Goldman Sachs U.S. Financial Services Conference

Dec 9, 2025

Okay, thank you. Good morning, everyone. It's my pleasure to introduce Bruce Flatt, CEO and Chair of the Board of Brookfield. Over the last several years, the Brookfield ecosystem has evolved into a leading global alternative asset manager with over $580 billion in fee-bearing capital across a wide range of strategies. The firm also operates a fast-growing insurance business and annuities business on the other side of the house now under BN, with deep expertise across the investment landscape. We look forward to hearing Bruce's perspectives on the environment, obviously what's in store for Brookfield over the next year and beyond. So thank you for being here. It's always great to spend some time with you at this time of the year as we turn the page onto 2026. So thanks for doing that. Thanks for having me. So I wanted to start with a bit of a bigger picture question for you guys, really on the back of some of the targets you announced at the Investor Day a few months ago, which effectively calls for doubling of the business. And you have lots going on. You're on your way there. 2025 was a strong start in terms of the fundraising targets that you laid out. But as you look out into 2026, talk to us about the fundraising environment and how you expect that year to shape up for Brookfield from a fundraising perspective? So I think probably the most important thing for us is we have a very diversified business. We have a big real estate business, a big infrastructure business, a big renewables business, a big credit business, a big private equity business. And each of those is spawning other strategies as we go. I think next year we have 50 funds in the market. So this is a broad and diversified franchise, which just means that no one single business is so important to the franchise. And secondly, the asset management business, when it was spun off, is largely fees today, and it grows into carry over five, seven, 10 years. But today it's largely just fee-bearing capital that's generating fees, not influenced by carry. And as a result of that, the resiliency of the business is extremely strong. We just haven't had, maybe because of the diversification and because of the operations mentality and because of the quality of the type of business we have, we just haven't had issues raising money. We raised $120 billion last year in 2024, I think. We've raised $100 billion this year. I think next year will be larger because we have a lot of our big funds in the market next year coming or starting now and through into next year. We just haven't had the issues with fundraising that a lot of people have had. When I think the issues have been, if you're in a single industry or an industry that got hit a lot, clearly some of those issues affected us. When you have a broad, highly diversified, and highly global business, we just get the benefits from that. Yeah. Let's spend a couple of minutes on some of the bigger initiatives you guys have coming up. Obviously, AI, all things AI, AI infrastructure has been incredibly topical for the space, but really for you guys as one of the leaders in the space. You've actually described AI infrastructure as a multi-trillion dollar capital formation cycle. You've been executing against that opportunity well with obviously a number of partnerships. You're in the middle of raising your large AI infrastructure program as well. You talked about that space being $100 billion of assets to Brookfield at some point of time potentially. So what are the priorities into next year as you're building out this ecosystem? How are the fundraising dialogues coming along as you're embarking on this kind of next leg of your journey? So maybe the first thing just to step back and identify is that the single number one thing that's important for artificial intelligence as we build out the backbone of intelligence is power. The biggest gaping hole in virtually every single country in the world, but in particular in the United States, is the fact that we do not have enough power to power AI. So we happen to be extremely lucky that we've been in the power business for our whole, in fact, the whole company's history, but in particular in the last 40 years. And we're the largest builder, operator, owner of power plants in the world in many different types of technologies. So that's the most important thing. Second, what's going on now is that the fundamental backbone layer of artificial intelligence is being laid down. And the way I would refer to it is in years past, we laid down railways and we put down roads and we put down water systems and we put down in the last 25 years fiber and mobile networks. And now what's happening is we're laying down this artificial intelligence network. And countries need to have artificial intelligence networks or their companies and their systems of government will fall behind. So every single country in the world and every hyperscaler who are leading this are looking to build artificial intelligence infrastructure to warehouse compute capacity for their companies and for their countries. And what's probably the most important thing, because leave aside the stock markets, there's only a certain number of stocks out there. Therefore, when money tries to push towards one set of stocks, the PE multiples go up. But if you look at the fundamentals of what we do is we just build backbone infrastructure for companies or countries. So we've done transactions and we provide them power or we provide them compute capacity or data centers. We've done transactions with Microsoft and Google and Sweden and France and Qatar this morning. And we continue to build out in the United States. And all of that is really just the necessary backbone. So I think probably the most important thing to leave you and everyone with is no matter what happens in stock markets, this artificial intelligence backbone buildout is very large, will be going on for 15 years. And those that have the operating capability to lay down the fiber will be doing it for 15 years. And the counterparty contracts in it are extremely good. And if you know what you're doing, very few mistakes will be made. And that's probably the most important thing. So this, back to your original question, is how big is this going to be? It's going to be very, very large. And it affects everything. It affects our power business because we can't build enough. It affects our infrastructure business because all data centers and all types of infrastructure are getting affected by it. We set up separate fund because we didn't want to engulf our infrastructure fund with artificial intelligence only. Therefore, we have a separate fund for that. It affects our real estate fund because many of our industrial sites that we have today, we're reverting away from industrial logistics to data centers if we have power and if we can locate the buildings. So it's affecting all of these businesses. Of course, when these conditions exist, one has to be very careful. I know that we will be and some others will be and some will not be. They'll make mistakes along the way like always. Yeah. So just maybe double clicking on that, given your exposure to this ecosystem and given all the headline concerns that we've seen, especially in a couple of months around the AI theme and potentially areas of overheating, how do you make sure you don't make some of those mistakes? So what areas you're avoiding and where are you leaning in? I would just say that we've been building backbone infrastructure for the global best in various forms for our whole existence. And this backbone infrastructure is no different. The technology may be different. The companies or countries you're dealing with may be different. In fact, difference number one is they're all better credits than we used to deal with when we dealt with mining companies or forest companies or businesses that rented our real estate. But this is actually the same thing. This is really just a real estate business. We build things, rent them to people, take credit risk, and make sure that we have long enough contracts to get all our money back and a return on that capital. This is really simple. People will make mistakes, but it's really simple at the fundamental basis of it. And the good news is we have huge operating teams in all of these places to build out this infrastructure. But people will make mistakes when they don't know what they're doing on construction and building. They don't have financing properly put in place. They make missteps on contracting with counterparties. Those are the three risks. They're all the same three risks that have always been in place, but every type of infrastructure in the world. And I think the most important thing here is this is just for what we do anyway. We're not a technology provider and we're not intending to be. We're just behind the scenes providing infrastructure like we always have. Yeah. So back to your original point where there's really not enough capital in the world today to support it. It's certainly not enough government capital to really support this. So when you think about your initial leg into this theme, you have the big AI fund that you're fundraising today. What other vehicles, what other products, what other strategies do you think could evolve around that? And when I think about Brookfield's history of building businesses, transition business is one of the examples, more recent examples, how big do you think the AI infrastructure business will be for you guys over the next several years? First point is there is enough money in the world to fund this because there's $60 trillion in sovereign institutional plans around the world. There's $40-$50 trillion of retail money that's out there. So there's $100 trillion to funding. And we're talking $10 trillion. What you need to do, it all sounds like small numbers, but what you need to do is figure out what's lacking is people to convert the $100 trillion into the $10 trillion. You need owner operators that know what they're doing and have the trust of countries and hyperscalers to be able to do that. That's really what it is. It's the skilled intermediaries to build infrastructure and raise money from that $100 trillion to build out the $10. And so there is enough money. We just have to figure that out. I would say what's important today is that the hyperscalers don't have enough money on their balance sheets. They're spending, I think it's quoted this year, $600 billion. It's estimated at $500-$600 billion a year over the next five, seven, ten years. That's a lot of money even for $3-$5 trillion companies if they keep stacking it on the balance sheets. So they need access to groups like us that can convert the $100 trillion into investments that support their business and infrastructure. And the bottom line is that's what we've been doing in various businesses we have for many, many decades. Great. Okay. Let's pivot away from AI for a minute. To your point earlier, Brookfield has a really diverse set of businesses across a number of different verticals. Where else are you finding interesting deployment opportunity? It feels like the pace of deployment has steadily been picking up. What else is interesting for you guys in terms of capital deployment over the next 12-18 months? So I think in 2025 to date, we invested $110 billion across the business. And it's pretty well diversified. We've done a lot of private equity businesses. We've put a lot of money into real estate. We just announced a transaction in Australia buying storage for $2.5 billion with GIC as a partner. We've done a lot of infrastructure deals, renewable power deals. We just did the deal with Westinghouse on nuclear. So it's pretty broad. And I'd say that's the success of our business is keep broadening the business and over time keep growing it, but never concentrate it in any one area. Because when you're building a business for the next 20, 30, 40, 50 years, being diversified helps. And it means that we're never subject to the markets. And if things are valued too high in one sector, we can just allocate capital somewhere else. Yeah. The other side of that coin is obviously monetization activity. It's been a place where the industry has sort of struggled for the last couple of years. It's really nice to see finally turning the corner in 2025. It's certainly been a better year for realizations for the space. It's been a better year for you guys as well. I think over $75 billion of sales year to date through Q3. It's really across the franchise. How should investors think about Brookfield's monetization outlook in 2026? And then within that, maybe talk a little bit about what are the segments or the product categories that are likely to be the biggest sellers? One never knows what the future brings, but fundamental conditions out there are favorable towards continued monetizations and increasing monetizations for groups. Now, still there are some groups that are having difficulties because it's the type of businesses that they own. And I would say in general, over the past three, four years when monetizations were less, we did much, much better than average because most of the things we buy are cash flowing, high-quality, long-term businesses, which we've been able to sell. And as you said, we sold $75 billion of investments this year. And if I took it in general, it was operating businesses, even in real estate, it was operating businesses which were very high quality that had teams to grow into the future. And largely, we did better monetizing outside the United States than inside the United States. With interest rates now coming down in the U.S. and with capital markets back, I'd say probably as efficient as they've ever been, you're going to see a lot more monetizations in the United States. And that's good for us, but it's also good for the industry in general. And the quantum, again, with the caveat that nobody has a crystal ball, but is the expectation 2026 to be better than 2025 somewhere? Yeah, probably. I would say for us, it all just depends on the life cycle of different investments. We're not selling things just to sell. But generally, we sell $75-$100 billion a year. Generally, we invest $100-$125 billion a year. That keeps growing all the time as our funds get bigger and broader. But I think $75-$100 billion next year is probably a good number. Great. Okay. All right. Let's pivot a little bit. I would love to spend some time on insurance and BWS, which is obviously part of Brookfield, the corporation, BN. It's been growing rapidly. You guys obviously established this platform as an investment-led insurance organization. It's really important to BN. It's really important to BAM. It's obviously very important to shareholders across probably both sides of that aisle. So when you think about 2026 and beyond, can you talk about what are some of the levers you're pulling on to sustain the growth, number one, and number two, and perhaps more importantly, to continue to deliver 15% plus type of ROEs? So for Brookfield Asset Management, I guess the simple point for it is it doesn't take exposure to insurance risk. It manages assets for institutional clients, retail clients, and insurance businesses. And the largest client it has is Brookfield Corporation. Increasingly, it will become even a larger client because four, five years ago, we took $25 billion of the equity capital we had and we stuck it into an insurance business, into the equity of an insurance business. And now it'll be almost $200 billion of assets shortly. And a lot of that capital is getting allocated in various strategies at Brookfield Asset Management. And we can't think of a better group to manage our capital. So I'd say that's what's important for Brookfield Asset Management. At the parent company, our goal is to continue to seek financial services businesses that can both earn us a very good long-term return on capital, but in addition, are symbiotic with the businesses that we have today, so insurance was super important to us because we thought we could invest into it at a point in time, build the skills, make the early mistakes you always make when you're starting out in a business by getting into it at a point which was very fortuitous because interest rates were zero, but we thought it was a good business in itself, but it's an excellent business for the combined group because it will be a $500 billion business someday and all of that capital gets allocated to our asset management arm, and so there's a double win when we can do that. Increasingly, we continue to, really, our goal is to seek capital with as little risk as possible on the liability side of the balance sheet and try to out-earn to earn excess returns by investing wisely. That's always what we've done for our own balance sheet. That's always what we've done for our clients. Now we're just doing that for our insurance company. We're not trying to take insurance risk. Why we say it's an investment-led insurance company, the difference is that we're not trying to take insurance risk to make money. What we're trying to do is minimize insurance risk, receive float, and invest wisely. It's a different model in that there are some that are like this, but it's different than most monoline insurance companies. Right. So given, I guess, how important the investment capabilities are going to be for BWS to sustain the sort of 15% ROE, maybe even grow it over time, talk to us a little bit about how the asset side of the balance sheet could evolve versus where it is today, what runway you see for utilizing more of Brookfield's asset management capabilities on the BWS balance sheet. So our strategy so far has been, as opposed to running an insurance company which just invests in traditional ways into both liquid and private credit, our strategy has largely been a barbell approach, not unlike what Berkshire Hathaway has always done, which is hold very large amounts of cash, which we hold today, and that allows you to put significant money into equity strategies which earn much higher returns, so don't try to earn 7%, earn 3% and 14%, and if you can earn 3% and 14%, that averages to 7%, but in our view, you can A, earn a higher return on average if you do your job right, but B, you can take less risk because of the things that we know that we're doing. The advantage that we have is that the strategies that are the underpinning of Brookfield Asset Management are long-term yielding cash flow type assets in renewables, infrastructure, real estate that are very well treated and earn excellent low-risk returns in an insurance company. Gotcha. Another one on insurance topic for you, property and casualty, so I know when we talk about BWS, mostly it's the annuities business. It's mostly the business that's been quite aligned with alternative asset managers when we look at a lot of your peers that are kind of participating in the same. You do have a small P&C business. What sort of strategy behind P&C? Is that an opportunity? Do you see space to grow organically or maybe even via M&A, and how does that play into the symbiotic relationship with the asset manager? Because that's quite a different type of risk and probably different asset management strategy as well. The property and casualty business is a very diverse business. Most people think of it as we're underwriting hurricanes. That's not generally where we want to put our capital longer term because you're making risk in taking insurance risk. The business is small today. What we'd like to find is a relatively low-risk P&C area where we can become globally dominant and create float to be able to invest into our strategies, in particular our higher earning equity strategies. As an example, today, we underwrite insurance for real estate construction in New York City. You might think, I hope you think, that we have some knowledge to underwrite construction risk insurance in New York City as one of the largest owners of property in the city. So I don't know if that's one that we could take across the U.S. and then take across globally, but it's possible. And so we're always trying to use the knowledge we have from our businesses and optimize our capital, but take low risks and earn a reasonable return by doing it. But find areas where we have something special. I think we have something special in that. So we've been now underwriting warehouses. We're a huge owner of logistics warehouses across the United States and globally. So we're now writing insurance for warehouses. We're writing insurance for renewable facilities. Of course, we know how to run renewable facilities and know how to replace them and are one of the largest insurers on the other side. So we know exactly what we're paying. So we're trying to figure out, we may never find one, or we're going to find an amazing area where we can be a globally dominant player where we have more information than anyone else and therefore we can take risk that nobody else can. And if we can do that, the goal is, sorry, the goal is just take small amounts of risk on the liability side, create float to be able to allocate to our asset strategies. Sure. Sure. And if you don't find something like that inorganically, is there appetite to just write that kind of business organically and just kind of chug along and make it somewhat additive to the whole ecosystem? Yeah. Look, maybe we'll find one to buy. Don't know. In the absence of that, we'll just keep growing it organically. In the absence of that, we won't do it. The fact is that we have many things like that that grow organically. Sometimes we find acquisitions. If we can't find it and it doesn't work, we'll shut it down. So these are all options. What our goal is, is how do we find low-risk float to be able to invest into using our investment skills to earn a higher return than we're paying on the float. And that's the simple strategy of BN. And Brookfield Asset Management is just there every day trying to put the money to work. Great. Okay. Let's go back to Brookfield Asset Management discussion for a couple of minutes. I would love to get your thoughts on private credit. Obviously, it's been super topical for the last couple of months. It's your largest business. It accounts for about a third of Brookfield's asset management fees. Now, a lot of the concerns in the market have really been surrounding direct lending and some of the more levered part of the ecosystem. You guys actually don't have a whole lot of exposure there. But when you kind of zoom out and when you think about the multi-asset credit platform that you've built, what are some of the more attractive areas to deploy capital, number one? And how do you think about that platform growing over the next few years? So again, it's important, but it's not everything. To us, we're highly diversified. So that's, I guess, the first point. Second is we've spent the last seven, eight years knitting together both organically within Brookfield and with a number of partner manager partnerships. We've been knitting together really a highly opportunistic credit business, which is our Oaktree franchise, alongside asset-backed finance, which we think will continue and continue to grow on the private side. So when you think about it, it's funding of real estate. It's funding of infrastructure. It's funding of airplanes. It's funding of all of asset-backed finance. And our goal is to become the best asset-backed finance lender out there. And again, the reason is we think we have more information than most people who do this. Therefore, we should be able to earn either higher returns or take lower risk and earn the same returns. And so we're continuing to grow that business. We're quite excited about it. And to the actual just the industry of private credit, I would say that private credit has caught a lot of headlines recently. I think everyone needs to just step back and consider the credit industry of which Goldman Sachs participates in as well. Last time I checked, yes. The credit industry right now, there aren't that many defaults. Defaults are very low. Credit is generally pretty strong. You haven't seen a lot of issues. Now, there's a few that came about that have been headlines. This industry is not going away. There is going to be liquid credit and there's going to be private credit. Private credit is really what banks did for years. A lot of that got pushed off the balance sheets to be able to ensure that they optimize their capital ratios. All private credit is, is we're accessing those clients we have over here with 100 trillion to be able to put their money directly into loans. Our specialty is asset-backed finance and opportunistic, but others will have their own specialties within each area they're in. Great. All right. Another important area I wanted to make sure we talk about is real estate. Again, not the whole franchise, as you pointed out. You guys are a diversified platform, but it's an important one, and it's important for both for a variety of reasons, right, so over the last few quarters, you've been pointing out signs of recovery both on the fundamental side of the picture, but also the capital markets healing, and hopefully, the lower rate environment will make it easier to start to sort of transact in the real estate space as well. So as you look out into 2026, maybe talk to us a little bit about your plans for further monetizations out of the BN portfolio and sort of lessons learned so far in terms of the appetite for the assets that you're bringing to market? And then on the fundraising side, at what point do you see healthier transaction activity translate into a more favorable fundraising outlook for real estate strategies? So on fundraising, we just raised our big fund. I think it ended at $17.5 billion, if I'm not wrong, and circa that number. And therefore, there's not a lack of money out there for good sponsors who have good track records. That's point number one. I'd say what happens in recoveries, and every cycle is different, especially in real estate. Every business, it's different, but real estate in particular, every cycle is different. And this one is really weird because fundamentals are actually very, very strong. The issues have been in capital markets and some markets in the world, I'll say. But capital markets got affected because of the psyche of people that real estate was bad because everyone went home and didn't go to the office and everyone didn't shop anymore, which both of those have been debunked, I think would be the word to use. And so the fundamentals are actually very, very strong. In fact, I was reflecting this morning. We built five office buildings during COVID. Five, globally. One in Dubai, two in London, two in New York. Either got renovated or built. Three in New York. They are 100% full today at 50% higher rents than pre-COVID and the highest rent ever signed in leases in each of those cities. That's an amazing fact. That's the worst business we have, let alone storage, multifamily, etc., etc. What the issue was is there was this psyche at the bottom of the market compounded with interest rates went up fast and therefore affected the capital structures of many people's, many groups' assets. And that was really the effect. And that's sorting itself out now. And capital markets are coming back. Transaction activity is coming back. Most assets are financeable today in a normal fashion. And what that leads to is once you can finance assets, because real estate can't be purchased without financing, once you can finance assets, sales start to come back. And you're seeing that today across the world. The U.S. was probably the heart of the most affected because interest rates went up the most and the fastest. But as interest rates come down here, you're going to see real estate come back even more. Great. Perfect. I think we'll leave it there, Bruce. Thank you very much for joining us again this year. See you next year, hopefully, as well. Thank you.