Brookfield boss Bruce Flatt says the firm’s focus on real assets provides a benefit as inflation rises. Here’s how.
Bruce Flatt, the chief executive of $US700 billion private capital giant Brookfield, has to be one of the most relaxed customers in global markets.
And while inflation is going up, Flatt says that’s a positive for Brookfield, which he says owns a portfolio mainly made up of real assets“If you think of our business in general, we own real, backbone things. Toll roads, pipelines, office buildings, retail centres, renewable energy plants, transmission lines.
Because Brookfield spends a lot of money upfront, its ongoing costs are lower. So, as inflation rises, it gets 100 per cent of the benefit on the revenue side, but the inflation hit on the cost side has been minimised by Brookfield’s big upfront spend. The result is better margins. “The last two-and-a-half years were tough. We bought things, but there was lots of money around with lots of sponsors and everyone could borrow money. Therefore, there was no way to differentiate yourself.
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