Connor Teskey on Brookfield, Infrastructure, and the Business of Real Assets

Connor Teskey

Our business today is really built around raising capital from the largest pools of money around the world and then turning around and deploying that capital into the largest and most attractive investment themes around the world. As a result, we are a very global business. We raise money all over the world, and equally we deploy it into 60 of the biggest countries and markets. Undoubtedly, our biggest markets continue to be the United States and Western Europe, but we are truly a global business today, with operations across Asia Pacific, India, the Middle East and South America as well.

Connor Teskey

That's a pretty high bar to exceed. What Bruce Flatt has built is amazing and quite frankly underappreciated — not only the investment platform and the asset base, but equally the culture. It's that culture that will ensure we can keep growing and keep building the way Bruce and other members of senior management have built up the firm for the last two-plus decades.

In terms of the things Bruce has done — and not just Bruce, but others in senior management — they're incredibly balanced. When there are big moves in the market, they're very measured in how they respond and how they think through changing dynamics. Secondly, very forward-looking. We learn a lot from the past, but we don't spend a lot of time dwelling on it. And then the importance of culture: one of the big cultural aspects of Brookfield is almost a worry about putting others in a position to succeed more than yourself. Bruce certainly embodies that, as do others, and therefore I don't think they always get the credit for what they've built. But we're very fortunate now to have this exceptional platform that is on the absolute front of some of the largest, most enduring and most attractive investment themes — themes that have been running for three or four or five years and are going to continue to run for one or two decades going forward.

Connor Teskey

There's no question, he's been doing it for 20 years longer than I have. In a lot of ways we've found each other to be very complementary. We run a very large investment organisation, and the most important thing we do is deploy capital at exceptional returns. That is the bedrock, the foundation of our business — it's always what we're going to be known for. But in order to do that at increasing scale and over a long duration of time, you have to be better at so many other things as well. You have to be very good at building teams, communicating strategy, interacting with your clients, your LP partners, your counterparties. It's that breadth beyond just the investment role, and I've been very fortunate to watch how Bruce excels in all of it and hopefully absorb some of it over the last 12-plus years of working together.

Connor Teskey

I don't know that the nature of how we invest has changed. Some things have, but one of the things we love about our approach is we've been very consistent over an exceptionally long period. We focus on high-quality assets that make up the backbone of the global economy — critical assets or services that really drive the growth and productivity of the communities and countries within which they exist.

Now, the assets and services that make up that backbone are constantly evolving. We give the example that probably two-thirds, maybe even 70%, of what we invest in today was not an investable asset class 15 or 20 years ago. Twenty years ago, we invested in hydro dams. Today, we invest in solar and nuclear and batteries. Twenty years ago, we invested in ports and railroads. We of course still invest in ports and railroads, but we also invest in data centres and fibre and telecom towers. So while we've been very consistent and focused on the backbone of the global economy, that of course changes over time.

The other thing that changes: a big part of our business over the last 10 years has been taking that same downside-focused approach and packaging it differently to meet the needs of a growing and increasingly diverse spectrum of LP partners and clients, and distributing those products in different ways. Ten years ago I think we had four products. Today we have 60. We've been very consistent in the verticals we focus on — infrastructure, real estate, private equity — but within each vertical, we used to just have a flagship strategy. Now we look to have a flagship strategy, a mezzanine debt strategy, a super-core strategy, a strategy focused on the retail wealth channel. Same consistent approach and focus, distributed across a wider spectrum of products so it can service a wider spectrum of partners and clients.

Connor Teskey

At least part of the answer has to be good fortune — fortunate to work on transactions and initiatives that were very successful, and in a few different places to be right place, right time. More tangibly, however, I had incredible mentorship first and foremost. The obvious one is Bruce, but it goes so much beyond that. Right from the first boss I had at Brookfield — that gentleman was as much mentor and friend as boss to me, and really helped me develop early in my career. A lot of the things he taught me paid huge dividends down the line.

Connor Teskey

One thing junior investment professionals spend a lot of time on is trying to get the model or the analysis perfect. There's almost a false degree of precision in today's world of Excel. The reality is so many times you just have to overlay good judgment. You have to recognise there are certain things outside of your control that your Excel model will make seem like a certainty, but aren't.

Another thing I attribute to that first mentor — I might get the exact words wrong — was something along the lines of: there are no absolute certainties in this business. So when something feels 90% right, you do that transaction, and the most important thing is you do 10 of them. You're going to be right nine times out of 10, and that's really, really good. If you wait to de-risk everything to the absolute nth degree — amazing, you'll de-risk your transactions, and you'll also do none of them.

Another very formative thing in my career: after joining Brookfield, I did four and a half, five years in the private equity group in Toronto, and in 2016 I moved to London. Concurrent with that move, I switched to the renewable power team and was part of a small group focused on building out a European platform. There is an incredible forcing function of not working in the same office as your boss. You're not going to send an email to ask to send an email. You're not going to wait five hours for the time zone to catch up to check something if you're pretty sure it's right. And maybe this is personal to me, but when you begin to take the initiative and do those things on your own prerogative, you think you're going to have a really low shooting percentage. Then, almost shockingly to the upside, you actually have a much higher shooting percentage than you expect. That's fun. You start getting stuff done, start building things with the team around you, and that spirit and excitement just snowballs from there.

Connor Teskey

This was in 2016. People always say, 'Did you want to join renewables?' The honest answer is no, I didn't have some strong specific desire to go to renewables, but Bruce and Cyrus Madan, who built our private equity business, asked if I would, and I of course said yes. If they'd asked me to go into infrastructure or real estate, I'd probably have a different business card today. I love the firm and I do whatever they ask me. And I was very fortunate — I joined the renewables team in the early innings of one of the largest and fastest-growing industry builds in history.

Connor Teskey

There are a lot of people who work really hard. I've always felt that's something within your control that can be a differentiating factor. It's two things. One, if you work hard, you have a bigger capacity to do more stuff — that's the obvious one. The other dynamic, sometimes underappreciated, is just being available for other people on the team. There are always people, both junior and senior to you, who have questions, want to bounce an idea off you, want career or deal-specific advice. Just being available and always willing to make time — maybe that means taking calls while you're walking through an airport or late at night. When people think I work hard, I don't think it's that I was crunching more Excel models or building more PowerPoint. I almost think it's the availability that people perceive as working hard.

Connor Teskey

Oh, tons. Let me put it a different way. Very early in my career — shortly after I joined Brookfield — I had a bit of a unique background. I didn't really have a financial modelling or valuation background, and then I joined a private equity group in an investment position, so I had a pretty steep learning curve at the beginning. Maybe 12 or 14 months in, someone said, 'You're doing really well, you're picking up the skills, you're producing great work — but when you go to present it, nobody knows what you're talking about. You're trying to explain too much. Your explanations are too complicated.'

When I got that advice initially, it put me in a tailspin. I was crushed. I thought that was the end of my career. And then you wake up the next day with a fresh perspective and go, well, it was tough to hear that people don't understand what I'm talking about, but it's so great to learn that now and focus on it. You realise it's not just the ability to do the work, but to explain the work. If you can't do both, it's kind of irrelevant.

Connor Teskey

So much of what we do at Brookfield is de-risking different business activities in such a way that we can turn the construction or operation of a project into a long-term, inflation-linked stream of cash flows. We are very comfortable taking execution risk, operating risk, development risk. We don't like to take market risk, and we work very hard to structure our deals so we're not taking it.

I'll give an example. When you build a renewable power plant — say a solar farm — there are four key drivers of your end return: your construction cost, your revenue off-take (your power purchase agreement), your EPC, and your financing. We do not like to put capital in the ground unless we lock in our capex contract, our off-take contract, our EPC contract, and our financing contract all at once. If you lock in those four things and you execute, it doesn't matter if interest rates go up or down — you've locked in long-term financing. It doesn't matter if power prices go up or down — you've locked in a long-term contracted revenue price. It doesn't matter if inflation goes up or down — you've locked in your capex. We do that in our power business, and we take a very similar approach in real estate, building on behalf of long-term tenants. We're now doing it in data centres, building gigafactories on the back of long-term contracts with hyperscalers or sovereign off-takes. It's a very repeatable model where we're comfortable taking operating and development risk — we feel we have an expertise in that — but we work very hard to structure out market risk.

Connor Teskey

The construction company — engineering, procurement, and construction.

Connor Teskey

Very similar. You've got your construction cost, your power supply, and your long-term compute contract. Data centres are fascinating today because it wasn't that long ago — maybe five, six, seven years ago — when an investor in a data centre was really funding the rack and the shell against a long-term off-take, typically a hyperscaler take-or-pay inflation-linked off-take.

There are three things happening in the space that are expanding that opportunity very rapidly, and they're all compounding on each other. There are more data centres being built. The ones being built are bigger than the ones that used to get built. And third, where historically the investor funded the rack and the shell, increasingly now that investor is funding the rack, the shell, the chips, the servers, the power supply, the grid connection, the substation, the redundancy. They're funding that whole data centre plus the energy supply chain — but it's still all wrapped in that long-term off-take, typically with an extremely high credit-quality counterparty, either one of the big global hyperscalers or a sovereign off-take.

Connor Teskey

Two interesting things there. One, the amazing thing about what we'll call AI infrastructure today is who your counterparties are. These are literally the greatest companies in the world, the highest credit-quality counterparties in the world — the large tech companies. They're almost undoubtedly the greatest companies of all time. That is the corporate credit counterparty risk you are taking, and it is as good as we've ever seen.

The other point: sometimes we get asked why things get turned down during an investment process at Brookfield. Of deals we choose to pursue but then walk away from in diligence or structuring, there are two most-common reasons. One, we don't like the revenue construct or the corporate credit counterparty that backstops it. Two, it's too much construction or development risk relative to the return the opportunity generates. Across our infrastructure, real estate and power businesses, those are absolutely the two most common reasons we choose not to do a deal.

Connor Teskey

We're very fortunate to have an extremely large, global platform. Everywhere we seek to invest, or own and operate assets, we like to have a local boots-on-the-ground team. That team splits into two — local investment professionals and local operating professionals — and actually a third, local fundraising professionals in all the markets we operate.

The obvious question is how you manage that across all these regions and asset classes. We've pursued a model where those local teams are given responsibility, autonomy and accountability to source, execute and operate very independently. We want those teams to know their markets inside and out — see the value-creation opportunities, hopefully before others, and position our businesses to capture them; see the risks coming and position to mitigate them. But while we give local teams lots of independence to source, execute and operate, all capital-deployment decisions get brought centrally to a fairly tight group for approval. Through that function, a small group at Brookfield has visibility of everything happening around the world, which is good for perspective and controls.

The underappreciated benefit is the global perspective it gives us. If one of our regional teams brings forward an opportunity, it might be the best they've seen in that region in 12, 18 or 24 months — but if it's not holding a candle to the risk-adjusted returns we can get in a similar opportunity in another region, we have that central perspective to say, we're going to allocate capital to where we're seeing the best opportunities globally and across asset classes.

Connor Teskey

Two things. We have an investment-committee process that's important because it substantiates approvals and is communicated to our LP partners. But we don't treat the investment committee like a single, discrete, one-time event where an opportunity is presented for the first time and ruled upon in a one-hour meeting. Our investment teams around the world are constantly iterating through the life cycle of the investment — not only with committee members but with the leaders of the platform — to get feedback along the way and build consensus. No deal is perfect; there are always unique dynamics or nuances. A lot of our businesses have a very detailed review three to four weeks ahead of the final investment committee, sometimes called a capital committee, where you can get really good feedback while you still have time to do a little more diligence or tweak the deal before the final approval.

The other thing: Brookfield really runs like a partnership. I've been fortunate to help build the power business over the last 10 years and lead it for the last five. When I was starting to lead power, I didn't necessarily have a lot to do day-to-day with our real estate business — but one of us would phone the other every two or three weeks. Brian Kingston, one of the senior guys leading real estate at the time, and I would talk: What are you seeing? What's working? Where are you seeing demand, capital flows? There is that constant interaction. The business does not operate in silos. Despite operating in four verticals, it's incredibly collaborative, with immense effort put into consciously sharing information and perspectives.

Connor Teskey

For sure, but even if they aren't on it, you'd pull their expertise in. One of the unique things about our approach is there really are no walls at Brookfield. We intone that from the top in how we develop people, even in how we compensate them. When the firm has an opportunity, it doesn't matter what someone's title is, what region they work in, or what strategy they spend most of their time on — if there's an individual who can be additive, we pull them in. Even on a private equity investment, if there's someone in our infrastructure business who can bring value, they get looped in. It doesn't matter what the job description on their business card is.

Connor Teskey

Westinghouse is a good example of what our investment-committee process is like. We focus a huge amount of time — the vast majority of the discussion — on the downside. We like to believe that if you buy high-quality businesses in good markets with strong downside protection, and you underwrite the worst-case scenario really well, the base case will end up being very attractive.

When we initially invested in Westinghouse, it was not an in-favour sector by any means. But it was a market leader, critical to the global supply chain of nuclear power — which at the time was not growing, but had a very long life tail, of which Westinghouse was a critical supplier. We felt it was an industrial operating business that could be run better using operational expertise we'd built in other industrial businesses. And we spent all of our time focused on the downside. That proved out to be right: Westinghouse is a market leader, absolutely critical to the supply chain, and we were able to drive significant operating efficiency. All of that would have led to a very good outcome on its own. And then we got the upside — a complete revitalisation of the nuclear power generation sector around the world, with Westinghouse at the forefront. We focused on the downside, made sure it was protected, and delivered our base case through things within our control. But there was asymmetric upside if some uncontrollable things we hoped would happen did. We didn't need them to have a good outcome — and in that case, we had a very, very good outcome.

Connor Teskey

Brookfield is unique in the alternative asset management space. We come from a background of being direct owner-operators of businesses. Brookfield and its predecessor companies were founded around 1900, and for the first 100 years of our history we were not an asset manager — we were essentially an industrial conglomerate directly owning and operating businesses ourselves. That history really informs our approach today. We like high-quality businesses we'd be comfortable owning directly over the long term. We tend to be slightly longer-term holders. And there's not an investment around the world today where part of our return bridge doesn't come from operational improvement. As a function of our history, where we used to be 100 cents of every dollar invested, today the largest investor in Brookfield products is still Brookfield's own balance sheet.

We've built a platform where we have best-in-class industry and geographical expertise in the asset classes we invest in. Take power: we have people in every region experienced in operating, technical, development, power marketing, tax, legal, regulatory compliance. When we buy a business, we bring that expertise to bear. Most of the time it doesn't actually go into the company — it sits above the company to support it. In certain cases, depending on the extent of the turnaround, we'll put our own people in to drive change.

On the first 120 days — very important. There are certain standards we implement; 100 days is probably too long. Our health and safety standards are global standards around certain processes and procedures, and those are non-negotiables. They get rolled out right away, and they're generally things everyone can buy into. You acquire a business, a Brookfield representative shows up on site and says we're proud to be the new owner and we're going to look to drive some changes — and the first one we always focus on is health and safety. People who get health and safety right tend to be the best operators long-term.

Connor Teskey

It's very deal-specific. When I joined Brookfield about 14 years ago, we used to say there were almost two types of investments: you'd either buy high-quality businesses at an attractive or fair value, or you'd buy a lower-quality business at an exceptionally discounted price. Today our business has focused increasingly on the former. We want to buy extremely high-quality businesses where you have incredible visibility into their long-term cash-generating profile — a lot of conviction that the cash flow will be there one year, three years, five years, 10 years from now. Because of that, there's less stress about extracting a bunch of cash in the near term. If you had a lower-quality business subject to increased competition or market variations outside your control, yes, you'd want to de-risk that really fast. We'll always pull capital out of our businesses whenever we can, but given the types of things we focus on, we can do it very prudently.

Connor Teskey

I like the way you said that. Two things about how we finance our businesses. One is the approach: we focus on asset-level, non-recourse, long-term, fixed-rate financing. It's sometimes not the cheapest, but it has features we really like. It takes away that market risk — the risk that interest or financing costs change over time. And asset-level non-recourse financing is, by choice, harder. You're doing a lot more individual financings rather than grouping huge portfolios and putting one debt facility over the top. But it ensures that if you ever run into something unforeseen — to the downside or the upside — everything you have to work through is done on an individual basis. You're never tainting an entire portfolio with the dynamics of an individual asset. It's obvious that if an asset goes bad it's nice that doesn't taint the broader portfolio, but it's the same on the upside: if you get an incredible bid for a single asset but it's stuck in a debt facility that won't let you release it, that inflexibility is not helpful.

The other thing, which probably isn't as obvious: we are huge believers that liquidity is almost consistently undervalued. Liquidity is this funny thing — it's overvalued when you don't need it, and incredibly undervalued when you do. So we prudently finance all our businesses, but always ensure we have some excess capital for something unforeseen — positive or negative. On the negative side, maybe your business plan isn't going quite the way you expect; having a little capital to keep your covenants on side and give you runway to get back on track is hugely valuable. On the positive side, having excess capital for growth when others don't has probably been one of the biggest differentiating factors for Brookfield over cycles and decades. That comes when the market crashes or there's a panic and capital gets really tight — and then you have capital, and you're available to deploy it.

Connor Teskey

It is, and it's something we spend a lot of time on — always ensuring we have tremendous access to capital. When times are great and everyone has access, it doesn't seem as important. But having access to capital when others, or not all market participants, do — that is incredibly valuable, and it's proven valuable to us across asset classes, geographies and cycles.

Connor Teskey

A hundred percent. Two things. One, this is where culture within an organisation is so valuable. We instil these principles day in, day out, across the business — to the young man or woman just out of school who doesn't have any investing experience. This is what we do across market cycles; this is our approach; this is why we do it. Here are examples of when it was very valuable, even if it doesn't seem super important today. The other thing is that as an organisation we're constantly mixing what I'd call young, energetic individuals — who can run super fast and jump super high — with experienced people who have lived through those cycles, made those investments, and have significant lessons learned to share. A big part of our culture is mixing that experienced, senior perspective with young, energetic, fast-moving capabilities.

Connor Teskey

Within our asset management business, our most important assets go up and down an elevator every day. We are a people business, so talent is hugely important. One thing we believe is that talent doesn't fit a perfect stereotype. We need lots of talent in different capabilities in different places, and it would be unrealistic to expect all of it to be rolled up in a single individual. We can have some people who are incredible judges of risk and return and incredible analysers of businesses. We can have others who are very good marketers, who can explain what we're doing to an investor who isn't living 20 hours a day in deals. We need people who are very good leaders and team builders and builders of platforms. What differentiates us over the long term is some mixture of the talent we have — so we spend a lot of time developing and retaining it, and creating a culture that can extract the best out of it.

Connor Teskey

I love that example, because American football has people who all play different positions. You've got offensive linemen who don't worry about catching or running the ball, but their job is hugely important. You've got wide receivers who don't worry about throwing the ball, but want to be the best in the world at running routes and catching it. Brookfield's no different. We want to find the things we need to do as an organisation — raise capital, invest capital, manage businesses, product development, work with teams, build platforms — find what our people are best at, and let them really focus on those things. If you've got a wide receiver who's great at catching the ball, you support them with people good at other functions. Then there are a handful of people who need to sit above it all and oversee everything — your coach, your quarterback, your ownership. That's your executive team.

Connor Teskey

One of the things I love about Brookfield, and I think a lot of people who work here love, is that it is a complete meritocracy. We really don't care what your background is, where you were born, how you were raised, who you pray to, who you love. It's about what value you can add to the firm. And that value can come in lots of different ways; there is no stereotype we're looking for.

One thing we do, perhaps differently from other organisations, is identify young talent very early and give them more responsibility and accountability than they'd sometimes get elsewhere. When it works, it works incredibly well — you get these fantastic men or women in their early 30s who've been in the workforce for 10 years but have the equivalent of 20 or 25 years' worth of deal reps, or people management, or product marketing. Those are incredibly valuable individuals. We need to be very proficient in identifying that talent, and always check we're coaching it up over time. It's not a straight up-and-to-the-right line for everyone.

Connor Teskey

It's funny — I'm going to give you the same answer I give to a different question, which is: what are the attributes of the people who do best at Brookfield? The line I sometimes use is we like people who are almost kind of nerdy. I don't mean nerdy in that they aren't enjoyable to hang out with or can't carry a conversation — I mean intellectually curious, in that they like to look at a hard problem others have struggled to solve, and they're willing to roll up their sleeves and put in the hard work to solve it, to generate an outsized positive outcome for the business. The derivative of that is being hard-working and willing to tackle hard problems.

The other one is that this is always a people business. It's impossible to get ahead if you can't work well with other people. It doesn't matter how talented someone is — they're not more talented than the entire team you can put around them. Having people who are exceptionally good at different aspects of the job, but who can also complement other individuals, or be complemented by them, to get more out of the broader team — those are the people who succeed the most.

Connor Teskey

Rather than say it as a negative, I'll say it as a positive. One of the things I've always said about Bruce is that it always seems like he cares more about the success of others than about himself. He's always more concerned that other people get the credit, that other people are positioned to develop. You see that in a leader who built an amazing organisation, and you also see it in very junior people — those who just want to contribute to a good team outcome and aren't worried about who gets the credit.

One of the ways I describe culture at Brookfield: we like the individuals who, after they do a great deal or complete a very successful initiative, the non-Brookfield thing to do would be to go on a three-week victory lap telling everyone what you accomplished. The Brookfield thing to do would be to come back the next day and say, okay, what are we working on now? You see that in very young people as a really redeeming and enduring quality. When people don't have that, they generally don't ascend or last within the business as much as the ones that do. Does it need to be perfectly proportional? No, I don't think so.

Connor Teskey

Absolutely.

Connor Teskey

I always think there are three ways to play the AI theme. One is to invest in the models — you invest in ChatGPT or Anthropic. We don't do that. There are some people doing it and being wildly successful; it's just not our area of expertise. The second way is to build the infrastructure that supports the growth and increased utilisation of AI — at a simple level, the data centres and the power that supports them. That is the largest and fastest-growing investment theme at Brookfield, and it brings together our digital infrastructure expertise, our power expertise, and our real estate expertise. We feel we're market-leading in that regard.

The third area is using AI within our own business, and we're doing this very actively. We own 500 companies around the world, and we've encouraged all of them to trial different AI applications that could enhance the efficiency, productivity and growth of their business. The only thing we ask is that you share the results. If you find a solution that's very additive — it doesn't matter if it's an infrastructure business in Australia — we've created a structure so that information can be shared across the entire company, and we can use it elsewhere. Similarly, if that company tried an application and it didn't work, share that too, so 499 other companies don't try it and have it fail.

We're very early days, but the impact is amazing, and two things jump out. One, there are some places where AI is having a very discrete, meaningful, near-term transformative impact. Our private equity business focuses on industrial companies and critical services. We're using AI to help with pricing models, and to re-evaluate how some of our shop floors and factories are configured — questioning processes that have existed for 20 years. The efficiency and productivity improvements coming out of those exercises are amazing.

Then there are two places, across almost a trillion dollars of assets, where AI is having a huge benefit — maybe not as exciting, but very intuitive. One is preventative maintenance on a trillion dollars of real assets around the world. The other is health and safety for the 300,000 operating professionals we have across those 500 portfolio companies. A computer can look at a piece of machinery that only gets serviced every three or five years, but look at an infinite number of data points and use pattern recognition to say something doesn't look right. It's not supposed to be serviced for two more years, but somebody should go look at it. Sure enough, we send someone out, and a bolt is loose or something is leaking, and we preserve a lot of value. Similarly, a computer that can run a million simulations instantaneously can help people address health and safety concerns in different environments around the world.

Connor Teskey

Some of this is using the technology, and some of it is a forcing function. In some of our infrastructure businesses where people are constantly building assets in multiple places, we have a program where, when a worker shows up on site, they have to use the camera on their phone to scan the site, and the program says, here are 10 health and safety risks we've identified. Candidly, experienced workers probably would have identified those — but it's a great forcing function. One, they have to do it. Two, they're reminded of it. Three, now they're thinking about those things. Health and safety is incredibly important in the businesses we own, and this is a great way of using one of the greatest technologies in the world to drive one of our most important initiatives.

Connor Teskey

One thing we're seeing as we use AI is that there's this fear — 'AI is going to take everyone's jobs.' That's not really what we're seeing in our business. AI will cause some structural turnover in certain occupations, but really what we're seeing is the same man or woman you employed yesterday getting two or three hours of their day back to focus on higher-value parts of their job. The same person you liked and supported is all of a sudden just more productive. It's taking the top off in terms of what we can expect out of our people and teams.

It does feel like we're still in the very early innings. If you asked us where AI has a bigger impact at larger scale, we think it's the role robotics can play in so many production and industrial functions — now that robotics can be reinforced by computers that can think and run a million simulations in real time. Like everything, it will happen slower than people expect, but have a bigger impact than people expect. We very much see that dynamic playing out in the use of robotics.

Connor Teskey

Exactly that dynamic. We like to think we are one of, if not the, leading investor in AI infrastructure around the world, where huge sums of capital are being invested on a global scale. We often get the question: will there be overbuild? Absolutely, unequivocally yes. There's overbuild in almost every product and every asset class everywhere in the world in every economic cycle. But the really important thing is that the overbuild is not random. In our business, we only build against long-term contracts with high credit-quality counterparties — we don't build on spec. And two, we're very thoughtful about where we build. We want to focus on tier-one markets where there are multiple end users and multiple sources of demand, such that even at the end of that 20-year contract life there will be multiple options to use or re-contract that facility. These cycles almost have a recurring trajectory, and we think there are incredible things we can do while participating in this growth to avoid the boom and bust that sometimes happens in other asset classes.

Connor Teskey

As an organisation we try to be balanced every time — come in neutral. We're very fortunate to be at the forefront of some very large investment trends and asset classes, such that even though we invest at very significant size, there's always the opportunity to do more. So we're always looking at whether we can invest more at attractive risk-adjusted returns. We don't spend a lot of time thinking about what we've done in the past — it's a very forward-looking organisation.

Connor Teskey

I don't know if it's that extreme, but it is a very enjoyable thing to wake up in a business investing in themes where the question is not can you grow — it's how much can you grow, and can you do the right growth. It doesn't matter if we've done two, three or 10 deals already. If the 11th deal is very attractive, we want to do that one as well.

Connor Teskey

The first thing that comes to mind is how amazing it is what Bruce and the senior leadership team have built over the last 25 years — a truly incredible, differentiated, and somewhat underappreciated platform, in terms of its scale and its ability to produce very attractive returns with a consistency that very few, if any, can match. That is the incredible value proposition of Brookfield — not just the returns we generate, but how consistently we do it, and at what scale of capital deployment. The platform has such an incredible organic growth trajectory, very visible and going out five to 10 years, where we have complete control over our success. What gets me and others coming up in the business very excited is: can we keep pivoting that trajectory above the incredible status quo that's been passed down?

Connor Teskey

Maybe I'd come at it from two perspectives. From an investment perspective, what's built the business into what it is today is really two things that will look different in the future but are very repeatable. One is being very consistent in the asset classes and types of deals we focus on, while spending an incredible amount of time thinking about where the market is going — what the critical goods, services and assets making up the backbone of the global economy will be five and 10 years from now. We absolutely need to keep doing this and be as good at it in the future as in the past. If we do, the breadth of what we invest in will keep expanding. There are things we think will be big opportunities today that become big in five or 10 years, and things 10, 15, 20 years from now that nobody is even thinking about today.

The other thing that will really drive growth over a 20- or 25-year period is that alternatives are at a really exciting point. They've grown tremendously over the last two decades, largely on the back of growing institutional allocations, and that will continue — institutional allocations to alternatives are going to double over the next 10 years. But there's a new, very large, long-term growth avenue we refer to as the individual investor: your retail and high-net-worth investor, your annuity and insurance policyholder, your 401(k) and retiree market here in the United States. That market is actually bigger than the institutional market today, and it has almost zero penetration from alternatives. The ability to take the disciplined investing approach we've delivered to institutional investors for 20 years and find ways to deliver it to the individual market — that should let us replicate, if not exceed, the growth profile of the last two decades.

Connor Teskey

There's absolutely that dynamic, and there's another. In today's public market, where index inclusion is such a big driver of demand, we're increasingly seeing larger companies do really well in the public markets, while companies that for whatever reason can't get index inclusion struggle more. As a result, your S&P 500 is increasingly a super-large-cap index, and so many businesses around the world — in fact the majority — are medium to large, but it's increasingly difficult to get exposure to those in the public markets. What we think alternatives can do, as part of an appropriately mixed and diversified portfolio, is ensure that individual investors can get exposure to the breadth of the market, and to different asset classes or sizes of companies that are tough to reach if you're simply looking at public equities.

Connor Teskey

Within Brookfield there are lots of individuals who are very good at generating ideas, and we have 1,300 investment professionals to filter through them. Quite early in my career — probably my first or second year at Brookfield — I was asked to look at another alternative asset manager. This was about 13 years ago, and that manager had run into some stumbles and hard times and needed capital. I really struggled to understand the right way to underwrite that business. Then one day the light bulb went on: if I can understand how Brookfield works, I can probably understand how this business works. It was very fortunate early in my career to really understand how Brookfield was growing, where it was making money, where it was seeing the greatest growth trajectory and value creation.

Because of that, we began to track the other large alternative asset managers — how we were doing relative to them, how we were trading and growing. One of those managers was Oaktree. At the beginning of 2018, we felt Oaktree was this amazing business that wasn't fully appreciated in the public markets because it was very counter-cyclical: it performed really well when markets went down, but its growth and profits plateaued when markets got really strong, given its leadership in opportunistic credit — back then a very large component of their business. I went to Bruce and said this company looks very undervalued. He gave me one simple piece of feedback: you're right, it looks undervalued — but what would be amazing is if we could do something strategic with them. They're market-leading in credit, which is an area we didn't have much exposure to at the time. We took that away, came up with the idea of buying out the public and partnering with the founders and senior management of Oaktree, presented it in late 2018, and did the transaction in early 2019.

Connor Teskey

This is where that organisation is exceptional in two ways. One, they've broadened their product offering the same way we've broadened at Brookfield — they've done an incredible job. They have incredible performing credit strategies, and they've found some niche areas of the market, certain asset classes and securities, where they are unique and can consistently outperform. Two, within their opportunistic credit strategies, they do an exceptional job of constantly being ready when those market opportunities do exist. We made the initial partnership in 2019, and they were incredibly active during COVID. The business took an incredible step change. That wasn't a particularly long downturn, but it was a brief, almost cyclical opportunity to drive a step change of growth, and they did it very well.

Connor Teskey

Two things come to mind. There are two things that matter to me in life more than anything else, and they're miles ahead of third place: my family, and Brookfield. That's where I spend 150% of my capacity. Let's be clear, I have great friends and we get out and have a good time, but really my priorities 99 times out of 100 are my family and Brookfield.

We're fortunate to have an amazing young family. When we were thinking of starting our family, I questioned — I don't know if I'm crazy to say this — how I was going to have time, and whether I'd still have the ability to care as much about the job, which was very important to me. Two conclusions. One, there is no limit to how much you can care about things. I care more about my family than I could have ever imagined, and I don't think I care any differently about Brookfield than before. Secondly, you find ways to become more efficient. Other stuff did fall off the plate, but what's funny is you don't miss it — it's been replaced by something you value so much more.

Connor Teskey

The best forcing function in the world. I felt like there was no time, no space. And now we have this amazing young family I'll go to incredible lengths to make time for, and it doesn't feel like I had to give up anything on the work front. Some things fell away that I couldn't even really tell you what they were.

Connor Teskey

I read a lot at work. I'm a big believer that if someone in the organisation emails or sends a deck to be discussed, you read it before you start the conversation. It leads to a more informed conversation — you can think more thoughtfully reading it to yourself than trying to read and listen at the same time. So I read almost everything that's been sent, and when possible, ahead of a discussion. I also read a lot of news. Sometimes people ask what the last book I read was — I don't have a lot of time for reading pleasure books, but I do read a lot of content about our business and the themes we invest in.

Connor Teskey

I quite enjoy getting an almost daily update — different services do it for different asset classes. These are the 15 relevant headlines in infrastructure. You read the headlines, maybe click on one for more information, but just reading the 15 gives you a sense, a pulse, of the direction of travel. If one is more relevant or interesting, you do a deeper dive on that. I certainly don't sit there and read a publication cover to cover every morning. Different people have a different approach; I don't do that.

Connor Teskey

There have been so many — I think you're supposed to love all your children equally. A few stick out. One of the very first deals I was fortunate to be on the deal team for was a small cold storage business investment in Canada, early in my time in private equity. It was a small, great business, underperforming when we bought it, and it turned out to be a fantastic investment. It was a somewhat simple business in terms of the value drivers, so it was a nice one to learn on — and it was successful. Some of our first investments right after moving to Europe, trying to build out that European power business, were really fun because we were a young, scrappy team building something from scratch, and in hindsight we did a few very good, foundational deals. And then some of the big ones — Westinghouse, Oaktree — have been fun because of their scarcity, their size, and the broader impact they've had on the organisation.

Connor Teskey

I would not say I'm happiest when everything is going perfectly. You want to have enough on the go that you feel a little stretched. One of the things I really like about this job — sorry if this is a tangent — is that I used to play a lot of sports, and I love the competitiveness of it. I like the exercise of trying to figure out the next thing, or improving something imperfect. If target is X, try and do X plus one. I'm not happiest when everything is perfect and under control. It feels good when we're within our culture of discipline and being methodical, but really pushing to continuously grow and improve.

Connor Teskey

I do think you can predict it. There's an incredible positive attribute in being able to digest information somewhat unemotionally and make the best decision at that point in time. Earlier I mentioned the organisation is very balanced, measured and forward-looking. When things move — and generally when you make this reference, it's when markets move negatively — some of the most incredible conversations we have as a business happen. One thing that always shocked me is we don't spend the first 30 minutes of a 60-minute conversation discussing the negative impact on what we have. We spend all 60 minutes on: how can we mitigate, protect and ensure the value of what we have is preserved — and then how can we capitalise on the opportunities this crisis or downturn may have created.

Connor Teskey

Well, thank you for having us.