pabrai on BAM

you've been in the news recently about your investment in Brookfield. Is that something you can speak to a little bit？

I don't think we we have anywhere near the upsides we have in places like Turkish companies.

Brookfield it's a very high quality business. it's a very high quality team.

they actually give you five year outlook on what they expect their business to look like in four or five years

 then they've been doing it for a while and they were actually exceeding what they set at their targets in the past

so if the management team is to be believed, and if we buy into their targets it'll be a great investment.

Brookfield is a very strong recurring revenue business, it's got multiple assets to business.

 one side is asset management where they have other people's money that they're putting out to work and getting fees and such 

they also have their own balance sheet where they co-invest and so on 

and they've got stakes in other companies they've listed in the past and so on 

and they've just got the quality of the assets that they own across different industries is truly exceptional 

gone after the very best real estate properties 

they've got great hydro plants and railroads and a number of different interests 

recently they did a deal with Intel to partially own Foundry that they're going to set up together 

and they've also now entered the music business,  the music licensing business and such 

so I think it's a very good team 

I've always liked Bruce flat a lot and so yeah we have a stake and we think they'll do fine 

why Brookfield? why not Blackstone?

I think you could probably buy a basket of these and do well 

I think if you bought Brookfield, Blackstone or Apollo all of them 

if you just put them all in a basket and bought them they would all do well 

I think Brookfield may do better than the rest mainly because of the DNA differential between them 

so if you look at KKR or Blackstone they come from a private Equity world 

so if we go back to the history of the original funds and deals and whatever it was a classic LBO private Equity type starting point

Brookfield's starting point actually goes back several decades 

and they really were not a manager of other people's money they were really investing their own money 

and then Bruce flat came on the scene and became CEO maybe more than two decades ago

 he got rid of all the businesses which he didn't think were that high quality 

they were in a bunch of Mining and different things they got rid of those businesses

 and he focused on extremely high quality long-lived infrastructure assets

 and the private equity world generally speaking because it's so competitive did not has not recently and even historically has had very high filters on the quality of the business 

they always felt that they could buy a mediocre business do some financial engineering and still make a good return 

Brookfield didn't take that approach. 

 their approach was that at the core they want to have a great asset and then later they want to look at what how they can finance and do other things with it to make it great 

so I think I I think the KKR's and Blackstone's of the world have moved towards Brookfield in the way they think about it 

but I think that when I look at this long-term DNA of how these companies think, I just think that Brookfield just from day one had the right DNA

Was there anything about the valuation of it that appealed to you? I mean how do you just kind of think about it from a pure valuation standpoint？

well I think it's not optically cheap. none of these guys are optically cheap

 they're not expensive either

 but I think if you look forward,  if you're a if you're a sovereign wealth fund you're like the Qatar investment Authority or Abu Dhabi Sovereign wealth fund and so on 

you have very large amounts of money to put to work 

and there are very few entities or places that you can put this capital with, which are very high quality places,  very high quality teams,  and they can be there with them for a very long time

 so it's an oligopoly type business where they're like three four players,  that all these guys have to come to at the end of the day 

when they want to invest they have to come to one of these three or four toll bridges to make the investment 

and the assets under management they have is going to grow a lot 

the carried interest is going to grow a lot

 the fees are going to grow a lot and they are creative about entering new areas like music or semiconductor foundries and so on

has the work from home Trend affected them at all?

I think they're I think clearly trophy I would say office properties in general across the world are facing much higher vacancy rates than they did before because of this trend 

and so obviously that demand has gone down because Brookfield sits at the very top end so they've always wanted to invest in tier one cities in the very best properties

 the kind of the Trophy Properties in  Brookfield Place or Canary Wharf and so on 

and so these would be the last ones affected and so their rents will go down 

but the ones at the periphery will just have high vacancy whereas the Trophy Properties will just have lower rents 

and so yeah I think they have some challenges with their property but also you know these are long leases so it takes a while.

so even if the a tower is got a lot of vacancy, Brookfield may still be collecting rent on it.

and for example meta has the tallest building in in Austin 

now they signed a very long lease for that and it's still not going to be ready for I think a year or two 

and they've already put it all up for sublease 

so they're on the hook for that rent but whoever the landlord is not affected by Meta's decision that they don't need that space

they take like a two billion dollar charge last quarter just just on office consolidations.