ALTERNATIVE ASSET MANAGERS WE DON'T TALK ABOUT AS OFTEN AS WE SHOULD GIVEN THEIR INFLUENCE IN THE PRIVATE MARKETS PERHAPS MORE THAN THE PUBLIC MARKETS, ALTHOUGH THEY DO THEIR SHARE OF BUYOUTS AND FINANCING THINGS AS WELL. BRUCE FLATT HAS RUN THE FIRM FOR A LONG TIME SINCE 2002, CONTINUES TO DO THAT AS WELL. THEY ARE BIG IN RENEWABLE, INFRASTRUCTURE, PRIVATE EQUITY, REAL ESTATE, PRIVATE CREDIT AND I ASKED HIM N TERMS OF WHERE THE OPPORTUNITY IS, TAKE A LISTEN. WHERE DO YOU THINK TO THE EXTENT THERE IS MORE OF AN OPPORTUNITY, AUM, YOU'RE, OBVIOUSLY, THE SMALLEST AUM IS RENEWABLE POWER AND TRANSITION, IS THAT ONE THAT YOU THINK WILL GROW THE MOST? >> LOOK, IT WAS PART OF OUR INFRASTRUCTURE BUSINESS BEFORE. WE SPLIT IT APART BECAUSE THERE'S THREE THINGS GOING ON IN THE WORLD TODAY. I'LL CALL THEM MEGA TRENDS. THE DEGCARBONIZATION OF THE WORLD, TAKING CARBON OUT OF THE SYSTEM DEESHGS GLOBALIZATION AND THE BIGGEST ONE THAT IS OUT THERE IS THE DECARBONIZATION OF THE WORLD. WE TOOK OUR RENEWABLES BUSINESS, SEPARATED IT FROM INFRASTRUCTURE, CREATED A FUND, RAISED A FUND LAST YEAR OR TWO YEARS AGO WITH MARK CARNEY AS THE HEAD OF IT, AND IT'S FOR DECARBONIZATION AND WHAT WE'RE DOING, IT'S A $15 BILLION FUND AND WE'RE RAISING A SECOND ONE NOW. WHAT WE'RE ESSENTIALLY DOING IS PROVIDING MONEY TO COMPANIES OR ASSISTING THEM, HAVE LESS CARBON WITHIN THEIR SYSTEM. THAT'S ALL. >> HOW ARE YOU DOING? >> IT'S NOT GOOD. WE'RE NOT MAKING DECISIONS WHETHER THINGS ARE GOOD OR BAD OR BLACK OR GREEN. WE'RE PROVIDING MONEY -- >> NOT AN ESG -- >> LOOK, IT SORT OF IS. BUT REMEMBER, ALL WE'RE -- WE'RE NOT MAKING ANY JUDGEMENTS. WHAT WE'RE TRYING TO DO IS HELP COMPANIES HAVE LESS CARBON. AN EXAMPLE A, MANY OF THE TECHNOLOGY BUSINESSES IN THE WORLD HAVE COMMITTED TO NET ZERO VERY QUICKLY. WHAT THEY NEED IS RENEWABLE POWER. WE ARE BUILDING THEM RENEWABLE POWER IN MANY COUNTRIES IN THE WORLD. WE'RE ONE OF THE LARGEST BUILDERS, WE'RE ONE OF THE LARGEST OWNERS OF RENEWABLE POWER AND BUILDING SOLAR AND WIND IN 15 COUNTRIES IN THE WORLD. WE'RE PROVIDING THAT TO THEM, AND BEFORE USED TO SELL POWER INTO THE GRID, TODAY WE'RE ACTUALLY SELLING IT TO THE CORPORATE CUSTOMERS AND THEY'RE USING IT WITHIN THEIR SYSTEMS. >> HOW ARE YOU STRUCTURING THE DEALS? ARE THEY DIFFERENT BASED ON THE BORROWER OR DO HE THEY SHARE SOMETHING SIMILAR? >> I WOULD SAY THEY'RE ALL BESPOKE TRANSACTIONS AND I GUESS THE INCREASINGBLY WHAT THESE LARGE INSTITUTIONS AND WHY COMPANIES COME TO US, WE CAN PROVIDE A BUYOUT, WE CAN PROVIDE A PARTNERSHIP, WE CAN LEND MONEY. SO WE HAVE ALL OF THOSE ACTIVITIES THAT WE CAN PROVIDE ON A SCALE BASIS. NOT MANY PEOPLE CAN PROVIDE 5 A $00 MILLION OR $2 BILLION, $5 BILLION, $10 BILLION. WITH INTEL WE COMMITTED TO HALF OF A $32 BILLION FACILITY IN ARIZONA, YOU MAY RECALL. >> I DO. I WANT TO DISCUSS THAT A BIT AS WELL BECAUSE I'M NOT SURE PEOPLE REALIZE HOW INSTRUMENT NALL THEIR PLAN TO BUILD ALL THESE FABS. >> LOOK. IT'S JUST PEOPLE NEED SO OUR GOAL IS BE A SOLUTIONS PROVIDER ON A GLOBAL BASIS IN THE INDUSTRIES WE PARTICIPATE IN, AND IF PEOPLE NEED DEBT WE'LL DO IT. >> HOW DID THE PASSAGE OF WHAT IS STILL CALLED THE INFLATION REDUCTION ACT IMPACT, IF AT ALL, THE WAY YOU THINK ABOUT ALLOCATING CAPITAL IN THIS AREA? >> WE BOUGHT AND OWN A LOT OF THINGS AND BOUGHT A LOT OF THEM PRIOR TO THAT, NOT BECAUSE IT WAS -- WE KNEW IT WAS COMING, BUT WE BENEFITTED FROM THAT A LOT. WHAT IT ESSENTIALLY MEANS IS THAT IF SOMEBODY HAD A BUNCH OF PROJECTS AND THEY EXPECTED 50% OF THEM WOULD GET BUILT OUT, BECAUSE OF THE INFLATION REDUCTION ACT, 75% WILL GET BUILT OUT, WHICH JUST MEANS WE'RE GOING TO COMPRESS MORE PROJECTS INTO LESS TIME AND THAT'S GOOD FOR BUSINESS. >> RIGHT. >> IT'S GOING TO GET MORE RENEWABLES BUILT OUT IN AMERICA. >> WHAT KIND OF RETURNS ARE YOU TYPICALLY TARGETING, PARTICULARLY IN THE INTEREST RATE ENVIRONMENT WHICH WE LIVE NOW? >> ON THE LOW END OF DEBT PRODUCTS, THE LOWEST TYPE OF RETURNS WE GET, ARE IN THE CIRCA 9, 10% RETURN, AND OUR EQUITY INVESTMENTS WHICH WE TARGET HIGHER RETURNS ARE CLOSE TO 20. OUR REAL ESTATE STRATEGIES HAVE EARNED 20% COMPOUND FOR 20 YEARS. OUR PRIVATE EQUITY BUSINESS 28% COMPOUND FOR 20 YEARS. INFRASTRUCTURE CLOSE TO 15. THESE ARE HIGH RETURNS. AND ON TRANSITION, WE'RE GOING TO DO GOOD AND ALSO DO WELL. WE DON'T HAVE TO COMPROMISE RETURNS TO GET RETURNS OUT OF THIS BUSINESS. >> IS IT A LOWER RETURN BUSINESS THAN SOME OF THE OTHERS YOU JUST -- >> LOOK. IT'S OVER TIME HAS BEEN SLIGHTLY LOWER. I THINK IT'S GOING TO -- I THINK OUR RETURNS WILL GET BETTER OVER TIME. >> WHY? >> JUST BECAUSE OF THE BUILD OUT AND THE NEED FOR CAPITAL OUT THERE. SO I THINK THAT THE RETURNS ARE GOING TO GET BETTER FROM HERE. >> SPEAKING OVERALL, YOU KNOW, GIVEN YOUR VIEW AND TO SO MANY DIFFERENT BUSINESSES IN THE ECONOMY, HOW ARE YOU FEELING ABOUT THINGS RIGHT NOW? WE SEEM TO HAVE REACHED POTENTIALLY A STASIS IN RATES, BUT DOESN'T MEAN THEY'RE COMING DOWN ANY TIME SOON. WHAT ARE YOU SORT OF SEEING AND EXPECTING AS THIS YEAR ENDS AND NEXT YEAR BEGINS? >> LOOK, DAVID, I THINK THE INTEREST RATE STABILIZING IS WHAT IS WHAT WAS NEEDED. WHAT WORRIED MOST INVESTORS WAS THAT INTEREST RATES WERE GOING TO GO LIKE THIS. FOR SOME UNFORESEEN REASON, NOBODY THOUGHT IT WAS GOING TO HAPPEN BUT PEOPLE WORRIED IT MIGHT. STABILIZED RATES IS BRINGING OVER THE LAST THREE MONTHS YOU'VE SEEN THE CAPITAL MARKETS EVERYWHERE IN THE WORLD START TO OPEN BACK UP, BANKS ARE OPENING BACK UP, AND THAT'S
