Brookfield Asset Management CEO Connor Teskey Talks Private Credit

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I want to get right to our first guest. Connor Teskey is chief executive officer of Brookfield Asset Management. They've got over tillion dollars in assets under management, touching into many different parts of the investment universe, and he joins us here at Bloomberg invest Nice.

To have you here with us. Thanks for having me.

It's been a while and you now officially are CEO of Brookfield Asset Management.

What's changed in your life? Very little.

At Brookfield we run a lot of businesses around the world. We like to run those business as well. We like to run our own business quite well. And full credit to Bruce in the other senior leadership team, this was a very thoughtful, methodical, incremental transition, so telegraph. Nice to get the announcement out of the way and just back to business as usual.

All right, So that went as expected. But the world is kind of crazy, to say the least, and I think about the volatility we see as a result. We see if playing out to some extent in the markets today, But we do have an environment macro where things can change pretty dramatically, as we saw this past weekend. With

We're very long term investors. We focus on long duration assets that are essential and critical in the communities and businesses that they operate in around the world. And these are assets that produce cash across a cycle. They're downside protected, their inflation linked. So we will take a very very long term view. And despite the headlines over the last weekend, our focus is on our people who are safe and

Does the geography change at all? And I bring that up because Data Center's energy infrastructure big investment play for you guys. You teamed up with Cutter Investment Authority on a twenty billion dollar venture to invest in AI infrastructure. How does the war with Iran, the instability in the region, does it change that specific investment at all?

It does not.

And again, when something like the past weekend happens. The focus is on our people who are safe, both at Brookfield and our portfolio companies, and then our focuses are on the assets and those are all performing. When you think longer term about our focus on the region, it's an incredible region. It's got very significant growth, it's got an increasing presence on the world scene. Those are the like those are the types of asset classes and geographies that we want to be investing in long term.

Could this make the region even more attractive? Is there an idea? I mean, look, we don't The President spoke from the Oval office today. It's obvious that there's not a clear person who is going to take over for the Supreme leader or with regard to Iran's leadership at all. Nobody knows what's going to happen. But is there chance that Iran becomes a more stable force in the in the world and that opens up opportunities for you in the region.

I would say when we think at Brookfield, in the types of things we invest in, they tend to have durations far beyond single administrations, political parties, individual leaders, and therefore we focus on the fundamentals and when you think about things like data centers like energy, the two you just mentioned. The fundamentals today are better than ever before, and that's what's going to drive our investment decisions.

Connor, one of the things that we love talking with you guys specifically is I mean, I think about Brookfield asset Management. You've got two hundred and seventy three billion in assets under management. When it comes to real estate, infrastructure, two hundred and forty seven billion, renewable power transition. This is something that you have been overseeing for a while

Where are you.

Seeing though, any signs of stress? Are you going to tell me the whole portfolio is fine?

So I think the topical one today is credit, and the first thing we would say is everyone needs to take a step back. Credit, private credit, and direct lending are almost used synonymously in today's market, and they represent very different things. Our view is credit markets are actually in very good shape. Corporate balance sheets are strong, banks are great, capital markets are incredibly liquid today. Then you can move to private credit. Our private credit focus is

So, but are there any situations that your guys are concerned about our note, I understand it's a small in proportion, but.

We've positioned the business really well over the last few years, and we've been very cautious and incremental about our exposure to the headlines. The themes that are dominating headlines today, whether it be software or retail.

Funds, Well, we have some, it's deminimous.

What's more important is we've positioned our entire business to be a net beneficiary from AI penetration. And then the other exciting thing for us is we've recently announced our full partnership with oak Tree, a very contrarian credit investor that's extremely well placed to go to work in this environment.

We'll get to oak Tree in just a second. One more on credit, though, outside of your portfolio, and when you look across the credit landscape, what gives you pause. Not Brookfield's assets, but out there in the environment.

In the environment today, I think the thing that we look at is sometimes there is issues with underlying credit quality and sometimes there is issues about liquid in which these credit investments are held. And those two things are very different, and in today's environment they're sometimes being conflated. There's a lot of talk about perpetual credit vehicles.

We think these vehicles long term are great.

They offer a unique private market exposure to a wider spectrum of investors that can offer diversification, that can offer growth. But those vehicles are perpetual in nature. They need to be managed, they need to be invested appropriately, and they need to be executed in a way that is thoughtful given the liquidity requirements they will have over time.

You're understanding and Brookfield's understanding of like the financial markets, this push to kind of spread those things like private credit to a wider investment pool, if you will, Do you think that still makes sense?

Absolutely? Yeah, absolutely.

Private markets offer an incredible opportunity for investors of all type. It gives them diversification versus what they can get in the public markets give them exposure to some of the most exciting growth themes that are sometimes difficult to get in public stocks and bonds, and historically private markets have.

Offered a premium return.

It comes down to a very simple fact that when they are offered to the individual investor, it needs to be through a structure that is well understood on both sides and is managed appropriately from both an investment and a liquidity standpoint.

And so understand it's not liquid, so understand what you're investing in.

Understand, and there is an onus on the manager to appropriately manage those vehicles.

I'll tell you from the Brookfield.

Standpoint, we've been very incremental and thoughtful of our growth in this space, at times restricting capital to avoid any situations that there could be a liquidity crunch.

Can we squeeze in one real quick one about forty five seconds or sixty seconds on AI. In terms of the data center build, what do you continue to see and has anything changed versus what we've seen in the last six to twelve months. You're starting to smile, so I'm assuming now.

It's exciting and the reality here is the demand is being driven by the largest, highest quality credit counter parties, the best corporates in the world and the best sovereigns in the world. And this is creating what is going to be a productivity enhancement for economies and businesses going forward. It needs large scale capital, it needs operating expertise across energy, real estate and digital infrastructure. We're excited because we think there's a big role for us to play.

So nothing slowing down. Nothing slowing down.

That's pretty amazing. Connor, thank you so much. I really appreciate you taking some time for us.

You'll have to come back well enough time to touch too much on Howard Mark's and oak Tree, but we can do that another time.

So Connor, thanks a lot. Always good to see you. Thank you for having us all right.

Connor Testca, of course chief executive officer of Brookfield as a management here at Bloomberg inst