Brookfield Asset Management Aktie

Good day, and thank you for standing by. Welcome to the Brookfield Asset Management First Quarter 2026 Earnings Call. [Operator Instructions]. Please be advised that today's conference is being recorded.

I'd now like to hand the conference over to Jason Fooks, Managing Director, Investor Relations. Please go ahead.

Thank you for joining us today for Brookfield Asset Management's First Quarter 2026 Earnings Call. On the call today, we have Connor Teskey, our Chief Executive Officer; Armen Panossian, Co-CEO of Credit and Hadley Peer Marshall, our Chief Financial Officer.

Before we begin, I'd like to remind you that in today's comments, including in responding to questions and in discussing new initiatives and our financial and operating performance, we may make forward-looking statements, including forward-looking statements within the meaning of applicable U.S. and Canadian securities laws. These statements reflect predictions of future events and trends and do not relate to historic events. They are subject to known and unknown risks, and future events and results may differ materially from such statements.

For further information on these risks and their potential impacts on our company, please see our filings with the securities regulators in the U.S. and Canada. -- and the information available on our website. On the call today, Connor will begin with an overview of the quarter and highlight the strategic momentum across our business.

We're also pleased to have Armen join us to provide an update on the Oaktree integration and share his perspective on how our combined platform is positioned to be opportunistic in today's market. And finally, Hadley will discuss our financial and operating results balance sheet.

After our formal remarks, we'll open the line for questions. To ensure we can hear from as many participants as possible, we're asking everyone to please limit themselves to 1 question. If you have additional questions, please rejoin the queue, and we'll be happy to take more questions if time permits.

And with that, I'll turn the call over to Connor.

Thank you, Jason, and good morning to everyone on the call. will not only be a record year for Brookfield, but 1 where we expect to exceed our long-term growth targets, and we are already off to a great start with a strong first quarter. Fee-related earnings for the quarter were up 11% to $772 million, and distributable earnings were $702 million. We raised $21 billion of capital this quarter and fee-bearing capital increased 12% over the last 12 months to $614 billion. Including the fundraising we have announced associated with the Just Group mandate and our flagship private equity fund -- year-to-date fundraising stands at $67 billion. More than half of the $112 billion we raised in all of 2025.

More important than the numbers, is what they reflect. The continued strength of our franchise, the quality of our client relationships and the increasing importance of the areas where we invest. We are operating from a position of strength with scale, liquidity and a portfolio centered on essential assets and businesses that form the backbone of the global economy. This year is being supported by a number of important strategic developments across the broader platform.

In early April, Brookfield Wealth Solutions completed its purchase of Just Group, a leading pension risk transfer platform in the U.K. And through that, BAM was awarded an additional $40 billion asset management mandate, further extending our presence in retirement and insurance-related capital. We are also very close to completing our acquisition of Oaktree, where -- which we expect to close in the second quarter. which will further strengthen and integrate our global credit franchise. In a few minutes, Hadley will speak more specifically to the financial impact of both those transactions.

At the same time, this year, we have one of the broadest product sets in the market. This includes our flagship private equity strategy, which has already closed $6 billion and will be holding its first close in the coming months. And it also includes our flagship infrastructure fund. In fact, all of our infrastructure funds alongside a growing number of complementary strategies.

We are also seeing excellent momentum across our partner managers, where each of primary wave, 17 capital and pine growth, recently held fund closes that not only exceeded their targets, but in all 3 cases, represented the largest fund of their kind. That breadth is driving strong fundraising momentum and setting us up well for the balance of the year.

Against this backdrop, we continue to expect 2026 to be Brookfield's largest fundraising year ever. One of the clearest ways our platform is evolving is in how we engage with our largest clients. For some time, we have said that investors are consolidating more of their business with fewer managers, particularly with firms that can invest at scale across asset classes, geographies, products, and up and down the capital structure.

Our partners are not only asking us for a view on one sector or one fund, but rather they are asking what we are seeing across the $1.2 trillion of assets in our ecosystem, how capital is moving across markets and how those linkages are shaping investment opportunities.

More and more, those conversations are leading to broader strategic relationships where we start with the client's objectives, across income, appreciation, duration, diversification and liquidity and then build customized solutions across our strategies to help meet those goals.

We are seeing tangible momentum for multibillion-dollar partnerships across multiple strategies, and we are investing behind it through our Investment Solutions group, a dedicated team focused on delivering those insights and tailored solutions at greater scale. While this capability has long been a differentiator for our business, it's importance has become more acute in recent years, and we expect it to be a key competitive advantage as alternatives continue to expand into retirement, insurance and individual markets.

In the near term, geopolitical uncertainty remains elevated. Trade and energy markets continue to adjust and investors are assessing what that means for growth, inflation and rates while also considering how quickly AI may disrupt certain business models. Those issues matter and they can move sentiment and market prices in the short run. But our view is that those movements are temporary and manageable, while the long-term trends we invest behind remain firmly in favor and continue to accelerate.

Our job is to own good businesses, operate them well, protect downside and compound cash flows over time. That discipline has served us well through many cycles. And today, we are seeing it in the continued performance of our assets, and we believe that this period will be no different. It's also worth reiterating something we have said before. We are fortunate to have outsized exposure to the largest and most attractive segments of the alternatives market and limited exposure to the areas where investor concern is currently the most concentrated.

We have very limited exposure to software across our strategies. Sponsor-oriented direct lending is an immaterial part of our business. And our listed private wealth credit vehicles are disproportionately small with our private BDC representing less than 1% of fee-bearing capital. But we would caution against viewing our position as simply defensive. Limited downside does not fully capture where we sit today.

In our view, we are not only protected from many of the areas under pressure, we are positively exposed to the areas that should outperform in this environment. The first reason is that in this environment, real assets win. When there is uncertainty around growth rates or the durability of earnings, Investors move toward high-quality cash-generative assets and essential service businesses. That is exactly where we are concentrated.

In real estate, we are clearly seeing the recovery accelerate. Sentiment is improving, financing markets are materially stronger. New supply remains muted in many sectors. And in a number of cases, assets can still be acquired well below replacement costs.

In private equity, our strategy has always been focused on essential industrial and service businesses where value creation comes from operations, not financial engineering. That approach is particularly well suited to the current market.

And lastly, in infrastructure, where digitalization, rising energy demand and deglobalization are all creating sustained demand for capital. We continue to see exceptional client interest and a very large opportunity set.

The second reason is that concerns regarding AI disruption are equally balanced by accelerating AI adoption. That is not a headwind for Brookfield. It is a very significant tailwind. AI requires enormous physical infrastructure, data centers, power generation, transmission, fiber, computing, cooling systems and industrial capacity across the supply chain.

We are already deeply invested across those areas. We have leadership positions in data centers and renewable power. We can combine real estate infrastructure and energy into integrated solutions at scale. And increasingly, that is exactly what the largest hyperscalers, governments and enterprise customers are looking for. This is also why all of our infrastructure, energy and AI infrastructure strategies are seeing such significant interest. As AI adoption accelerates, Brookfield's market-leading position and a very large portion of our assets become increasingly valuable.

The third reason is credit. If current concerns in select pockets of credit persist, where the natural credit cycle continues to turn. That is precisely the type of environment where our platforms should be at its best. We have been disciplined in how we built our credit business. We have always preferred areas where underwriting matters, where structure matters and where there is real downside protection, notably real asset credit, asset-backed finance and opportunistic credit.

And lastly, we could not be more thrilled with the timing of our integration with Oaktree. Through the combined BAM and Oaktree platform, we have what we believe is the preeminent opportunistic credit franchise in the world. When liquidity becomes scarce and capital is repriced, that is when disciplined investors with flexible capital and deep experience have historically generated some of their best returns.

We will turn the call over to Armen in a moment, who will speak more specifically about the current credit environment and how Oaktree is seeing the opportunity set today.

In conclusion, our message is simple. We are entering this period with strong results, significant strategic momentum, limited exposure to the areas causing the most concern, and meaningful exposure to where capital should continue to flow. We are positioned not just to navigate this backdrop but to outperform through it. Armen?

Thank you, Connor. It is a pleasure to join you at such an exciting and dynamic time at the firm, taking on the role of co-CEO of Brookfield's credit business. The integration of Oaktree and Brookfield will meaningfully strengthen our already differentiated platform. allowing us to bring more of the combined firm's capabilities to clients across asset classes and up and down the capital structure.

Over the past 6 years, this partnership has already proven itself and our cultures and investing principles are already well aligned. We share a long-term vision, a deep respect for disciplined capital allocation and a focus on building client relationships over years and cycles, not quarters. But there have also been natural limitations to how much we could do as 2 separate companies, bringing the platforms together eliminates those barriers and creates immediate benefits. -- simplification, better alignment and broader access to the combined capabilities of our firms.

While this combination creates clear operating and financial benefits, its greatest significant and most meaningful impact will be on the strategic side. As an example, clients increasingly want broader solutions. Whether that means flagship strategies, complementary strategies, customized multi-asset portfolios or co-investment opportunities delivered at scale.

Our combined platform positions us to meet that demand more effectively to serve clients more comprehensively and to compete for larger and more complex opportunities than either firm could do on its own. And that matters, especially in the market we are in today. Over the past 5 years, credit markets have undergone an extraordinary transformation. As economies reopened in 2021 and government injected significant stimulus, inflation surged prompting one of the most aggressive rate hiking cycles in modern history.

Short-term rates moved from near 0 to over 5%, fundamentally reshaping capital markets. That shift created a meaningful dislocation and subsequently, immense investment opportunity. Traditional bank lending and broadly syndicated markets pulled back, particularly for middle market borrowers and private credit stepped in to fill the gap, offering capital at initially wider spreads, which helped drive very attractive returns, often in the 10% to 12% range. Those returns attracted capital, fundraising accelerated, competition increased and spreads compressed back towards prepandemic levels.

In response, parts of the market leaned into higher leverage, looser covenants, noncash pay interest loans or PIC structures and greater exposure to certain sectors like software to gain higher returns. Today, we're entering a new phase.

Recent headlines have raised legitimate concerns around certain parts of private credit, rising impairments, questions over valuations, the use of leverage, liquidity mismatches, refinancing risk and software exposure in an increasingly AI-driven world. But it's important to separate the fundamentals of private credit in the excesses and select parts of direct lending.

Private credit itself, tailored nonbank financing is a proven model in which Oaktree has been actively involved for over 3 decades. It works, providing capital to help businesses grow and delivering fair and attractive returns across the cycle. The issue is that in a period of abundant capital and low rates underwriting standards in the market become looser. That's not unusual.

Risk tends to build in strong markets and only becomes visible as conditions turn and become more stressed. What we are seeing now is less a systemic issue and more a period of recalibration. Taken together, today's environment is characterized by tighter spreads, higher leverage in certain segments and increasing dispersion in credit quality. That creates both risk and opportunity and it's exactly the kind of environment in which we thrive.

Both Oaktree and Brookfield have a long history of investing through cycles. Our approach has always been grounded in discipline, patients and a willingness to prioritize risk management and long-term value over short-term growth. We didn't maximize deployment during the recent years of heightened competition. Instead, we maintained conservative leverage in our funds and remain selective in underwriting, even when that meant sacrificing near-term growth.

As a result, we entered this period with a resilient platform, ample dry powder and the flexibility to act as opportunities emerge. And that flexibility matters today because as rates come off their peak and spreads and spread becomes a larger driver of returns, credit selection matters more than ever. We are already seeing greater differentiation across vintages, sectors and structures. And the winners will continue to differentiate themselves as time progresses.

We don't view private credit in isolation. We constantly compare relative value across performing credit, liquid markets, asset-backed finance and opportunistic strategies. When we see early signs of stress in that area, it informs how we position elsewhere, both defensively and offensively. That perspective is even more valuable in collaboration with the Brookfield ecosystem.

Together, we will have a fully integrated information network across credit and equity teams, industries and geographies and public and private markets. We are already tracking dozens of emerging opportunities in real time, sharing notes across teams and identifying dislocations earlier through direct exposure to underlying businesses, assets and capital structures.

Brookfield's strength as an owner-operator combined with Oaktree's leadership in credit creates a differentiated platform for sourcing and executing complex capital solutions. While today's market presents real risk, it is also creating exactly the kind of environment where our experience, discipline and scale can drive meaningful outperformance.

Thank you for having me on today's call. And with that, I'll pass it over to Hadley.

Thank you, Armen. I'll cover our quarterly results, ample positioning and why we are on track to deliver a record 2026. Fee-related earnings, or FRE in the first quarter were up 11% from the prior year period to $772 million or $0.48 per share. Over the last 12 months, FRE has grown to $3.1 billion, up 18% from the prior year period. Distributable earnings or DE, were up $702 million or $0.43 per share in the quarter, up 7% from the prior year period, bringing DE over the last 12 months to $2.7 billion.

Growth in DE continues to closely track growth in FRE, reflecting the high-quality recurring and stable nature of our revenue base.

Turning to margins. We've maintained strong levels alongside this growth, with margins of 57% for the quarter and 58% over the last 12 months. As previously discussed, once the Oaktree acquisition closes, likely in the second quarter, we'll report a consolidated margin that includes 100% of Oaktree. We'll also provide more transparency in our partner managers, which will impact the presentation of our margin, but will not reflect any change in the underlying economics of the business.

Importantly, while our partner managers operate at lower margins, they're highly accretive and strategically beneficial to our platform. As Connor mentioned, they're also expected to be meaningful growth contributors to Brookfield.

As they continue to scale, we will benefit from their inherent operating leverage, further expanding their margins as well as our consolidated margin. Before turning to fundraising, I want to touch on share repurchases. Historically, share repurchases have not been a primary use of capital, as we have had compelling opportunities to invest in the growth of the business, including acquiring partner managers interest and seeding complementary strategies. However, given the recent public market volatility, we believe our shares are meaningfully undervalued, and so we have been more active in repurchases.

In the first quarter, we opportunistically repurchased $375 million of stock and have so far repurchased an additional $200 million in the second quarter. This brings our total buyback activity over the past 7 months to nearly $800 million. We also remain committed to our objective of broader index inclusion. The continued growth and scale of our U.S. business, including the acquisition of Angelo and our increased ownership of Oaktree further support our path toward broader U.S. equity index eligibility over time.

Now let me turn to the details of the $21 billion we raised in the quarter, which was driven by our complementary strategies and in insurance inflows. Within our infrastructure business, we raised $3.4 billion including $800 million for our super core infrastructure strategy, which now has over $20 billion of capital and $800 million for our Infrastructure Private Wealth strategy, which now has over $8 billion of capital.

Within our private equity business, we raised $1.4 billion, including $1 billion for our private equity special situation strategy, which held its first close of $2.4 billion. Within our credit business, we continue to see broad-based demand. We raised $13 billion of capital, including $4.7 billion of long-term private funds and $3.8 billion from Brookfield Wealth Solutions. '17 Capital completed the final close of Credit Fund II, adding $2.5 billion in the quarter, bringing the strategy to $7.5 billion, the largest NAV lending strategy raised to date.

Our fundraising benefits from strong performance built our investment disciplined approach, focused on fundamentals and risk-adjusted returns, -- that approach has led both Brookfield and Oaktree independently to limit exposure to areas such as direct lending and software, where we saw less compelling risk-adjusted opportunities. This discipline has reinforced our clients' confidence in our capabilities and continues to support fundraising.

Fundraising is also well diversified geographically. We continue to see strong traction around our high conviction strategies, and the trend we have previously discussed, large clients concentrating commitments with fewer strategic managers that can offer a broad range of strategies at scale, appears to have become even more pronounced. These drivers together with our flagship fundraising and recently awarded Jess Group investment mandate, position us well for a record year of fundraising.

Turning to deployment and monetization. We invested or committed $34 billion and generated approximately $8 billion of equity proceeds from monetization -- based on our deep pipeline, we expect activity to further build as the year progresses. Overall M&A has picked up, particularly in larger strategic transactions where buyers are moving with greater conviction. Despite pockets of uncertainty, both corporates and sponsors are increasingly willing to transact.

In many cases, that uncertainty is driving activity rather than constraining it. as companies are using stronger access to capital to reposition portfolios in response to structural shifts, including AI, geopolitics and evolving supply chains. At the same time, sponsors are seeking to return capital, which is contributing to increased steel supply. While a normalized rate environment requires discipline on valuation and greater operating expertise to drive returns, we are seeing markets adjust to this environment. This creates opportunities for us.

Our focus on high-quality real assets and essential services businesses aligns where demand is strongest, particularly where durability and cash flow visibility are at a premium. In addition, our scale, global platform, operating capabilities and access to capital position us to be both an active acquirer and a disciplined seller in today's environment. As M&A activity broadens, we expect to benefit from both increased deployment opportunities and improving backdrop for monetization.

Turning to our balance sheet. We continue to operate with a strong asset-light financial profile that provides flexibility to support growth while maintaining healthy liquidity. Subsequent to quarter end, we took advantage of an attractive opening in the market and issued $1 billion of senior unsecured notes comprised of $550 million of 5-year notes at a coupon of 4.832% and $450 million of tenures at a coupon of 5.298%. We ended the quarter with $2.5 billion of corporate liquidity and providing ample flexibility to support ongoing operations, strategic initiatives and growth across the business.

We are off to a great start in 2026 and remain well positioned for a record year. While markets remain uncertain, our scale and expertise position us to navigate the environment and execute effectively.

With that, let's open up the line for questions.

[Operator Instructions]. Our first question comes from Kenneth Worthington with JPMorgan.

Armen, I wanted to dig further into Oaktree in the distressed market. I think as you stated, we've been in a very strong credit environment for an extended period. How much money does Oaktree have to invest? And how much could Oaktree recently deploy if a distressed window opens briefly or for a more extended period? And what does that mean for Brookfield's credit business?

Thanks, Kevin. I appreciate the question. So Oaktree does have funds under management and relationships with LPs that are considerable I want to hesitate to answer questions specifically about fundraising, but we have a lot of dry powder to invest into the market currently. And have a long-term track record of really leaning into the markets when distressed opportunities present themselves.

Today, we don't see a broad-based macro condition that would result in meaningfully higher deployment patterns than what we've seen over the last 5 years. But we always see sector-specific distress. Today, we see distress in software, building products, chemicals, autos packaging. And so that sector-specific distress, I would say, gives us sort of a more normalized pattern a more normal pattern of deployment in these years. It numbers in the billions, but it doesn't number in the tens of billions with our kind of risk control way of investing.

Now if we do see a dislocation, our deployment capabilities measured in a 12- to 24-month period, would be in the tens of billions. We have done that in the past. We are prepared to do that in the future. And we are right now watching what is unfolding in a variety of respects globally.

We're looking at inflation caused by energy prices. We're looking at the software industry, we have a target list of credits that we are watching closely and willing to buy at the right prices. So we are constantly boiling the ocean and looking for the opportunities.

We don't think at this moment, it is the time to really lean and hard, but we are seeing the beginnings of a real opportunity set developing. And I think part of that has to do with the maturities that we see in a lot of LBOs, some software, some outside of software really coming to play in 2027 and 2028.

So we're getting ready for a big opportunity probably not measured in the quarters -- in the immediate quarters to come. But in the next couple of years, we would expect to deploy a considerable amount of capital.

Great. And then, Connor, you mentioned that partner capital companies have raised their largest vintages ever. Can you quantify how Brookfield's acquisitions of these businesses is impacting that fundraising? And to what extent the strong fundraising has been influenced by Brookfield's bigger sales force and your broader client relationships.

Thanks, Ken. There's no doubt. Whenever we acquire a partner manager, we specifically pick market leaders in a given sector, where we think we can accelerate the growth profile of that business as part of the Brookfield platform. And I think we're really beginning to see that play out. We had 3 partner managers raise new funds this year that were not even the biggest of their kind, but biggest in their industry. And partner managers are increasingly driving earnings growth across the consolidated business.

Our next question comes from Cherilyn Radbourne with TD Cowen.

I was hoping that you could touch on a few aspects of AI, how fundraising is going for your fund. In what respects do you think you're differentiated versus peers? And I guess more strategically, how do you -- how do you manage the balancing act of meaning in enough to AI without getting over allocated to it.

Thanks, Cherilyn. AI, which for Brookfield really means a focus on AI infra is undoubtably the largest and fastest-growing theme across our broader business. And this is derived from the fact that we've always been a leader in the historical inputs into real estate, energy, digital infrastructure, but we've also recently expanded into leadership positions in the new forms of AI infrastructure, sovereign AI and actually selling the compute itself.

To your questions around growth and what we're seeing, maybe to point to something tangible, and it's very representative of what we're seeing in the market is the first deal we did in our AI infrastructure fund was our partnership with Bloom Energy. That was announced, I want to say, 6 or 9 months ago, a $5 billion partnership.

We are already in conversations to expand that partnership, not by percentages, but by multiples. And that's very reflective of the opportunity set and the scale that we expect to play.

And then the last point I would just make on how do we remain balanced. It's important to recognize while there is significant amount of capital flowing into the sector, the investment opportunity set is incredibly vast. And as a result of that, we can be incredibly selective. We can focus on the best assets and the best markets with the best revenue constructs and the best corporate credit counterparties. And even in being that selective, we can still deploy very, very significant sums of capital.

So we do see all the activity, but in terms of some of the risk-adjusted returns that we're actually executing on, there are certainly some of the most attractive opportunities we're seeing in the market.

Our next question comes from Alexander Blostein with Goldman Sachs.

I was hoping we can start with a question for sort of the broader outlook for the rest of the year for you guys. Now clearly, the business is facing a number of structural tailwinds you mentioned, energy, AI and many other things. So kind of encouraging to hear you kind of reaffirm the expectations to exceed your Investor Day goals for 2026.

A couple of questions here. So first, just a point of clarification. Are we talking related earnings per share for '26 up at the '25 base just to confirm that. But then also more importantly, how is the fundraising backdrop sort of evolved in the last 3 to 4 months, given the changes in the landscape we're seeing to kind of build on that momentum. So what's feeling better, what's feeling worse? What's feeling the same?

So thank you for the question, Alex. You're absolutely right. We have an incredibly positive outlook for 2026. We expect it to be a record year for fundraising and not by a little bit. We expect it to be a significant record year for fundraising.

In response to your question, outperformance, yes, it's going to be largely on the FRE side and that outperformance for the remainder of the year feels largely secured other than the limited market exposure we have through our listed affiliates, and that's really driven by run rating of strong performance through the end of last year, very strong growth in our partner managers.

And then some big step-change revenue adders that start this year and we'll candidly carry into next year as well, our flagship PE fund, our flagship infrastructure fund the Just Group mandate, the Oaktree acquisition.

In terms of what are the big things that will drive that FRE growth, it's exactly those. We expect to see incredibly strong demand for our 2 flagships PE is off to a great start. We expect that to be the largest vintage of its kind. And obviously, we're in a very fortunate position that we have all of our infrastructure funds in the market right now. at a time where we're in the greatest infrastructure capital deployment environment in the history of time.

So I would say those are the biggest drivers. We're seeing growth across everything on the infrastructure and energy side and then outperformance relative to past precedent on the private equity side.

Our next question comes from Bart Dziarski with RBC Capital Markets.

I wanted to ask around capital allocation. So nice to see you stepping in on the buyback to take advantage of this location. Just curious how you're thinking about the buybacks going forward? And related to that, you issued that in the quarter, the commercial paper program and the senior notes. Maybe just an update in terms of your funded position and maybe more broadly philosophically how you think about the buyback versus issuing more debt component?

Yes. Thanks for the question. So when we think about our options, obviously, when it comes to liquidity, we have a lot of attractive opportunities within Brookfield. And that's around our partner managers, around seeding our complementary strategies. And so we're always assessing those attractive opportunities to grow our business.

When we see irrational undervalued stock prices associated with Brookfield, that is an opportunistic time for us to take our underlevered position as an asset manager and use that capital to really generate attractive return for us. And so that's something that we do opportunistically. We have been active starting in the fourth quarter up until now, and that's about that $800 million of buybacks that we've executed.

In terms of our liquidity, we did access the bond market earlier this year back in April when we saw an opening in the market that was quite constructive to add liquidity. And so we issued $1 billion with strong execution. But that puts us in a position where we have $2 billion plus of excess debt capacity and remember that as our DE growth, our debt capacity grows as well. So that positions us to continue to be opportunistic with the opportunities that we see within Brookfield holistically as well as continuing to support the buy -- buying our partner managers, the remaining stakes as well as our complementary strategies.

Our next question comes from Sohrab Movahedi with BMO Capital Markets.

Okay. Connor, you highlighted a bunch of issues that have been kind of hurting the sector, one of which was retail redemptions. And in the past, I think you've highlighted the importance of retail, both from a fundraising and from, I guess, individual participation and probably a big important source of growth for you guys on the funding side of it.

So I'm just curious as you've been kind of watching what's been happening, you are always methodical, I suppose, and disciplined. Is the -- are you rethinking your retail ambitions based on what we've seen more recently. And some of your peers, I guess, would have been first movers to the extent you are not rethinking those ambitions.

Is this one of these cases if the second mouse gets to cheese, is there an opportunity or a disruption where you get to run in as folks are running out -- and maybe like an Oaktree acquisition that you have done, which has aged well, an opportunity maybe present itself? And how willing would you be to expedite those retail plans?

Thank you for the question. In terms of what we're seeing and what that leads to in terms of our approach going forward is, we're very proud of how the private wealth, retail and individual market. And we think our approach is paying dividends now and the market is coming to us. Obviously, private wealth is a smaller portion of our business relative to some of our peers is we've been very methodical and thoughtful in how we build that business for the long term.

I think it's important to recognize that our private wealth business grew versus this point last year despite perhaps some of the concerns in private wealth credit, we continue to see tremendous inflows to our private wealth products on the real asset side. So this continues to be a more modest part of our business today, but one that's growing very quickly. It's been growing at about 40%, 40% for the last couple of years, and we expect that growth to continue, particularly as investors in that market continue to pivot increasingly towards real assets.

I would also [indiscernible] individual market. And in this regard, we think our growth and penetration of the individual market is perhaps accelerating far faster than people appreciate. Obviously, we have the growth on the private wealth side. On the 401(k) and retiree market side, we're in advanced discussions with some of the largest target date fund providers who are interested in putting Brookfield's real asset products into some of their default portfolios, they're recognizing the role that long-duration, inflation-linked cash generative, downside protected investments can play in those portfolios.

And then we're certainly the market leader in terms of introducing real asset exposure into insurance policy and annuity portfolios through our partnership with BWS. So I would say our approach is working. It plays very well in this market. We're going to continue to lean in, but it's more of the same as opposed to some major shift in strategy.

Our next question comes from Brian Bedell with Deutsche Bank.

Maybe just shifting to the topic of energy transition. Obviously, you guys are a leader in that space. And the energy platform broadly kind of rebranded from the renewables side. So can you talk about does that change your -- any of your marketing strategy within those types of products?

And maybe just talk about how you link energy and infrastructure. A lot of those themes are similar. And I would imagine the investor -- investor base has similar ambitions. How do you, let's say, sell those products maybe as a solution to LP investors? Is that something that you're thinking about?

And then maybe just your view on the demand for energy transition given the power needs that we're seeing for AI and the disruption of supply chains amid the geopolitical backdrop.

So I'll perhaps address that in reverse order. The demand for energy is at an unprecedented high and will continue to be at an unprecedented high throughout the end of this decade and well into the next one and perhaps beyond. This is going to require take your slogan, take your catch phrase, it's going to require any and all or all of the above type energy solutions. And we're fortunate to be a leading player across all of them.

The big ones are obviously going to be low-cost renewables, flexible gas and dependable nuclear where we [indiscernible] formatting thing than anything else. It changed nothing in terms of our allocation strategies in one of our business, [indiscernible].

Our next question comes from Dan Fannon with Jefferies.

So I just wanted to follow up on the strength in fundraising. -- as you think about this year, I was hoping to get a little bit of help heavily around the management fee cadence given the timing of this. And also catch-up fees as we think about first and final closes as the year progresses? Any timing and/or guidance around that would be helpful.

Yes. So our timing -- we've already closed for our flagship private equity strategy. We've had an initial first close of $6 billion, and we will have the final first close later this year. we anticipate with our infrastructure flagship fundraising to have a first close and meaningful first close also in 2026.

So fees should be turning on for both of those strategies very shortly. And so as you take this particular quarter, as an example, we didn't have any catch-up fees, but you'll see that build throughout the year.

Our next question comes from Craig Siegenthaler with Bank of America.

So BAM stock-based comp payout is the lowest in the U.S. all peer group, but it does jump around a little bit. But no part of this is seasonal, but I was hoping you could refresh us on not just the seasonal drivers but also how stock-based comp fits into your overall employee compensation program because this is actually a pretty important input for a lot of us with valuation.

Sure. Perhaps I can take it from a corporate side. We use stock-based comp as our primary form of compensation for the entirety of the senior leadership team at Brookfield. And then beyond that, we include stock-based comp as a component of every single investment professional across the firm. We think that is unique in that it aligns the broader firm such that investment professionals are not only focused on driving value in their individual strategy but driving value across the entire firm, such that whenever we see an opportunity, it doesn't matter what vertical, what group, what geography a man or woman is in.

If they can add value to a transaction or an initiative, they get brought in. So we use stock-based comp extremely wide across the firm, in our view, far wider than almost anyone in the peer group.

Our next question comes from Mario Saric with Scotiabank.

Maybe for Armen. Coming back to the Oaktree integration. As you mentioned, the relationship in Brookfield and Oaktree has been in fact for some time now. Can you provide some examples of low-hanging fruit that may not be as apparent to kind of people on the outside that comes from owning 100% ownership interest out of the integration that may have a direct incremental impact on FRE for Book field more so than the separate entities.

Sure. Thanks for the question. So a couple of things. Oaktree and Brookfield obviously established their partnership in 2019 and that partnership and the relationships between the 2 institutions have grown and become a lot closer. So we've gotten to know each other very well. We're very, very aligned. Foundation is very strong. And I think we share a lot of the same cultures and investment principles including taking a long-term view through the cycle. So it's been -- it's not early days. It's several years in the making now. And so we've had a chance to think about the synergies.

The synergies are, I would say, are largely revenue synergies and that the combination of the 2 institutions gives us the ability to offer more tailored solutions to some of the biggest clients in the market, a broader solution base that taps into the strength of Brookfield as an owner-operator and the strength of Oaktree as a credit manager having invested through many cycles as -- largely as a distressed investor as our single largest strategy over 30-plus years.

So that tailored solution opportunity is executed through a new group at Brookfield called the Investment Solutions group that has portfolio analytical capabilities to advise clients on how to adjust their portfolios over time and how possibly Brookfield, Oaktree and partner manager solutions could really be brought to bear.

I think the breadth and depth that we have as a combined institution now is really unmatched and being able to offer those products in a seamless way in a one firm type of way is new and exciting. I think the other combination that is helpful is Oaktree had a balance sheet on its own, Brookfield had a balance sheet on its own and optimizing the 2 balance sheets separately was not as efficient as it could have been.

And so bringing those 2 balance sheets together in a single platform really helps to think about a single unit of shareholders that own that balance sheet, and we could maximize the value for the benefit of the shareholders without having disparate ownership between on balance sheet and the other. So that's a little bit harder to quantify and harder to assess, but that efficiency is very, very strong.

And then finally, Oaktree is a very large and well-built out credit platform. We do other things outside of credit, but I would say credit is our tent pole. As a result, we have a very large middle and back office that's able to support our strategies and more. And so as we grow our credit capabilities in partnership with Brookfield in a more integrated way, we are able to layer on additional revenue, additional AUM with modest increase in cost.

And we don't really -- we don't need to staff up to grow in any sort of meaningful way because we're already a scale player. So there is a cost benefit or a cost synergy, it's not really with taking a big knife to our cost structure, either at Brookfield or at Oaktree. But it is certainly a platform that we could use and in a scaled manner to drive profitability as we grow.

Our next question comes from Michael Cyprys with Morgan Stanley.

Our next question comes from Crispin Love with Piper Sandler.

First, on real estate, Connor, you hit on the recovery accelerated in your prepared remarks. Just curious if you can dig into that a little bit further, which areas of real estate are you seeing the most opportunities today to put capital to work and then relatedly just your outlook on office.

So in addressing that 2 things, the real estate recovery and its very rapid acceleration. I would say is part of -- the part of our business where what we're seeing on the ground is far ahead of what you're reading in the headlines, -- in fact, we are seeing very significant increases in transaction activity, deal volumes and recovery and valuations. I think across our real estate platform, this is on the asset side but not the equity side, we're looking to do about $20 billion of real estate transactions in a 2-month period here just to give a sense of the pace and breadth of deal volume.

In terms of where we're seeing that deal activity, it's primarily in what I will call the alternative forms of real estate. Hospitality, logistics, housing, we have seen lower deal volume activity to date in office and retail, but we think that is coming because the fundamentals for office are absolutely flying, and it comes down to one thing.

On a relative basis, nobody started new construction. There was no new supply generated starting in 2020 because of the pandemic and then following 2020 because of the rise of rates and then following that because of work from home concerns. So we've now seen a recovery in demand that's being matched by 0 new supply in the market. And in Tier 1 markets, we're seeing the top come off rent.

Rents legitimately $50 million, $70million percent higher than they were 5 years ago, and that's beginning to flow through the numbers. If that continues, it's only logical that we're going to see the deal activity return to that sector as well.

Our next question comes from Michael Cyprys with Morgan Stanley.

Our next question comes from Mike Brown with UBS.

A lot has already been covered, but I wanted to maybe ask to that or a little more impactful for the model here. So the margins have expanded to the high 50s, but you will be consolidating Oaktree and that's at kind of a cyclical low in terms of margins or dilutive -- can you maybe talk a little bit about that medium-term margin trajectory as you think about 2Q and then how as Oaktree normalizes and you have more operating leverage to the platform, how does that margin continue to kind of rebuild.

And then on the fee rates, just because there's an implication for margin there, too. Can you just talk about some of the puts and takes in 1Q? Just some of those fee rates came in lower than expected.

And then for 2Q, there's going to be a bit of noise around some of the partner buy-ins as well, so maybe unpack any implications for 2Q as well.

Sure. So on the margin front, I think you and others now appreciate that in second quarter, assuming we close Oaktree, which is the anticipated date we will adjust our margins to show our partner managers in a more transparent way.

We also have 100% of Oaktree flowing through, which given that they operate at a slightly lower margin, we'll have an offset there. And so that will come through. But what is important to note is that across all of our businesses, we -- when we look at our projections for the year and going forward, there's operating leverage for each of the businesses. And that will continue to showcase on an apples-to-apples basis. So that's very important to emphasize around our margins.

In terms of the fee rates, overall, we're seeing no spread compression around fee rates. And so we continue to see strong fundraising, transaction fees play a part of that. And so when you look at our 2026 numbers, as Connor explained, this is going to be a record year in all categories.

That concludes today's question-and-answer session. I'd like to turn the call back to Jason Fooks for closing remarks.

Okay. Great. If you should have any additional questions on today's release, please feel free to contact me directly, and thank you, everyone, for joining us.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Brookfield Asset Management Fourth Quarter 2025 Earnings Call.

[Operator Instructions]

Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your speaker today, Jason Fooks, Managing Director of Investor Relations. Please go ahead.

Thank you for joining us today for Brookfield Asset Management's earnings call for the fourth quarter and full year of 2025. On the call today, we have Bruce Flatt, our Chairman; Connor Teskey, our Chief Executive Officer; and Hadley Peer Marshall, our Chief Financial Officer.

Before we begin, I'd like to remind you that in today's comments, including in responding to questions and in discussing new initiatives and our financial and operating performance, we may make forward-looking statements, including forward-looking statements within the meaning of applicable U.S. and Canadian securities law. These statements reflect predictions of future events and trends and do not relate to historic events. They're subject to known and unknown risks, and future events and results may differ materially from such statements. For further information on these risks and their potential impacts on our company, please see our filings with the securities regulators in the U.S. and Canada and the information available on our website.

Let me quickly run through the agenda for today's call. Bruce will begin with an overview of the quarter and the market environment. Connor will discuss our activity in 2025 and outline the key drivers of our growth for 2026. And finally, Hadley will discuss our financial results, operating results, balance sheet and dividend increase. After our formal remarks, we'll open the line for questions.

[Operator Instructions]

And with that, I'll turn the call over to Bruce. Thank you, Jason, and welcome, everyone.

2025 was another strong year marked by continued growth across the business and consistent execution against our long-term strategy. Let me start with a few highlights. We raised $112 billion of capital during the year, reflecting strong demand from institutional, insurance and individuals for our diverse suite of strategies. We also invested a record $66 billion of capital over the past year into high-quality assets and businesses that form the backbone of the global economy. We made these investments in areas where we have deep competitive advantages and strong operating capabilities, positioning us to generate very attractive risk-adjusted returns. At the same time, we monetized $50 billion of equity from investments at very good returns, demonstrating that stabilized high-quality assets and essential service businesses continue to attract strong demand.

As a result of all of this activity, fee-bearing capital increased 12% over the year to more than $600 billion. Fee-related earnings reached a record $3 billion, up a very strong 22% year-over-year, driven by growth in our capital base and continued operating leverage across the business. Distributable earnings were $2.7 billion, an increase of 14% from the prior year. Our distributable earnings are almost entirely fee-based, as you know, and long duration, and our cash flows are further reinforced by the diversification of our platform across asset classes, products, geographies and client channels. This diversity and lack of reliance on any single segment or product provides our business with many growth options, providing a platform to grow across economic cycles and varying market conditions.

Turning to the broader market environment. We entered 2026 with a constructive backdrop. Interest rates have stabilized, economic growth is resilient and transaction activity has increased due to improved confidence in valuations and market liquidity. In this environment, we are seeing renewed global demand for real assets that generate stable cash flows and provide inflation protection, areas where we have focused for decades. While near-term conditions are supportive, what matters most to our business are the long-term structural forces that shape global capital allocation. We are fortunate to remain at the forefront of the largest global investment trends. These trends remain firmly in place and continue to expand the opportunity set for private capital.

An important structural shift is also taking place in how capital is allocated. Individual investors are increasingly gaining access to private assets through retirement and long-duration savings vehicles. This represents a significant expansion of the addressable market for private assets. Retirement and individual portfolios are among the largest and fastest-growing pools of capital globally, and they are naturally aligned with long-duration income-generating real assets. With our scale, track record and diversified platform across infrastructure, power, real estate, private equity and credit, we are well positioned to meet this growing demand.

Our ability to invest through cycles, recycle capital and partner with long-term investors continues though to differentiate our platform. This combination positions us to deliver strong growth over time and supports our long-term objectives, including doubling the business by 2030 and generating a 15% annualized earnings growth.

Now before I turn the call over to Connor, I want to touch on our leadership announcement today. As part of our long-term succession process, we announced that Connor Teskey has been appointed CEO of Brookfield Asset Management. I will continue as Chair of the Board as well as CEO of Brookfield Corporation. We began this process 4 years ago when Connor was appointed President of BAM. Over that time, Connor has taken on running virtually everything. So this title change merely matches title to substance. There is hence no real transition and our partners and people have all been involved in this. Connor has played a central role in building Brookfield's investment strategy, scaling our renewable business globally and developing many of the leaders who now run our businesses. He brings deep investment expertise, strong judgment and a long-term mindset that is fully aligned with Brookfield's culture. He's actually closer to what the next backbone of the global economy is, and we are excited about that. I've never been more thrilled about the prospects for our business than I am now.

I intend to continue supporting Brookfield, focusing my energy where I can be most useful and will remain fully invested and involved to assist the whole team. Of course, as CEO of Brookfield Corporation, we have a substantial interest in ensuring Connor and BAM are hugely successful. With that, I'll turn the call over to Connor to discuss our performance in more detail and how we are positioned for a strong 2026.

Thank you, Bruce, and good morning to everyone on the call. I'm honored to be assuming this new role, especially at such an exciting time in BAM's growth story. With Bruce's support and the incremental approach to transition we have been taking for years, we are already fully operating under our new structure. I look forward to continuing to work closely with our team to deliver strong results for our clients and our shareholders and continue to grow our business around the megatrends shaping the backbone of the global economy.

With that, now let's turn to our results. 2025 was not simply about raising capital. It was about putting that capital to work at scale and doing so with discipline. On the deployment side, we were active throughout the year across all of our businesses, investing in high-quality assets at attractive values. In renewable power, we invested in Neoen, a leading global developer with long-term contracted clean power assets, and we acquired National Grid's U.S. renewables platform, expanding our footprint in North America. In private equity, we invested in Chemelex, a global industrial technology business with mission-critical products. Our infrastructure business acquired Hotwire Communications, a leading U.S. fiber-to-the-home operator serving both residential and commercial customers; Colonial Pipeline, the largest refined products pipeline in the United States and a part of Duke Energy Florida, a vertically integrated electric utility with long-duration regulated cash flows to name only a few.

Our real estate business recently acquired Generator Hospitals, a differentiated hospitality platform benefiting from structural growth in experiential travel and urban tourism, and we acquired National Storage REIT, the largest self-storage company in Australia. Collectively, these investments reflect our focus on essential assets and businesses with durable cash flows, strong downside protection and meaningful opportunities for operational value creation. 2025 was a record year for investment activity, and it gives us a strong foundation as we look ahead.

Turning to fundraising. 2025 was also an excellent year across the platform, continuing our momentum to be market-leading in each of our businesses. We completed final closings for 2 major flagship funds, the fifth vintage of our real estate flagship and the second vintage of our global transition flagship. Both were the largest funds we've raised in their respective series and exceeded our targets with broad and diversified support from existing investors as well as new relationships. These fundraises are particularly important given where we are in the cycle. In real estate, we have significant dry powder at a point in the cycle where we're seeing attractive entry points, particularly in larger, high-quality assets where there are a limited number of players with scaled available capital.

In transition, demand for power continues to accelerate globally, driven by electrification, AI growth and energy security. Together, these dynamics create a growing opportunity set for long-term capital, and we are well positioned to capture it. While our flagship fundraises were successful, the overwhelming majority of our fundraising this year, nearly 90%, came from non-flagship strategies, underscoring the growing breadth and durability of our fundraising engine. These complementary strategies included continued momentum across our infrastructure and private equity platforms through a range of products as well as further expansion of our private wealth platform. We raised capital across a wide range of funds, [indiscernible], demonstrating the depth of investor demand for our products and our ability to raise capital consistently across market environments and flagship cycles. A key theme this year has been the continued scaling of our credit platform. Through a combination of organic growth and strategic acquisitions, we have meaningfully expanded our origination capabilities and product breadth.

When combined with our long-standing partnership with Oaktree and the full integration of that business, we are building one of the most comprehensive global credit platforms in the industry, spanning real asset credit, asset-backed finance, opportunistic credit and insurance-oriented strategies. We are also preparing for a meaningful expansion of our asset management mandate with Brookfield Wealth Solutions upon the closing of their acquisition of Just Group, which we expect in the coming months. These 3 initiatives alone, Oaktree, Just Group and the credit managers we acquired in the fourth quarter are expected to generate more than $200 million of incremental annualized fee-related earnings, which positions us well for a very strong earnings growth in 2026 as that is all before any additional fundraising from our flagships and the approximately 60 strategies we will have in the market or deployment.

Looking ahead, 2026 is shaping up to be another record year for fundraising with strong momentum across the business that we expect will drive meaningful growth, especially within both our infrastructure and private equity platforms.

Starting with private equity, we recently launched the seventh vintage of our flagship fund at a time where clients value our differentiated approach. Our private equity business focuses on value creation driven by operational improvement rather than leverage or multiple expansion. We have executed this strategy for 25 years because it works across market cycles. However, today's environment plays directly to our strength as a long-term owner and operator of mission-critical, essential assets and businesses. Private equity was the first fund we launched more than 25 -- we've delivered some of the strongest returns in the industry. With market conditions aligned with our approach and a deep pipeline of opportunities, we expect this vintage to be our largest private equity fund to date. Alongside our flagship fund, we continue to broaden our private equity platform.

We recently launched a new strategy tailored for the private wealth market, which is well aligned with client demand. We also saw strong fundraising across our complementary strategies, including our financial infrastructure fund and our Middle East partner strategies, both of which we expect to reach final close this year as well as our venture technology platform, Pinegrove, which recently held a final close on its inaugural fund at $2.2 billion, exceeding its target.

In our infrastructure platform, we also see a meaningful step change emerging in 2026, driven by the breadth of strategies we now have in the market and the scale of the opportunity in front of us. This year, we will have all of our infrastructure strategies fundraising concurrently, including the launch of our next flagship infrastructure fund, which we expect to be our largest to date. Alongside the flagship, our infrastructure debt strategy is in the market and both our open-ended supercore infrastructure fund and our private wealth infrastructure vehicle continue to scale with each seeing record inflows in the fourth quarter.

Further, later this year, we expect to launch the second vintage of our infrastructure structured solutions strategy. Together, these strategies position us to raise and deploy capital across the full spectrum of risk and return within the infrastructure asset class, taking advantage of our leading platform and the strong market conditions and growing investment opportunity set.

Building on this foundation, last year, we launched a $100 billion global AI infrastructure program, anchored by our inaugural AI infrastructure fund with a $10 billion target. The fund already has strong momentum with $5 billion of commitments at launch, reflecting the early conviction in the opportunity. Our objective is to deploy more than $100 billion of capital across the full AI infrastructure value chain from land and power to data centers and compute capacity. leveraging Brookfield's existing scale and digital infrastructure and energy to deliver integrated, long-duration solutions that support the global build-out of AI. We've already announced several transactions for the strategy, including most recently a $20 billion strategic AI joint venture with Qai, focusing on developing integrated AI infrastructure in Qatar.

These initiatives reflect a growing opportunity for long-term private capital to fund infrastructure that has historically sat on corporate and government balance sheets, and Brookfield is uniquely positioned to lead in this space. Taken together, our execution in 2025 and the initiatives already underway position us extremely well as we enter 2026. With strong fundraising momentum, a scaled deployment platform and clear drivers across private equity, infrastructure and credit, we feel very good about the growth outlook for the business and expect 2026 to be at or above our long-term targets.

With that, we will turn it over to Hadley to walk through our fourth quarter financial results and discuss the durability of our earnings in more detail. Hadley?

Thank you, Connor. As mentioned, we've had a great quarter as well as year, and I'll provide an overview of these results and how we're positioned for 2026. In the fourth quarter, we delivered strong performance. Fee-related earnings, or FRE, were up 28% from the prior year period to $867 million or $0.53 per share in the quarter, bringing FRE for the year to $3 billion. That brings our margins to 61% for the quarter and 58% for the year. Our business has significant operating leverage. So as our growth initiatives scale, our margins improve. That said, after buying the remaining stake of Oaktree, which operates at lower margins, it will bring down our consolidated margin even though the transaction is highly accretive and strategically strengthens our platform. Plus, Oaktree's margins are near cyclical lows, reflecting the countercyclical nature of its business.

In that same quarter, we will also enhance disclosure around our partner managers as these businesses have scaled, becoming more meaningful. Instead of reporting only our share of their FRE, given their smaller historical contribution, we will break out our share of partner manager revenues and expenses, which will not impact FRE or DE, but should provide investors with clear insights as our platform continues to evolve. Distributable earnings, or DE, were $767 million or $0.47 per share in the quarter, up 18% from the prior year period, bringing distributable earnings over the last 12 months to $2.7 billion. Growth in DE continues to closely track growth in FRE. This reflects the high-quality, recurring and stable nature of our revenue base and the limited reliance on carry or transaction-driven income.

The primary driver of earnings growth in 2025 was our strong fundraising and deployment activity. Over the past year, we raised $75 billion of capital that became fee-bearing, and we deployed $16 billion of previously raised capital that also became fee-bearing. As a result, fee-bearing capital grew by 12% year-over-year or $64 billion to a total of $603 billion. This growth reflects both strong inflows and disciplined capital deployment across the platform, even as we continue to return capital at an accelerated pace to clients through realizations and distributions.

Turning to fundraising. The fourth quarter marked our strongest fundraising quarter ever, with $35 billion of capital raised across more than 50 strategies. This success underscores the breadth, depth and diversification of our platform that enables us to sustain consistent momentum regardless of individual fund cycles. Within our infrastructure business, we raised $7 billion, including $5 billion for our AI infrastructure fund. We expect the first close for the strategy in the coming months with a target size of $10 billion. We also raised $900 million for our super core infrastructure strategy, bringing the fund to $14 billion and $900 million for our infrastructure private wealth strategy, our largest quarter yet, which puts the strategy at $8 billion.

Within our private equity business, we raised $1.6 billion, including $900 million for our private equity special situation strategy. And we had our final close of prime's opportunistic strategy at $2.2 billion, exceeding our target, a very successful outcome for our first-time fund. Within our credit business, we raised $23 billion of capital, which represented a record quarter. Driving our credit fundraising was real asset and asset-backed finance strategies as well as our insurance channel. This includes nearly $9 billion of capital raised from Brookfield Wealth Solutions. We also raised $5.6 billion from our long-term private funds, $1.4 billion of which was for our fourth vintage of our infrastructure mezzanine credit strategy, $4 billion for our perpetual credit funds and $3.2 billion for our liquid credit strategies.

Over the past decade, we've been intentional in evolving our business to become more diversified across not only client types, but asset classes, strategies, products and geographies, which has reduced our reliance on any single market cycle or source of capital. Along with our long-term disciplined approach, this has allowed us to compound earnings across varying economic environments and strengthen our resiliency. Today, our earnings base is well balanced across each of our businesses, infrastructure, renewable power and transition, private equity, real estate and credit, with no single business contributing more than 1/3 of our fee-related revenues.

As an example, the introduction of our transition platform 5 years ago and the expansion of our credit platform have meaningfully broadened our earnings mix and enhanced durability. In 2026, we will be fundraising across nearly 60 strategies compared to only 4 in market just 10 years ago, enabling more consistent and diversified fundraising. We now serve more than 2,500 institutional clients globally, alongside a private wealth platform reaching nearly 70,000 clients and insurance solution business managing over $100 billion of fee-bearing capital on behalf of approximately 800,000 policyholders.

Importantly, this breadth allows us to grow through different market environments by shifting capital toward asset classes and regions where opportunity is strongest, while also creating a stable, resilient earnings stream that can perform consistently in different market environments and continue to grow across cycles. Looking ahead, a more balanced share of our fundraising will come from individual investors as private wealth, annuities and more retirement and 401(k)s will be able to allocate to alternative investments.

Turning to our balance sheet. We continue to operate with a strong asset-light financial profile that provides flexibility to support growth. In November, we issued $1 billion of new senior unsecured notes, including $600 million of 5-year notes at a coupon of 4.65% and $400 million of 10-year notes at a coupon of 5.3%. We ended the year with $3 billion of corporate liquidity, providing ample flexibility to support ongoing operations, strategic initiatives and growth across the business. As we look ahead to 2026, we are positioned for another very strong year, and I will emphasize again that the best is yet to come. Our performance as a disciplined investor sets us up to capitalize on the strong momentum across the business with continued capital inflows from institutional, insurance and retail channels and a pipeline of opportunities to deploy capital at attractive returns.

Given our strong financial position and significant growth prospects ahead, I'm pleased to confirm that our Board of Directors has increased our quarterly dividend by 15% to $0.50025 per share or $2.01 per share on an annualized basis. The dividend will be payable on March 31, 2026, to shareholders of record as of the close of business on February 27, 2026.

That wraps up our remarks for this morning. We'd like to thank you for joining the call, and we'll now open up for questions. Operator?

[Operator Instructions]

Our first question comes from Cherilyn Radbourne with TD Cowen.

So clearly, manager consolidation is continuing, and the recent emphasis seems to have been on private credit and also secondaries. With regard to secondaries in particular, is that an area that you consider strategically important and a gap that you might look to fill?

We've made a few complementary acquisitions in recent years focused on areas where we wanted to expand and build out the platform. Looking ahead, we would expect probably to be slightly less active, focused primarily on the further acquisition of our existing partner fund managers. Beyond that, we'll continue to be incredibly selective and opportunistic. In terms of secondaries, it is a space we track very closely. It's growing rapidly. It's a segment of the market where our expertise would be very clearly differentiating, and it would add an additional service that we could offer to our clients. So we do track the space, but we will be very opportunistic, only looking at opportunities that would be highly additive and complementary. But you would be correct that if we were going to do something, secondaries is probably near the top of the list. we would focus on a platform that we thought would grow significantly as part of the broader Brookfield ecosystem.

Our next question comes from Alexander Blostein with Goldman Sachs.

Connor, congrats. Obviously, I think well deserved on many fronts. Question for you guys around the growth for 2026. So it sounds like a lot of momentum in the business on multiple fronts as you highlighted. When you refer to at or above long-term targets, I just want to dig into that a little bit more. I believe your long-term targets, you generally talk about FRE. I think at the Investor Day, you talked about that being 17%. So is that what you're referring to when you think about '26? Do that include Oaktree and Obviously, those are going to be additive to that FRE? So I was hoping to just unpack that a little more and if possible, get a sense of the sort of organic FRE growth within that statement for the year.

So we expect 2026 is going to be very strong. We had strong momentum that accelerated throughout the past year and positions us very well going into next year. You are absolutely correct. In our 5-year plan, we expect growth rates in, call it, the mid- to high teens, and we absolutely have an outlook today that exceeds that level. Maybe just to put some substance around that, there are 3 initiatives, the acquisition of the remainder of Oaktree, the closing of Just Group and some of the acquisitions we made in Q4 that will add $200 million to FRE growth that have already been funded.

Beyond that, the earnings this year and going forward will benefit from what we expect to be a further step change in our fundraising. And we thought we had a strong year this year. Next year is going to be even better. And this is driven by continued growth in credit and then outsized growth in both PE and infrastructure where in each of those platforms, we'll have all of our strategies in the market.

And then the last thing just in terms of 2026 outlook, in terms of investment and monetization, obviously, this will be market dependent. But based on the very constructive environment we're currently experiencing, the major trends that we continue to be on the forefront of and the large pipeline of deals that we have in the near term. If market conditions hold, we see no reason why 2026 wouldn't also be a market step-up from 2025 in terms of deal activity as well.

Our next question comes from Michael Brown with UBS.

So a lot of anxiety surfaced in the market yesterday around AI-driven disruption, including within the alternative space. Based on our analysis, your exposure screen's below peers, but could you maybe break down Brookfield's software exposure broadly across private credit and private equity funds? And then additionally, for the industry, Connor, I'd love to hear your high-level views on how AI-related disruption could flow through the private asset ecosystem. And if there are major losses, how do you think LP allocations to private assets could react?

So there's really 2 punchlines from our side. First and foremost, this is a strong net positive for our business. It validates our focus on digital infrastructure and servicing increased power demand to support the growth and increased penetration of AI. These are some of the largest and most active platforms we have at Brookfield. And the announcement's not yesterday, but the increasing tailwinds over the last several months only provide further support for those initiatives. Obviously, this question is topical given the significant market move yesterday. But given our firm-wide focus on AI, this is a trend we've been tracking for a while. And as a result, the punchline is our exposure across the organization is very minimal. As a reminder, our portfolio is almost entirely focused on long-term contracted real assets where we don't take any technology risk or build on spec.

Maybe to get into some of the specifics you asked about, within our private equity portfolio, we have less than 1% exposure to software businesses. Within our credit business, our focus has been on areas of expertise such as infrastructure and real estate credit, real asset lending and asset-backed finance where we get benefits from the Brookfield ecosystem, and we have no software exposure. And then within our corporate credit portfolio, we've been actively positioning to where we see the best risk-adjusted returns. And as such, our opportunistic credit strategies have very little software exposure and our performing credit strategies are significantly underweight relative to indices.

Taking that all together, our firm-wide focus has been being positioned to benefit from increased AI penetration. And therefore, the headlines yesterday just further reinforce our conviction in that theme. And our disciplined approach to building our credit business has once again put us in a favorable position to manage through this volatility and to continue to be a net beneficiary of the impacts from AI.

Our next question comes from Bart Dziarski with RBC Capital Markets.

Connor, also echoing the congrats on the CEO appointment. I wanted to ask around liquidity, just given you pay out most of your free cash flow. And so with the $2.5 billion of debt outstanding now, would you consider the business in a place where it's fully funded? And just related to that, could you give us a high-level sense of the duration over which the $130 billion-ish of uncalled commitments could get called?

Yes, sure. So this is Hadley. I'll take that question. In terms of our balance sheet and liquidity, we're in a really good place. We've got over $3 billion of liquidity. Now part of that is in anticipation of funding our share of the 26% of Oaktree that we currently don't own. And so that's a critical component. So we're well capitalized from that perspective. But then looking forward, we've been instrumental in supporting our business, whether that's through initiatives around our complementary strategies and the growth there as well as our partner managers and buying additional stakes related to our partner managers.

So we're in a really good position. For some time, we've benefited from the cash on hand from the spinout, but it slowly entered the bond market earlier last year and anticipate when we look forward in terms of our leverage, obviously, the capacity is quite ample and will continue to build as our business grows. But when we look at 2026, we'll be much less active than we were in 2025, given we were obviously in a big growth area and wanting to support that growth.

When we look at our other area of liquidity, that's the uncalled capital at $130-ish billion, that's a significant amount of capital that can turn into fee-bearing capital. And this is a critical component of our business. We always want to be in a position where we've got liquidity to take advantage of the environment that we're in. So a good example of that is our BSREP, our flagship for real estate closed its fundraising earlier in '25. And so in a great position to have ample liquidity to be quite active. And in Peakstone, the announcement we made yesterday is a good example of that. And so our flagships obviously have built into some of that uncalled capital.

But separately, our credit strategies, which are also heavily in market last year and some into this year, have uncalled capital that will get deployed over time and become fee-bearing capital. So that will take a few years to get called, but it puts us in a really good position no matter what environment we have going forward.

Our next question comes from Craig Siegenthaler with Bank of America.

And Connor, first just big congrats on your promotion to CEO of Brookfield. And I think you're probably the youngest CEO in asset management, too. So my question is on artificial intelligence. So Brookfield has really built a leading business servicing the AI industry. So like your peers, it's a lot of picks and shovels, not actually the AI models. So data center and power. Can you talk about the mix of capital being deployed today between equity and also debt? And on the equity side in data centers, is it mostly investment-grade tenants like the hyperscalers? And I'm sorry, but one more I'm going to squeeze in, if you can address this one, too. And on the leases, they're, I think, almost all 15-year plus leases. Are there scenarios where they can be broken early or no, because there's a financial benefit to the data center provider when it's broken? Sorry about the 3, but they're all kind of related.

So in terms of themes across Brookfield, AI continues -- AI and AI infrastructure and the value chain that supports the increased penetration of AI remains at the top of the list. And this is not only the digital infrastructure, but also the energy generation that is required to support these data centers. Just as a general comment as to why the market opportunity is so robust today, you've got 3 dynamics that are all compounding on themselves. One, more data centers are being built. Two, the data centers that are being built are now larger. And then the third one is historically, the financial investor in a data center typically funded the rack in the shell.

Increasingly, there is an opportunity for those that have the scale and the operating capabilities to not just fund the rack and the shell, but to fund the rack, the shells, the chips, the servers, the power supply, the grid redundancy, the substation, the interconnect, the whole system, if you will. And that's creating a very large and attractive investment opportunity on both the credit side and the equity side because while that wallet is getting bigger, it's still backstopped by that same long-term take-or-pay offtake with one of the greatest either hyperscaler or sovereign credits in the world.

In terms of our pipeline today, it's as large as it's ever been, and we expect it to only continue going forward. There's 2 things that perhaps we would highlight that are of interest. There is the largest component of growth for AI demand is the hyperscalers. And we are absolutely leading in supporting and investing the infrastructure to support their AI initiatives. But there's also a growing opportunity to support sovereign AI. This is the AI offtakes from countries to support the national interests of those regions. Again, very high-quality credit offtakes, large-scale investment opportunities where our skills can be brought to bear. And this is an area where we do think we're market-leading given our announcements with Sweden, France, Qatar, et cetera.

The last point I'd simply make here is this is not just an investment opportunity. We are seeing incredible demand from our clients to get exposure to this investment theme. We announced our AI infrastructure fund with a target of $10 billion. We've already secured $5 billion. We expect we'll hit our targets and expect the broader program to be well north of $20 billion when we include the co-invest given the size of some of these investment opportunities.

And sorry, I'm just seeing here. The second part of your question, these are very strong long-term offtakes, very similar to what we would expect in other infrastructure asset classes. These are take-or-pay where if we continue to provide the asset, the offtaker is locked in. And similar to what we do on the power side, the real estate side, the infrastructure side, AI infrastructure is no different. We spend a lot of time ensuring it's a great revenue construct backed by a great high-quality credit counterparty.

Our next question comes from Michael Cyprys with Morgan Stanley.

Maybe just sticking with AI and data centers. I understand the U.S. administration wants to see new data centers stand up their own power generation. Curious, how do you see that impacting bottlenecks? And as you invest in data centers, talk about how you're bringing together your greenfield power capabilities, which is a major differentiator for you? And how you're expanding your capacity there given bottlenecks?

There is no question. The bottleneck to AI growth today is not capital. It is not demand. It is electricity supply. And unlocking that electricity supply and the slogan, bringing your own power, is a key differentiator. And while electricity grids around the world are doing everything they can to increase their capacity as much as possible, they very simply cannot keep up with the increased level of demand that we've been seeing in recent years, it's only going to accelerate going forward. And therefore, our ability to bring unique solutions beyond just simply flowing power through the grid is a key differentiator. Our ability to bring quick to deliver power through our investment in Bloom Energy, longer term, our ability to use nuclear solutions through Westinghouse and then behind-the-meter energy storage and renewable solutions that can be hooked up directly to these data center complexes.

All of these are different ways that we can look to capture this significant demand and essentially not be restricted by the growth of the grid that is not going to keep up with the opportunity set we see in front of us.

Our next question comes from Dean Wilkinson with CIBC.

Congrats, Connor and Bruce. Just want to circle back on credit overall. I mean there's been concerns around private credit, I guess, going back to September of last year. Can you comment just on what you're seeing in credit within the portfolio, a general view and maybe a comment on some of the redemptions that you're seeing in the industry in the private wealth strategies.

So the market demand for credit continues to be very robust, and it's driven by the same drivers we're seeing across our equity business, huge capital requirements to build out assets around key themes of energy and digitalization and deglobalization. And maybe to dive into what we're seeing, we continue to see very strong demand and attractive spreads in real asset and asset-backed lending where, quite frankly, demand continues to outweigh supply. And we expect that dynamic to continue going forward.

We are seeing incredibly tight spreads in select pockets of more commoditized segments of the market. And while that subset specific, some uncertainty in this space is significantly increasing the pipeline for our opportunistic credit business, which we have seen increase its activity over the last couple of months. In terms of credit flows, you're absolutely right. Across the market, there were modest increases in retail redemptions or wealth redemptions late last year. For us, these were very modest and very manageable. But what they shouldn't overshadow is on the institutional side, we're still seeing very robust inflows into credit, especially those products that are well positioned to outperform in this market.

Our next question comes from Dan Fannon with Jefferies.

Just wanted to follow up on just the outlook for wealth flows. You've obviously had very good momentum exiting 2025. Can you talk about your product road map as you look into 2026 and beyond as well as just the continued momentum?

So 2025, our growth in the wealth channel was a little bit north of 40%, 4-0 percent. We expect that to continue in 2026, particularly on the back of a number of new products we launched in the space at the end of the last year, notably in the credit and private equity segments. And those are seeing great early receptions. In terms of our outlook for the business, we're going to continue to build incrementally. This is an amazing opportunity in terms of the scale, the potential scale for our business. And we absolutely intend to capture it, but we want to go about doing it the right way. We're focusing, first and foremost, on getting the right products on the right platforms. Here, we're having an incredible amount of success.

Secondly, we're very focused on raising prudent amounts of capital to ensure that through these wealth products, we deliver the same strong and consistent returns that have defined our business for years. We feel that is the right way to build this business over time so we can lead in this space the same way we lead in the institutional space. And it's clearly not restricting our growth taking this approach given our 40% plus CAGRs. And then maybe lastly, the one thing we are doing is taking some incremental steps in 2026, really around brand awareness for Brookfield and also filling out our product offering, most notably on the credit side.

Our next question comes from Crispin Love with Piper Sandler.

First, congratulations, Connor. And then just on my question, FRE margins have expanded nicely in recent quarters to 60% plus. Can you share your views on the margin trajectory from here? How do you feel about sustainability of current margins, potential for further expansion just given some of the tailwinds that you've discussed for the business broadly? Just any puts and takes there would be great.

Sure. So I can describe that. I mean you're absolutely right about the margins and the operating leverage that we've seen play out. As a reminder, when we close the 26% of Oaktree, that will have a shift in our margins just because of where they operate and the cyclicality of their business. But the other thing that we mentioned that we're going to do, which is really just a onetime presentation change is take our partner managers, which have continued to grow as a business and our share has grown, which is reflecting more into our numbers, we're going to actually bifurcate their revenues and expenses, the portion that we own, whereas today, we include only their FRE.

So this change won't impact FRE or DE, but it will increase the reported revenues and costs as a result, impact the margins. Now the reason why we've always just shown their FRE is because they were a small part of the business. But as mentioned, they continue to grow, and we're quite excited about that. So we want to provide more transparency around that. And this should also help investors better understand the components of our credit business specifically as well as the underlying fee rates for our credit strategies.

But importantly, to get to really the crux of your question, the margins for our business will continue to improve because of that operating leverage that's built in across all of our platforms. In fact, when we look forward, every -- especially for 2026, every business should have stronger margins, except maybe real estate only because they don't have the catch-up fees. So we're quite excited about the business in general for 2026 and onwards, and that will be reflected in the margins.

Our next question comes from Mario Saric with Scotiabank.

I just had a quick follow-on question with respect to the emerging pursuit of the individual investor and wealth channel. I think, Connor, you highlighted 3 initiatives for '26 on that front, including brand awareness. I'm just thinking from a cultural perspective, Brookfield's culture has been very consistent, very strong, excellent institutional culture to make Brookfield where it is today. How do you balance the drive for brand awareness on the private kind of individual wealth side with maintaining kind of that institutional culture that you've had historically?

Our culture is one of our biggest and most valuable assets, and it is not going to change going forward. It guides how we operate, how we partner with our clients, how we're disciplined and take a long-term view to investing. When we speak about increasing brand awareness, one of the important things is it's about increasing the awareness of the Brookfield brand, which, to your point, is very distinct. It speaks to stability. It speaks to discipline. It speaks to long-term focus. And that's all we will be reinforcing. One thing we're incredibly proud of at Brookfield is everybody represents the brand. And that's really what we're going to look to reinforce. As we do increase the brand awareness, it's just ensuring that people know who Brookfield is and what we stand for.

Our next question comes from Jaeme Gloyn with National Bank.

Congrats as well, Connor. On the private wealth market as that continues to evolve and access for private markets and 401(k)s expands, how should we be thinking about the potential impact on BAM's fee-bearing capital and FRE? And what do you need to have happen for that to become material?

So when we think about the large opportunity in the future for the individual investor, we think about that in 3 parts: the retail and high net worth channel, the insurance policy and annuity holder and the 401(k) and retiree benefit market. In that third bucket, we do expect the opportunity set to be very, very large, but we expect it to grow incrementally over time. In terms of what's happening in the near term, we do expect guidance to come later this week, which we expect will be highly supportive of alternatives in 401(k)s and will include -- we expect initiatives that will create catalysts for increased reviews of alternatives within these portfolios. And we are very well positioned to capture these opportunities in the DC channel.

We are already working with leading target date fund managers to provide the best of Brookfield strategies to improve participant plan outcomes. We've been focusing on professionally managed portfolios and target date funds where we can co-develop sleeves and solutions with the existing providers of those products. And in that regard, we're very confident that we can demonstrate value for cost while meeting the regulatory requirements. And that really goes to the strength, track record and durability of our private investment strategies.

Maybe the last point just on this market because we're very excited about it. From all stakeholders, we continue to receive very positive feedback that our focus on high-quality downside protected real assets that provide cash yield and inflation protection is uniquely suited to the objectives of these plan participants. And that's what we'll be looking to offer on an increasing basis going forward.

Our next question comes from Kenneth Worthington with JPMorgan.

Connor, congratulations. My question is for Hadley. There was a more meaningful increase in the long-term fund and co-investment revenue in both the transition and private equity businesses this quarter. For transition, it went from like $5 million to $28 million sequentially. In private equity, the revenue went from $44 million to $62 million sequentially. What drove the jumps here? And to what extent is this sequential jump in revenue this quarter sustainable at these levels? Or were there one-offs that we should be accounting for?

So one thing to keep in mind, and we've mentioned this for PE is Pinegrove, and they had a great first fund with a final close of $2.2 billion, and that had catch-up fees. So that's what you're seeing there. So there's some catch-up fees there, but that is capital that's now going to be earning FRE going forward. So very exciting outcome there. On the transition side, what you're seeing there is one of our partners that we have in terms of some revenues that they generated from there. That is probably a little bit more one-off generated that the overall business is performing quite well, but they did have a solid wind. And so that's something that you're seeing flow through there.

Our next question comes from Sohrab Movahedi with BMO Capital Markets.

Congrats to Connor as well. Hadley, can you just give us a sense of how you arrived at the 15% div bump and whether or not you expect to be below 100% payout ratio next year?

Yes. So look, we do a lot of forecasting and analysis around our business by each business, tops down and bottoms up. So this is a thorough analysis that we conduct. It does make it a little bit easier when we've got $200 million of FRE coming in for 2026 that we can forecast with incredible certainty around Oaktree and Just Group. So that's quite supportive. And when we think about our payout ratio over time, as you know, we target around the 95%. And so that is the goal that we're going to be leading into, especially as we get in carry, which is the second leg of our growth. So what gives us that confidence around 15% is the analysis that we performed and then the overall long-term goal from that perspective.

That concludes today's question-and-answer session. I'd like to turn the call back to Jason Fooks for closing remarks.

Okay. Great. If anyone should have any additional questions on today's release, please feel free to contact me directly, and thank you, everyone, for joining us.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Okay. Thank you. Good morning, everyone. It's my pleasure to introduce Bruce Flatt, CEO and Chair of the Board of Brookfield. Over the last several years, the Brookfield ecosystem has evolved into a leading global alternative asset manager, with over $580 billion in fee-bearing capital across a wide range of strategies. The firm also operates a fast-growing insurance business and annuities business on the other side of the house now under BN, with deep expertise across the investment landscape. We look forward to hearing Bruce's perspectives on the environment, obviously, what's in store for Brookfield over the next year and beyond. So thank you for being here. It's always great to spend some time with you at this time of the year as we turn the page on to 2026. So thanks for doing it.

Thanks for having me.

So I wanted to start with a bit of a bigger picture question for you guys, really on the back of some of the targets you announced at the Investor Day a few months ago, which effectively calls for a doubling of the business. And you have lots going on. You're on your way there. 2025 was a strong start in terms of the fundraising targets that you laid out. But as you look out into 2026, talk to us about the fundraising environment and how you expect that year to shape up for Brookfield from a fundraising perspective?

So I think probably the most important thing for us is we have a very diversified business. We have a big real estate business, a big infrastructure business, big renewables business, a big credit business, a big private equity business. And each of those is spawning other strategies as we go. I think next year; we have 50 funds in the market. So this is a broad and diversified franchise, which just means that no one single business is so important to the franchise.

And secondly, the asset management business, when it was spun off is largely fees today, and it grows into carry over 5, 7, 10 years.

Sure.

But today, it's largely just -- it's just fee-bearing capital that's generating fees not influenced by carry.

And as a result of that, the resiliency of the business is extremely strong. And we just haven't had -- maybe because of the diversification and because of the operations mentality and because of the quality of the type of business we have, we just haven't had issues raising money. We raised $120 billion last year -- in 2024, I think.

Yes.

We've raised $100 billion this year. I think next year will be larger because we have a lot of our big funds in the market next year coming or starting now and through into next year. So we just haven't had the issues with fundraising that a lot of people have had.

When -- I think the issues have been if you're in a single industry or an industry that got hit a lot, like clearly, some of those issues affected us. But when you have a broad, highly diversified and highly global business, we just get the benefits from that.

Yes. Let's spend a couple of minutes on some of the bigger initiatives' you guys have coming up. Obviously, AI, all things AI, AI infrastructure has been incredibly topical for the space, but really for you guys as one of the leaders in the space.

You've actually described AI infrastructure as a multitrillion dollar capital formation cycle. You've been executing against that opportunity well with obviously a number of partnerships. You're in the middle of raising your large AI infrastructure program as well. You talked about that space being $100 billion of assets to Brookfield at some point of time potentially.

So what are the priorities into next year as you're building out this ecosystem, how the fundraising dialogues coming along as you're embarking on this kind of next leg of your journey?

So maybe the first thing just to step back and identify is that the single number one thing that's important for artificial intelligence as we build out the backbone of intelligence is power. The biggest gaping hole in virtually every single country in the world, but in particular, in the United States is the fact that we do not have enough power to power AI.

So we're -- we happen to be extremely lucky that we've been in the power business for our whole -- in fact, the whole company's history, but in particular, in the last 40 years. And we're the largest builder, operator, owner of power plants in the world in many different types of technologies. So that's the most important thing.

Second, what's going on now is that the fundamental backbone layer of artificial intelligence is being laid down. And the way I would refer to it is, in years past, we laid down railways, and we put down roads and we put down water systems, and we put down in the last 25 years, fiber and mobile networks. And now what's happening is we're laying down this artificial intelligence network. And countries need to have artificial intelligence networks, or their companies and their systems of government will fall behind.

Right.

So every single country in the world and every hyperscaler who are leading this are looking to build artificial intelligence infrastructure to warehouse compute capacity for their companies and for their countries.

And what's probably the most important thing because leave aside the stock market. There's only a certain number of stocks out there. Therefore, when money tries to push towards one set of stocks, the PE multiples go up.

Right.

But if you look at the fundamentals of what we do is we just build backbone infrastructure for companies or countries. So we've done transactions and we provide them power or we provide them compute capacity or data centers. We've done transactions with Microsoft and Google and Sweden and France and Qatar this morning, and we continue to build out in the United States. And all of that is really just the necessary backbone.

So I think probably the most important thing to leave you and everyone with is no matter what happens in stock markets, this artificial intelligence backbone build-out is very large, will be going on for 15 years. And those that have the operating capability to lay down the fiber we'll be doing it for 15 years and the counterparty contracts in it are extremely good. And if you know what you're doing, very few mistakes will be made. And that's probably the most important thing.

So this -- back to your original question is how big is this going to be? It's going to be very, very large. And it affects everything. It affects our power business because we can't build enough.

Right.

It affects our infrastructure business because all data centers and all types of infrastructure are getting affected by it. We set up a separate fund up because we didn't want to engulf our infrastructure fund with artificial intelligence only. Therefore, we're -- we have a separate fund for that. It affects our real estate fund because many of our industrial sites that we have today, we're reverting away from industrial logistics to data centers if we have power and if we can locate the building.

So it's affecting all of these businesses. And of course, when these conditions exist, one has to be very careful, and I know that we will be and some others will be and some will not be. And they'll make mistakes along the way like always.

Yes. So just maybe double-clicking on that, given your exposure to this ecosystem and given all the headline concerns that we've seen, especially in a couple of months around the AI theme and potentially areas of overheating, how do you make sure you don't make some of those mistakes? So what areas you're avoiding and where are you leaning in?

I would just say that we've been building backbone infrastructure for the global best in various forms for our whole existence. And this backbone infrastructure is no different, the technology may be different. The companies or countries you're dealing with may be different. In fact, difference number one is they're all better credits than we used to deal with when we dealt with mining companies or forest companies or businesses that rented our real estate. But this is actually the same thing. This is really just a real estate business.

We build things, rent them to people, take credit risk and make sure that we have long enough contracts to get all our money back and a return on that capital. It's really -- this is really simple. People will make mistakes, but it's really simple as the fundamental basis of it. And the good news is, is we have huge operating teams in all of these places to build out this infrastructure, but people will make mistakes when they don't know what they're doing on construction and building.

Yes.

They don't have financing properly put in place; they make missteps on contracting with counterparties. Those are the 3 risks. But they're all the same 3 risks that have always been in place, but every type of infrastructure in the world. And I think the most important thing here is this is just for what we do anyway. Like we're not a technology provider, and we're not intending to be. We're just behind the scenes providing infrastructure like we always have.

Yes. So back to your original point where there's really not enough capital in the world today to support it. It's certainly not enough government capital to really support this. So when you think about your initial leg into this theme, you have the big AI fund that you're fundraising today. What other vehicles? What are the products? What are the strategies you think could evolve around that? And when I think about Brookfield's history of building businesses, transition business is one of the examples, more recent examples. How big do you think the AI infrastructure business will be for you guys over the next several years?

First point is there is enough money in the world to fund this because there's $60 trillion in sovereign institutional plans around the world. There's $40 trillion, $50 trillion of retail money that's out there. So there's $100 trillion. The funding, and we're talking $10 trillion. What you need to do, it all sounds like small numbers.

But what you need to do is figure out what's lacking is people to convert the $100 trillion into the $10 trillion. You need owner operators that know what they're doing and have the trust of countries and hyperscalers to be able to do that. That's really what it is. It's the skilled intermediaries to build infrastructure and raise money from that $100 trillion to build out the $10 trillion. And so there is enough money. It's just -- we just have to figure that out.

And I would say what's important today is that the hyperscalers don't have enough money on their balance sheets. They're spending, I think it's quoted this year, $600 billion. It's estimated at $500 billion to $600 billion a year, over the next 5, 7, 10 years. That's a lot of money even for $3 trillion to $5 trillion companies if they keep stacking it on the balance sheet. So they need access to groups like us that can convert the $100 trillion into investments that support their business and infrastructure. And the bottom line is that's what we've been doing in various businesses we have for many, many decades.

Great. Okay. Let's pivot away from AI for a minute. To your point earlier, Brookfield has a really diverse set of businesses across a number of different verticals. Where else are you finding interesting deployment opportunity? It feels like the pace of deployment has steadily been picking up. What else is interesting for you guys in terms of capital deployment over the next 12 to 18 months?

So I think in '25 to date, we invested $110 billion across the business, and it's pretty well -- it's pretty well diversified. We've done a lot of private equity businesses. We've put a lot of money into real estate. We just announced a transaction in Australia, buying storage for $2.5 billion with GIC as a partner. We've done a lot of infrastructure deals, renewable power deals. We just did the deal with Westinghouse on nuclear. So it's pretty broad.

And I'd say that's the success of our business is keep broadening the business and over time, keep growing it, but never concentrated in any one area because when you're building a business for the next 20, 30, 40, 50 years, being diversified helps. And it means that we're never subject to the markets. And if things are valued too high in one sector, we can just allocate capital somewhere else.

Yes. The other side of that coin is obviously monetization activity. It's been a place where the industry has sort of struggled for the last couple of years. It's really nice to see finally turning the corner in 2025. It's certainly been a -- it's been a better year for realizations for the space. It's been a better year for you guys as well. I think over $75 billion of sales year-to-date through Q3. It's really across the franchise.

How should investors think about Brookfield's monetization outlook in 2026? And then within that, maybe talk a little bit about what are the segments or the product categories that are likely to be the biggest sellers?

One never knows what the future brings, but fundamental conditions out there are favorable towards continued monetizations and increasing monetizations for groups.

Now still, there are some groups that are having difficulties because it's the type of businesses that they own. And I would say, in general, over the past 3, 4 years when monetizations were less, we did much, much better than average because most of the things we buy are cash flowing, high-quality, long-term businesses, which we've been able to sell. And as you said, we sold $75 billion of investments this year.

And if I took it in general, it was operating businesses, even in real estate, it was operating businesses, which were very high quality that had teams to grow into the future. And largely, we did better monetizing outside the United States than inside the United States. With interest rates now coming down in the U.S. and with capital markets back, I'd say, probably as efficient as they've ever been, you're going to see a lot of more monetizations in the United States, and that's good for us, but it's also good for the industry in general.

And the quantum, again, with the caveat that nobody has a crystal ball, but is the expectation '26 to be better than '25, so?

Yes, probably. I would say for us; it all just depends on the life cycle of different investments. We're not selling things just to sell. But generally, we sell $75 billion to $100 billion a year. Generally, we invest $100 billion to $125 billion a year. That keeps growing all the time as our funds get bigger and broader. But I think $75 billion to $100 billion next year is probably a good number.

Great. Okay. All right. Let's pivot a little bit. I would love to spend some time on insurance and BWS, which is obviously part of Brookfield, the corporation, BN. It's been growing rapidly. You guys obviously established this platform as an investment-led insurance organization. It's really important to BN. It's really important to BAM. It's obviously very important to shareholders across probably both sides of that aisle.

So when you think about 2026 and beyond, can you talk about what are some of the levers you're pulling on to sustain the growth, number one? And number two, and perhaps more importantly, to continue to deliver 15-plus percent type of ROEs?

So for Brookfield Asset Management, I guess the simple point for it is it doesn't take exposure to insurance risk. It manages assets for institutional clients, retail clients and insurance businesses. And the largest client it has is Brookfield Corporation.

Increasingly, it will become even a larger client because 4 or 5 years ago, we took $25 billion of the equity capital we had and we stuck it into an insurance business, into the equity of an insurance business. And now it's almost -- it will be almost $200 billion of assets shortly. And a lot of that capital is getting allocated in various strategies at Brookfield Asset Management. And we can't think of a better group to manage our capital.

So I'd say that's what's important for Brookfield Asset Management. At the parent company, our goal is to continue to seek financial services businesses that are -- can both earn us a very good long-term return on capital. But in addition, are symbiotic with the businesses that we have today. So insurance was super important to us because we thought we could invest into at a point in time, build the skills, make the early mistakes you always make when you're starting out in a business by getting into it at a point which was very fortuitous because interest rates were 0.

Yes.

But the -- we thought it was a good business in itself, but it's an excellent business for the combined group because it will be a $500 billion business someday and all of that capital gets allocated to our asset management arm. And so it's -- there's a double win when we can do that. And increasingly, we continue to -- like really, our goal is seek capital with as little risk as possible on the liability side of the balance sheet and try to out-earn to earn excess returns by investing wisely.

Right.

And that's always what we've done for our own balance sheet. That's always what we've done for our clients, and now we're just doing that for our insurance company is -- but we're not trying to take insurance risk and why we say it's an investment-led insurance company. The difference is that we're not trying to take insurance risk to make money. What we're trying to do is minimize insurance risk receive float and invest wisely. And that's -- it's just -- it's a different model that -- there are some that are like this, but it's different than most monoline insurance companies.

Right. So given, I guess, how important the investment capabilities are going to be for BWS to sustain the sort of 15% ROE, maybe even grow it over time. Talk to us a little bit about how the asset side of the balance sheet could evolve versus where it is today? What runway you see for utilizing more of Brookfield's asset management capabilities on the BWS balance sheet?

So our strategy so far has been as opposed to running an insurance company, which just invests into traditional -- in traditional ways into both liquid and private credit. Our strategy has largely been a barbell approach not unlike what Berkshire Hathaway has always done, which is hold very large amounts of cash, which we hold today. And that allows you to put significant money into equity strategies, which earn much higher returns.

So don't try to earn 7%, earn 3% in 14%. And if you can earn 3% in 14%, that averages to 7%. But in our view, you can; a, earn a higher return on average if you do your job right; but b, you can take less risk because of the things that we know that we're doing. And the advantage that we have is that the strategies that are the underpinning of Brookfield Asset Management are long-term yielding cash flow type assets in renewables, infrastructure, real estate that are very well treated and earn excellent low risk returns in an insurance company.

Got you. Another one on insurance topic for you, property and casualty. So I know when we talk about BWS, mostly is the annuities business. It's mostly the business that's been quite aligned with alternative asset managers when we look at a lot of your peers that are kind of participating in the same. You do have a small P&C business. What sort of strategy behind P&C? Is that a -- is it an opportunity? Do you see space to grow organically or maybe even via M&A? And how does that play into the symbiotic relationship with the asset manager because that's quite a different type of risk and probably different asset management strategy as well.

So the property and casualty business is a very diverse business, and most people think of it as we're underwriting hurricanes. That's not generally where we want to put our capital longer term because you're making risk and taking insurance risk.

Our -- the business is small today. What we'd like to find is a relatively low-risk P&C area where we can become globally dominant and create float to be able to invest into our strategies, in particular, our higher earning equity strategies.

And as an example, we underwrite -- today, we underwrite insurance for real estate construction in New York City. And you might think we -- I hope you think that we have some knowledge to underwrite construction risk insurance in New York City as one of the largest owners of property in the city. So I don't know if that's one that we could take across the U.S. and then take across globally, but it's possible.

And so it's -- we're always trying to use the knowledge we have from our businesses and optimize our capital, but earn low risk -- take low risk and earn a reasonable return by doing it. But find areas where we have something special. I think we have something special in that. So we've been now under -- we're now underwriting warehouses. We're a huge owner of logistics warehouses across the United States and globally. So we're now writing insurance for warehouses. We're writing insurance for renewable facilities. Of course, we know how to run renewable facilities and know how to replace it and are one of the largest insurers on the other side.

Yes.

So we know exactly what we're paying. So we're trying to figure out -- we may never find one or we're going to find an amazing area where we can be a globally dominant player where we have more information than anyone else, and therefore, we can take risk that nobody else can. And then if we can do that, the goal is -- sorry, the goal is just take small amounts of risk on the liability side, create float to be able to allocate to our asset strategies.

Sure, sure. And if you don't find something like that inorganically, is there appetite to just write that kind of business organically and just kind of chug along and make it somewhat additive to the whole ecosystem?

Yes. I -- look, maybe we'll find one to buy. I don't know. In the absence of that, we'll just keep growing it organically. In the absence of that, we won't do it.

Right.

Like the fact is that we have many things like that, that grow organically. Sometimes we find acquisitions. If we can't find it and it doesn't work, we'll shut it down.

Yes.

So it's not -- these are all options. What our goal is how do we find low-risk float to be able to invest into using our investment skills to earn a higher return than we're paying on the float.

Yes.

And that's the simple strategy of BN. And Brookfield Asset Management is just there every day trying to put the money to work.

Great. Okay. Let's go back to Brookfield Asset Management discussion for a couple of minutes. I would love to get your thoughts on private credit. Obviously, been super topical for the last couple of months. It's your largest business. It accounts for about 1/3 of Brookfield's asset management, management fees.

Now a lot of the concerns in the market have really been surrounding direct lending and some of the more levered part of the ecosystem. You guys actually don't have a whole lot of exposure there. But when you kind of zoom out and when you think about the multi-asset credit platform that you've built, what are some of the more attractive areas to deploy capital, number one? And how do you think about that platform growing over the next few years?

So again, it's important, but it's not everything. To us, we're highly diversified. So that's, I guess, the first point.

Second is our -- we spent the last 7, 8 years putting -- knitting together both organically within Brookfield and with a number of partner manager partnerships. We've been knitting together really a highly opportunistic credit business, which is our Oaktree franchise, alongside asset-backed finance, which we think will continue and continue to grow on the private side. So when you think about it, it's funding of real estate, it's funding of infrastructure, it's funding of airplanes. It's funding of all of asset-backed finance. And our goal is to become the best asset-backed finance lender out there.

And again, the reason is we think we have more information than most people who do this. Therefore, we should be able to earn either higher returns or take lower risk and earn the same returns. And so we're continuing to grow that business. We're quite excited about it. And to the actual -- just the industry of private credit, I would say the private credit has caught a lot of headlines recently. I think everyone needs to just step back and consider the credit industry, of which Goldman Sachs participates in as well.

Last time I checked. Yes.

And the credit industry right now, there aren't that many defaults. Defaults are very low. Credit is generally pretty strong. And you haven't seen a lot of issues. Now there's a few that came about that have been headlines, but this industry is not going away. There's going to be liquid credit and there's going to be private credit.

Private credit is really what banks did for years, and a lot of that got pushed off the balance sheet to be able to ensure that they optimize their capital ratios. And all private credit is we're accessing those clients we have over here with the $100 trillion to be able to put their money directly into loans. And our specialty is asset-backed finance and opportunistic, but everyone else -- others will have their own specialties within each area they're in.

Great. All right. Another important area I wanted to make sure we talk about is real estate. Again, not the whole franchise, as you pointed out, you guys a diversified platform, but it's an important one. And it's important for both for a variety of reasons, right? It's important for BN on one end, and it's important for them on the other one.

So over the last few quarters, you've been pointing out signs of recovery, both on the fundamental side of the picture, but also the capital markets healing and hopefully, the lower rate environment will make it easier to start to sort of transact in the real estate space as well.

So as you look out into 2026, maybe talk to us a little bit about your plans for further monetization's out of the BN portfolio and sort of lessons learned so far in terms of the appetite for the assets that you're bringing in the market? And then on the fundraising side, at what point do you see healthier transaction activity translate into a more favorable fundraising outlook for real estate strategies?

So on fundraising, we just raised our big fund. I think it ended at $17.5 billion, if I'm not wrong, and circa that number. And therefore, there's no lack of money out there for good sponsors who have good track records. That's point number one.

I'd say the -- what happens in recoveries in this -- every cycle is different, especially in real estate. Every business, it's different, but real estate, in particular, every cycle is different. And this one is really weird because fundamentals are actually very, very strong. The issues have been in capital markets and some markets in the world, I'll say. But capital markets got affected because of the psyche of people that real estate was bad because everyone went home and didn't go to the office and everyone didn't shop anymore, which both of those have been debunked, I think, would be the word to use.

And so the fundamentals are actually very, very strong. In fact, I was reflecting this morning, we built 5 office buildings during COVID, 5 globally, Dubai -- 1 in Dubai, 2 in London, 2 in New York, either got renovated or built, 3 in New York. They are 100% full today at 50% higher rents than pre-COVID and the highest rents ever signed in leases in each of those cities. That's an amazing fact. That's the worst business we have, let alone storage, multifamily, et cetera, et cetera.

What the issue was is there was this psyche at the bottom of the market, compounded with interest rates went up fast and therefore, affected the capital structures of many people, many groups' assets. And that was really the effect. And that's sorting itself out now. And capital markets are coming back, transaction activity is coming back. All -- most assets are financeable today like in a normal fashion.

And what that leads to is once you can finance assets because real estate can't be purchased without financing, once you can finance assets, sales start to come back. And you're seeing that today across the world. The U.S. was probably the heart of the most affected because interest rates went up the most and the fastest. But as interest rates come down here, you're going to see real estate come back even more.

Great. Perfect. I think we'll leave it there. Bruce, thank you very much for joining us again this year. See you next year, hopefully, as well.

Thank you.

Yes.

Good day, and thank you for standing by. Welcome to the Brookfield Asset Management Third Quarter 2025 Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Jason Fooks, Managing Director, Investor Relations. Please go ahead.

Thank you for joining us today for Brookfield Asset Management's earnings call for the third quarter of 2025. On the call today, we have Bruce Flatt, our Chief Executive Officer; Connor Teskey, our President; and Hadley Peer Marshall, our Chief Financial Officer.

Before we begin, I'd like to remind you that in today's comments, including in responding to questions and in discussing new initiatives and our financial and operating performance, we may make forward-looking statements, including forward-looking statements within the meaning of applicable U.S. and Canadian securities laws. These statements reflect predictions of future events and trends, and do not relate to historic events. They're subject to known and unknown risks and future events and results may differ materially from these statements. For further information on these risks and their potential impact on our company, please see our filings with the securities regulators in the U.S. and Canada, and the information available on our website.

Let me quickly run through the agenda for today's call. Bruce will begin with an overview of the quarter and the market environment. Connor will walk through key growth initiatives across each of our businesses. And finally, Hadley will discuss our financial results, operating results and balance sheet. After our formal remarks, we'll open the line for questions. [Operator Instructions]

One last item to mention is that the shareholder letter, which this quarter will be a single letter covering the biggest themes across Brookfield will be published Thursday morning alongside Brookfield Corporation's earnings.

And with that, I'll turn the call over to Bruce.

Thank you, Jason, and welcome everyone. We are pleased to report another strong quarter for our business, marked by record fundraising, earnings deployment and monetization. Quarterly fee-related earnings grew 17% over the past year to $754 million. Distributable earnings grew 7% to $661 million, and fee-bearing capital reached $581 billion, an 8% increase year-over-year, all driven by our strongest fundraising period ever. These results reflect the strength of our franchise and the benefits of our global scale diversification and long-term client partnerships.

Our business continues to benefit from the major themes shaping the global economy. The acceleration of AI and data digital infrastructure, the accelerating demand for electricity and the improving strength in the real estate markets. Each of these themes plays directly to our strength as an owner, operator and investor in real assets and together, they are fueling multiyear growth across the business.

In the third quarter, we raised $30 billion, bringing total inflows over the past 12 months to more than $100 billion. This was our highest pace of organic fundraising ever. Our fundraising in the quarter came from strong closes for two of our flagship funds, and increasing capital from our comp to entry funds and partner manager strategies. Our flagship global transition fund, our venture-focused pine growth strategy and our music royalties focused primary wave business, all had closes recently and each exceeded its target.

Turning to the broader market environment. Transaction conditions have improved steadily throughout the year. The global economy remains resilient despite trade and tariff uncertainty. Corporate earnings are healthy. Capital markets are liquid, and the Federal Reserve has begun lowering rates. This is giving the market more confidence and leading to transaction activity significantly increasing.

Global M&A volumes are up nearly 25% year-over-year. The third quarter alone saw $1 trillion of announced deals, the highest level since 2021. This resurgence in large cap M&A and a record backlog of sponsor-owned assets are therefore fueling activity. This is creating a good environment for both deployment and also asset sales. We remained active in this environment, deploying large-scale capital at attractive entry points where operating expertise provides us a competitive edge, while also crystallizing value from our mature investments at attractive returns. Our ability to recycle capital efficiently, returning proceeds to clients while raising new funds for the next generation of opportunities is fundamental to how we compound value over time and continue to consistently grow our business.

Another important milestone was our recently announced agreement to acquire the remaining 26% in Oaktree Capital Management. As you know, one of the most respected names in global credit investing. When we partnered with Oaktree 6 years ago, the goal was to combine our global scale and real asset expertise with Oaktree's deep credit experience and value-oriented culture. That partnership exceeded expectations, enabling the rapid expansion of our credit platform, supporting the launch of Brookfield Wealth Solutions, and driving a 75% increase in Oaktree's asset base. Bringing Oaktree fully into Brookfield is the next natural step. It combines the scale and reach of our nearly $350 billion credit platform, enables deeper collaboration across our businesses from origination and underwriting distribution and analytics. Most importantly, it enhances our ability to deliver the full breadth of Brookfield's credit capabilities to clients.

Turning briefly to overall credit markets. Liquidity remains ample, and spreads in both public and private markets are near historically tight levels. Certain pockets of private credit such as middle market, direct lending and sponsor-backed leverage have become more commoditized as large amounts of capital [indiscernible] for a small pool of attractive deals. We've been disciplined in avoiding these segments of the market and instead of focused on attractive risk-adjusted return opportunities where we have strong competitive advantage. Such as infrastructure, renewable power, asset-based finance strategies and opportunistic credit.

Across our business, our ability to raise large scale capital deployed strategically across the mega trends, and deliver risk-adjusted returns to trusted clients continue to drive record results. Our balance sheet is extremely solid. Our margins are expanding and double-digit growth trajectory is sustainable. With record fundraising momentum, deep deployment pipelines and healthy monetization activity across our platforms, the foundations we've built over the past years have set the stage for an even stronger 2026.

With that, I'll turn the call over to Connor, and thank you for [ the ] results.

Thank you, and good morning, everyone. As Bruce mentioned, this past year was the most active period in our history across fundraising, deployment and monetizations. Our infrastructure and renewable power franchise is one example of this momentum. As over the past 12 months, we've raised $30 billion, deployed $30 billion and monetized over $10 billion at approximately 20% returns, demonstrating strength, scale, and consistency of our platform.

Our franchise is the largest and most established globally, serving as a cornerstone of our business and a key driver of long-term growth. Deployment is centered around sizable investments across all sectors, geographies and positions in the capital structure, including [ by utilities ], from a controlling equity investment for an industrial gas business in South Korea, and a minority equity investment in the United States for Duke Energy Florida across transportation, via structured equity investment in a Danish port, across data with a mezzanine financing for a European stabilized data center portfolio, and across renewables, by an equity investment in a South American hydro platform, and to take private of a global renewable developer concentrated in France and Australia. And finally, across our first AI infrastructure deal with [ Bloom Energy ], which we committed to this past quarter.

AI promises unprecedented improvements in productivity but it is simultaneously driving an unprecedented demand for infrastructure, from data centers and power generation to compute capacity and cooling technologies. We estimate that AI-related infrastructure investments will exceed $7 trillion over the next decade. Brookfield's unique position, owning and operating across the full energy and digital infrastructure value chain gives us a tremendous advantage in capturing this opportunity.

On the back of this generational investment opportunity, we are launching our AI infrastructure fund. A first-of-its-kind strategy that pulls together our global relationships with hyperscalers, our expertise in real estate, and our leading position in infrastructure and energy into one strategy. With the goal of being the partner of choice to leading corporates, governments and other stakeholders looking for integrated solutions that combine development capability, operating expertise and large-scale capital. We are also preparing to launch our flagship infrastructure fund, which is our largest strategy at Brookfield early next year.

Looking ahead, we expect to have all of our infrastructure strategies in the market in 2026, including our flagship infrastructure fund, our AI infrastructure fund, our mezzanine debt strategy, our open-ended super core and private wealth strategies. And in the back half of the year, we expect to launch the second vintage of our [ Infrastructured ] Solutions Fund. As a result, despite raising $30 billion over the last 12 months, we expect next year will be even bigger.

Within renewable power, this quarter, we also held the final close of the second vintage of our global transition flagship at $20 billion, making it $5 billion larger than its predecessor and the largest private fund ever dedicated to the global energy transition. The success of this fund raise also reinforces the scale, credibility and momentum of our energy franchise. Since launching our first ever transition strategy less than 5 years ago, our platform now produces over $400 million of annual fee revenues.

More important, we are investing into an environment that is highly attractive and increasingly constructive for us. Global demand for electricity is increasing at an unprecedented rate. This is the result of the ongoing trend of electrification as large sectors like industrials and transportation are increasingly electrifying. And this growth has now been supercharged in recent years by the surge in electricity demand from data centers to support cloud and AI growth around the world. Data centers are becoming some of the largest single consumers of electricity and the scale of new generation required to support them is immense.

Each of these forces is contributing to a structural shortage of generation capacity. To put it plainly, the world needs more power, and it needs it faster than ever before. Our business is uniquely designed to meet this challenge. We are positioned to provide that any and all power solutions that will be necessary to meet this need. Our leading renewable power business can provide the low-cost wind and solar solutions needed to meet this increasing demand. Renewables continued to see significant growth due to their low-cost position, but also their ability to win on speed of deployment and energy security, as they do not rely on imported fuels.

And in a world where baseload power and grid stability are increasingly important, in addition to renewables, we have leading platforms in hydro, nuclear and energy storage, all of which play a critical and growing role for electricity grids, both independently and as complement alongside natural gas and renewables in the energy mix.

In this regard, we are very pleased to announce, last week, a landmark partnership with the U.S. government to construct $80 billion of new nuclear power reactors using [ Westinghouse ] technology. The agreement reestablishes the United States as a global leader in nuclear energy and positions Brookfield at the center of a historic build-out of clean baseload power, creating one of the most compelling growth opportunities across our transition platform, and potentially one of the most successful investments in Brookfield's history.

Within our private equity business, we recently launched the [ seventh vintage ] of our flagship private equity strategy, which focuses on essential service businesses that form the backbone of the global economy. These include industrial, business services and infrastructure adjacent companies where we can apply our operational expertise to drive efficiency, productivity and scale. Early investor feedback for this strategy reflects a growing recognition that value creation in the current environment is driven less by multiple expansion or financial engineering, and more by hands-on operational improvement, an approach that has long defined Brookfield's success.

While many traditional buyout strategies are navigating slower fundraising cycles, we continue to be differentiated. We have consistently returned capital at strong returns from preceding vintages, and are seeing strong demand for our differentiated, operationally focused model. We expect this next vintage to be our largest private equity fund ever.

We are also bringing our private equity strategy to the private wealth channel with the recent launch of a new fund structured for individuals. Similar to how we structured our successful private wealth infrastructure fund, this new private equities fund will be able to invest alongside all of our private equity strategies. This means that targeting individual investors in the retirement market does not require us to invest differently, but rather simply package our current investment activity in a different way to meet the growing demand from a new set of clients.

Within real estate, we continue to see strong momentum across our property business. Market conditions have improved meaningfully. Transaction volumes are rising, capital markets are robust and valuations for high-quality assets are firming. We are actively monetizing stabilized assets, selling approximately $23 billion of properties, representing $10 billion of equity value over the past 12 months.

At the same time, it is an excellent point in the cycle to be deploying capital into certain segments of the market, and we have significant dry powder to put to work following the successful close of our latest flagship real estate fund, our largest real estate strategy ever. The combination of limited new supply, recapitalization needs and improving sentiment is creating one of the most attractive investment environments we've seen in years. We are also taking advantage of the constructive financing backdrop to strengthen our long-term holdings, including the $1.3 billion refinancing of 660 Fifth Avenue in Manhattan, part of the over $35 billion of real estate financings we've closed year-to-date.

And finally, on our credit business, we will make a few additional points. We continue to see a large opportunity set to invest in the areas that fit our core competencies. The themes driving our equity businesses will require significant debt capital investment and Brookfield is well suited with its expertise and capital to meet that need. Whether it be in real asset, opportunistic or asset-backed finance.

As we look ahead to the rest of the year and into 2026, we see the market continuing to be strong for our business. Capital markets remain healthy. Liquidity is abundant, and the opportunity set across our businesses continues to expand. The flagship strategies we are launching will continue to anchor our growth while our complementary products, including our AI infrastructure fund, and our rapidly scaling fundraising channels such as wealth and insurance, are diversifying our platform and driving our consistent high-teens growth rates.

The secular forces shaping the global economy, digitalization, decarbonization and deglobalization are the same themes that have guided our strategy for many years. Today, they are accelerating. As these trends converge, Brookfield's global reach, operating depth and access to long-term capital position us well to continue leading the industry.

With that, we'll turn the call over to Hadley to discuss our financial results, record quarterly fundraising and balance sheet positioning.

Thank you, Connor. Today, I'll provide an overview of our third quarter financial results, including additional color around $30 billion of fundraising, our recent M&A activities, and the strategic positioning of our balance sheet.

As previously mentioned, we delivered another record quarter of earnings, driven by strong fundraising, deployment and monetization. Fee-bearing capital increased to $581 billion, up 8% year-over-year. Over the last 12 months, fee-bearing capital inflows totaled $92 billion, of which $73 billion came from fundraising and $19 billion came from deployment of previously uncalled commitments.

In the third quarter, fee-bearing capital grew $18 billion, driven in large part by the final close of the second vintage of our global transition flagship fund and continued strong capital raising and deployment across our complementary strategies. Fee-related earnings were up 17% to $754 million, or $0.46 per share, and distributable earnings were up 7% to $661 million, or $0.41 per share. Distributable earnings growth reflected higher fee-related earnings, partially offset by increased interest expense from the bonds we issued over the past year and lower interest and investment income.

Overall, growth was driven by a record $106 billion raise over the last 12 months and record deployments of nearly $70 billion. This activity has been a major catalyst for our business and we will continue to be active on the deployment front given strong investment opportunities in front of us. The simplicity and consistency of our earnings anchored almost entirely in reoccurring fees, gives us a strong foundation to continue to build from, especially as we continue to further our capital base and launch new strategies. Lastly, our margin in the quarter was 58%, in line with the prior year quarter and 57% over the last 12 months, up 1% from the prior year period.

This margin increase was driven by three offsetting dynamics. First, we continue to acquire a greater portion of our partner managers. These businesses have lower margins, and therefore, while these acquisitions are highly accretive acquisitions, they do weigh a bit on our consolidated margin. Second, Oaktree margins are temporarily lower than usual. At this point in the cycle, Oaktree is returning significant capital, but has not yet called capital for some of its deployment, leading to a natural reduction in fee-related earnings and margins. That trend will reverse as it has in the past given the strong growth in the business. Finally, our margins on our core business continued to increase as expected, more than offsetting these dynamics.

Turning to fundraising. In total, we raised $30 billion of capital in the quarter, bringing our 12-month total to $106 billion. Over 75% of that capital came from complementary strategies, reflecting the breadth strength and diversification of our offerings, which allows for sustained fundraising momentum in addition to our flagship cycle. As for our flagships, we also raised $4 billion for the final close of our second global transition flagship, bringing the strategy size to $20 billion. We continue to raise capital for the [ fifth vintage ] of our flagship real estate strategy, bringing in $1 billion from [ SMA ] regional sleeves and private wealth for the quarter with $17 billion being raised to date for the entire strategy.

Within our Infrastructure business, we raised $3.5 billion, including $800 million for our private wealth infrastructure vehicle, bringing our year-to-date total for the fund to $2.2 billion. In our private equity business, we raised $2.1 billion, including a total of $1.4 billion for 2 inaugural complementary funds, our Middle East private equity fund and our financial infrastructure fund. Subsequent to quarter end, we held a final close for the inaugural Pine Grove opportunistic strategy for $2.5 billion, exceeding its initial target and ranking among the largest first-time venture growth, or secondary fund ever raised.

And finally, on credit, we brought in $16 billion of capital across our funds, insurance and partner manager strategies. This included over $6 billion across our long-term private credit funds, including $800 million for the fourth vintage of our infrastructure mezz credit strategy, which has raised more than $4 billion for its first close. We also raised $5 billion from Brookfield Wealth Solutions, including an SMA agreement with a leading Japanese insurance company, marking its first entry into the Japanese insurance market, which should be the first of more to come.

As we head towards the end of the year, we're confident this will be our best fundraising year ever, and we see that trend continuing with strong momentum for 2026. Broadening the scope to the next 5 years, we recently laid out our plan to double the business by 2030 at our Annual Investor Day hosted in New York. We outlined our plan to continue expanding our product offerings by scaling existing offerings and launching new ones, diversifying our investor base, including across Europe, Asia, middle market and family offices, and on the retail side by launching new private wealth related products. These drivers should enable us to double our business over the next 5 years with fee-related earnings reaching $5.8 billion, distributable earnings reaching $5.9 billion, and fee-bearing capital reaching $1.2 trillion. However, our business plan does not include certain additional growth opportunities such as [ product ] development, M&A associated with our partner managers, and opening up of the 401(k) market opportunity, which gives us multiple paths to outperform and to deliver over 20% annualized earnings growth.

Turning now to our balance sheet. In September, we issued $750 million of new 30-year senior secured notes at a coupon of 6.08%, extending our maturity profile and diversify our funding sources. We also increased the capacity of our revolver by $300 million to provide additional flexibility as our business continues to grow. At quarter end, we had $2.6 billion in liquidity, a strong liquidity position. We use our balance sheet selectively to [indiscernible] new products and support strategic partnerships, such as closing the acquisition of a majority stake in Angel Oak, and signing the acquisition, the remaining 26% of Oaktree that we currently do not own, both of which occurred after the quarter.

On Oaktree, we will invest approximately $1.6 billion to acquire their fee-related earnings, carried interest in certain funds and related partner manager interest. Upon close, it will create a fully integrated leading global credit platform with significant scale and capability. The transaction is expected to close in the first half of 2026, and is subject to customary closing conditions including regulatory approval. Lastly, we declared a quarterly dividend of $0.4375 per share, payable December 31 to shareholders of record as of November 28.

In closing, we are confident in our trajectory towards achieving our long-term growth goals. The breadth of our platform, our operational expertise and our global scale continue to give us a clear advantage. Our strategies align with the strong tailwinds of digitalization, decarbonization and deglobalization, and we're expanding in areas where these trends intersect. AI infrastructure, energy transition and essential real assets.

Thank you for your continued support, and we're ready to take questions.

[Operator Instructions] Our first question comes from the line of Alex Blostein with Goldman Sachs.

I was hoping we could start maybe with the commentary around fundraising momentum in the business you're seeing into 2026. A number of pretty robust verticals. But at the same time, it sounds like monetization outlook is also picking up. So maybe help us frame what that could mean for management fee growth as you look out into 2026? So maybe we could start there.

Thanks, Alex. We're very excited about 2026. Maybe if we can start with fundraising. For 2025, I think we guided that fundraising would exceed 2024s levels ex AEL of $85 billion to $90 billion. Through 3 quarters, we're at $77 billion and expect to meaningfully exceed that target.

As we look forward to 2026 with our infrastructure and flagship -- infrastructure and private equity flagships in the market with a bumper year expected in infrastructure fundraising with the closing of Just Group, and the continued growth in our partner managers and complementary strategies, we very much expect 2026 to exceed the levels we'll achieve in 2025.

And then when you turn that towards FRE growth, we expect to maintain our momentum and either reach or exceed what has been laid out in our 5-year plan. And this is really driven by two things. One, with the addition of Oaktree, Just Group, Angel Oak. Those transactions will add almost $200 million to our FRE on a run rate basis going forward. And then when you add the run rating of the growth in 2025 rolling through our numbers in 2026, and the expected growth just laid out from new fundraising in 2026, we expect next year to be a very strong year.

Our next question comes from the line of Sohrab Movahedi with BMO Capital Markets.

I just wanted to focus just a little bit on the credit business, if we can. Obviously, an important source of fee-bearing capital growth as part of the 5-year plan. This quarter, the fee rate, the blended fee rate, if I look at the fee revenues relative to the private credit, or the total credit I should say, funds was a bit higher than what we're used to seeing. Can you just talk a little bit about what was the driver of that, if that is a new rate we're looking at, if the fee rate is a little bit higher? Is that consistent? Or is that a one-off?

And then there's just private credit has been a little bit more in the headlines. Just curious to kind of get a sense of how you think about it relative to your business and the growth aspirations that you have especially coming from credit?

Perhaps I'll start, and then I'll hand to Hadley. In terms of the slightly elevated fee rate this quarter in terms of private credit, it's really driven by two things. Our private credit business continues to evolve -- as the mix shift within our business adjusts through the transactions and the increasing ownership of our partner managers. And what we would say is on a blended basis, our fee rate is going up marginally. We will acknowledge that particularly within our Castlelake business that is performing very well.

There was an outsized quarter with some one-off transaction fee revenue that is creating a little bit of upside in this quarter's numbers, but that shouldn't detract for a broader positive trend that we're seeing across our credit business.

Yes. And I'll just talk a little bit about how we're seeing credit more holistically. I mean, there have been a few high-profile credit events in the market. And what we're seeing across our portfolio, and the broader credit trend, is that these events are very isolated and not a sign of a broader credit cycle. And if you actually look at our portfolio, we don't have any relevant exposure to these issues.

But when we think about our portfolio, our area of focus has really been heavily around real assets, asset-backed finance, opportunistic. And these are where we have expertise around the structuring, the underwriting of the sectors, the sourcing capabilities and then, of course, our scale. And we've been less focused around the more commoditized part of the private credit market related, especially around direct lending.

The one point I would probably also add though, is that if there was a broader credit cycle, that plays to our strength with our opportunistic credit strategies. So overall, we feel really good about our positioning. We have a large, diversified and differentiated platform around our credit business, and that's built for growth and resiliency across the market cycles. And we'll only benefit with the integration of Oaktree.

Hadley, if I can just ask one quick follow-up on that. Given the pleasant surprise, for example, this quarter, as minor as it was, came out of one of the partner managers that you own. Like is there a potential for negative surprises, I suppose, to come from the partner managers as well? And can you dimension what sort of risk management, I suppose, is in place to [indiscernible] that?

No, we don't see that. And it goes back to the area of focus. If you think about our expertise around real assets and the areas within asset-backed finance that we focus on, that's critical because we're doing the due diligence. We've got collateral. We've got strong structures in place, and look, low default rates and high recovery rates. And so that puts us in a really good position. That's why we like that part of credit.

Our next question comes from the line of Cherilyn Radbourne with TD Cowen.

With regard to the pending buy-in of the Oaktree minority stake, can you talk about some of the things that you'll be able to do together as a combined company that you can't do today as a majority owner?

Thanks, Cherilyn. We're thrilled about the transaction that we've announced with Oaktree. And really what it allows us to do is accelerate the combination of the businesses and unlock the benefits of integrating two leading institutions. And maybe to simplify it, we would say the low-hanging fruit near-term upsides are really in three places.

One will be almost instantaneously on closing. Oaktree had its own subsidiary balance sheet. We can immediately collapse that. That's much more efficient for us from a financing perspective. Even further within that balance sheet, there are a number of securities and investment positions, that under Brookfield Asset Management's asset-light model. We will actually monetize those positions and use them to fund a very large portion of our purchase price, making that transaction highly, highly accretive.

The second opportunity is really just around operating leverage. When it comes to fund operations, administration and back office, there's tremendous synergies in operating leverage as both our businesses continue to grow from combining our combined capabilities, and not really as a scale business and putting the two institutions together, will unlock a lot of value.

And then the last one is absolutely the most important. And it's the ability to see upsides in our marketing, our client service and our product development. Our ability to combine the power of the two organizations in terms of the products and solutions and partnerships that we can offer to our clients, we think it's going to be unmatched. And this is particularly valuable for serving the growing portions of the market, whether it be insurance companies and individual investors going forward.

Maybe just on a closing note. The team at Oaktree has been our partners for the last 6 years, and this just takes that partnership to a whole another level. Howard Marks is on the Board of BAM. Bruce [ Karsh ] is going to go on the board of Brookfield Asset Management. And it's early days, but our interactions with [ Arm ] and Bob, [ Todd ] and the fantastic team at Oaktree, we already expect this integration to be far better than we initially hoped.

Our next question comes from the line of Bart Dziarski with RBC Capital Markets.

I wanted to touch on the retail theme. So you talked about the infrastructure wealth product and the momentum there and then the PE evergreen strategy, I think that's in the market now. So one theme, but two parter. Just can you give us a sense of the early indication that you're seeing these products and the momentum into next year? And then just a reminder of the distribution strategy as you build these products out into next year?

Thank you. I think it goes without saying that the momentum we're seeing in the individual market is very robust. And again, that we will highlight. We view this as a market -- the broader individual market. That's your high net worth in your retail investor. That's your annuity and insurance policyholder. That's your 401(k) in your retiree market. We view this as a very significant market opportunity that will continue to grow incrementally for the years and candidly, decades to come.

In terms of where we're seeing growth opportunities in the near term? We are launching new products into this market. We just recently launched our private equity product for the retail channel. That launched just recently and started with an incredibly successful launch in Canada and is now launching in the U.S. And our expectation is that's really the equivalent to our infrastructure product for the retail market. We expect the private equity product to scale even faster than our infrastructure product has. And therefore, we continue to expect this to be an increasing portion of our growth in earnings going forward.

And sorry, just on the distribution strategy?

Certainly. So I think there's two key components there. In terms of distribution into the individual market more broadly, the winners in this market are largely going to be driven by who has the track record, the scale and the credibility. And as a result of that, we are seeing the significant opportunity to get our products placed onto the leading bank distribution platforms around the world for that near-term market opportunity in retail.

As we think ahead more broadly to other components of the individual market, in particular, the 401(k) and the retiree market. At this point, we are preparing our business for that very significant opportunity, making sure we have the right relationships and the right partners with all the stakeholders in that space. That's the advisers, that's the plan administrators, that's the consultants, that's the record keepers. And there's a significant effort within Brookfield. And we feel, given our focus on real assets that lends itself well that growing market, we feel we're very well positioned.

Our next question comes from the line of Craig Siegenthaler with Bank of America.

So our question is on corporate direct lending, both [ IG ] and [ non-IG ]. From your prepared commentary, it sounds like you're less constructive on the investment opportunity today, versus some of what your peers are saying due to intensifying competition. However, when you take a step back, it looks like aggregate LTVs are still pretty low, and the spread to public are still pretty rich. And with the cash yields declining now at Fed rate cuts, the relative attractiveness to retail insurers institutions should still be there. So my question is, what am I missing here besides the gaining share of private credit versus [ BSL and high yield ]?

So Craig, great question. And maybe just to put some context around this, let's come at it from a few different ways.

On a more general basis, we believe private credit for various reasons has become, and will continue to be a very important component of global finance, and it's going to continue to grow beside bank credit and other liquid sources. And that growth is very robust, and it's not short term in nature. It's going to be enduring for the long term.

In terms of today within the market, where are we seeing the most attractive returns on a risk-adjusted basis? Obviously, every investment is specific. But broad-based, we're seeing tremendous -- we're seeing a very strong premium in particular, in credit related to real assets, infrastructure and real estate credit and certain components of the asset-backed finance market.

I think the comments that you are referring to is there have been a significant amount of capital poured into the direct and corporate lending market. And in some places, we are seeing spreads very compressed. And in other places, we're seeing a little bit of covenant degradation due to the competition to secure some of those lending mandates.

Obviously, that is specific on a case-by-case basis. But in general, what we are trying to do is avoid the most commoditized components of the market and really focus to where we're getting that attractive spread premium, and where we can preserve our covenant positions the way we have in the past. But I appreciate the question because what we would not want you to interpret is that we think private credit is slowing down. It is a very large and growing and enduring part of the financial system going forward.

Thanks, Connor. I have a follow-up on the credit business, and I think you covered a little bit earlier, but I was bouncing around between two calls. But management fees in the credit business went up a lot faster than average fee-bearing AUM. And I know Castlelake went in there. So maybe that had some lumpiness in there. But we still have the fee rate up 10% on the average fee-bearing AUM base. So were there any lumpy items in the revenue side that we should back out?

And also, I don't think you hit this part, but were there any lumpy items in the expense side of the credit business? Because sometimes a lumpy revenue item might correlate with an expense item. So we just want to make sure we get the P&L run rate correct as we walk into 4Q here.

Sure. And it's pretty simple. Thank you again for the question. The outsized growth that we had in credit this quarter, I think the way to think about it is I think that business was up almost 15%. About half of that is just run rate organic growth, the continued momentum we're seeing in that business. And half of that was the full quarter of an acquisition that was made within our Castlelake business. So some of it was M&A related, and some of it was organic growth. Maybe you can think about that as roughly half and half.

And then on the fee rate component within Castlelake, which is a business -- a partner manager of ours that's performing very well. They did have some outsized transaction fees in this quarter. The blended broader fee rate is trending up, but it was somewhat enhanced this quarter by onetime transaction fees.

Our next question comes from the line of Kenneth Worthington with JPMorgan.

Great. Maybe for Hadley. You're operating at 58% operating margins right now. You highlighted on the call that Oaktree margins are depressed, but getting better. Core margins are rising, but that acquisitions are operating at lower margins. How do we put these pieces together, particularly since we've got some of the transactions just closed, or closing?

And you mentioned sort of the transaction fees sort of helps in the current quarter. So how do we think about the right level, and then the trajectory once everything gets closed?

Thanks for the question. First, I'd say that we are very disciplined when it comes to our cost. And we expect our margins to continue to improve over time as we presented at Investor Day. And that's on the backs of our growth initiatives that will play out and the operating leverage that's built into our business, as well as we execute on ways to drive additional efficiencies, including the integration of Oaktree. And in this regard, we are on track and actually ahead of our margin improvement plan that we've laid out.

It's also worth pointing out that the consolidated margin increase that we're seeing today is a blend of a few offsetting dynamics. The first being, we acquired a greater share of our partner managers and these businesses, while highly accretive to our earnings do have lower margins, and do mildly dilute our overall margin level.

Second is Oaktree's margins are temporarily lower as we point out. As they've been returning more capital and haven't yet called capital for some of its deployment. That's a typical cycle for that business, and it will naturally reverse given the countercyclicality to the overall business.

And the last point I'd make is that the margins across our core businesses continue to expand, which is more than offsetting the first two items I just mentioned. So while we focus on continuously improving our margins and are delivering in that regard, we run our business with a focus to grow FRE over the long term, and we don't manage the business to a specific absolute margin level, which obviously can be impacted by the mix.

Our next question comes from the line of Dan Fannon with Jefferies.

So lots of momentum in fundraising, but I wanted to talk about private equity, in particular, it sounds like your outlook is quite optimistic around raising a larger fund. That seems different than what we've heard for that asset class from others. So just curious about what informs that optimism given the market backdrop?

Thanks, Dan. Our private equity business is a little bit unique, and it has been for 25 years. In that, it focuses on essential assets and services, and it -- and as a result, it produces very consistent results across the market cycle. And why that really plays out well today is, as mentioned, we've just launched BCP, the next [indiscernible] BCP in the quarter, and we do expect it to be our largest private equity fund ever.

We do feel that we are differentiated in the market because our focus on, one, high-quality assets that generate cash across the cycle, has allowed us to return significant amounts of capital out of this strategy in recent years. So we're not facing the DPI issue that has driven a lot of headline noise in the sector. And then secondly, We, I think, all recognize that the next generation of growth in value creation and private equity, given the more normalized interest rate environment is not going to come from financial leverage and financial engineering. It's going to come from operational improvement.

And given that over the 20-year history of our flagship private equity fund, we've delivered over 25% IRRs for 2 decades. With over half that value creation coming from operational improvement. We are seeing tremendous market demand for our approach to private equity that we think is -- it works across the cycle, but it's perfectly suited for where we're at in the current economic environment. So it's early days. We've just launched the fund, but we do expect it to be our largest fund to date.

[Operator Instructions] Our next question comes from the line of Jaeme Gloyn with National Bank.

Good job on the fundraising this quarter this year. One thing that was mentioned at the Investor Day was broadening, or deepening the client base -- the institutional client base. So I'm just curious on what the source of fundraising looked like from a breadth of client standpoint?

And in terms of broadening the fundraising base, I think we can answer this question quite specifically. The growth in our business over the last several years has really been driven by the scaling and increased penetration of large-scale institutions. And while we focus on other additional pockets of fundraising, it's important to remember that component, and that core foundation of our business continues to grow.

But what we have done internally within Brookfield and what we've been investing in for the last 12 to 24 months is dedicated fundraising teams that can target a much broader base of investors. This is small, or medium-sized institutions. This is a dedicated team focused on insurance institutions. This is a dedicated team focused on family offices. All of those initiatives, we would say, are still in the relatively early innings, and we're seeing tremendous growth across 3 verticals.

One, a greater number of clients within each of those groups. Two, a greater number of products amongst those clients that we're bringing on board. And three, simply larger checks from those clients that we have. So we would expect this momentum to continue, but it's really driven by having dedicated teams focusing on all the different subcomponents of the institutional market going forward.

And I'm currently showing no further questions at this time. I'd now like to turn the call back over to Jason Fooks for closing remarks.

Okay. Great. If you should have any additional questions on today's release, please feel free to contact me directly, and thank you, everyone, for joining us.

This concludes today's conference. Thank you for your participation. You may now disconnect.

Please welcome from Brookfield Asset Management, Jason Fooks, Managing Director and Head of Public Investor Relations.

All right. Good afternoon, everyone, and welcome to Brookfield Asset Management's 2025 Investor Day. On behalf of our entire senior management team, thank you for joining us here in person in New York and virtually webcast. We appreciate your continued interest and partnership.

We've planned a terrific agenda today for you. First, Connor Teskey, our President, will begin by discussing our strategic priorities, priorities that underpin our success and they are driving sustained growth across our businesses. Next, Hadley Peer Marshall, our CFO, will talk about the targets we set for ourselves 5 years ago, and how we performed against them and outline our plan over the next 5 years. After that, we've lined up a terrific panel. People that will highlight some of the important strategies that are coming to market soon and spuns their scaling quickly. Finally, Cyrus Madden, Executive Vice Chair, will sit down with our CEO, Bruce Flatt, for a conversation on leadership, reflecting the lessons that have shaped Brookfield's success over the past few decades and their perspectives on the future. Between each of these sessions, we'll feature short case study videos. We often speak about owning and operating the real assets and essential service businesses that make up the backbone of the global economy. The purpose of these videos is really to highlight the true scale and quality of these assets, something that's difficult to convey just through slides and numbers alone.

Now before I begin, I just want to touch on a few housekeeping notes. We'll be happy to take questions, both from our in-person audience and our virtual audience, but we'll do that at the end of BAM's presentations. If you just wait for a mic to reach you, that will allow us to hear your question clearly. And as always, I'd like to remind you that during the Q&A and throughout today's discussion, we will make forward-looking statements. These statements are predictions about future events and trends and are subject to risks and uncertainties. Actual results may differ materially from these that we discuss today. And for further details, please refer to our filings with the securities regulators in the U.S. and Canada and the cautionary statements contained in our presentation, all of which are available on our brand-new website that we just launched last week. So definitely go and check that out later because for now, please silence your phones, sit back and enjoy the presentations.

Let's get started by welcoming Connor Teskey to the stage.

Thanks, Jason.

Last year, when we gave this presentation, we explained how our platform was prepared to deliver and double in size over 5 years, matching more than the growth that had been delivered in the 25 years prior. This year, we intend to convey how we continuously add new additional growth levers to our business that will allow us to outperform our long-term earnings targets, not only in the near term but beyond. Today, Brookfield Asset Management is the leading global alternative asset manager focused on real assets. We manage over $1 trillion across 5 key verticals, and we use a distinct owner-operator approach to deliver attractive risk-adjusted returns across all our strategies and products. And our platform, our global reach, our scale allows us to deliver on this performance, but it is our focus on critical assets and services, the backbone of the global economy, that ensures that we are always positioned at the epicenter of the largest and most attractive investment themes around the world. We execute on this business through an irreplaceable platform that is global in nature that allows us to raise and deploy capital in all of the world's most attractive markets. We use boots on the ground individuals that allow us to invest, operate and raise funds across each of our strategies in every market around the world that we do business. And while that gives us a platform for success and growth. It also gives us an unparalleled global perspective to identify new trends around the world that we can position our business to capitalize on wherever and wherever they originate. And as we continue to say and have been saying for years, the largest investment themes around the world today are those of digitalization, deglobalization and decarbonization. Similar to what we said last year, these are attractive because the growth opportunities and the capital needs in each of these themes are so significant that they outstrip what is available from both public companies and from governments. And this creates a large, attractive and growing opportunity for private capital. And that comment is more true today than it was last year, and it's far more true today than it was 4 or 5 years ago when we started talking about the 3 Ds. And we continue to believe that the largest and most attractive opportunities are for those who can operate at scale at the epicenter of 1 or more of these dynamics. And when you look at our platform, our position in the market and the themes that we are on the forefront of, we not only have a business that can double in less than 5 years, but can continue to add new growth levers over time on a repeatable basis, and that allows us to deliver up to 20% compound earnings on a year-over-year basis, not just in the near term but longer term as well. And we can do this because of the leadership position that we already have that we continue to build from, and that leadership position is very difficult for anyone to replicate. It's been built over decades of delivering attractive risk-adjusted returns at a scale and a consistency that few, if any, can match. However, our focus on the backbone of the global economy and our continued focus on essential assets sometimes overshadows what we think is an underappreciated component of our business, which is we continue to work to preserve our leadership position by constantly evolving our platforms to take advantage of whatever the next large and attractive opportunity is. By doing this, we can continue to raise more capital from a wider spectrum of investors. And similarly, on a continuous basis, we can generate proprietary deal flow, we can identify new trends, and we can continue to launch and scale new products and strategies that meet the needs of the market and of our clients. And as we think of what are the dynamics that will continue to add these new growth levers in the future, there are 4. These are products, partnerships, performance and individuals.

Let's start with products. Brookfield has a proven embedded capability to scale strategies that we already have. but we also have a unique and repetitive capability to develop, build and launch one, new strategies that meet the evolving market needs around the world and the demands of our clients as well as products within those strategies that are uniquely tailored to the widening spectrum of investors that are now seeking to get exposure to alternatives. And we can do this very efficiently and effectively because we already have large and leading platforms across the most important and fastest-growing segments of the alternative sector. When we launch a new adjacent or complementary product, it is not starting from scratch. It can leverage the existing global platform that already exists within that asset class. And this allows us to do this on a repeated basis with a high degree of success very quickly and at strong margins. And Hadley is going to come up shortly to explain our 5-year plan. And what she's going to show is that our largest products are flagships they continue to scale very quickly. But a growing portion of our future growth is now coming from complementary and ancillary products. And this is not new. This is part of an ongoing process that has been happening for more than a decade, where we are systematically looking to offer the full suite of products and services across debt equity and structured solutions across every vertical we have for every investor type we look to service, and this is already showing up in our results. Over 70% of our fee revenue today comes from products and strategies that have been launched in the last decade, and we expect those strategies to make up about 2/3 of our fundraising in our 5-year plan. So what are some tangible examples of this. Over the last 10 years, we've built a credit franchise that today represents 30% of our global revenues and is growing at more than 20% a year. And we've done this solely by not trying to be all things to all people, but rather leveraging the existing leadership positions we already have. We have a leading real asset finance business that leverages Brookfield's historical leadership in real assets. We have a leading opportunistic credit franchise, leveraging Oaktree's historical leadership position. And we have 1 of the largest and fastest-growing asset at to finance franchises, leveraging the leadership of Castlelake Primary Wave and our other partner managers. But it doesn't always take 10 years. Sometimes it can be a lot faster. In 2021, we launched our first-ever energy transition product, leveraging our multi-decade track record within renewables. In less than 5 years, we now have a franchise that produces over $400 million a year, and every product within that strategy is market leading in terms of its scale. And we were able to do that by simply leveraging the capabilities platform and knowledge that already existed within Brookfield. And this is not a one-hit wonder. We are already seeing history repeat itself. Today, there is a significant market opportunity to fund the growth of AI infrastructure, both in this country and around the world. And that strategy is going to require a unique pool of capital that is dedicated to the investment profiles within that theme. And given our leadership in digital infrastructure, our relationships with the hyperscalers, our experience in advanced manufacturing and our leading power business around the world across traditional renewables and nuclear, we feel we are placed to launch a market-leading AI infrastructure franchise. And you will hear more about that on the panel later today.

So let's move to partnerships. Brookfield is unique. Our owner-operator approach, the alignment that comes by investing significant Brookfield capital alongside our LP partners and our own -- and the dedicated industry-specific knowledge and experience. This differentiates us and makes us a sought-after counterparty for the largest and most important organizations in the world for their strategic and growth initiatives. And our ability to provide large-scale, flexible capital solutions and to deliver transaction certainty provides us a large an attractive proprietary deal flow pipeline, where we don't need to compete on cost of capital. And we are able to offer this interactive deployment to our clients through our private funds. And again, this is not theoretical. Simply from bilateral partnerships that we have announced in 2025, we have $40 billion of go-forward deployment opportunities. And that's on top of partnerships we had announced before this year where we're already and continuously deploying capital. And obviously, we can use this attractive deal flow to scale up some of our existing strategies, but we can also use it to launch new strategies. The way our Barclays partnership is helping us launch our financial infrastructure fund, where our sovereign AI partnerships are helping us launch our AI infrastructure platform. And these partnerships go beyond just funding arrangements. By working closely with the largest and most sophisticated organizations around the world, we consistently and continuously find more ways to work together. We can be their operating partner. They can be a tenant in our buildings. We can manage our pension -- we can manage their pension for them. We -- they can be an offtaker of our assets. We can pursue new investments together in the future. These partnerships are only going to scale with us as our business grows. And we are able to launch these -- we execute these partnerships, and we are able to launch these products because of what is the bedrock of our business, which is our long track record of delivering very attractive risk-adjusted returns. Our value-oriented approach and our focus on essential durable assets with long-term cash flows provides a platform that can perform across the market cycle and in a number of economic environments. And this is particularly important today as public markets become more volatile and as some of the new investors looking to get exposure to alternatives put an increasing focus on downside protection, consistency and liquidity. And this is exactly what we offer. By continuing to invest in high-quality businesses, we can continue to expand into the largest and most attractive areas of real assets, but those that can continue to deliver the consistency and resiliency of returns that have defined our franchise for years. And this is particularly important for the individual investors we are looking to target and also insurance companies that are looking to get exposure to alternatives, who want those premium returns but want to avoid illiquidity and volatility that has plagued some in the sector. And again, this shows up in our results. Across all of our major strategies and products, we have met or exceeded our returns on a long-term basis. And this is something we will not compromise on as we continue to scale. Our investment discipline and our product innovation discipline will ensure that we continue to deliver this track record even as our platform expands. But there's 1 more point to be made about insurance. And our focus on high-quality essential assets that produce cash flow has insulated Brookfield from some of the liquidity concerns that have plagued the alternative industry in recent periods. By focusing on businesses that generate steady and growing cash flows, and in particular, by avoiding investments that require high valuations on exit in order to generate returns. We have more options to either up-finance or monetize businesses to provide LP's distributions even if market conditions are not ideal. Take real estate and private equity as an example, 2 sectors of the market where the narrative of meager returns of capital is the strongest in just 2025 or the 12 months -- the most recent 12 months, we've actually had some of our most active periods of distributions reflecting the high quality of our portfolio. This differentiates our platform and will provide our next leg of growth, particularly to the new investors looking to enter the alternatives market, which brings us to our fourth growth lever, which is individuals.

There are more people across more investment types -- investor types around the world today that are looking to get access to alternatives. And as this takes place, we see perhaps the largest growth opportunity for our platform since we launched our flagship funds. And not only are we prepared and well positioned to capitalize on this opportunity, we think we can take a disproportionate amount of share as this market grows over time. And the background here is simple. For 2 decades, the alternatives market has grown as institutions have allocated more of their portfolio to alternatives. And the important thing to be reminded of here is this trend is not slowing down. Institutions continue to allocate more to alternatives and not alone could double the size of the alternative market over the next 10 years. And yes, well, Brookfield is working to provide alternatives to a wider spectrum of investors, we continue to see significant growth from within institutions. The dynamic of the largest institutional investors continuing to concentrate their capital in a smaller number of managers with the scale, track record and products to meet their global needs continues to benefit us because here, we feel we are second to none. More specifically within Brookfield, there are still areas of the institutional market where we are only scratching the surface. Take Europe, for example. For years, it's been a market we deploy heavily into, but we've not raised as much capital there historically. We expect to raise 3x as much capital in Europe this year than last year. We are still in the infancy of our Family Capital business. These are parts of our institutional platform that can grow not at 20% or 30%, but 2 or 3 times a year going forward. But as mentioned, everyone recognizes that we are in the early innings of 1 of the largest growth opportunities for the alternative sector and that is offering alternatives to the individual investor. This is your high net worth of retail investor. This is your annuity or insurance policyholder. This is your 401(k) or retirement market. And this market is exciting because not only is it larger than the institutional market on a global basis, but has a smaller allocation to alternatives today. And over the next several many years, we expect that allocation to alternatives to increase dramatically due to changes in both regulation and invest demand. And we are already on the forefront of this trend. Through both our high net worth and retail platform we are going to raise $10 billion this year. That is more than 50, 5-0, percent higher than last year, a momentum we expect to maintain as we launch more products that are specifically designed for that distribution channel. We're launching a private equity product currently, and we will launch another credit product before the end of the year. Similarly, on the insurance and annuity side, we are already 1 of the largest providers of alternatives to the insurance and annuity space not only through our service at BWS that continues to scale rapidly, but also offering alternatives through SMAs to third-party insurance companies. When we look at who will win in offering alternatives to individual investors, it is those who have size brand and track record. And here, we feel we are matched. But perhaps more importantly, these investors want those premium returns from alternatives, but they put a higher value on liquidity, consistency and downside protection. And our focus on essential critical backbone of the global economy assets is perfectly matched to meet this market demand. No one is bigger in these areas of alternatives, and therefore, we feel we are best placed to offer these products to the individual market over time. And therefore, what are we doing today? We are using our unique capabilities to provide real assets to meet the specific needs of individual investors. And this is not something we hope to do, and we hope there will be demand for, this is exactly what we are hearing from the planned administrators, the consultants and the financial advisers. Secondly, we are actively developing new products that are specifically tailored to the needs of these individuals, and we will look to do that as their needs evolve and scale over time. And lastly, we already have very large and dedicated teams that are focused on these end customers and we will continue to scale these teams such that we can have a leadership in this market the same way we do in the institutional market. And as such, when Hadley comes up to present our 5-year plan, we believe the individual investor represents an upside to our base case 5-year performance where we could materially outperform.

So in conclusion, we have a platform that can deliver that doubling of size in less than 5 years, but more importantly, due to products, partnerships in the individual market, we continue to add new growth levers to our business on a consistent and repeatable basis. And our ability to do this will allow us to outperform our long-time earnings target, not only over the near term but beyond.

Thank you.

[Presentation]

Please welcome from Brookfield Asset Management, Hadley Peer Marshall, Chief Financial Officer.

Thank you. Thank you, and welcome. We're very excited to be hear today.

These videos we put together for our private funds Investor Day, and we thought we'd showcase a few of them for you. So you have a better sense of the types of opportunities we're investing in. what drives these opportunities, and why we find them attractive. So I hope you're enjoying them.

I want to spend a few minutes going deeper into some of the themes that Connor talked about, especially around the growth of our business and put some numbers behind this. Connor has been clear that we expect to double the size of the business over the next 5 years. But I think it's important that we're also clear why we have the confidence to deliver this. And the main reason is because we've done it before, repeatedly. We have strong results consistently strong results on the back of significant growth expectations. And these goals were realistic because the drivers of our business, strong investor demand, opportunities -- that's actually a large opportunity that fits our areas of expertise, competitive advantages that Connor outlined and above all else, our disciplined approach to protecting our performance.

So if you go back 5 years, this is when we laid out our 5-year plan, similar today, doubling the size of the business. And at that point, we had $277 billion of fee-bearing capital, growing to $510 billion. Fee related earnings or FRE was $1.3 billion expected to grow to $2.6 million doubling. Now these goals may have seemed ambitious, but they were grounded in a broad-based thoughtful plan where we're going to expand our strategies and continue to grow our business with a leadership position across all of our businesses. [indiscernible] let's check the report card, I guess.

And as you can see, not only do we meet expectations, but we exceeded expectations. Today, we have $563 billion of fee-bearing capital. That's a 200 basis point outperformance. Fee-related earnings is $2.7 billion. Now this period of time was interesting. It was dominated by uncertainty, but we knew that we could deliver on this plan because the underlying fundamentals of our business and especially the diversification across all of our businesses. So how did we do it? Flagships are the cornerstone of our business. You've heard us say this before. They are where we house our operating skills, our asset knowledge, our sourcing capabilities and above all else, 125 years of learning lessons as we've been investing. So if you go back to 2020, we had 4 strategies: real estate, private equity, credit and infrastructure. And that round generated about $53 billion of fee-bearing capital. Today, that round is $93 billion, 75% growth. And if you exclude our global transition fund, which is on a second vintage and launch since 2020. That's about 30-plus percent growth on a same-store basis. Bottom line, investors have shown a willingness to continue to commit round after round because of the performance of our funds, the quality and the return of capital on an attractive risk-adjusted return basis. But the flagships do more than just scale and repeat. They're the launching pad for our complementary strategies, both equity and credit.

So let's go back to 2020. We had about $14 billion of fee-bearing capital. That made up about 20% of our fundraising at that time. Fast forward today, $74 billion, 5x growth. So some of the strategies that existed behind these numbers are financial infrastructure fund, our real estate solution strategy our infrastructure debt fund and he's continued to scale up. We've also expanded our platform. Wealth Solutions is the perfect example here where we're growing that at a quick pace. And the last part is the evolution of credit. So again, let's return to 2020. We just invested in Oaktree. We had about $100 billion of fee-bearing capital. And today, that's $250 billion, 130% increase. What's more is the composition of our credit capabilities. We've expanded and diversified into our core competencies, asset-backed finance, real assets, that's infrastructure and real estate where we dominate on the equity side and opportunistic credit. And our partner managers, best-in-class partner managers, have helped us expand our capabilities here. But above all else, the major theme of our credit business is to stick to what we know, invest only when we see a distinct advantage and make sure that we're returning the appropriate risk-adjusted returns to our investors.

Now fundraising obviously supports all of this growth that I've just outlined. In the past 5 years, we raised $450 billion, that's a big number. And when we think about that, we've been able to broaden and deepen our relationships with institutional market that's grown 25% to 2,500. And those new clients make up about 20% of our institutional fundraise. Many of our clients have increased the size of their tickets and allocating amongst more of our strategies. But the step change came in private wealth. This has been a big change for us. We went from really starting from scratch to 60,000 clients and growing quickly.

Now finally, we've got Brookfield Wealth Solutions. And when you look at that, we manage about $100 billion of fee-bearing capital. And behind that is 800,000 annuity policies. So given this growth and diversification, you can see that our business is more durable and more stable from a fundraising perspective, regardless of the market environment. So now all in, we further strengthened our franchise deepened the pools of fundraising and offered more products, they're tailored to our investors. And this formula has worked for us, generating long-term growth. In fact, if we look back 15% growth rate, flagships generate about $100 billion. We have about $160 billion coming from complementary strategies. Another $100 billion coming from insurance solutions Finally, returning $133 billion back to our clients. So this shows you why we're confident that we can deliver the next doubling of our business. And in fact, we're off to a great start. If you go through the past 12 months, we've raised $97 billion, we've deployed $135 billion and into some of the most significant transactions we've done at Brookfield, Colonial Pipeline, GEMS Education, Divi, Duke Energy, these investments highlight the scale of capital we can raise but also the opportunity set that we can only access.

Now monetizations are an incredible part of our business. This is where we return capital back to investors and strengthen and deepen those relationships. And if you look at the past 12 months, even during the period of time, when M&A volumes have been low, we delivered a record monetization number, $75 billion of assets have been sold, returning about $50 billion of equity to investors.

Now we'll think about different strategies in order to deliver these monetizations. Sometimes we'll do a partial cell like we did with Data4. We sold a portfolio of stabilized data centers. Aveo is a good example of where we sold the investment outright. And there are times that we will think about the public markets. In fact, we launched an IPO successfully back in June for Leela, and that was our Indian luxury hotel portfolio. Above all also, what is the critical part of that is returning the capital with the appropriate risk-adjusted returns, strong returns.

Now we've talked about in the past, buy versus build. Think about build complementary. On the back front, there are times when we want to expand our capabilities that we will invest in partner managers. And this past year, we've been active. We've invested in Castlelake, asset-backed finance, Angel Oak, mortgage and structured credit solutions provider. But in addition, there are also times that we will attract and retain more stakes within our partner manages. So Oaktree and Primary Wave, we increased our stakes there. Across the board, we have about $175 billion of fee-bearing capital that we manage from the partner manager perspective. This has really further enhance our capabilities as well. So the success of all this growth means that we have delivered double-digit growth for all metrics, $2.7 billion for fee-related earnings. $2.5 billion for our distributable earnings. And if you look at our DE, about 100% of that comes from FRE. Revenues have grown faster than our costs, meaning our operating leverage is built into the business, expanding our margins. And so we've been very happy with the success we've generated to date. Liquidity is also something we focus on extremely with prudence and discipline. And we continue to find other sources of capital for Brookfield Asset Management. Recently, we issued our first bond deal back in the spring, and we actually did our second 1 last week. That leaves $4 billion of capacity at our high investment-grade ratings and that's more than enough to support the business plan that we're presenting to you today. In addition, that capacity only grows as our DE growth over time. We've expanded our banking relationships. We outsized our revolver to $1 billion. So we have plenty of capital to support the business, but we will remain an asset-light model.

Now I want to spend a few minutes talking about the strategic initiatives because we've made excellent progress I've covered some of this. We've expanded our product offerings, our fundraising capabilities and our sources of liquidity, but we brought more liquidity to our shareholders, and we simplified our corporate structure. We are now headquartered in the U.S., which fits our profile. We have simplified the corporate structure by exchanging Brookfield Corporation share in the privately held entity for the public entity, which now means their market cap reflects 100% of our business, it's around $100 billion. In addition to that, we filed SEC registered reports similar to our peers. And what that led to is us being included in the Russell 1000 and being positioned for additional index inclusion. So now we're on to the next 5 years, the Dublin. This is a compounding growth model supported by flagship funds, complementary funds and wealth solutions. The flagships I'm going to repeat again how important this is to our business. And there is still scalability. We see a 30% growth for the 2030 round of fundraisings for those 5 strategies. Our complementary funds will continue to grow with a 100% growth. So we're really going to see a lot of growth attached to our complementary strategies. And this year, we thought it was important to really distinguish between the 2 categories. Mature strategies versus new strategies. Mature strategies are strategies that have already seen success, multiple fundraises, opportunity set out there, investor demand. So our infrastructure debt fund, which is on its fourth vintage right now, is a good example of that. New strategies are strategies that were in product development or we are just recently launched. So the AI infrastructure fund is a good example. Wealth Solutions is another part of our growth story. We manage about $100 billion of fee-bearing capital. That's growing to $325 million by 2030. Now [indiscernible] section are going to come up and talk about their growth plans for the business. But they've already announced just a U.K. pension risk transfer business and that had about $30 billion of fee-bearing capital. But what else I want to point out on this slide is, as you can see in the blue allocation, which is our private funds, that's increasing over the next 5 years. So we are taking life in the liquid bucket and moving it over to our private funds. And as [indiscernible] appreciates, we earn a management fee across the board regardless of the allocation. But when it does move into the private funds, we are in additional fees. So that's another growth engine. So now pulling this all together. We have further strengthened our franchise. We have continued to expand and grow our business, and we anticipate generating about 16% growth rate. Our flagships and mature complementary strategies will generate about 50% of our fee-bearing capital. And these are always successful. They're just scale and repeat. New complementary strategies will bring in about $120 billion. Insurance Solutions, $230 billion, while returning $170 billion back to our clients. And this will get us to doubling of our business of $1.2 trillion. The growth will be seen across all of our businesses. Connor talked about the mega trends we're feeling in our business. And that you can see is part of the growth story for all businesses.

So let's spend a second about the capital base that we have because today, about 87% of it is either long-term or permanent in nature. And that's going to continue to grow to 92% by 2030. Again, showing the predictability and the stability of our business. Now getting into the weeds of the numbers. You can see the growth of our revenues, and that's the driver behind 17% growth for FRE at $3.59 per share. Again, revenue is growing faster than our costs, to expanding our margins, and that FRE is the driver behind a DE, 18% growth. There is a little bit of carry coming in, $1 billion net of cost. And so you start to accumulate that carry. So we're very happy with this 18% growth. But I want to spend a second on the carry. Because as you may recall, when we spun out BAM about 3 years ago, all the legacy carriers stay with Brookfield Corporation. And for any fund that we launched post the spin-off 2/3 comes from Brookfield Asset Management; and the third goes to Brookfield Corporation. So Nick buys me coffee. I think everyone gets

that. When you think about the $30 billion that will accumulate from 2031 to 2035, [indiscernible] Brookfield Corporation and net Brookfield Asset Management will get $10 billion. That's the next leg of both for Brookfield.

So I mentioned the 18% growth. And that is really our base case. But I want to also discuss some of the other levers that are not built into their business plan that could generate growth for us. Access to 401(K) is a great example. This will be something that will grow our business over the long term, $10 trillion opening up. That is a step change. New complementary funds, so these are the types of funds that aren't in product development right now, but they will come about AI infrastructure fund wasn't in our business plan last year, and now it is. So that's an example of a fund that will come about because of the market drivers of investor demand. Capital Markets. This is an area where we've been quite conservative with the numbers, and there is upside to that. And then finally, M&A. We have additional stakes options really at Brookfield against our partner managers, so we can buy additional percentages for attractive multiples, and in that, if you look at it, assuming 100% of ownership by Brookfield, as an example, that equates to $300 million of fee-related earnings addition. In addition to that, we will look at opportunistic M&A, and that is a possibility. So all of these multiple paths when assuming the base case of 18% can generate 20-plus percent annualized earnings growth. So now you understand why we have confidence in delivering the double of our business, especially around the products, partnerships and individuals that we've laid out. We are built for this. And when we set a plan, the culture of Brookfield is aligned to deliver it. So I know I said this last year. But when I think about our base case plan plus the additional levers in all the growth drivers that I've just outlined, I genuinely believe the best is yet to come. So thank you.

[Presentation]

Please welcome Executive Chair, Real Estate, Brian Kingston.

Good afternoon, everyone. Hadley and Connor outlined some pretty dramatic growth plans over the next 5 years. And obviously, in order to do that, they need to sort of start at a very high level. And because of the size and scale of the operation. That growth comes from a lot of different different areas. So we wanted to try and bring some of this to life for you. So in the next section, we're going to do a panel with some of my colleagues who are responsible for a lot of that growth and really trying to highlight 3 examples of what Hadley talked about, one, growth from our existing mature strategies; two, growth that comes from complementary strategies that spin out of that; and three, growth from accessing new channels, new channels for fundraising and for capital.

So I'm going to be joined on stage in a minute by these 3 individuals. But first, Anuj Ranjan, who is the CEO of our private equity business is just going to come up and talk about Brookfield Capital Partners, which is our global flagship private equity fund. We'll be launching -- we've launched the seventh iteration of that fund. And it's a little unique in the private equity world. But when you hear the description of the strategy, it's really not unique to Brookfield, right? So it's very focused on durable cash flows, businesses that are complementary to what we do in infrastructure and in real estate. And as a result of that, has had a tremendous track record. So over the last 25 years through the first 6 vintages, we have an average return of 26%, which I think is the best performing private equity track record in the market today. And a lot of that importantly comes from, and this will sound very familiar from our other businesses from operational improvements, a huge focus on that. As Connor said, we're not really relying on markets being buoyant and multiples being high to get those returns. A lot of it is coming from just rolling up your sleeves and driving returns.

Joining us as well will be from Brookfield Infrastructure Income Fund is Chloe Berry, who -- this is a unique fund. So this is an example of a new fundraising channel for us, which is -- this is now our largest private -- sorry, our largest private wealth platform. Launched just 2 years ago, we raised over $6 billion for this strategy, also unique compared to some of the competitive product out there in that it's not a new strategy, really what this is, it's offering the best of Brookfield Infrastructure in particular. So it co-invests alongside our global infrastructure fund, our global debt fund, BGTF, the transition fund and our structured equity product as well. So Chloe is going to talk a little bit about what's made that successful, and how we've -- what the plans are for the future. And then finally, Sikander Rashid is going to join us. Sikander runs our infrastructure business in Europe, but more importantly, is responsible for launching our AI fund, which will be coming out later on this fall.

For those of you that have been to this conference before, you're well familiar with the 4 Ds, 1 of which is digital infrastructure, which we've been investing in over the last 10 years through our infrastructure business. But because of the scale and growth and explosion in demand for this type of product over the last 12 months, we really see an opportunity to break this strategy out as a whole individual fund. Sikander is going to talk a little bit about what's driving that but Connor touched on this as well. We think there's a $7 trillion opportunity here for the capital that's going to be required to build out data centers additional compute capacity and all of the associated power generation that goes with that. And so this is a great example of a complementary strategy being borne out of an existing 1 that we already had.

So without further ado, I'll ask the 3 of them to come join me on stage.

So Anuj, maybe we'll start with you. We -- you and I always debate about whether real estate had the first fund or whether private equity was the first fund 25 years ago. But either way, look, we've been doing this for a really long time. You're the boss now. So you can -- you don't have to give Cyrus all the credit, but tell us like what has actually been in your mind, the key differentiator for this franchise to drive those returns.

So look, just to clarify, Private equity was the first one. Real estate can be the biggest business, but you can't take away being the first from private equity. What we do is we are value investors who drive operational transformation in the businesses that we own. We focus on industrial companies and essential services that touch the Brookfield ecosystem. We have an information advantage, or we know the business better than anyone else could. Our goal is to be the best owner of the business, not just the highest payer of a business. We make most of our money through margin expansion, not multiple expansion. And so the goal really is in any company that we own to be able to just increase the free cash flow in a business enough that it generates our returns on its own. If we are lucky, and we get some multiple expansion on exit, we do even better. All of that taken together, it's allowed us over 25 years to have top quartile track record. That has been very consistent across all of our funds. It's also allowed us to build some complementary strategies around our core flagship offering. And so this capability we have in industrials, essential services and operations. It's allowed us to build a structured equity product. It's allowed us to build a new wealth product that we're soon to be launched and a financial infrastructure product as well. And so I'd say we're pretty happy and pleased with how it's performed over the past 25 years, but we've really got a lot of ingredients in place today for expansion?

Yes. So regardless of which fund it was first, which we can agree to disagree. Over that time in the last 25 years, we have launched a lot of different strategies. And Connor had a slide where a bunch of dots just sort of magically appeared as new strategies over that period of time. But [ Sikander ], it is a lot of work launching a new fund strategy. Maybe just talk a bit about how the AI fund came about and the process that we've got to go through to stand a new strategy up like this, even when it is complementary.

Yes, Brian, happy to. Look, firstly, I'll say it's been 1 of the most fun projects, if not the most fun assignment, I've had over the last 13 years at the firm. But obviously, it's not come without its challenges. We've had to huddle up multiple times over the last 18 months to ensure we have conviction that this is going to be a highly scalable platform to make sure we have the right deals to show to our investors and also, obviously, to make sure that the clients, our clients themselves are interested in a product like this. So those have been some of the challenges we've had to grapple with. The good news is, we've done it before. As Hadley talked about earlier, just 4 years ago, we launched our transition strategy, which as Connor mentioned, today is generating $400 million of annual revenue. We have raised $30 billion of capital over the last 4 years. And at the time, I would say there's 4 important considerations. First was, is the tangible market opportunity, big enough? The answer was, yes. We expect tens of trillions of dollars will be expected invested in the world to decarbonize it. Secondly, do we have the credibility and the track record at the time, yes, we had $100 billion of assets under management for renewable power around the world. Third was can it be scalable? And fourth was do our clients want a product like this. So the answer to all those questions was yes. Fast forward to today, I would argue, AI is no different. It's going to be a huge market opportunity, $7 trillion of CapEx, as Brian you mentioned. Secondly, we have a track record. We've been doing it for a long time. Today, our artificial intelligence infrastructure business is $150 billion. And third, we have interest from our clients. So when you pull it all together, yes, it's been a challenging endeavor over the last 18 months, but having precedent helps, and we're really excited how we can scale this to the next level.

And Chloe, like, I guess, for CECO, like the challenge here is convincing our existing investors. This is a new strategy and investing in it. You had a whole different challenge, which is that there was a slide up there that in 2020, we had 0 private wealth clients. And today, we have 60,000. So you really had to go out and reestablish -- or sorry, establish our brand in that market. Can you talk a little bit about what we've learned over the last couple of years in that channel and really what's allowed you to be so successful so quickly with -- which is really a first time plant.

Yes. Thanks, Brian, and good afternoon, everyone. I think for BII, it's really our platform. Brookfield is the preeminent infrastructure manager. We heard it from Hadley. We start with the expertise with the flagship. We are the best at what we do. We have the longest history we have the most number of strategies. We have the most consistent track records. We have the deepest operational knowledge out there. And that for BII is particularly important because we are really investing across the whole Brookfield infrastructure platform, really the best of Brookfield, and we're creating a comprehensive infrastructure portfolio across our platform for private wealth. As you mentioned, the AI fund and Sikander is creating a new fund strategy from deal deployment. We are doing it from the investor side. We are taking our platform, and we're putting it in a wrapper or in a fund structure that we think is attractive for private wealth. So lower minimum, monthly subscriptions with immediate access to the investments or the assets held in the fund, monthly distributions, the yield component, this set of investors like, all with underlying benefits of infrastructure. So we look for downside protection in our assets. that cash yield, the stable cash flows, inflation linkage. So they get a bit of everything there, and it's been a good ride.

And like, obviously, 1 of the big challenges with private wealth is shelf space, right, getting in front of these advisers and their clients and getting their attention. We're not the only infrastructure fund in the private wealth channel. Maybe just touch on a little bit about how we differentiate our vehicle and our platform for maybe some of the competitors.

Of course, our name, our brand, it really comes down to that to open doors. It does open doors. People want to hear from us in the infrastructure space. But when we're talking to financial advisers and investors, it's really interesting to hear the complementary nature between what they're looking for and what we offer and how we invest and how we do business. Individuals are looking for -- from an infrastructure allocation, are looking for a product that's going to add resilience to their portfolios. They've seen the traditional 60-40 mix wasn't as diversified as they thought over the last few years with things moving in the same direction. They're looking for that diversifier that core allocation that can add, again, that resilience in their portfolio. And that's how we approach investing. We look for the highest quality infrastructure assets out there with long-term contracted or regulated revenues with investment-grade counterparties, providing that stability and then we do simple things around the edges to add a bit of return. So this is our bread and butter. It's that operational value add that we do day in, day out, recapitalizing our balance sheet extending a contract, improving supply chains, again, things that are in our nature to do. So once we have the product and the platform, we need to sell it. And that's another differentiating factor that's really led to our success. We partnered with Brookfield Oaktree Wealth Solutions, which is our distribution platform for private wealth. So I've worked with them for a few years now, 150-strong sales force globally. And they are amazing. They're knowledgeable, they want to learn more, they really believe our products are going to add value and create better outcomes for individuals. And so they're out there pushing our message and doing a phenomenal job getting it out there.

And that's really going to be the key. Again, there was another slide up there about the 401(k) market and some of the changes that are coming there. But I think you guys have laid the groundwork with getting the brand in there, but that Bose channel is really the key to unlock...

it's off the back of the -- the good work -- the great work that Chloe the infrastructure team have done, your team done in real estate in accessing retail wealth channels that have allowed us in private equity to actually build a product now that we're really excited about for the wealth channel that we're able to launch something that probably a year ago, we would not have been able to do. So it's that kind of capability that we have in-house that gets shared across the platform that really helps.

Yes. Brian, I would say the reason why the AI program, infrastructure program is differentiated is because it's not a data center fund, which are usually greenfield in nature. So there's no yield for investors in the first few years. Half of our program will be capital partnerships with some of the best tech firms and governments in the world. Those are usually yielding investments with very strong overall risk-adjusted return, that would be a pretty good fit for the BI product.

Yes. We're looking forward to it.

Yes. And while we're not highlighting a real estate fund in this discussion, that's exactly how the private wealth product that we already have launched for real estate works as well, which is co-investing in our global opportunistic fund as well. And so what's really unique about all this is, is you're giving access to these private wealth investors who don't typically have access to these types of deals in a wrapper that makes sense for them. And I think that's been a huge game changer.

So complementary to the platform.

Right. Right. Okay. So Sika let's talk about deals, though. That's what everybody wants to hear about. But there's obviously been explosive growth. We talked a little bit about the demand, and how we see it. But I would say every conversation that I have with anybody about data centers, they say, yes, but what if this gets overbuilt, like how are we not just running off a cliff here? Like how do you think about balancing those 2 things that there is this tremendous demand out there but not to get too far ahead of ourselves.

Yes, Brian, so has anyone heard the word data centers or artificial intelligence in the last 2 years, I've been around the data center industry for 10 years, which is the century in the tech NDI world. And I think about it a lot, and obviously, I talk about it a lot to a point where my 5-year-old daughter thinks that every warehouse in the U.K. or Europe, for that matter, is a data center. And I obviously correct or intel her it's not a data center, it's an AI factory. And 10 years ago, in our business, I just want to give you some context in our business. We used to do victory laps around the office if we signed a 5-megawatt contract with a customer. Today, some of the younger guys on the floor don't want to get out of bed for less than a 1 gigawatt deal. But there is a reason for that. And the reason is if you take the U.S. As an example, this year, the U.S. market will add 10 gigawatts of leased capacity. That's unprecedented. The vacancy rates in the U.S. data center market are less than 2.5% and also unprecedented. And lastly, I would say if you watched Oracle results last night, or if you watch the White House tech dinner from a week ago, the amount of dollars expected to be invested in the U.S. alone might actually be understated underestimated already. So obviously, the point is -- the dollars are huge, and there's naturally concerns that are we going to have over bill similar to the 1840s when the real build-out in the U.K. led to $25 billion of bankruptcies in today's dollars, between 1995 to 2001, we had the dot-com bubble that led to a lot of casualties in the fiber space. So investors and I guess everyone at Brookfield is rightly thinking about, is this above. The counter to that is 3 things. First is we've had unprecedented growth demand in our renewable power business and our data center business in the last 2 years, but we've not invested any capital on a speculative basis. We have incredibly strong counterparties on the other side of the contract and long-duration contracts, 20 years plus. So that gives us the comfort that our capital is protected and is invested to serve some of the most credible companies in the world. That's the first point. The second point I would make is the early results of the technology, the early results from the tech firms are quite strong. You can read the reports this morning from what Oracle reported last night, Microsoft 2 weeks ago, reported a 20% jump in its Azure revenues, thanks to incorporation of the AI product. And similarly, Meta reported a 20% jump thanks to AI. So my point is we have to watch this carefully, but early signs are positive. And lastly, it's a bit of a technical point I do want to draw parallels to the fiber casualties. Fiber by definition, has unlimited capacity. That's not the case with data centers. There is a shortage. There's a demand supply shortage at the moment. So anyway it's right. So summary is yes, it is right to be thinking about some of the casualties and overbuilt infrastructure capital overshooting itself. But there are signs that -- there's not some mitigants in place which gives us the confidence.

Yes. And we often talk about how there's complementary overlap between the different platforms. But I think of AI and data centers in particular, like that's 1 area where in a lot of our other ones, we think we can invest better because of that sharing. But here, it's almost necessary. -- right? Like your constraint on AI is power and particularly renewable power. You need the [indiscernible]. Maybe just talk a little bit about how some of the things we're doing in AI does not actually neatly fit into just 1 of the silos, but really it's cutting across the whole firm.

Yes. I think absolutely. So the way I think about this is I use this brain and body analogy, tech firms are building the brain and infrastructure investors build the body. The brain cannot think or function without the body cannot communicate, cannot listen, it cannot process. And what is the body, right? What's the definition of this body. It's AI infrastructure. It's land -- to Brian's point, it's land, it's power, it's data centers, and it's the chips and of course, the capital. So in our business individually, whether it's real estate or renewable power, or data centers or infrastructure, we have world-class businesses. And the point is we want to bring it all together. So I want to contextualize that with an example. In North of France, our real estate business owns a very large industrial site. It's got hundreds of acres of land. It's got 100 megawatts of power, and we've worked with our renewable power colleagues to figure out a way to scale that power from 100 megawatts to 1 gigawatt. We see there's a path in doing so. And on the technical side, this particular location is located within 2 to 5 millisecond latency between Amsterdam Frankfurt, London and Paris, and those are the largest data center markets in Europe. So what have we done with that? Coming back to Brian's question, we have taken that land plot, that package to the French government and a European Union who are very keen to work on a sovereign AI project with us. And if they're picking us because we've got those assets, and we have a program that we can fund. So hopefully, that example helps contextualize why we believe we are extremely well positioned to be a big, big player in the AI space.

Okay. And Chloe, like Connor talked a little bit about how we use the flagship funds to spin out strategies. You're strategy is very much that, where we're touching on it. But you're not doing every deal in every single fund. So maybe just talk a little bit about how we're utilizing the platform and then how that's a real differentiator for BII.

Yes. So I think we -- at Brookfield, we have a really good track record of growing platforms, launching more strategies. BII is in a very fortunate position. where the investor base is so immense and private wealth has very little allocation to alts today and the growth could be immense there, but we need deal flow compare with it. So as you say, it's very important we have the platform to invest alongside and keep growing. And we will build in new strategies like BAI fund into where we can deploy within BII. As we, again, will be the best of Brookfield infrastructure across the whole platform. But I think it's important to note that Brookfield, we've been doing this for years this innovation, this growth. If we just look at infrastructure, we're not doing anything new with these new funds. We look at deal deployment that we don't have a pool of capital for or investors that are looking for something a little bit different from what we offer today, and we pair the 2 together like Sikander spoke about. So within infrastructure, we started with the flagship fund Brookfield Infrastructure Fund about 15 years ago. It gave us that credibility had we spoke about in this space, that knowledge, that deep operational know-how and that presence in the market. And then we saw an opportunity a few years later from the deal side where as we were talking to infrastrure owners and operators, not all of them wanted to sell equity, but almost all the needed capital to grow their businesses. And so we launched the infrastructure credit strategy now the largest infra credit strategy in the world. So that was deal driven. And then on the investor side, investors wanted something a little lower risk return, more [indiscernible] like cash flow. So we launched our Supercore infrastructure fund, a perpetual institutional offering. And then a few years later back on the deal side, transition. So our presence in renewable power was so strong. We saw that adjacent strategy in transition, and we took the opportunity to launch that, which is now the largest transition strategy in the world. Sikander said -- always we said, we saw the deal flow as well, the AI fund, which BII can invest alongside as well. So again, on the deal side. And BII does it all. So it's just so important that we have that all wrapped up for us and that deal flow coming in, so we can raise all that great capital out there.

Right. Okay. So Anuj, your group does a fair bit across all the various platforms as well. Like maybe just with a couple of minutes we got left here, just touch a little bit on a couple of examples of where private equity, similar to what Sika described on AI has sort of touched across the platforms.

Yes, we're a huge beneficiary of the overall Brookfield ecosystem in all of our platforms. Many of the businesses we've acquired, we've been able to learn a lot from our colleagues on the end markets or the actual underlying business model. So Westinghouse is an example, the obvious leader in nuclear services if it wasn't for our presence in renewable power being the largest in the world. We wouldn't have fully understood that there was no transition about nuclear. We were able to underwrite those assets on a plant-by-plant basis and really predict those cash flows with a whole lot of accuracy. If it wasn't for real estate, I don't think we would have had a good understanding of the Canadian or the Australian housing end markets. to be able to underwrite First National, which we did very recently or the [indiscernible], which we did a few years ago in Australia or [indiscernible], the mortgage insurance provider that we own also in Canada. And on the infrastructure side, an acquisition we made in January of this year, is a company called Chemelx, which provides heat tracing equipment that is used for pipes or other types of infrastructure utility-type assets to keep what moves within the pipe at a precise temperature. If it wasn't for our infrastructure colleagues who educated us on how the mission critical nature of this end product and service, we probably wouldn't have been able to surface value there either. So I'd say we -- having the broader platform, having the insights and the data and the knowledge from across the Brookfield ecosystem. It allows us to act with conviction and often invest where other and find value where others don't see it.

Okay. Great. So we have 3 minutes left. There's 3 of you and you have a room full of investors. So I'll give you each 60 seconds to make your elevator pitch on your strategy and just really sort of highlight what the opportunity is for investors [indiscernible] people with.

Chloe?

I'm hoping I don't need my 60 seconds. I've already sold you all, but [ profit ] has to be the platform for BII, it's so important over 125 years. We've built a platform with global scale and reach. It allows us to be flexible. We can look for the best risk-adjusted returns around the world. You pair that with our operational value add our expertise, and it's an incredibly powerful combination and BII gets the benefit of all of it.

Anuj?

So the proof is in the pudding. Of all the listed asset managers, we have the best private equity track record period. And if that interests you, I have subscription forms with me, and we're happy to take orders.

That was a good one. I -- it's going to be hard to beat that. I'll go back to my brain and body analogy, tech forms are building the brain. They need partners who can build the body. And I would say, in the last 3 to -- 3 years, 2 things have changed. One, the AI race is not only between China and the U.S. alone, every Western nation and select Asian economies want to participate in it. So that's changed the dynamic a little bit. Second is the raise is also between the tech firms themselves. And so therefore -- and the pace of technological innovation is exponentially increasing literally on a monthly basis. So what that means is 3 years ago, the tech firms, whilst they're building the brand, they could pick different stakeholders to build a body for them, assemble it, fund it. Now they're looking for 1 partner. And as we talked about earlier, we believe given the strength of our platform and given the various ingredients of the body that the tech firms need, we're really well positioned to capitalize on what is quite topical at the moment.

Great. So hopefully, that gave all of you a little more color for some of the various strategies and the different channels that we're pursuing to drive some of our growth. So thank you very much for your time. And I think we have another video up next.

[Presentation]

Please welcome Chief Executive Officer, Bruce Flatt, for a conversation moderated by Executive Vice Chair, Brookfield Asset Management, Cyrus Madden.

I thought they did a pretty good job. What do you think?

Excellent. It was awesome.

So look, Bruce, it's been about 20 years since we launched our asset management business. Back then, we had a balance sheet. We were investing in companies. We own some great businesses. We were a very good investor owner operator back then, and we were already pretty successful. So it was not an obvious decision to become an asset manager. And it pains me to say this, but I remember when you wrote the business plan, you send it out to a bunch of us, and I was among a couple of us who said, Bruce, this is crazy. Like why would we do all this work and let everyone else enjoy the profits of it. So you were right, I was wrong. That's why we have this amazing business today. But I think people would really like to hear why we chose to start raise money from institutions investing our capital beside them.

Yes. Maybe in hindsight, it was crazy at the time. But look, I think it goes back -- firstly, and you all know this, but I'm going to say it is change is always really uncomfortable. But being uncomfortable is what makes great businesses and which makes life exciting. And what most companies do is they just sit around, they have a great business, and they just keep doing exactly what they're doing. And often, people then done things, and they may be changed. And and make big, big mistakes. But if you can incrementally change over time, it's tremendously valuable to evolve the business because if you don't end up like Kodak, or many, many businesses that have happened in time. But if you go -- I'd say if you reflect back at that time, Cyrus, probably the most important thing that we have always adhered to is if you're in the types of businesses that we're in, you need scale amounts of money. And I -- probably the #1 thing, the reason was that it wasn't that we were going to really create the asset management business that has been created. It was that we needed access to do the things we wanted to do and to execute the business plan of internationalizing the business going to other countries and building out that you needed to have access to capital. And it was -- the glimmer of hope at that time was that we could access international pools of money on a private basis and deploy it into these types of assets. And of course, 25 years later, the -- it's a highly -- the business is highly institutionalized. Then there was no business. And as you remember, Cyrus, we actually had to make it up, like literally made it up as we went along. And I look at our team now, they're highly professional and do an incredible job. We were making up, embarrass. We probably have our presentations from 25 years ago, and they're embarrassing compared to what gets done today. And I would just -- the last thing I'd say, Cyrus, is I think the 2 things that the team talked about earlier, which is what's happening with retail wealth today, and what we're -- we'll talk about this afternoon, the insurance sector and what we're doing insurance are 2 similar junctures of what's going on with our business that are almost exactly the same as what happened 25 years ago because the retirement markets and retail wealth we're at the early, early, early, early innings of that change, and that's going to be like the institutional markets over the last 25 years. And the insurance business for us is going to be incredibly changing to the company. So I think both of those things are really, really exciting.

When you use the term we've institutionalized our processes in our business, and I agree 100%. And 1 of the themes that I heard today from everyone who spoke is we have deep operating expertise, operational capability. And that's something that, as I said earlier, I think we had that 25 years ago. So we learned a lot being an owner operator, and how do you think that's helped us manage money for institutions and clients?

Yes. Look, you were deep in the businesses for decades. What do you think?

Well, it's like you said, I'd say early on, we probably didn't know as much and over time through trial and very good advice from our predecessors we learned the basics, and we codified them. We created processes to make sure people follow the right process when we bought a business, what to do with the business, how to put -- how to choose a great management team, how to choose the right strategy, et cetera, et cetera, et cetera, and how to focus on the right KPIs. These are things, at least when I started, we didn't really...

Yes. And look, I would also say that it's foundational are -- some of the things we got right, maybe as opposed to you could have gone a different way. We didn't change for the marketing purposes. When we started, and you will remember and some others here in the room that work with us over that period would remember, our marketing people told us, the only way to sell funds is to do this.

Oh, yes.

And we said, well, we're not doing it that way. Our -- we invest and we're going to invest. And if people want to come to us, with us, they will invest with us. And I think that was probably 1 of the more foundational things we decided to do, which was we're in the -- and this is subtle. But we're in the business of investing, and we invest our money, and we bring along others that want to invest with us in our strategies. That's very different than some money can get raised, and we're going to try to put it to work. And it's behind the scenes and -- but it's subtle, but it's extremely important because -- what it means is that we leave in everything that we invest into. We put our money, both our money our other shareholders money and our clients' money into the exact same things. And that probably was -- that's what -- I think that's the reason for a 25-year track record that is is really good and that people can invest with us, which gives us the basis to do all the things for the future. And it was really led to -- we actually run these businesses, and we own them and it's not sometimes you get lost in the numbers, but these are just companies with people and you're just trying to provide essential services to people around the world. It's not that hard, but it's foundational to make sure that you don't take stupid risks and do dumb things in the company.

We have better marketing people today and back then. Look, we had the opportunity to work with, say, the prior generation of leaders at Brookfield. And what key lessons do you think they pass down that are still relevant to us today?

Look, I think all of the things, in fact, led by Jack Cockwell, who still on our Board in his 80s and not actively involved, but is I'd say, set many, many of the things that I think he'd be okay hearing me. Hopefully, he's not listening. If he doesn't like it...

He's listening. Hi, Jack.

But I would say that I think he set many of these principles. I think we refine them, tailored them, build them, institutionalize them and made them better. And they were make sure that everyone, all of our people, the companies we buy are incented properly. They were incented properly and that everyone is an owner of the business. Number two, that we only buy things that we can understand that we can build and we can grow and we can be responsible for, and we can be proud of owning. And number three, foundationally have more capital than anybody else and build businesses off of that and never ever, ever get yourself in a situation where you don't have capital when things are going down because that's when you know this Cyrus better than anyone. You've been the most -- you bought the best businesses at the worst times in the markets, but we had to have the capital to be able to do it. And that having capital and never putting yourself in a situation where you don't -- where you're not on the offense if not defensive at in both times is really, really valuable. I'd say those 3 things are probably the most important.

Look, we are super fortunate. We have a lot of people here who have been here for a very long time, and I think that's helped maintain our culture immensely over many years. So how would you describe our culture, Bruce, to other people?

It's unusual. Like it's not an easily explainable thing -- but I guess I'm proud that, firstly, as you go -- as you get bigger and bigger, it's tougher. It's usually tougher and tougher. And it probably is. There's no doubt because we had people before, and now we have 2,500 or 3,000 in our investment manager. And it's just tough to keep the that. But I spent a lot of time in all the offices around the world, and it's amazing the people are -- they're not the same, but they're similar. And so I think that's really important. But underlying it, essentially, we have a team approach the team matters more than any individual. You will be successful and be rewarded if you're a part of a team. You're in some way, shape or form, depending on where you are in the company, whether you're an operating person, executive individual, you're an entrepreneur. You're an investor in the business. We are all investors, that's it. But we're all entrepreneurs, and we're just here because we have our money invested, and we feel like it's ours. It's not ours. It's not our company. It's the shareholders' company, but we're all shareholders, and we all feel like it's ours. And...

Think and act like an owner, right?

Yes. And so it just -- and I'd say that that pervades the people within our business. And we try to encourage, and many of you have heard me say this before, we try to encourage making incremental evolutionary changes in the business because that is, if you don't change, you go backwards, but what that means is that you're always making mistakes. And not that we like making mistakes, but you have to accept within the culture, some mistakes and not have ramifications of it or nobody is everyone -- if not, people are petrified to change and petrified to do something new. And but never make big mistakes like don't bet farm on anything. You know that better than anyone. We've always tried to keep the downside protected. But you have to push the edges or nothing changes. We have -- to use an example, Sikander was up here. We had most incredible franchise on the planet for infrastructure. There's nothing that comes close to it. We could just sit aside, run our fund and do nothing else. And we keep pushing the edges because I believe we're in the midst of this AI revolution that is going to happen. It's going to change every single business in the world it's incredible what's going to happen. And we need to be at the forefront of. And if we're not, we'll be behind. 5 years from now, we'll look back and we'll be behind. So it's really, really important. And I'd say those are the -- I'd say those are the things in the culture.

Look, you talked about when we started, we had 10, 20 people, whatever it was. I remember the entire investment team could fit in a boardroom at 1 point in time. And today, we have 2,500, 3,000 investment people Connor talked about the scaling up, we plan for the future. So the question for you is do you think there was a seminal moment or a couple of seminal moments or events that really accelerated our trajectory.

Yes. Look, I think during good times, everyone excels during tougher times, Mr. Buffett always said it, you see that when the tide goes out, you see who's wearing...

Underwear?

Whatever the statement is. I think during during the tough times over the last 30 years is when we've been able to, at a minimum, continue to grow -- to continue the business that we have. But in particular, in 2008, we came out of 2008, '09 on a very strong basis, and we're able to propel the business when everyone was and was just -- they weren't even in business anymore. Some went out of business, a lot went out of business. But the others were not able to grow fast. I think we came out of COVID. We -- firstly, we all went back to the office in COVID. It was the best thing we ever did. 3 weeks after COVID hit. We went back the office. And it was the best thing we ever did because we were working every day 3 weeks after COVID started, firstly, it was more fun being at the office and sitting at home. But I think we've done 5 things since then that will be game changing for the business 5 years from now and a number of them happened during that period of time. Back our insurance business is [indiscernible] is going to show you later, it's going to earn $2.5 billion next year, it was 0 and started in COVID. So I think those tougher periods of time are where -- they're the ones that make the difference in a business because you either go backwards or you can make great advances forward.

And culture matters in those periods of time, too. Bruce, you started at Brookfield in our real estate business. You ran our real estate business for a long period of time. You've seen many cycles, many events in real estate. Where do you think we are today in the cycle? And what are the opportunities that you see in real estate?

So before I answer that question, I was listening to some of the presentations earlier. And I think probably 1 of the most important things of what's going on with artificial intelligence is that we started as real estate investors. What's being built out for artificial intelligence is the backbone of the global economy, and really, it's just a giant real estate business. And because what we're doing is we're providing enormous infrastructure backbone infrastructure to technology companies and the build-out is unprecedented. And the fact that we have power real estate power and data center expertise allows us to build those things out. But it's really the all of those things are backed off of what we learned out of real estate. And I think -- so I think that's really really important when you just think about what we're embarking on in AI factories because this is just real estate. It sounds more complicated than that, but it is just real estate. If I go to the cycles, look, everyone knows this. I'm going to state it. Real estate is a highly cyclical business. It always has been and always will be because it consumes large, large sums of money and you lever it to get returns. But over time, you can make a lot of money if you buy great assets, and if you are in the right places, the most fundamental things. And I would say, first point number one, fundamentals real estate globally and most things are really strong. Yes, there's always some extreme stuff that's out there that's not so positive. This time, this cycle and each 1 is different, each cycle has been different for 30 years. This time, fundamentals are good. The issue has been in the capital structures and interest rates went up fast and went to -- they're not high, but they're much higher than they were, and therefore, people had to adjust their capital structures to it. And those things are sorting out in the marketplace. But as Brian said earlier, and as Connor said in his presentation, the real estate fundamentals have turned dramatically in the last 12 months. Transaction activities come back doesn't mean everything is there, but you can now finance virtually everything in real estate across the world and real estate lives on financing. And it's just turning in 100 basis points coming off of interest rates in the next in the United States. Most other markets have already turned much greater. But in the U.S., it's really just waiting for interest rates. And you will see some of that come and drive the recovery even further in values.

And there aren't too many cranes...

There are no cranes. That's what always happens. There's -- we've had the -- I don't think there's an office building under construction in New York City. I'm going to look at somebody. Is there a real estate building? Any major building under construction in New York City? If there's one, our guys are going to tell me. I see no hands from 1 of our team. But literally, that is shocking in London, there are small buildings in the West End. There's nothing really under construction in the city. What that means is next 5 years, rents gone through the roof. Retail, nothing under construction, industrial, highly moved come down. So it's about supply-demand interest rates and financing, and it's all coming back.

Okay. I want to switch gears a little and talk about the capital markets. And I may get the numbers slightly wrong. But if you look over 25 years, 25 years ago, there were thousand public companies in the United States. Today, the number is something like 4,500. In the private markets, 5 years ago, there were 2,000 companies owned in the private markets. Today, it's more than 10,000. So what's happened? What's going on here?

Look, you and I own Brookfield shares, we've never sold them, we just keep them. We own a business. Why would we sell? Like -- and that's what the private business, right? If you own a business, you own a store. We -- instead of at Brookfield, we're going to own a store. We own a store. We run store. We don't look at the stock market price of our store every day. We don't care. We're not selling it. We operate our store. The stock market just distracts people, and with the ETF market, active management in many places, going down, ETFs taking over. It changes the value of stocks and men don't trade properly. That presents enormous opportunity. I think we've probably taken 10 companies private in the last 12 months. That's going to continue to increase. We're going to keep taking more companies private. Once in a while, we'll take 1 public where it makes sense, but by and large, not. And I'd say when people say, oh, there's going to be more IPOs. There's not -- there will be some IPOs, but more companies are just going to be sold to our institutional clients and to other sponsors. And people say, "Oh, that doesn't make sense because some sponsor is going to buy it from you." I argue the opposite. It makes total sense. Those are smart owners who want to buy a business and own it for the next 10 years instead of taking it public. Why have it in the public market. So I think it's -- there are there'll be the global titans that are just too large to be private, like Microsoft, $4 trillion business. Of course, that's not going to be private. And maybe that will trade well because it's in indexes and it's large. But by and large, the rest of it's all staying private. And remember, these institutional clients, in particular, when I -- back when we were seeing them 25 years ago, they had a big 1 had $80 billion or $100 billion. But we're 25 years later, those institutions have $500 billion, $700 billion, $900 billion, $1 trillion and $1 trillion is going to end up at 8, 9 years at their returns, it doubles. When you have $2 trillion, $2 trillion goes to $4 trillion, $4 trillion goes to $8 trillion. This is -- these are staggering amounts of money that need to get put in places. And if you don't need liquidity, own a private business. There's no reason not to.

So what about -- you talked about institutions. What about an individual investor. What does it mean for them?

I think people are going to end up with -- that's why the United States is opening up 401(k). They're going to end up with 40% of the portfolio in privates and 40% will be in ETFs and liquid stocks because they should have some form of liquidity within every portfolio, and the rest of it is going to be in private. So I -- whether some will be at -- like some institutions they are 50%, 60% in private. I would add at always do advocate to anybody who ever asked me, have liquidity for whatever you might need, double it, because you might have a need that's in excess of what you ever -- what you think you need and everything else should be in private. And that's what's going to happen. That's what's happened and happening in every institution in the world. And that is what's going to happen in retirement accounts. So I think the -- Hadley, I think the number was $20 trillion of retirement wealth around the world. $3 trillion, $5 trillion, $10 trillion, $15 trillion of that is going to go into private assets. And it's going to be from real estate to infrastructure to companies owned in private hands, and they'll be better for it. Much, much better for it.

Okay. One -- we have time, 1 more question. What are you most excited about, Bruce, to sit here today?

You know Cyrus. I get excited about everything. Look, I...

Everything with a Brookfield in front of us.

Yes. I -- what I'm most excited about, I actually watched our team up here earlier, and they're so much better than you and I were like they're smarter, better train, they've seen everything. We can help them, but they are amazing. And so I'm excited about the future of what Brookfield has because the people we have are incredible. And therefore, that's probably the most exciting thing that we have, which is just to watch that -- the next generation of people come along.

So we're going to keep our shares.

You're definitely keeping your shares.

Okay. Thank you.

Thank you, Cyrus.

Thank you.

All right.

Please welcome back Connor Teskey.

Great. Well, thank you, everyone, for joining us through for our prepared remarks and sessions. We do now have 10 minutes for Q&A from those in the audience. Please wait for a mic to to you such that everyone, both in the room and online can hear you. I will let the mic runners start.

Connor, it's Cherilyn Radbourne from TD Cowen. I know that the excitement is kind of on the private wealth side in the industry at large at the moment. But I did want to ask something on the institutional side. And that is the crossover and sort of the number of institutions that you have invested in multiple strategies and where that sits versus where you think it can go?

To put it bluntly, it sits far below where we think it can go. I think historically, that number has been in and around 2. We do see room to push that up to 3, but there's a little bit of a numerator denominator effect going on there. With our existing clients, we are making tremendous progress in cross-selling and adding the number of products per institution. But at the same time, we keep adding new institutions to the denominator. So I would suggest if we were to run that number today, it probably actually looks quite similar to what it has in the past. But if we were to almost vintage weight those clients from when they made their first investment with Brookfield, we're seeing that crossover trajectory go up very significantly. And what's being added to that is we're also adding more products. It's not just cross-selling what we had before. But as we add more products, it's always with the intention of simply meeting the demand of our clients. And that's a further driver of that trajectory.

It's Craig Siegenthaler, Bank of America. My question is on the corporate structure. I saw your targets for 2030 to '35 roughly in terms of realized carry. You added $700 million of debt on the balance sheet this year. Does your pure FRE model kind of really drift away from that in 5 years?

So maybe just 2 different parts of your question. And what do we use debt for? We should be clear what we use the balance we have a cash-generative business on a stand-alone basis. We use our balance sheet for 2 things. One, to fund M&A, new organic M&A, but also to acquire a greater percentage of our partner managers. And 2 to see new strategies. That is what we are using the capital that we access the public markets for. It's 2 things. When we look out beyond 2030, we will begin to introduce more carry into our earnings. But under our structure, where some of that carry does go to BN under a royalty, we do expect to continue to be under all scenarios, very FRE weighted. Even out to 2035, it is the vast, vast majority FRE in our earnings, even as carry introduced towards the end of the decade.

Bart Dziarski, RBC Capital Markets. Just going back to the institutional channel. You talked about early days in 4 areas, so mid-market, corporate pensions, family capital in Europe. Can you just unpack those a little bit in terms of like what we could expect that over the next 5 years, and what the strategy is to tackle those 4 areas?

The strategy is actually easier to explain. We always want to be self-critical and look to how can we grow faster, how can we improve maybe perhaps victims of our own success. We were raising so much money from institutions and large-scale institutions, that is where we focused our efforts. And candidly, you can understand it is difficult for someone who covers the largest sovereign wealth funds around the world to say, also, can you cover 10 family offices. They're going to dedicate their time to what they've done in the past and where they can raise the greatest amount of dollars. So the big thing that has changed in our business is we now have dedicated teams to target of those subsectors. They are people who wake up every day looking to meet the needs of those clients. They aren't distracted by other investors. They aren't distracted by trends in other markets. And perhaps the other point I would make is that's not -- our capabilities are integrated. So the client team that works with our clients every day, they also feed into product development. And therefore, we can also look to develop products that are more tailored to family capital. or more tailored to a region, maybe we do a euro-denominated sleep for European investors. So how we tackle it answers essentially where we think the growth is coming from.

Brett Reiss, [ Jonnie ] Montgomery Scott. If BAM is able to hit the 18% distributable earnings targets. How do you think the Board will view the cadence of dividend increases versus share buybacks versus retaining money in the business, and what do you think the corporate parents preference of those choices will be going forward?

So let's break that down into a couple of things. We have a cash flowing business so we don't need to retain money in the business. We have a highly cash-generative business. Similar to the previous question, we generally pay a high percentage of that out as dividends. We set our dividend to match with the near-term run rate earnings of the business, and we've set a high payout ratio of 85% to 90%. And we are committed to that, and we'll continue to deliver it going forward. So if our business is going to grow at high teens, we would expect our dividend to do the same thing over those years. And that does leave us with a little bit of money but we're going to need that capital to fund M&A and seed new strategies. So we expect the vast majority of capital to be used to pay out into dividends. but we don't need to retain any cash on balance sheet.

Maybe time for 1 more here in the front.

Stephanie Ma from Morgan Stanley. I wanted to dive into the additional levers to drive the 20% plus earnings growth. Maybe first on 401(k). How are you going about this? Do you need to partner to tap that opportunity more meaningfully? And then second, just on capital markets. Where are you in terms of that build-out? Any steps you're taking? And how meaningful could that be?

It's important to reiterate that the 401(k) market, and again, we'll call it the individual market. This is incredibly significant. Over a number of years, it would take time, but this is a driver to our business that can supersede what has been built in the institutional market and some of the biggest step changes in our business, things like our flagship funds, the opportunity set is very large, but it will take place over a number of years in an extended period of time. So what are we doing right now? It's really simple. We're leaning into the fact that we have the right product mix and capability to best service that market. And from there, we are having the right conversations with the right partners and developing the right products. We understand that there have been a number of announcements of partnerships in the space we should all recognize that those partnerships are not exclusive. And as this market grows and expand, we very much expect it to be open architecture. And that is how we are building our business to service a wide range of distribution channels. And then just to touch on your comment about capital markets. Again, here, we are coming off a very, very low base. As we said in the past, we think it's probably 2 to 3 years before that is any sort of materiality to our results, but that could accelerate very, very quickly. And the real driver of the acceleration could be the growth of our credit business. And our partnerships with Castle Lake, with Oaktree, we're doing more in credit than ever before, and that's what creates the upside torque to make that number more meaningful potentially in a 2- to 3-year time frame than what's in Hadley's base case.

We'll bring Jason to close out.

Thank you, everyone. We hope you found the presentations both informative and interesting. We're going to invite you to take a short break outside, and Brookfield Corporation will begin their presentation at 3:30 p.m. Thanks.

Good day, and thank you for standing by. Welcome to the Brookfield Asset Management Second Quarter 2025 Conference Call and Webcast. [Operator Instructions]. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Jason Fooks, Managing Director of Investor Relations. Please go ahead.

Thank you for joining us today for Brookfield Asset Management's Earnings Call for the Second Quarter of 2025. On the call today, we have Bruce Flatt, our Chief Executive Officer; Connor Teskey, our President; and Hadley Peer Marshall, our Chief Financial Officer.

Before we begin, I'd like to remind you that in today's comments, including in responding to questions and in discussing new initiatives and our financial and operating performance, we make forward-looking statements, including forward-looking statements within the meaning of applicable Canadian and U.S. securities law. These statements reflect predictions of future events and trends and do not relate to historic events. They're subject to known and unknown risks, and future events and results may differ materially from such statements. For further information on these risks and their potential impacts on our company, please see our filings with the securities regulators in Canada and the U.S. and the information available on our website.

Let me quickly run through the agenda for today's call. Bruce will begin with an overview of the quarter, highlighting the strength of our platform and discuss how we're positioned for long-term growth, particularly around our thematic investment strategies. Connor will discuss our accelerating pace of investment activity and monetizations, both at multiyear highs and the growing opportunity to reach individual investors through retirement and wealth channels. Finally, Hadley will walk through our financial results, balance sheet and some of our recent strategic initiatives. After our formal remarks, we'll open the line for questions.

Before I hand things over, I'd like to take a moment to welcome the new analysts who have initiated coverage on Brookfield over the past few months. We're glad to have you with us. To ensure we can hear from as many participants as possible, we're asking everyone to limit themselves to one question. [Operator Instructions]

And with that, I'll turn the call over to Bruce.

Thank you, Jason, and everyone joining us on this call. We delivered strong results this quarter with fee-related earnings up 16% to $676 million. Distributable earnings were up 12% to $613 million. We raised $22 billion of capital in the quarter and over the past 12 months, $97 billion, helping drive fee-bearing capital to $563 billion, which was 10% up year-over-year. The broader market environment is very constructive. M&A is gaining traction, and there is significant liquidity with well-functioning capital markets, a much different environment than we saw even a few months ago when investors were waiting for signs of stability. This shift plays directly to our strength. We have always focused on long-term mission-critical investments related to the backbone of global economy and that continues to be our strategy.

The businesses we own: critical infrastructure, renewable power, industrial and logistics assets, high-quality real estate and essential service businesses provide stable inflation-linked cash flows, which are sought after in a market where resiliency is valued. This opportunity set is large and compelling and is driven by 3 powerful themes, which we have discussed for years with you: digitalization, decarbonization, and de-globalization. These 3 Ds are more relevant today than ever before. They have expanded and are converging in ways that are accelerating demand for capital at a global scale.

First, deglobalization has evolved from a discussion around supply chain resiliency into a broader reordering of global trade. We are seeing increased reshoring and near-shoring across manufacturing and significant investment in alternative and duplicate supply chains. That is driving a surge in demand for logistics hubs, advanced manufacturing facilities and modern industrial infrastructure.

Decarbonization originally centered on net zero commitments now also reflects growing concern around energy security and more -- and increasingly grid stability. The focus on new energy sources is no longer a long-term policy goal. It is a near-term economic imperative. The lowest cost, fastest-to-market, scalable solution remains renewable power. Most Importantly, increased solar penetration is driving soaring demand for the grid stabilizing benefits of hydro, nuclear and storage.

Lastly, digitalization, which initially focused on cloud infrastructure, telecom towers and fiber has entered a new phase. Artificial intelligence is transforming how data is created, processed and consumed. That transformation is driving exponential demand for computing power, data center capacity and sovereign scale AI campuses. In fact, we believe the infrastructure build-out for AI will be one of the largest capital formation cycles of this generation. Connor will speak more about our positioning in AI, but the bottom line is this.

We have scale, experience and integrated approach that few can match and we are viewed as a partner of choice. We are developing next-generation AI infrastructure around the world with having already built 2,000 megawatts of data center capacity and being one of the largest renewable providers in the world, we can deliver on large complex transactions integrated with energy, land entitlement and development under one roof, and that is exactly what the largest hyperscalers and governments are looking for in a partner. The convergence of these megatrends has created a powerful investment landscape. We are uniquely positioned to lead. We're investing at scale in these high-growth sectors supported by multi-decade structural tailwinds.

This year-to-date, we invested $85 billion. We also harvested investments that have benefited from our operating value approach and sold over $55 billion of assets at very good returns. This represents our highest level of activity in years. Connor will discuss monetization more broadly in a little more depth, but these realizations demonstrate the quality of our portfolio and the value creation delivered by our operating teams. The current environment marked by secular tailwinds, improving sentiment and a premium uncertainty is suited to our strategy.

Our focus remains the same: invest with discipline for value, protect downside, return client capital to clients at excellent returns. By doing so, we will continue to be rewarded with growing fee-bearing capital and the ability to deliver on long-term value to our shareholders. I will now turn the call over to Connor to walk through how we are deploying capital, building strategic partnerships and monetizing assets across our global platform.

Thank you, Bruce, and good morning, everyone. As Bruce highlighted, the market environment is more constructive today and the structural drivers behind our business have been accelerating. With these themes converging to create an unprecedented demand for assets that make up the backbone of the global economy, Brookfield is uniquely positioned to meet that need. This is evident across our platform, where we are deploying capital into long-term trends at greater rates and forming strategic partnerships that reinforce our leadership position.

Let's start with partnerships. We recently entered into several large-scale agreements that reflect the depth of our platform and the confidence that the world's largest governments, corporates and institutions placed in Brookfield. The first is a $10 billion public private investment program to support the Swedish Government in building out of next-generation digital infrastructure to power the growth of AI and cloud computing within the country. This framework allows us to integrate our renewable, infrastructure and real estate capabilities to deliver a full suite solution at scale.

The second is a renewable energy framework agreement with Google. Under this agreement, we will deliver up to 3,000 megawatts of hydroelectric capacity across the United States, starting with initial contracts valued at more than $3 billion. These facilities provide stable, clean baseload power, a critical input for AI and data operations. These transactions build on other strategic partnerships we've already formed with Microsoft, Barclays and the French Government to deliver high-value infrastructure. This is part of a broader shift, sophisticated counterparties are increasingly turning to us for our ability to not only bring capital at scale, but to bring integrated solutions and most importantly, the experience and capabilities to execute with certainty.

Turning now to investment activity. We are seeing transaction volumes increase, particularly around the same secular themes. Nowhere is the impact of the 3 Ds more visible than in our Infrastructure business. This year, we have committed to a number of major infrastructure transactions totaling over $30 billion in enterprise value. These include Colonial Pipeline, the largest refined products pipeline in the United States; Wells Fargo Rail, the second-largest railcar leasing platform in North America; Hotwire Communications, a leading U.S. fiber-to-the-home provider. And even yesterday, Duke Energy, Florida, a vertically integrated electric utility serving 2 million customers with 53,000 miles of transmission and distribution lines and over 13 gigawatts of installed generation capacity. Each of these assets is mission-critical, defensively positioned and underpinned by long-duration cash flows.

This pace of activity is only possible because of our global footprint and readiness to deploy at scale. We can move decisively, underwrite large and complex assets given our experience, and we will use our operating capabilities to drive value in these businesses under our ownership. Based on our advanced pipeline, this recent pace of activity is not expected to slow down.

At the same time, we are seeing robust demand for high-quality assets and businesses we invest in. As evidenced by a significant increase in monetization activity so far this year. Year-to-date, we've announced asset sales valued at over $55 billion, generating $33 billion of equity proceeds. These exits have achieved strong returns and reflect the operating value we've created over time. And we are seeing this across our franchise.

In real estate, we've announced $15 billion of sales across senior housing, net lease, student housing and hospitality. We also completed the IPO of Leela Palaces in India had a record value for the sector. In Infrastructure, we've announced the sale of nearly $13 billion of assets, including partial interest in Patrick Terminals, our final stake in NGPL and stabilized data centers developed through our Data4 platform. We've also been active in renewable power, exiting wind and hydro assets, and in private equity, where we've returned more than $10 billion to clients over the past 2 years.

And while we're harvesting value today, equally focused on tomorrow's opportunities, none more important than AI infrastructure. Artificial intelligence is driving exponential demand for compute and requires an unprecedented build-out in infrastructure. Data centers, tower, fiber, liquid cooling and semiconductor capacity are all essential and required trillions in capital investment. This is the next frontier for infrastructure investing and Brookfield is well positioned to lead.

We already have strong capabilities in power and data center development globally, and we are scaling these platforms aggressively. But the infrastructure outside the box, land, power and buildings, essentially the racks and shelves is only part of the story. The infrastructure in the box, the compute, chips and cooling systems have largely been funded by corporate balance sheets. We believe that will change.

We see an emerging opportunity for long-term private capital to help fund this next wave of AI build-out. We're already seeing demand for GPU Infrastructure-as-a-Service. Long-term compute capacity delivered off balance sheet and funded by third-party private capital. We also see opportunities across the broader AI supply chain, from liquid cooling and power distribution to fiber networks and chip fabrication capacity. Combined with the need for developers that can deliver turnkey AI campuses as we are doing in Sweden and France, we believe this may ultimately support a dedicated strategy of its own.

Our integrated platform, spanning equity and credit allows us to deliver these solutions with speed, structure and scale, and our relationships with governments, hyperscalers and industrial leaders are generating proprietary deal flow across the new AI ecosystem.

Alongside this transformation in infrastructure, we're also seeing a transformation in our client base. For decades, alternatives have been driven by institutional capital, particularly defined benefit pensions and sovereign wealth funds. That remains our core base, and it continues to grow rapidly. But a new major growth engine is now emerging, the rise of individual access to alternative investments: defined contribution plans, insurance-based savings, and private wealth are quickly becoming the next frontier.

In the U.S. alone, 401(k) plans and retail annuities now represent over $10 trillion in assets, on par with institutional pools, and private wealth clients represent another $10 trillion opportunity. A recent executive order from the U.S. administration could accelerate this shift by laying the groundwork for greater access to private strategies through workplace retirement plans. Even a modest reallocation could result in hundreds of billions to trillions of net new flows into alternatives over time.

We are well prepared for this evolution. In this evolving landscape, distribution will matter, but it is the quality and durability of the products that will ultimately determine success. Our business is centered around real assets and essential business services that offer income, capital stability and inflation protection that long-term retirement and wealth portfolios require.

We've made significant investments across our platform to meet the needs of retail investors through the build-out of our private wealth and retirement platform. Brookfield Wealth, which is on track to raise over $30 billion of capital this year from private wealth and insurance annuity channels. This year, we're launching two new offerings focused on private equity and asset-based finance, and at the same time, we are expanding our dedicated teams for both private wealth and defined contribution channels.

At the same time, we manage approximately $100 billion and growing portfolio of annuities on behalf of Brookfield Wealth Solutions, which is designed to generate stable, attractive returns for retirement accounts. And that platform continues to expand globally. Last week, Brookfield entered into an agreement to acquire Just Group, a leading provider of retirement services in the U.K. individual retirement market.

While Brookfield Asset Management is not contributing capital to the transaction or taking on insurance liabilities. Upon closing, we could become the investment manager for a significant portion of Just Group's $36 billion portfolio, on terms consistent with our existing arrangement with Brookfield's insurance group, Brookfield Wealth Solutions. This will immediately add stable, incremental fee-related revenue for our business with significant upside as Just Group's origination capabilities support further growth in retirement savings. This transaction demonstrates the significant opportunity for us to service BWS' growing global platform, a feature that remains underappreciated-upside for our business. While such transactions are discrete in nature, they continue to be a meaningful and highly accretive source of growth for us as part of Brookfield's ecosystem.

In summary, our global scale, real asset focus and track record of delivering income stability and downside protection, make us well suited to serve this new cohort of investors. And as capital flows expand from institutions to individuals, we are well positioned to lead.

To close, across our business, we are seeing an acceleration of the most important drivers of our growth. Capital markets are robust, partnerships are expanding and the pipeline of opportunities continues to grow. We are investing behind long-term themes, monetizing into strong demand and leaning into sectors where we have a competitive edge. With a strong balance sheet, global platform and long-term orientation, we are well positioned in today's market and excited about what lies ahead.

With that, we'll turn the call over to Hadley.

Thank you, Connor. Today, I'll provide an overview of our second quarter financial results, which demonstrated the advantage of our stable and predictable business model. I'll also discuss our strong fundraising performance and our balance sheet positioning.

We delivered strong financial performance in the second quarter. Fee-bearing capital increased to $563 billion up 10% year-over-year. Over the last 12 months, fee-bearing capital inflows totaled $85 billion, of which $60 billion came from fundraising and $25 billion came from deployment of uncalled commitments. We saw contributions from scaling our partner manager platform and growth of our listed affiliates market cap.

The strong growth in our capital base continues to drive the strong growth in our earnings. One of the most unique features of our model is that fee-related earnings comprise nearly all of our distributable earnings, making our earnings highly stable and predictable, which is particularly valuable in today's environment. Fee-related earnings were $676 million or $0.42 per share and DE was $613 million or $0.38 per share. That translates into 16% and 12% growth from the same period last year, respectively. With earnings partially offset by higher interest expense paid on our $750 million bond deal issued in the quarter, and lower interest income as we've deployed our cash to acquire partner managers, which will pay off over the long term.

Overall, growth has grown by strong fundraising, $97 billion over the last 12 months and robust deployments. Notably, year-to-date, we've deployed over $85 billion of capital into investment, including over $50 billion of equity value. This has been a huge catalyst for our business, and we will continue to be active on the deployment front, given our robust pipeline.

The simplicity and consistency of our earnings anchored almost entirely in reoccurring fees, gives us a strong foundation to continue to build-out, especially as we grow further our capital base and launching new strategies. Lastly, on financials. Our margin expanded 56%, up 1% from the prior year quarter.

Let me spend a minute discussing some of our quarterly fundraising highlights. In total, we raised $22 billion of capital, bringing the 12-month fundraising total to $97 billion. Notably, almost 3/4 of our fund rates for the quarter came from complementary strategies, demonstrating the growing diversity and strength of our product suite, which now provide consistent and increasing fundraising regardless of whether our flagships are in the market.

Within renewable power and transition, we raised $1.5 billion, including over $800 million for the second vintage of our global transition flagship, bringing total capital raised to over $15 billion. This is already the world's largest energy transition strategy, and we will raise a significantly more capital before our final close later this quarter.

Infrastructure fundraising totaled $1.7 billion, including over $1 billion raised for our super core infrastructure strategy, the fund's largest quarter in over 3 years, and over $800 million raised for our private wealth infrastructure vehicle, which is the strongest quarter ever. In addition, we raised $1.3 billion across private equity Strategies and $1.8 billion across real estate strategies, including $500 million for the fifth vintage of our flagship real estate strategy. The scale and diversity of our fundraising, especially across our complementary funds continues to show strength, and we will have strong fundraising tailwinds in the coming months with two of our flagships currently in the market, expecting final closes shortly.

Turning now to private credit, where our platform continues to grow in both scale and capability. During the quarter, we raised $16 billion across our credit strategies. Our partner managers brought in over $10 billion, and we raised more than $4 billion from insurance accounts. We also raised over $800 million for the fourth vintage of our infrastructure mezzanine debt strategy, which will hold its first close shortly, bringing total capital raised to $4 billion. With more than $250 billion of fee-bearing credit capital, we manage one of the largest private credit franchises globally. Importantly, we have meaningful origination capabilities having deployed and committed over $10 billion during the quarter and over $30 billion over the past year.

Our platform is highly diversified across credit strategies, including asset-backed finance, opportunistic credit and real asset lending. This diversity is key as it gives us the ability to remain disciplined when certain markets become commoditized or when risk-adjusted returns are less compelling and to focus instead on areas where we see more attractive opportunities.

Today, we continue to see strong demand in asset-backed finance and real assets, two areas that align closely with our strength, deploying large-scale capital with specialized underwriting capabilities or in sectors where we have deep domain expertise like infrastructure, power and real estate. These capabilities have also guided our partnership with managers who share our focus that can help expand our platform.

In the quarter, we invested approximately $350 million towards buying and growing our partner managers, including an additional 9% stake in Primary Wave, our leading platform for music royalties, participating in a Castlelake-led acquisition of Concora, a specialty consumer credit manager and origination platform and increasing our ownership in Oaktree. Additionally, we expect to finalize our acquisition of a 50% stake in Angel Oak, a leader in nonqualified mortgage origination later this quarter. These are high quality, scalable platforms that enhance our credit capabilities and position us to continue delivering strong risk-adjusted returns.

As for our balance sheet, at quarter end, we had $1.5 billion in liquidity. We continue to use our asset-light balance sheet to seed new products, and support strategic partnerships, including the up-and-coming Angel Oak closing, with the goal of generating long-term high-quality revenue streams. We were also picked to be added to the Russell 1000 Index in June, a first step in our broader goal of achieving broader inclusion in the U.S. equity indices. We are prioritizing this initiative, and we believe we are well positioned to continue making progress.

And lastly, we declared a quarterly dividend of $0.4375 per share payable to shareholders of record as of August 29. To close, we remain firmly on track with our long-term growth objectives. Our diversified platform, operational depth and global reach continues to give us a competitive edge in today's environment. Our strategy is anchored in the mega trends of digitalization, decarbonization and deglobalization and we're scaling into the areas where these trends intersect, particularly AI infrastructure, energy transition and critical real assets and essential businesses.

We look forward to sharing more of these themes at our Investor Day on September 10 here in New York. Thank you for your continued support. Operator, we can open up to questions now.

[Operator Instructions] Our first question will come from Michael Cyprys from Morgan Stanley.

This is Barron Thomas on for Mike. Want to ask about the fundraising backdrop, how you see that progressing into the second half of this year and into 2026? And what you see as some of the key contributors there? Also more broadly, how is the overall environment for raising capital evolving, given industry challenges around DPI?

Thank you for the question. We would characterize the fundraising environment as incredibly robust. To put it simply, we're raising more money in more places across more products than at any point in our history. And that's both by geography and by asset class and product. As an example, year-to-date, we've raised twice as much capital in Europe as we did versus last year.

But perhaps even more important and really characterized by this quarter is just the growth in terms of our complementary strategies. This quarter, approximately 3/4 of our fundraising came from complementary strategies, showing the increasing diversity of our business and how these products are becoming a very critical and meaningful growth driver for our business.

Flagships are going to continue to drive step changes in our growth and our profitability, but the growing number and growing size of our complementary products are providing greater stability and ongoing growth to our business. So where we sit today, we very much expect fundraising this year to be bigger than last year.

And our next question will come from Cherilyn Radbourne from TD Cowen.

Connor, I wanted to pick on the prospect for alternatives to gain access to the broader retirement market. I think there's been a lot of emphasis placed on distribution and shelf space thus far. But in the letter, you commented that ultimately you think the product offering will be the key determinant of success. Can you elaborate on that a bit more and comment on timing as well?

Perfect. Thank you for the question. You are absolutely correct. This is a major and significant growth opportunity for our business. We feel it will grow incrementally over the next several years and decades. But you're right, there's 2 things of note. One, success in this space is going to be driven by those with the brand, the scale and the track record. And in this regard, we feel we're second to none. And then secondly, we feel the winners are going to be determined by who has the right products to meet the needs of these investors and these new pools of capital.

And here, our leadership in the right asset classes, notably real assets across infrastructure, power, real estate in asset classes that have long duration inflation-protected cash flows, which within the alternative space, absolutely make the most sense for retirement products. So at this point, our focus is utilizing our leadership in these key sectors to provide the right products across the right asset classes as this opportunity evolves. And we have every intention to be a leader in the space as the opportunity grows.

Our next question will come from Alex Blostein from Goldman Sachs.

I was hoping we can spend a couple of minutes on insurance. Obviously, an important growth area for the firm. Two-part question there. I guess, number one, we've seen generally increased competition and tighter credit spreads in the U.S. retail channel. How are you guys thinking about both growth in the U.S. retail with respect to kind of that $20-ish billion target you've talked about in the past and the ability to ultimately pivot and rotate more assets into Brookfield strategies?

And then secondly, I was hoping you could also hit on the Just acquisition and just kind of thinking what kind of footprint and the ambitions you might have in the U.K. market on the back of that deal?

Thanks, Alex. Maybe taking that all together, in terms of the Just Group transaction, for everyone's benefit, Brookfield Wealth Solutions last week announced an agreement to acquire Just Group, a leader in provider of U.K. retirement products. If this transaction is successful in closing, we could expect to manage a significant portion of Just's $35 billion-plus portfolio under our existing IMA with BWS. And this would add immediate high-quality, stable fee-bearing capital under our platform.

Perhaps most important is we feel this transaction again highlights an underappreciated benefit of -- and an underappreciated upside for Brookfield Asset Management, which is as BWS continues to scale, we get to partner with them on that growth and scale our asset management activities to support their business, and we get to do so without the need to invest capital or take on insurance liabilities. And while these transactions are somewhat discrete, that is absolutely a growth platform. It grew first in the U.S. Now it's growing in the U.K. and there's the potential that it will grow in other markets around the world. And we certainly will look to benefit and prosper and grow alongside that business.

In terms of what we're seeing in the United States and the ability for that business to grow, we very much feel it's consistent with what we've said in the past. Yes, there are other market participants in the space, but the underlying fundamentals are incredibly robust. There is more demand for these types of products today than ever before. There will be more demand next year than there is this year. And by having leading platforms, we are well positioned to capture our portion or more of that long-term growth trend.

And maybe I'll just add to Connor's remarks and talk a little bit about what we're seeing in credit specifically and deploying that capital because obviously, credit is a big area for us. We manage over $300 billion, a major player. And we see significant growth, especially around our core competencies. So that's around asset-backed finance, real assets and opportunistic credit. And these are areas where we've had a long history of investing, competitive advantages around the origination side and of course, the deep expertise that we bring plus the ability to structure complex investment opportunities with appropriate downside protection. So we maintain a disciplined approach, and these areas are less commoditized and less exposed to spread compression.

When you look at, as an example, the ABS market, which about 10% is made up of private credit, and that's a growing area. Infrastructure is really feeling the deployment on the credit side related to the 3 Ds as well, the megatrends that we've been seeing. Real estate and opportunistic are also finding opportunities with bad capital structures and a growing need for tailored financing, which is a big driver. So overall, we feel very good about deploying these opportunities with very strong discipline and attractive risk-adjusted returns where we're not getting caught up in spread compression, which is valuable for all types of our investors, including the institutional and retail market.

Our next question will come from Bart Dziarski from RBC Capital Markets.

I wanted to follow up on the fundraising commentary. Just specifically diving into the evergreen private equity strategy. So given your position within the retail channel and the strength you called out there, how are you thinking about if we see success on the PE evergreen fund raise, what that could mean for BBU in terms of maybe going into an evergreen structure?

There is no doubt that we view the semi-liquid private evergreen PE strategy as complementary and additive to our product suite within private equity. We were able to leverage our existing positions in order to seed that strategy. We think that will put it in a position to launch with success and grow faster. But the reality is having more products that can meet more different investment types and investor needs will allow us to do more transactions in the space.

The other point that we would highlight is our approach to private equity, which is very much focused on high-quality industrial and services business strong cash generation, less focus on growth or significantly leveraged private equity strategies, we feel is incredibly well suited to the current point in the market and also incredibly well suited for the growing number of investors that are looking to get access to private equity exposure, whether that be retail investors or potentially in the future, things like 401(k) accounts.

Our next question will come from Kenneth Worthington from JPMorgan.

I wanted to follow up on Cherilyn's retirement question. You highlighted the 401(k) opportunity, specifically in your shareholder letter and the prepared remarks as part of that retirement opportunity. Is the 401 channel something specifically that Brookfield wants to pursue? And if so, what is your approach to pursuing this? There seems to be a lot of different angles that one could take, whether it's target date funds, adviser managed accounts, record keepers. So how are you thinking about it if, in fact, you are going to go after that channel? And if so, is partnership something that you feel is important to success here?

We'll be clear. we absolutely expect to go after this opportunity. And at this point, we would look to do so across all channels. Piggybacking on the previous question and our comments in the script and on the letter, we believe the most important thing for success here is having the right products. And that is where we are focused. And right now, the environment and the objectives of what people are trying to meet continues to remain fluid. And our view is given our leadership in the right -- right types of alternatives to put into these new accounts as well as the products that we can create given the breadth and depth of our platform, we should be extremely well positioned.

There have been some partnerships announced in the space, and that's great. It shows a very constructive direction of travel for more alternatives going into these pools of capital. But we feel that this is going to be an opportunity that is created over an extended period of time, several years and decades. And none of those partnerships, to the best of our knowledge, are exclusive. And we feel if we have the best products in the right leadership position, we'll be well positioned to capture this opportunity in the years to come.

Our next question will come from Crispin Love from Piper Sandler.

Can you share your latest thoughts in real estate -- been a tougher area for recent -- in recent years, but seems to be getting better. So curious what you're seeing with regard to investor appetite, deployment and then also realization opportunities and what areas you're most interested in today across real estate?

Chris, welcome to the call. Maybe just to start with some stats around what we're seeing in our real estate platform. And then when we talk about the strength we're seeing, it's backed by a bit of data. Deployment in real estate year-to-date is up 2x versus last year. Monetizations year-to-date are up 4x versus last year. Across our office portfolio, in recent months, we've signed our highest leases ever, not this year, our highest leases ever in both New York and London. And I think that stat would probably pertain to almost every other major market around the world.

And the last thing we would highlight is perhaps the most important that the capital markets that support real estate are now increasingly liquid and very robust. We're seeing some of the financings we've done in certain asset classes come in -- the numbers are quite staggering, anywhere between 300 and 450 basis points versus financings that we were doing as recently as 18 to 24 months ago. So in terms of the momentum of our real estate business, we are seeing an incredibly robust recovery.

Maybe to put some context around that, when we talk about the monetization activity we're seeing in real estate, the way we would frame it is the ability to exit is expanding very rapidly, but it's still a very discerning market. Investors are willing to pay full value for high-quality platforms that can drive growth in years to come as this market recovers. The read-through to the broader industry is we are still in the early stages of a very robust recovery. But we feel it's perfect for our business model.

We can still find some very attractive opportunities to deploy capital. We feel the timing of our most recent flagship fundraise, which is just wrapping up now, is perfect. And we can use our capabilities to buy and step into the tail of opportunities that still exist, while at the same time, monetize more pristine cash flowing assets into an increasingly robust and high-demand market. The recovery is absolutely underway and very robust, but we think it's got a long way to run, and we expect to continue to see strength out of our platform.

Our next question will come from Brian Bedell from Deutsche Bank.

Maybe one for Hadley. Just switch gears a little bit to the expense outlook. Good to see the expense control and margin improving. If you can comment on whether you think this -- I think we're about a 10% year-over-year expense growth pace, if that's -- if you also see that continuing in the back half of the year? And then how you see the FRE margin expanding into next year? Whether we can get to a 60% level at some point. I know that might be a little bit futuristic.

And then also on the acquiring the additional stakes in the partnerships, I think there was about a $250 million FRE upside potential that you outlined in the Investor Day last year. Where are we on that path? And I think Angel Oak is incremental to that $250 million, if you can confirm that.

So these are good questions. On the margin front and on our cost that 10%. It does include a little bit of build. As you know, we've been in building mode around different areas, accessing the retail channel as the example on the fundraising front, our credit platform as we grow our renewable strategy. And so you're seeing that operating leverage that's built into the business pay off on the margin front. So we are 1%. And so that does make a difference. The margins are also impacted by the mix of our businesses.

So as an example, when we acquire more of our partner managers at very attractive levels. But when we do acquire them, they generally come at low margins, and we're also in a cycle where our opportunistic business is in a -- is returning on a relative basis, a significant amount of capital while they build into their deployment. So when getting to your question around the rest of the year and just kind of overall long term, we see expenses around that 10% level as we continue to do a little bit of the building, but a steady state kind of as we move forward and meeting our long-term goals from that perspective. So that's critical for the business as we look out over the 5 years.

On your second question related to the $250 million attached to FRE that we have options against with our partner managers. You're right, Angel Oak did not exist at that time. So that was not included in that. And we're just really in the early part of that because we bought a small portion of Oaktree, 1.5%. We bought a little bit more Primary Wave that takes us to about 44%. So there's a lot more attached to that, that can generate additional FRE growth, again, at very attractive multiples.

Our next question will come from Dan Fannon from Jefferies.

This is Rick Roy on for Dan Fannon. If I could start with maybe a housekeeping item and fundraising first and then ask a follow-up for the wealth channel. So you noted that you expect to launch your flagship PE and infrastructure fundraises shortly after the AI infrastructure rollout. And I believe last quarter, you mentioned that the upcoming PE flagship was still on track for 2025. Given kind of the new developments and new strategies that have been announced, should we think about a slight pushout of this BCP flagship into 2026? Or are you still, I guess, accounting for a second half story there?

So on both of our next generations of our flagship, PE and Infra. PE, we absolutely expect to launch this year. Infra, either late this year or early part of next year with large meaningful first closes in 2026.

Understood. And then -- more on the wealth channel, a lot has been talked about by my peers. But given the recent seeding of the PE vehicle, are you able to size your expectations for demand for that and the asset-backed finance products relative to the $30 billion raise from BWS this year? And then maybe expanding upon the expense and margin discussion from earlier and your previous comments on investing in defined contribution. Where are you in your investment cycle for the wealth channel and thinking about 2023 as an era of spend and depressed margins in that context? How should we think about where you are in that cycle and how that might impact margins a little bit more near term?

So I'll perhaps try and recall that into 3 points. We have now launched our semi-liquid PE strategy. It's now in the market we expect to have our first closes in the latter part of this year. In terms of total capital raised, if we break the $30 billion out and we focus just on what we generate through retail or Brookfield Oaktree Wealth Solutions. We very much expect to hit our target of $10 billion for the year. We're seeing incredible strength in that channel.

And then the last point to tie it all together, when Hadley talks about expense and investing for the future, unequivocally, the place where we are putting the most investment through expense is to target this retail and individual investor channel over the long term.

Our next question will come from Mario Saric from Scotiabank.

I want to come back to the individual allocation, seeing the amortization of alternatives that you put it. How do you see the ramp-up in that demand relative to the ramp-up that you saw with respect to institutional allocations rising to alts over the past 5, 10, 15 years in terms of timing?

And then the second part of the question would be how much of this opportunity would you say is already embedded in your 5-year Investor Day forecast as it pertains to the 16% to 17% fee-bearing capital and fee-related revenue CAGR that you laid out last September.

Thanks, Mario. The opportunity for increased allocation to alternatives from what we will call individual investors. Again, we will reiterate -- we view it as incredibly significant, perhaps matching and exceeding in size over the long term, what is available from institutional investors, but it will take time. This will grow incrementally over years and decades to come. The actual process of including these still needs to -- the regulations to be adjusted, the products need to be formed. It is a very large opportunity, but it is an incremental one in the early years that expands into a very significant one in later years.

The other point in context of your question is it's important to recognize that institutional allocations to alternatives are still going up. And we do not see that slowing down anytime soon at any point in kind of our short or medium-term plans. So in terms of comparing the individual to the institutional, it's tough to do those at this point. But only to say we see the retail growing incrementally at first and then scaling very rapidly in the future. And then on the institutional side, we still see increasing demand there.

Our next question will come from Jaeme Gloyn from NBF.

Just wanted to get a sense with the Just acquisition and more broadly what are the requirements and then time lines to be able to shift some of these large fee rate assets that are managed currently in-house by Just or others into the BAM private funds to enhance yields above the standard IMA fee rates?

Thanks, Jaeme, and to you as well, welcome to the call, whenever BWS does a transaction such as Just Group, obviously, the transaction needs to be closed, it needs regulatory approval. And then such shifts need to be agreed and approved by a regulator. And that is no different in the situation of Just as any of the other similar transactions we've done in the past. So we would expect that process to take place at some point in 2026.

In terms of the opportunity to then increase allocation to private funds, if that is indeed approved by the regulator as we are seeing in our other insurance portfolios, at that point, it becomes an incremental process over time. We have a little bit of a denominator effect in trying to measure that because the base of assets keeps growing up, the amount that we've been transferring into our private funds continues to be at a low percentage, but we are seeing that increase. And I would say any time we acquire a new portfolio, it's generally a period of somewhere between 2 to 5 years to make that shift.

And our next question will come from Dean Wilkinson from CIBC.

Just a quick question around the base shelf that was filed last night. Given your current financial positioning and liquidity, could we perhaps read into that document that there are acquisition opportunities that may come to the forefront over the next 12 months or so that could be additive to your fee-bearing capital that perhaps we haven't considered at this point?

No. I mean I would say that our focus really is around making sure we can generate the liquidity in order to support the business. So we've got $1.5 billion as of the quarter end. And so we're in a very strong position, but we will continue accessing the bond market in order to support the growth of our business because we still have a lot of opportunities on the partner managers, which we talked about, the $250 million of FRE, and then, of course, seeding additional strategies. We've had such strong success with our complementary strategies, and we see a lot more on the product launch side as well as just newer initiatives that we're looking at.

So from that standpoint, that is what you're really seeing in that shelf. In terms of acquisitions, we're always opportunistic, but there's nothing that we need to do. And so it really is just an opportunistic play from that perspective.

And our next question will come from Vikram Gandhi from HSBC.

I've got a two-parter, perhaps starting with the changes incorporated in the Big Beautiful Bill. I wondered if you could share your thoughts on how these changes around tax breaks for renewable projects could possibly maybe back your deployment and exits in that area?

So in terms of our renewable business, there's 3 points that we would make. One, our renewables strategy, at this point, we are confident that we can safe harbor or secure the legacy tax credit treatment for the entirety of our advanced stage U.S. renewables pipeline. That would be point one. Two, well, the changes in the One Big Beautiful Bill did lead to an accelerated retirement of those tax credits. It does leave a window for those projects that are already either under construction or start construction in the next 12 months to receive the legacy tax treatment. And we feel that opportunity lends itself best to the largest platforms that have access to capital and centralized procurement programs to get those advanced stage projects started, and we're certainly the leader in the space.

And then the third thing I would say, beyond our renewables business, we do receive tax credits across a number of investments we have at Brookfield, but some of our advanced manufacturing, nuclear, hydro, batteries, all of that was well protected under the bill. And therefore, we are certainly one of the biggest beneficiaries.

That's very helpful. The other one, if I may, was on a comment made at the Financial Times, Global Insurance Summit by the BWS CEO suggesting the private credit trade was kind of overcrowded. Just curious if you could provide some context around that comment and where do BAM and BWS. Where are the 2 companies thinking about the asset allocation on incremental AUM, especially once the Just Group deal is concluded?

Yes. So I'll add some clarification around that. When we think again about our core competencies in credit, it is around real assets, asset-backed finance and opportunistic. So these are the markets that we play, and we have a competitive advantage. Where we are less inclined to spend a lot of our time is around the sponsor direct lending. And so that's what that article is referring to because it's more commoditized, a lot of spread compression, and we're seeing better risk-adjusted returns from the core competencies that I laid out. So we are very active in that space. We're growing. We're doing a lot of investments in those areas, and we'll continue given the pipeline of opportunities that I mentioned earlier.

Thank you. And I am showing no further questions from our phone lines. I'd now like to turn the conference back over to Jason Fooks for any further closing remarks.

Okay. Great. Thanks for everyone's participation. If you should have any additional questions on today's release, please feel free to contact me directly. Thank you, everyone, and have a good day.

Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.