Bruce Flatt, CEO of Canadian investment fund Brookfield, predicts good times for his company amid an economic recession.
Brookfield, valued at $1 trillion, owns retirement village operator Aveo and is reported to be interested in buying RetireAustralia from its owners Infratil and NZ Super. It owns $70 billion of assets in Australia.
Bruce told The Australian Financial Review a recession was coming but Brookfield would prosper from it.
“Central banks floated us through the pandemic, and now we’re going to have the recession. But it’s just a normal recession – it’s not a recession that could turn into a depression. That’s what they were trying to avoid,” he said.
“I would just say: it’s just a cycle. We’re in the business of buying good assets with good people in good countries, and owning them for long periods of time.
“Don’t ever get yourself in trouble where you have to sell something at an inopportune time, keep investing during all periods of time, and you’ll do very well over the longer term. That’s what business is about. The rest of this stuff is just market gyrations that confuses most people.”
COVID-19 had been hard for Brookfield.
“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,” he said.
“Today that’s different. Credit is harder to come by. Banks are only lending to some people. Capital markets are differentiating between good sponsors and ones that aren’t good sponsors or aren’t seasoned sponsors. So, this now is the time which favours us. We will find better deals now.”
RetireAustralia’s annual underlying profit to 31 March was $56.5M, up 87% despite COVID-19. 15 of its villages are now operating waitlists, and overall village occupancy has increased to 95% compared to the Australian industry average of 90%.