TORONTO - The next two years offer an "exceptional" opportunity for those with both the capital and the expertise to invest in global infrastructure projects, the chief executive of Brookfield Asset Management Inc. (TSX:BAM.A) said Friday.

"Thankfully, it now appears we're in the bottom portion of the recovery phase of this market cycle and that bodes well for everyone, including us," said Bruce Flatt, whose Toronto-based company holds a large and growing global portfolio of infrastructure assets.

Flatt told a third-quarter conference call with analysts that infrastructure as an asset class had become "bruised" in the eyes of many investors in recent years because of problems some companies have experienced.

"But we believe this is unwarranted . . . and think that with proper capital allocation and underwriting assumptions these assets are one of the most compelling real return assets for institutional investors."

He cited a number of mistakes by investors over the last four years, including paying too much, too-high assumptions for cash-flow growth and "probably the most fatal one, as usual, is that excessive leverage was employed within strategies."

Many of these troubled companies are now the focus of Brookfield's attention, Flatt said. "Our goal is to assist financial institutions and owners of assets by providing solutions for unravelling some of these situations."

Brookfield has raised almost $12 billion in investment capital and is continuing efforts to raise capital both privately and publicly, "which should enable us to continue to acquire assets in the bottom portion of this market cycle."

Brookfield believes this environment "probably exists for another 18 to 24 months, similar to what we believe exists for real estate," Flatt said.

Beyond opportunities in the private sector, he believes governments are going to have to sell assets to pay down debt.

Earlier Friday, Brookfield released results showing profit and revenue fell in the third quarter, although the company managed to meet or beat analyst expectations.

The diversified Toronto-based investment company, which is active in real-estate, forestry and power generation as well as increasingly in infrastructure, said its net income fell to US$112 million or 17 cents per diluted share in the quarter

That was down from US$171 million or 27 cents per share in the third quarter of 2008.

Revenue declined to just under US$3 billion from $3.2 billion in the third quarter of 2008, said Brookfield, the former Brascan conglomerate.

Flatt said in a statement that despite the reduced earnings and lower revenues, the company "made significant progress on several fronts during the quarter."

"We launched several new funds with nearly $7 billion of investor allocations; generated $1.3 billion of new liquidity through equity issuance and asset monetizations; and proposed a recapitalization of an Australian infrastructure group which will expand our operating base in this sector," Flatt said in a release.

"In addition, we achieved solid operating results during the quarter, which continues to demonstrate the strength of our operating platforms and quality of our assets."

In another earnings report Friday, Brookfield's real estate brokerage subsidiary, the Brookfield Real Estate Services Fund (TSX:BRE.UN), reported net earnings of C$2.2 million or 23 cents a unit in the quarter, up from $1.8 million or 18 cents a unit for the same year-earlier period.

Royalties from real estate sales rose to $10 million in the quarter, up 3.9 per cent from $9.6 million in the third quarter of 2008.

The brokerage services company said that reflected the strong rebound in the Canadian real estate market in the quarter, when the number of real estate sales rose 30 per cent nationally and 37 per cent in the Greater Toronto Area.

"Early in the year, we predicted that first-time buyers, who did not bear the psychological burden of a home that may have decreased in value, would be attracted into the market by improved affordability and that the activity that they triggered would kick-start the Canadian market again," said Phil Soper, president and CEO of the fund, formerly known as Royal LePage.

"Through the second and third quarters, this phenomenon did play itself out, as the widespread availability of affordable mortgage financing and improving consumer confidence drove sharply increased demand across all housing types."

At Brookfield Asset Management, the company's revenue was in line with analyst estimates but earnings per share beat expectations by three cents per share, according to figures compiled by Thomson Reuters.

Four earnings estimates compiled by Thomson Reuters called for 14 cents per share, while two estimates of revenue were between $2.9 and $3 billion.

Brookfield shares were down 59 cents or just over 2.5 per cent at $22.61 in midday trading Friday on the Toronto Stock Exchange.

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