Brookfield’s Flatt Shares Secret Behind 3700% Return

Brookfield’s Flatt Shares Secret Behind 3700% Return

Take chances but avoid big mistakes, advises Bruce Flatt of the Toronto-based Brookfield Asset Management Inc. one of the largest alternative-investment companies in the world. He spoke with David Rubenstein on BNN Bloomberg about putting this philosophy into practice at his firm, which has returned more than 3700% since he took over in 2002 and increased its assets under management to roughly $700 billion.

Brookfield invests alongside its clients by using its own balance sheet, and concentrates mainly on infrastructure investment. The firm is also looking to add more wealth products for individual investors; in addition to the private real estate investment trust it started last year, the company wants to build similar models for infrastructure and renewables. Right now, Flatt is looking at higher inflation as a positive for the firm, as “its businesses and real assets can adjust revenue higher over time,” just as long as interest rates don’t rise too much or too quickly.

Brookfield doesn’t sell consumer products, and when asked about positions in Russia or Ukraine, Flatt was quick to explain that his firm doesn’t have any direct investments in either country. But even without direct involvement, “every business around the world is going to be affected in some way, so there’s no good news coming out of this,” he said.

But one good thing on the horizon for Brookfield is their forthcoming $15 billion fund that will hold traditional renewables businesses such as solar and wind, with the goal of helping companies transition off of coal. That fund will be run by former Bank of England Governor Mark Carney, who joined Brookfield last year to build up its ESG business. Flatt told Bloomberg that he expects “excellent rates of return” in addition to doing “great things for the world.”

However, investing in a firm like Brookfield isn’t for everyone, Flatt says in the interview. Inexperienced investors would probably do better in a passive index fund, where they can put their money in and just let it compound over time as opposed to selling it. In fact, selling at the wrong time is the biggest mistake an investor can make. But compound interest can be “an incredible miracle of business, finance and human existence,” Flatt rhapsodizes, especially “if you keep at it and don’t quit[.]”