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Brookfield, Carlyle execs weigh in on US infra

At the Milken Institute Global Conference, Brookfield’s Bruce Flatt and Carlyle’s David Rubenstein said US infrastructure will hold desirable investments for the next decade.

The chief executives of two private equity heavyweights, Brookfield Asset Management and The Carlyle Group, were bullish on infrastructure in the US, arguing in Los Angeles on Tuesday that the opportunity is great for America.

Bruce Flatt of Brookfield and David Rubenstein of Carlyle said in a Milken Institute Global Conference panel covering the growth outlook for private equity that US infrastructure holds considerable potential.

Flatt, whose firm closed its $14 billion third infrastructure fund last year, said “it will be great for America” if President Donald Trump can follow through with his promise to generate $1 trillion of investments in the asset class. He suggested Trump’s team follow the model of countries that have in previous decades implemented privatisation programmes.

“The model is all there,” Flatt said. “They’re on the right track. It’s all about execution from here on.”

Brookfield sealed its last major US infrastructure deal in March, when it agreed to buy two clean energy companies, TerraForm Power and TerraForm Global, from bankrupt developer SunEdison for $2.5 billion. TerraForm Power holds 3GW of renewable generating capacity in North America, while TerraForm Global’s 1GW portfolio spans emerging markets.

Despite delays from the Trump administration, which shelved its infrastructure package for later this year, Rubenstein remained confident the programme would move forward.

“It will get done,” he said. “If anything of significance passes Congress this year, the president really wants something related to infrastructure.”

Discussing performance, Rubenstein asked whether infrastructure would be able to bring double-digit returns.

“It will be one of the great areas to invest in over the next five, 10, 15 years in the United States,” Rubenstein said. “In emerging markets, while it is riskier building infrastructure there, that can be a very attractive area as well, but it’s not quite as reduced risk as I think it will be in the developed markets like the United States.”

Carlyle said in February that it was nearing a close on its $2.5 billion Global Infrastructure Opportunity Fund.