Brookfield Asset Management Shareholders, 2nd Quarter, 2025

Brookfield Asset Management Shareholders, 2nd Quarter, 2025

Overview

We delivered strong results in the second quarter. This was as a result of strong earnings, good fundraising, and the resilience of our business.

Our diverse strategies and global fundraising continue to support strong capital inflows, raising $22 billion of capital in the second quarter and bringing our total to $97 billion over the past twelve months. As a result, our fee-bearing capital has grown to $563 billion, up 10% over the past year. This momentum underscores our consistent track record of growth and the depth of our client relationships. In the second quarter, we achieved a 16% increase in fee-related earnings to $676 million, or $0.42 per share. Distributable earnings increased 12% to $613 million, or $0.38 per share.

Fundamentals of our business have remained strong and are now further improving with capital markets increasingly favorable. A year ago, investors were waiting for a window of stability to begin evaluating transactions. Today, many are standing ready to put capital to work, generating a heightened level of activity across our business.

The current environment continues to favor our strategy of investing in the backbone of the global economy. Critical real assets and essential service businesses, the types of investments we make, provide stable and inflation-linked cash flows across the cycle. In today’s environment, investors value these high-quality assets and their associated investment profile even more. This positions us well to deploy capital into attractive opportunities and realize value through monetizations, even amid changing conditions.

Year-to-date, we have deployed over $85 billion of capital into investments. Over the same period, we sold over $55 billion of assets, all at strong returns. This represents our highest level of activity in years.

With good underlying economic fundamentals, liquid capital markets, and an environment well-suited to our investment approach, our leadership position across the most important themes in the alternatives market positions us well to continue growing our cash flows and compounding value for our clients and shareholders.

Partnerships Make the Difference

We have a long track record of identifying high-quality assets, optimizing operations, and monetizing investments to generate strong returns. This approach has created meaningful value for our investors and allowed us to scale our business over decades.

Our model continues to attract partners. With our global platform and operating expertise, we are increasingly the partner of choice for governments, corporates, and institutions seeking access to scale capital and an aligned counterparty with the ability to move quickly, execute with certainty, and deliver complex, large-scale projects. This demand has built a differentiated opportunity set for Brookfield, where we are forming long-term strategic partnerships that are difficult to replicate, while delivering attractive risk-adjusted returns for our clients.

We recently entered into two such partnerships:

• A renewable energy framework agreement with Google, that was announced at the recent Pennsylvania Energy and Innovation Summit, attended by President Trump. Under the agreement, we will deliver up to 3,000 megawatts of hydroelectric capacity across the U.S., beginning with an over $3.0 billion contract for power from two existing facilities in Pennsylvania.
• A $10 billion investment program to support the Swedish government build-out of the next-generation of digital infrastructure to power the growth of AI and cloud computing. It is a landmark public-private partnership and a powerful example of how we are assisting governments to deliver critical infrastructure with speed and scale. In this situation, and in others, we are differentiated by our scale of capital and an integrated offering through our infrastructure, renewable and real estate businesses.

We’ve pursued similar frameworks in the past with other global corporations and sovereign nations, including a €20 billion investment program announced alongside the French government to support the build-out of AI infrastructure and a 10.5-gigawatt renewable energy agreement with Microsoft.

These frameworks reflect the breadth of our capabilities, the credibility we have built over decades and the scale of our capital to support these initiatives. They also serve as a long-term competitive moat, anchored in our ability to deliver capital, flexibility, and operating expertise, and should allow us to continue to offer proprietary investment opportunities for our clients that will generate strong risk-adjusted returns for decades to come.

Global Megatrends Accelerate Our Leadership

For several years, we have consistently highlighted three powerful megatrends—Digitalization, Decarbonization, and Deglobalization—that are reshaping the global economy and will require more than $100 trillion of capital. Brookfield is positioned at the intersection of these secular drivers, which will continue to provide meaningful tailwinds for our business.

Nowhere is the impact of the three Ds more apparent than in our infrastructure business. Since the beginning of the year, we have committed to numerous large-scale infrastructure transactions, the four largest of which total $30 billion of enterprise value. Each one is anchored by long-term contracted or regulated cash flows and significant barriers to entry. These include the following:

• A 20% stake in 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, for $8.2 billion ($6.0 billion of equity value). Substantial capital will be invested in Florida over the next 20 years to enhance grid reliability, resiliency, and capacity.
• Hotwire Communications, a leading bulk fiber-to-the-home provider across the U.S., for nearly $7.0 billion ($4.0 billion of equity value). Substantial capital will be invested across the U.S. to upgrade fiber connectivity.
• Colonial Enterprises, a world-class midstream portfolio including the Colonial Pipeline, the largest refined products pipeline in the U.S., for $9.0 billion ($3.4 billion of equity value). This is a dominant and mission critical east coast U.S. pipeline system.
• Wells Fargo Rail, the second largest railcar leasing platform in North America, in partnership with GATX, for over $5.0 billion ($1.2 billion of equity value).

Today, these megatrends are accelerating dramatically and are now more relevant than ever. As an example, Digitalization, once centered on cloud infrastructure, has entered a new phase. Artificial intelligence is transforming how data is created, processed, transported, and consumed, driving rapid demand for computing power and network capacity. Productivity is being reshaped across nearly every sector, and demand for data centers and compute infrastructure is expanding exponentially.

Our investment programs in Sweden and France reflect a broader trend we are seeing globally, as AI emerges as a transformational infrastructure theme that will require significant capital investment. While the potential of AI is widely acknowledged, the scale of infrastructure investment and the operating capabilities required to support its growth remain underappreciated. Trillions of dollars are required.

• We have a leading position in foundational AI infrastructure, having already built meaningful scale, including over 2,000 megawatts of data center capacity, and one of the world’s largest renewable power platforms. Today, we see a growing need for next-generation AI factories, purpose-built for high-density workloads and powered by dedicated energy sources.
• Private capital will play a critical role across the AI infrastructure supply chain, especially in compute infrastructure, which requires high-performance chips for large-scale AI training and inference. We see an opportunity to provide GPU infrastructure as a service under long-term contracts, easing the burden on corporate balance sheets.
• We also see major opportunities across critical adjacencies, such as liquid cooling systems, fiber networks, robotics manufacturing, and recycling infrastructure—all vital to AI system performance and sustainability.

We are uniquely positioned to deliver across each of these solutions. We are leveraging our real estate, power, and infrastructure teams to integrate land, energy, compute, and capital into a single investment proposition across both equity and credit, and our global team brings deep technical and operational expertise across the AI infrastructure value chain. Our AI frameworks in France and Sweden reflect this integrated approach.

To build on this momentum, we are launching a dedicated strategy focused on the development of AI infrastructure—designed to meet the growing demand from hyperscalers, enterprises, and governments for scalable, integrated solutions. We believe AI infrastructure is one of the defining investment themes of the decade, drawing together the three Ds and playing directly to our strengths. We are well-positioned to extend our leadership position. We have already deployed tens of billions into this area and see a significant pipeline of opportunities that fit our capabilities and integrated approach.

High-Quality Assets and Operational Execution Drive Strong Monetizations

Across all asset classes, the transaction market is improving. As a result of the high-quality and resilient nature of our assets, our ability to return capital has been strong, and we are seeing activity levels increase across all our verticals. Year to date, we have sold assets valued at over $55 billion at strong returns. Our success can largely be attributed to our ownership of assets which are of the best quality, and those which form the backbone of the global economy—renewable power, infrastructure, real estate, and industrial businesses—that deliver essential services and generate long-duration, contracted cash flows.

The improvement in transaction activity is particularly distinct in real estate, where investor interest in high-quality assets has turned. Year to date, we sold $15 billion of real estate across all asset classes and to a diverse set of buyers. Notable transactions include the $2.4 billion sale of Aveo Group, a senior living platform in Australia; the $2.2 billion sale of Fundamental Income, our net lease real estate platform in the U.S.; the $1.4 billion sale of Livensa Living, a student housing platform in Iberia; and the $500 million sale of Mare Nostrum, the largest single-asset hotel transaction in Spanish history. We also executed the IPO of Leela Palaces, Hotels and Resorts, our rapidly growing Indian luxury hotel business, a transaction that values the business at $1.8 billion—the highest multiple ever for a hospitality IPO in India.

We also saw strong monetization activity and a continued robust pipeline in our infrastructure business, where we sold nearly $13 billion of assets. This includes a portfolio of stabilized data center assets developed by our Data4 platform for $3.6 billion; Patrick Terminals, a container terminal operations business in Australia, for $2.0 billion; and Natural Gas Pipeline of America for $1.4 billion. We continue to be well-positioned to capitalize on ongoing monetization demand with numerous infrastructure assets in the market.

In our other businesses, we executed several meaningful monetizations. In renewable power, we sold $7.0 billion of assets, including a U.S. hydropower portfolio and an additional 25% stake in a U.S. wind project. In private equity, we are actively advancing sales of businesses that are ready for exit as part of our ongoing effort to return capital to clients. Over the past two years, we have returned $10 billion of capital.

Operations Were Strong

We had strong, broad-based demand from investors across all of our fundraising channels in the quarter. This included institutions, insurance, private wealth, and strategic partners. This momentum translated into over $22 billion of new capital raised, with activity spanning flagship, complementary, insurance and public affiliates. Nearly 70% of capital raising this quarter came from complementary strategies, including private wealth and our perpetual, open-end funds.

We also saw a meaningful increase in deployment. Our competitive advantage is that we can underwrite with conviction, move quickly, and offer scale and certainty; attributes that set us apart and enable us to differentiate our capital. In the second quarter, we deployed nearly $30 billion of equity capital.

Together, these items are driving momentum in FRE growth. This also grows our accrued carry base that will generate significant cash flows in future years.

Second quarter highlights of our activities across each of our business groups include:

• Renewable Power & Transition: We raised $1.5 billion, including over $800 million for the second vintage of our global transition flagship fund, bringing the capital raised to date for the strategy to over $15 billion. This makes it the largest renewable power or energy transition fund ever and we expect to raise more capital into the final close which is targeted for the end of the third quarter. In these strategies, we deployed $1.3 billion, including over $900 million for the acquisition of National Grid’s U.S. renewables business.
• Infrastructure: We raised $1.7 billion, led by over $1.0 billion for our supercore infrastructure strategy—our strongest quarter in over three years. In these strategies, we deployed nearly $10 billion.
• Private Equity: We raised $1.3 billion, including over $500 million for our special investments strategy. In these strategies, we deployed $1.9 billion across new investments.
• Real Estate: We raised $1.8 billion, including $500 million for the fifth vintage of our flagship real estate strategy, which, on close, will be our largest real estate strategy ever raised. We deployed $3.5 billion in these strategies.
• Credit: We raised $16 billion, including over $10 billion across our partner managers and $4.4 billion from insurance accounts. We expect to hold a first close for the fourth vintage of our infrastructure mezzanine debt strategy shortly, which would bring total capital raised to-date to $4.0 billion. Deployment totaled $11.8 billion across a broad range of strategies, including $1.7 billion out of our flagship opportunistic credit strategy.
• Corporate: We acquired an additional 9% stake in Primary Wave, our partner manager focused on music royalties and participated in the Castlelake-led acquisition of Concora, a specialty credit card origination platform and manager.

Scale, Track Record and Brand Will Win in Retirement Markets

For decades, the growth of the alternative investment industry has been driven by institutional capital, anchored by defined benefit pension plans and sovereign wealth funds, each managing over $10 trillion in assets. These long-term, return-oriented investors have provided a stable foundation for the expansion of our industry and for Brookfield’s own growth as a leading manager of real assets. Allocations to alternatives from these institutional investors continue to grow and represent the largest component of our business and we remain deeply committed to serving this important client base.

At the same time, a powerful new growth engine is taking shape—the democratization of alternatives. Defined contribution retirement plans, insurance-based savings products, and private wealth channels are rapidly emerging as the next generation of growth for our industry. In the U.S. alone, outstanding 401(k) accounts and retail annuities now exceed $20 trillion, on par with the size of the global defined pensions and sovereign wealth funds. Private wealth investors represent another $20 trillion opportunity as they increasingly turn to private markets to help meet their investment objectives.

We expect the U.S. administration to pave the way for defined contribution plans, like 401(k)s, to invest in alternative assets. Even a modest reallocation toward private strategies will meaningfully expand the addressable market and unlock hundreds of billions to trillions of dollars of new flows over time. The ability to serve individual savers directly, whether through workplace defined contribution plans, annuities, or wealth accounts, has the potential to double the size of the private markets industry in the years ahead.

This global shift is already underway, and our platform is built for it. Our business is centered around real assets and essential service businesses that offer income, capital stability, and inflation protection that long-term retirement and wealth portfolios require. These characteristics are often difficult to replicate with traditional public market investments and are especially compelling to savers seeking diversification, downside protection, and dependable compounding over time.

In this evolving landscape, distribution will matter, but it is the quality and durability of the products that will ultimately determine success. Individual investors are looking for reliable investment outcomes, they want portfolios that can withstand volatility while compounding over time. We believe no other business has the track record in the diversified products which will drive the future of retirement accounts, like we do.

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 Solutions, which is on track to raise over $30 billion of capital this year from private wealth and insurance annuity channels. We’ve developed a diverse suite of products structured specifically for private wealth and individual investors, each designed to deliver strong, stable performance across market cycles. That offering is continuing to grow with the upcoming launch of two new strategies dedicated to private wealth investors, one focused on private equity and the other on asset-based finance, creating new avenues for individuals to access our industry-leading platforms.

We are also expanding our reach with dedicated team members focused exclusively on capturing the growing opportunity in defined contribution and private wealth channels. At the same time, we manage an approximate $100 billion (and growing) portfolio of annuities on behalf of Brookfield Wealth Solutions designed to generate stable, attractive returns for retirement accounts.

With our global scale, operational expertise, and long-term mindset, Brookfield has a distinct advantage in delivering real asset solutions to a new generation of investors. Our ability to scale these strategies without compromising on risk or return positions us at the forefront as the market for alternative investments opens to a broader investor base.

This shift from institutional to individual capital marks more than incremental change—it is a structural reorientation in how capital is raised, portfolios are built, and retirement is financed. We are well positioned to lead in this transformation and capture the next frontier of industry growth.

Our Retirement Market Presence Continues to Grow

As part of this evolution, our largest shareholder, Brookfield, recently entered into an agreement to acquire Just Group, a leading provider of retirement services in the U.K. individual retirement market. Just Group focuses on long-duration, income-oriented retirement products, serving both individuals and institutions across the U.K. The transaction is expected to close in the first half of next year.

While we are not contributing capital to the transaction or taking on insurance liabilities, we will become the investment manager with respect to a significant portion of Just Group’s $36 billion portfolio upon closing on terms consistent with our existing investment management agreements with Brookfield’s insurance group (BWS). This will immediately generate meaningful incremental annualized stable fee-related revenue, with significant future upside as Just Group’s origination capabilities contribute to BWS’ growth strategy. This transaction demonstrates the significant opportunity for us to service BWS’ growing global platform, a feature that remains an underappreciated upside for our business.

Following completion of Just Group, BWS is on track to originate upwards of $25 billion of new individual annuity and pension-risk transfer volume annually across North America and U.K. markets, the latter of which generates £40–50 billion of annual pension-risk transfer volume and a defined contribution market that is projected to grow to £1.3 trillion in assets across 14.9 million active savers by 2044.

This acquisition expands the scale and reach of our retirement-focused investment capabilities and reinforces the ongoing upside for us as BWS continues to grow. 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.

Communications with You

In response to investor feedback and with the goal of simplifying and streamlining our communications, we will transition to publishing a comprehensive Brookfield investor letter on a quarterly basis, beginning with our third quarter reporting. This new format will take the place of our current shareholder letter and will cover the most important themes and strategic developments across all of Brookfield, including topics most relevant to Brookfield Asset Management. The letter will be published at the end of Brookfield’s reporting cycle to cover all themes and updates across all parts of Brookfield and its affiliates.

We believe this approach will make it easier for investors to stay current on the full breadth of activity across Brookfield through a single, consolidated update.

We will continue to provide timely updates throughout the year via our quarterly press releases and earnings calls with management. In addition, we will also publish a standalone Brookfield Asset Management investor letter on an annual basis alongside our fourth quarter results.

Closing

We remain committed to being a world-class asset manager by investing our capital in high-quality assets that earn solid, attractive returns, while emphasizing downside protection. The primary objective of the company continues to be to generate increasing cash flows on a per-share basis, and to distribute that cash to you by dividend or share repurchases.

We look forward to seeing you on September 10th in Manhattan at our Investor Day. If you cannot attend in person, our presentation will be webcast live on our website, and also available for replay.

Thank you for your interest in Brookfield, and please do not hesitate to contact any of us should you have suggestions, questions, comments, or ideas you wish to share.

Sincerely,

Bruce Flatt
Chief Executive Officer

Connor Teskey
President

August 6, 2025