have done that for a long period of time. and the reason we are at the scale we are is that we have been thoughtful with their money and we have earned them a good return and we have not taken a lot of risk. and if you can do that over long periods of time, you can compound their wealth, investment wealth to very large sums of money. and that is what is important for these sovereign institutional pension investors. because they have long durations and they need this type of asset to earn them returns over the long return. francine: you have also gotten into credit. how much are you expecting that to grow? bruce: what has happened with regulations in the banking system is it has pushed out credit off the balance sheets at the banks and the right place where that is being funded from is institutional investors.

and therefore, investors like ourselves are continuing to grow our businesses where we are funding these type of products. but it's not -- our business is not in competition with the banks. it is actually in partnership with the banks. and as a result of that, i would say it is facilitating the growth of the global financial markets as opposed to something that often people talk about it, that we are in the wrong time in the cycle or whatever it is. this is going to be growing and happening for a long period of time. francine: so how big do you expect? bruce: it's going to get big. because remember, this is where most of the capital is in the world, in sovereign institutional funds and pensions. these funds used to be $20 billion and $30 billion.

today, they are $300 billion, $500 billion, $1 trillion, $1.5 trillion. these are large, large sums of money. they need to put it to work, and therefore, it is going to continue to grow for a long period of time. francine: are you focused -- when you look at regions, is it mainly the gcc countries? bruce: we invest for people in the -- for the long term, try to earn them good returns by taking moderate risk. and if we can do that, it is all around the world. for you, what you want to do in your own portfolio is take moderate risk and earn a good return. francine: bruce, what is moderate risk? again, you make it sound easy but actually, this is a know-how. so do you look into -- you're also quite acquisitive. bruce: yeah. look, i would say in the businesses that we are in, we have more information than most people about what we do. therefore, what you might think of as risky, to us, it's not risky because we've been in this business -- these businesses for a long period of time. we have the information of every -- we know what's getting shipped across the ocean in our containers. we know what's getting booked into the ports in different countries. we know what's traveling on the roads. we know how many people are going into a shopping mall.

we know all of those things. and that just informs us. so we have, i would say, better information to base our decisions than most people. and -- but we are always -- you know, we're trying to take -- so we are trying to lower the risks by doing that. of course, investing is tough. it's not easy. and therefore, you are always taking some form of risk. francine: how do you choose what company to buy? bruce: you know, thoughtful analysis about what is in the business. proper pricing. when things are up a lot, just wait. and most people invest at the wrong time because they get excited about what the markets are telling them about a business. and therefore, that is usually when we are not investing. and just wait for the time when it will be a little better to invest. francine: do you expect -- i think you have spoken in the past about a possible big acquisition that would be transformational for brookfield. bruce: you know, i would say we are always in the -- we are always looking for additions to the business. in 2018, we brought oaktree into

our fold, and we have a partnership with the management there. that's been transformative to our credit business. and we're always looking for things like that to continue to build the business and just grow over time. but if not, we just keep plugging away every day. francine: so this is more partnerships than outright acquisitions, like altera. i mean, this is a different kind of carbon fund. bruce: our transition business, we started -- we split off from our main infrastructure business 4.5, four or five years ago. we raised a large first time fund. we just did the first close of our second fund for $10 billion. and then we started an emerging markets business. so i would say that is just a

split off. this is just -- all we are trying to do is we informed ourself about transition, we built a team over a long period of time. now some people said to us, can you solve emerging markets as opposed to just developed markets? francine: right. bruce: we didn't feel it appropriate to put the two in the same fund, so we are creating another fund to do that. and some of our clients will come along with us, and we are quite excited about it. francine: is that a template for possible future kind of spinoffs? bruce: we have -- in our private equity business, we have a buyout sponsor business. but we are also doing -- we're just in the midst of creating a strategy for the middle east, which will be a separate pool of money. we're creating a strategy for financial infrastructure. because we think that's the next -- the next phase of infrastructure investing is in the financial backbone of the

global economy. and a lot of the world has been pushing towards financial infrastructure, and it's not appropriate for our infrastructure fund. but -- so we are creating a new pool of money to do that. and so we -- there's a fine line between having too many things and making sure your clients, who want to be invested with you in that type of area, have a pool to be able to do it with us. francine: bruce, when you look at infrastructure, there is -- consolidation was really the, i guess, the name for the last six months. does that make your job easier or tougher? bruce: look, we were the -- i'm going to say one of the pioneers of infrastructure -- francine: the original, you want to say. bruce: well, going into institutional clients. we were the original because we were in industrial businesses

ourselves, and how we got into the infrastructure business is we decided we didn't like the up and down of many of the industrial businesses we had and mining businesses. but we really liked the backbone infrastructure that was in these businesses. and 20 years ago, we started doing it for institutional clients. at that time, nobody would listen to us and nobody would invest with us. so it's quite -- it's great that this has become mainstream today. the good news, i'd say we're still a leader in it. we have very large funds, in fact, the largest in the world. and therefore, we just continue to try to differentiate our investment strategies, and with size, scale, operating people, and the ability just to grow in the places we are. so i think we are -- do others getting stronger help us? probably not. but it doesn't really bother us. and i think there is a place for us to continue to grow in business. francine: coming up, why bruce

flatt has faith in the future of commercial real estate. bruce: there's opportunity coming. and if you know what you're doing, you can pick the right assets. there's a great opportunity here. ♪ at morgan stanley, old school hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real.

francine: from the united states to europe, plunging office valuations are spooking investors, raising fears about a broader contagion. as one of the world's biggest owners of commercial real estate, brookfield is at the center of a global industry shakeout. but the chief executive bruce flatt, who made his name in real estate, sees opportunities where others see risks. we continue the conversation. commercial real estate. so a lot of people say, well, this is not the right time. we are going to see a shakeout in commercial real estate. there are opportunities that you see? bruce: i think, look, the next -- the next story is that interest rates are coming down. fundamentals are pretty good in a lot of commercial real estate. look, of course, there are some -- there is a tale of some investors that had properties that for this environment, the fundamentals either don't

support it or the financing they have can't be supported, and therefore, those have to get dealt with. so that's a tale that is getting dealt with within the financial system. the fundamentals are actually getting better. interest rates are coming down, which means that values are going to improve. but that tale, there is opportunity coming. and if you know what you're doing, you can pick the right assets. there's a great opportunity here. and we have done this for a long period of time and we have seen these cycles before. real estate's cyclical. and you can make a lot of money when you pick the inflection point of markets. and i remember it in the early 1990's. i remembered it in the early 2000's. i remembered it in 2009, 2010, 2011, 2012. there are points when there's an inflection point, and we are at one of those inflection points today.

francine: so you are buying? bruce: we are buying. our opportunistic fund, we just bought some -- we foreclosed on some loans for multifamily in the u.s. recently. we are very excited about that, and we continue to look at a bunch of things. francine: do you see anything in europe? bruce: absolutely. i think there will be -- you know, the biggest, most liquid markets are in the united states. that doesn't mean -- therefore, because they are the most liquid, you always find the most opportunities. but europe, there's less capital, and therefore, there will be opportunities here as well. francine: but how do you make a difference between the ones that, you know, will get better and the ones that actually you should forget? bruce: you know, i would just say it depends on the types of real estate. you just need to -- quality wins, always. it always has. it always will. francine: what do you spend most of your time thinking about? bruce: you know, personally, i spend my time sometimes helping our teams with business.

sometimes -- i would say a third of that, a third with clients, helping them understand what we are doing, where we are going. and a third is just internal people -- running the organization, i'll call it. and with that, we spend an enormous amount of time building our people and transitioning our people within all of our businesses. and it's just a -- it's not something that happens once. it's happening all the time. and our whole goal is, our culture of our place is bring people up that are very young, give them opportunities that they would never get anywhere else. grow them throughout the organization. make sure they are entrepreneurial, hard-working, and want to win. and if you have that, you have a great culture in a company. and that's sort of where we spend all of -- a huge amount of our time trying to build within the organization.

francine: bring them up to test them or just to make them learn? bruce: look, if we can bring them up to take on roles. and eventually, eventually, i will become an executive chairman. and i'll still be around. but somebody else is going to run the place. francine: will you ever retire? bruce: i will become an executive chairman at some point in time. and what that means is, i'm here to help mentor young people, help with business development, look after clients that can be helpful to the overall organization. but at some point in time -- this is a hard business. we are in 30 countries. we have lots of people. it's better to have younger people grow the business. i took over at 30 -- in my early 30's. and i'm probably slower today than i was then. not that i have slowed down, but i am slower today. and at some point in time, it's the right thing just to bring -- to give the people those roles. and so, we are continually

evolving the organization in that way. francine: but are you going anywhere anytime soon? bruce: no. francine: bruce, is this the biggest mistake, actually, for politicians and chief executives is staying on for too long? or is leadership in 2024 different to what it was in the early 2000's? bruce: you know, i think it all depends on the organization. some organizations fit one way, some fit another. i'm not suggesting our culture is what works for everybody else. but we have a culture where our elders stay around for long periods of time to help. and our young people get opportunities which they would not otherwise get if the elders stayed in place in a full-time role. and that's what we do. but maybe it does not work for everyone and that's ok. francine: bruce flatt, thank you so much for joining us today. ♪ is smart here, right?

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