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Forbes for Vogt Franco CAN CRAIGSLIST BE KILLED? • DISINHERIT YOUR KIDS FOR GOOD MAY 16, 2017 S OVER ES G N R T O A W E T R H G 25 SMALL GIANTS BROOKFIELD BOSS BRUCE FLATT HE’S BESTED BUFFETT’S RETURNS OVER 15 YEARS WORLD BUILDER DONALD TRUMP WANTS AN INFRASTRUCTURE PLAN? THIS BILLIONAIRE ALREADY HAS $250 BILLION AT WORK. AND YOU CAN GET IN ON IT. PRINTED COPY FOR PERSONAL READING ONLY. NOT FOR DISTRIBUTION. PRINTED COPY FOR PERSONAL READING ONLY. NOT FOR DISTRIBUTION. FRANCO VOGT FOR FORBES FOR VOGT FRANCO FORBES MAY 16, 2017 The Toll Collector WHILE WALL STREET WASN’T LOOKING, ACCOUNTANT BRUCE FLATT BECAME A BILLIONAIRE BY ASSEMBLING ONE OF THE WORLD’S LARGEST PORTFOLIOS OF OFFICE BUILDINGS, POWER PLANTS AND INFRASTRUCTURE PROJECTS—AND MAKING BROOKFIELD ASSET MANAGEMENT THEPRINTED SAFEST COPY GROWTH FOR PERSONAL STOCK READING ON THE PLANET.ONLY. NOT FOR DISTRIBUTION. BY ANTOINE GARA MAY 16, 2017 FORBES BRUCE FLATT ust off a 14-hour commercial flight from Dubai, Brookἀeld Asset JManagement chief Bruce Flatt stares into a gaping hole in the ground that looks like open-heart surgery performed on an entire city block in Manhat- tan. Piles of beams, mazes of scaffolding and even active railroad tracks criss- cross each other endlessly. “The amount of steel here is enormous,” Flatt shouts over a systems in North and South America. In France, Brookἀeld cacophony of honking car horns, grinding cement mixers and has the largest independent owner of cell towers. In Chile its moving cranes at one end of the notoriously clogged Lincoln electric power lines serve 98% of the population. In Ireland Tunnel. More than 17.2 million pounds of steel, to be precise, it owns 20% of the country’s wind-farm capacity. It owns enough to anchor a 67-story glass officeower. t Two more 36 ports in the U.K., North America, Australia and Europe, towers are also going up, along with a 30-floor boutique hotel and in India and South America it manages 3,600 kilome- and a 16-story trapezoidal glass officeuilding b with 26-foot- ters of toll roads. All told, Brookἀeld has 2,000 projects high ceilings and floors the size of football ἀelds—much of it across 30 countries on ἀve continents, encompassing $250 suspended over railroad yards. Dubbed Manhattan West, this billion in assets and 70,000 employees. President Trump 7-million-square-foot, $5 billion project encompasses two talks about an infrastructure plan—Bruce Flatt is actually square city blocks. executing one. And yet it’s completely invisible in the public conscious- And Wall Street loves it. Despite Brookἀeld’s low proἀle, ness—the vast majority of New Yorkers have never heard of its stock has returned 1,350% since Flatt took the helm in it. Most people assume it’s part of the adjacent Hudson Yards 2002, versus 183% for the S&P 500—that’s a Buffettesque 19% development, a $25 billion project from billionaire Stephen annual average, buoyed by assets that generated some $25 bil- Ross and his Related Companies that will feature 16 skyscrap- lion in revenues last year and net proἀts of $3.3 billion. With a ers and 18 million square feet. $36 billion market cap, Brookἀeld is the size of KKR, Apollo, That’s ἀtting. The high-proἀle Stephen Ross has an ocean- Carlyle Group and Colony Northstar combined. “Bruce is not front Palm Beach mansion, owns the Miami Dolphins and afraid to make large bets when he sees an opportunity,” says travels in the same circles as Donald Trump. Bruce Flatt is Jonathan Gray, Blackstone’s real estate chief and a possible an accountant from Manitoba who lives in a quiet Toronto heir to Stephen Schwarzman. “He buys high-quality, long- neighborhood and often commutes by subway. duration assets—be they pipelines or electric grids or large But if you’re comparing their portfolios? It’s not even close. pieces of real estate. Between the combination of yield and Brookἀeld quietly owns entire city skylines in places like appreciation, they generate strong returns over time.” At 51, Toronto and Sydney. It’s the biggest office landlord in London Flatt just joined the Forbes Billionaires list, with a net worth of and downtown Los Angeles. In Berlin it owns Potsdamer $1.3 billion. Platz and, in London, Canary Wharf, two of the biggest real Flatt has been called Canada’s Warren Buffett not only be- estate developments in Europe. It has 14,200 hotel rooms, in- cause he’s a contrarian, long-term investor but also because his cluding Atlantis in the Bahamas and the Diplomat in Florida, investment strategy relies less on price than on patience and and scores of shopping malls courtesy of divisions like Rouse the power of compounding income streams. “We will pay more Properties and General Growth, and several high-end Brazil for quality because in the fullness of time, real assets will gener- shopping centers. In all, Brookἀeld owns some 400 million ally always go up in value,” Flatt says. “We’d rather earn a 12% square feet of commercial space. to 15% net return over 20 years than a 25% over three.” And that’s just the real estate. Flatt’s true passion is infra- In fact, if ever there were a collection of sleep-well-at-night structure, which he sees as a $35 trillion opportunity that, like investments that might one day rival the safe-haven status PRINTEDManhattan West, COPY is hiding inFOR plain sight.PERSONAL “Infrastructure READINGwill of U.S. ONLY. Treasury bondsNOT or FORgold, you DISTRIBUTION. could argue that it’s the be an enormous asset class for institutional investors in the well-diversiἀed trove of real assets in Brookἀeld’s $250 bil- coming 25 years,” Flatt insists. lion portfolio. It’s essentially a call on the future of civilization Brookἀeld owns 218 hydroelectric plants on 82 river itself. And it’s about to get far bigger. FORBES MAY 16, 2017 BRUCE FLATT THE WORLD IS FLATT’S WHEN IT COMES TO GLOBAL DIVERSIFICATION AND GROWTH, BROOKFIELD’S COLLECTION OF REAL ASSETS IS UNRIVALED. IN REAL ESTATE, BROOKFIELD OWNS ENTIRE SKYLINES IN CITIES LIKE TORONTO, SYDNEY AND BERLIN, PLUS MALLS, APARTMENTS AND SELF-STORAGE. BUT INFRASTRUCTURE AND RENEWABLE ENERGY COULD BECOME EVEN BIGGER. GLOBALLY, THE COMPANY ALREADY HAS 36 PORTS, 218 HYDRO- ELECTRIC PLANTS, THOUSANDS OF KILOMETERS OF PIPELINES AND RAIL NETWORKS, PLUS CELL TOWERS, WIND FARMS AND TOLL ROADS. ASIA/SOUTH AMERICA NEW YORK CITY In India, Brazil, Chile and The city’s third-largest LONDON Peru, Brookfield con- commercial real estate Already London’s big- trols 3,600 kilometers owner, with 18.6 million gest office landlord, with of toll roads connecting square feet of com- 20 properties after taking to major cities. Recently mercial space, includ- control of 97-acre Canary struck deal for 29% stake ing Brookfield Place and Wharf in 2015, Brook- in portfolio of 40,000 AUSTRALIA Manhattan West. field also ownsPD Ports, wireless towers. Hay Point’s Dalrym- TORONTO a company that oper- ple Bay Coal Terminal Headquartered in To- ates 8 ports in the United accounts for rough- ronto, Brookfield is king NEW YORK Kingdom. ly 20% of metallurgical in its home market with 20 mil sq ft NEW DELHI coal exports. Brook- 8.5 million square feet of 12 properties 11.5 mil sq ft field operates ports office space and more LONDON 35 properties, in Sydney, Melbourne, under development. 11.9 mil sq ft Brisbane and Perth, 20 properties and rails in Western SEOUL Australia. TORONTO 5.4 mil sq ft 11 mil sq ft 5 properties 11 properties BERLIN, GERMANY LOS ANGELES Recently acquired By far the biggest office Potsdamer Platz, an SYDNEY owner in downtown L.A., 5 mil sq ft OTTAWA iconic 2.9-million-square- with 8.3 million square foot-plus development of 11 properties feet of office space 2.5 mil sq ft 6 properties 16 properties across ten across seven towers. streets in the center of the city. SHANGHAI 2 mil sq ft BRISBANE LOS ANGELES 0.6 mil sq ft 13.6 mil sq ft DUBAI 1 3 properties 9 properties BERLIN 1 1.1 mil sq ft KOLKATA 1 3.6 mil sq ft 1 property 16 properties 28 mil sq ft 10 properties 1 1 4 PERTH 3 CALGARY 2 mil sq ft 1 5 properties 6.8 mil sq ft 11 1 6 8 properties MELBOURNE 1 1.4 mil sq ft 23 2 properties 1 2 SAO PAULO BOSTON 2.4 mil sq ft Utilities 1.15 mil sq ft 5 properties 2 properties 2 37 1 Transportation 1 2 RIO DE JANEIRO 1 8 1.8 mil sq ft Energy 2 149 3 properties 7 1 8 52 4 SAN FRANCISCO WASHINGTON, D.C. Communications Infrastructure 0.6 mil sq ft 8.7 mil sq ft NORTH AMERICA 2 properties 25 properties Brookfield’s big play in infrastructure and 1 Sustainable Resources renewable energy in- DENVER cludes 180 plants 3.7 mil sq ft MEDELLIN, generating 6,000 2 properties COLOMBIA Renewable Energy megawatts, ports in Isagen is Colom- Los Angeles and Oak- bia’s third-larg- SANTIAGO, land, and pipelines HOUSTON est power genera- CHILE supplying natural gas 8.1 mil sq ft tion company and Transelec’s 10,000 to Chicago. 6 properties accounts for about kilometers of 20% of Colombia’s power transmis- installed generating sion lines serve capacity. 98% of Chile’s population. IF FLATT IS TRYING to cultivate the Buffett comparisons, his His break came early.
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