CONNOR TESKEY ON BAM’S Q3 FUNDRAISING AND INFRASTRUCTURE GROWTH WITH BLOOMBERG TV - BROOKFIELD ASSET MANAGEMENT LTD

Financial Performance:

• Achieved 15% earnings growth and recorded another record quarter.
• Raised a total of $160 billion over the last 12 months, with $50 billion specifically allocated to infrastructure (an all-time high for the alternative sector).
• Secured $25 billion in new capital during the third quarter alone.
• Reported the first quarter of meaningful "realized carry" since spinning out in 2022.

Guidance and Future Outlook:

• Management expresses high confidence that infrastructure fundraising volumes represent a sustainable trend driven by structural demand rather than temporary sentiment.
• The long-term supply-demand imbalance in critical assets is expected to persist even if growth rates plateau or decline slightly.
• Future growth is anticipated to continue across energy, traditional infrastructure, midstream, utilities, and transportation globally.
• Management anticipates that the "bottleneck" will remain on the supply side (execution capability) rather than demand.

Business Segments and Product Lines:

• Infrastructure: Identified as the fastest-growing sector, heavily driven by AI and digital infrastructure, though maintaining a broad diversification across energy, utilities, and transportation.
• AI Focus: Directly funding the build-out of AI infrastructure while mitigating concentration risk through global and sectoral diversification.
• Project Jupiter/Bloom Energy: Investing in power supply for data centers via Bloom Energy, utilizing a de-risked development approach where capital is deployed only after securing permits, equipment, and supply chains.

Market and Competitive Landscape:

• Positions Brookfield as a key player in the "greatest infrastructure build-out in history," capitalizing on exceptional capital needs and investor interest.
• Views the current market environment as one where "supply was always the bottleneck, not demand," favoring established players with decades of experience over new entrants ("neoclouds," chip financing startups) that may lack operational expertise.
• Maintains that despite volatility in public equities pricing "marginal demand," the underlying fundamentals for physical infrastructure remain robust.
• Notes that election results and regulatory sentiment shifts have only slowed growth on the margins, not the core trend.

Risks and Challenges:

• Regulatory & Permitting: Acknowledges delays in specific permitting processes (e.g., oil pipelines for data center power) and political uncertainty (elections, ballot measures) as potential headwinds.
• Execution Bottleneck: The primary industry challenge is the lack of companies with the specific expertise to execute large-scale infrastructure projects quickly.
• Market Volatility: Recognizes volatility in public securities valuations driven by sentiment, though the private infrastructure model aims to remain insulated from these short-term swings.
• New Entrant Risk: Observes that inexperienced market participants entering during growth phases may make mistakes that disrupt headlines but not the broader trend.

Management Commentary and Tone:

• Tone is characterized by extreme confidence, describing the momentum as "incredible" and the business model as "very resilient" and "robust."
• Emphasizes 40 years of experience as a defensive moat against market froth and new entrants.
• Management dismisses political narratives, stating infrastructure needs are universal and "not political."
• Highlights a strategic focus on projects with community support and a "social license to operate" to mitigate local opposition risks.

Analyst Questions and Answers:

• Q: Does AI concentration risk and recent election volatility slow growth?
  • A: No; growth is supported by a persistent supply-demand imbalance. Even if demand growth slows, the lack of supply ensures continued opportunity for capacity producers.
• Q: Is the market environment too risky for new entrants like neoclouds or chip financiers?
  • A: New entrants without experience may make mistakes, but this does not disrupt the robust directional trend for experienced players delivering on time and on budget.
• Q: How are public market valuations and private asset pricing decoupled?
  • A: Public markets may be volatile regarding marginal demand, but private infrastructure fundamentals regarding long-term supply needs remain unchanged.
• Q: How are you handling permitting delays on specific projects like Project Jupiter?
  • A: Capital is only deployed after securing permits and supply chains; the company relies on long-term contracts with high-quality counterparties (e.g., Bloom Energy) and off-takers.
• Q: How does Brookfield compare to peers facing realization challenges in the exit environment?
  • A: Unlike peers reporting rougher quarters due to volatility, Brookfield is experiencing its first meaningful realized carry, indicating resilience in their broader business model.

Other Key Points:

• Brookfield differentiates itself by refusing to deploy capital until all development risks (permits, equipment, supply chain) are mitigated.
• The firm's infrastructure strategy is described as "global, diversified, and broad-based," avoiding over-reliance on any single narrative or region.
• Management notes that 41 measures on the US ballot regarding AI data centers were largely positive, further indicating political headwinds may be overstated.