Executive Summary / Key Takeaways

• Brookfield Asset Management (BAM) is strategically positioned at the nexus of global megatrends—digitalization, decarbonization, and de-globalization—driving unprecedented demand for real assets and specialized capital solutions.
• The firm delivered robust financial performance in Q2 2025, with fee-related earnings up 16% to $676 million and distributable earnings up 12% to $613 million, propelled by record fundraising and deployment activity.
• BAM's differentiated technological capabilities in AI infrastructure, including 2,000 megawatts of data center capacity, integrated renewable power, and unique nuclear SMR technology through Westinghouse, provide a significant competitive advantage in delivering turnkey solutions for hyperscalers and governments.
• A rapidly expanding private credit platform, now managing over $250 billion in fee-bearing capital, and a growing presence in the individual investor and retirement markets are key drivers for future fee-bearing capital growth, targeting $1 trillion and 15% annual cash flow per share growth over the next five years.
• Despite a dynamic market, BAM's scale, operational depth, and disciplined investment approach enable it to thrive in both a "buyer's and seller's market," consistently generating strong returns and attracting new capital.

The Bedrock of the Global Economy: Brookfield's Strategic Foundation

Brookfield Asset Management stands as a global leader in alternative asset management, distinguished by its unwavering focus on long-term, mission-critical investments that form the very backbone of the global economy. The firm's core business revolves around acquiring, operating, and enhancing real assets across critical infrastructure, renewable power, industrial and logistics, high-quality real estate, and essential service businesses. This strategy is designed to generate stable, inflation-linked cash flows, a highly sought-after attribute in today's market environment.

The firm's strategic compass is firmly set on three powerful, multi-decade megatrends: digitalization, decarbonization, and de-globalization. These "3 Ds" are not merely buzzwords for Brookfield; they represent fundamental shifts accelerating demand for capital on a global scale, creating an unprecedented investment landscape. Brookfield's integrated approach and deep operational expertise allow it to capitalize on the convergence of these trends, particularly in the burgeoning sectors of AI infrastructure, energy transition, and critical real assets.

A History of Resilience and Strategic Expansion

Brookfield Asset Management's journey to its current stature is marked by strategic foresight and resilience. Spun out as a standalone public company in December 2022, BAM inherited a rich history of disciplined investing. A notable early move was the acquisition of Westinghouse, a world leader in nuclear technology, around 2019. This prescient investment anticipated the critical role nuclear energy would play in achieving clean energy grids, a theme now gaining significant traction globally.

The firm's ability to navigate challenging environments was starkly demonstrated during the onset of the COVID-19 pandemic. While many hesitated, Brookfield maintained its discipline, investing strategically and ultimately raising over $400 billion of capital and nearly doubling its fee-related earnings in the subsequent period. This period of uncertainty forged a more global, diversified, and capable franchise, setting the stage for its current growth trajectory.

Recent history further underscores this expansion. In 2022, Brookfield acquired Magnati, a major payment processor, which it later merged with Network International (NETW) to create a combined $4 billion payment processing platform across the Middle East. The formal launch of its credit group in late 2023 or early 2024 rapidly propelled it to become Brookfield's largest business by assets, managing nearly $250 billion of fee-bearing capital by 2024 and contributing 60% of the year's organic capital raise. This strategic build-out, coupled with acquisitions like a 51% stake in Castlelake for asset-based finance and a majority stake in Angel Oak for mortgage origination, has significantly broadened Brookfield's capabilities and reach.

Technological Edge: Powering the AI Revolution and Energy Transition

Brookfield's competitive differentiation is deeply rooted in its technological capabilities and integrated operational approach, particularly in the context of the digitalization and decarbonization megatrends. The firm is at the forefront of the AI infrastructure build-out, which management believes will be one of the largest capital formation cycles of this generation.

A core technological advantage lies in Brookfield's ability to deliver comprehensive, turnkey AI campuses. The firm has already developed 2,000 megawatts of data center capacity globally and, as one of the largest renewable power providers, can integrate energy, land entitlement, and development under one roof. This integrated solution is precisely what large hyperscalers and governments seek in a partner. For example, a $10 billion public-private investment program with the Swedish Government aims to build next-generation digital infrastructure for AI and cloud computing, leveraging these integrated capabilities. Similarly, a €20 billion AI infrastructure commitment with the French government further highlights this unique offering.

Beyond the physical data centers, Brookfield is actively pursuing opportunities across the broader AI supply chain, including liquid cooling, power distribution, fiber networks, and chip fabrication capacity. The firm's $30 billion semiconductor fabrication plant being built with Intel (INTC) in Arizona exemplifies its commitment to this ecosystem. This holistic approach, spanning equity and credit, allows Brookfield to deliver solutions with speed, structure, and scale, generating proprietary deal flow through its relationships with governments, hyperscalers, and industrial leaders.

In decarbonization, Brookfield's leadership in renewable power is critical. It is the largest supplier of green power to the technology sector, evidenced by a 10.5 gigawatt renewable power development agreement with Microsoft (MSFT). Furthermore, Brookfield's ownership of Westinghouse positions it uniquely in the emerging nuclear energy landscape. Westinghouse services approximately half the global fleet of nuclear power plants and possesses the design and engineering capabilities for micro, small modular, and utility-scale nuclear reactor solutions. This access to nuclear technology, combined with its renewable power capabilities, allows Brookfield to offer unmatched clean energy solutions, including 24/7 power, to the largest consumers. The firm is actively working on integrating its land entitlement, power franchise, data center capabilities, and nuclear SMR technology to power the most advanced data centers in the world. This technological breadth and integration are formidable competitive moats, enabling higher-value contracts and a broader addressable market.

Financial Performance: A Story of Consistent Growth

Brookfield's strategic focus and operational prowess are clearly reflected in its robust financial performance. In the second quarter of 2025, the firm reported fee-related earnings (FRE) of $676 million, a significant 16% increase year-over-year. Distributable earnings (DE) also saw strong growth, rising 12% to $613 million. This momentum builds on a record first quarter of 2025, which saw the highest quarterly earnings growth since the company went public, with FRE reaching $698 million (up 26% year-over-year) and DE growing 20% to $654 million.

The primary driver of this earnings expansion is the consistent growth in fee-bearing capital. In Q2 2025, fee-bearing capital reached $563 billion, marking a 10% increase year-over-year. Over the past 12 months, Brookfield raised an impressive $97 billion in capital, with $22 billion raised in Q2 2025 alone. Notably, approximately three-quarters of the Q2 2025 fundraising came from complementary strategies, highlighting the increasing diversity and strength of Brookfield's product suite. This strong capital formation is not just about raising money; it's about deployment and monetization. Year-to-date in 2025, Brookfield invested $85 billion and monetized over $55 billion of assets at very good returns, representing its highest level of activity in years. This ability to return capital to clients at attractive returns is crucial for fostering a constructive capital-raising environment.

The firm's operating leverage is also evident in its margin expansion, with margins improving to 59% in Q4 2024. Management anticipates continued margin acceleration into Q4 2025 and early 2026, driven by revenue growth outpacing cost increases, even with strategic investments in new platforms. Brookfield's balance sheet remains robust, with $1.5 billion in liquidity at the end of Q2 2025 and no third-party debt.

The successful inaugural bond offering of $750 million in April 2025, which was over 7x oversubscribed and received high investment-grade ratings (A from Fitch, A- from S&P), underscores strong investor confidence and provides ample capacity for future growth initiatives.

Competitive Landscape and Strategic Positioning

Brookfield operates in a highly competitive alternative asset management landscape, vying with global giants like Blackstone (BX), BlackRock (BLK), and KKR & Co. (KKR). However, Brookfield's distinct focus on real assets and integrated operational capabilities provides a significant competitive moat.

Compared to Blackstone, which often pursues a broader, more opportunistic investment strategy, Brookfield's emphasis on long-term, mission-critical real assets like infrastructure and renewables tends to generate more stable, inflation-linked cash flows. While Blackstone's extensive deal-making network is formidable, Brookfield's integrated solutions approach, particularly in AI infrastructure and energy transition, allows it to undertake complex, large-scale transactions that few can match. This often leads to less competition and potentially outsized returns.

Against BlackRock, a dominant player known for its ETFs and technology-driven solutions, Brookfield differentiates itself through active management and direct operational involvement in physical infrastructure. Brookfield's offerings, including its growing insurance solutions, provide diversification into real economy assets, contrasting with BlackRock's more technology-focused portfolio management. While BlackRock excels in efficiency and scalability through platforms like Aladdin, Brookfield's hands-on operational expertise in sectors requiring deep domain knowledge, such as utilities and renewable power, provides a distinct edge.

KKR, another major alternative asset manager with a focus on private equity and real assets, shares some similarities with Brookfield. However, Brookfield's strategy leans more towards long-term wealth building through diversified operating businesses, while KKR's approach can be more aggressive and transaction-oriented. Brookfield's market positioning as a stable, global operator offers advantages in regulatory environments and sectors demanding long-duration capital.

Brookfield's competitive advantages are multifaceted:

• Scale and Integrated Solutions: The firm's global footprint and ability to bring together capital, operational expertise, and integrated solutions (e.g., energy, land, development for data centers) are unmatched.
• Proprietary Deal Flow: Relationships with governments, hyperscalers, and industrial leaders generate unique investment opportunities.
• Product Quality and Durability: Brookfield's real asset-centric products offer income, capital stability, and inflation protection, which are highly attractive to long-term retirement and wealth portfolios.
• Disciplined Credit Strategy: In private credit, Brookfield avoids commoditized sponsor direct lending, focusing instead on asset-backed finance, real assets, and opportunistic credit where it has competitive advantages in origination and underwriting.

The current market environment, characterized by robust demand for high-quality assets and a scarcity of capital for new build-outs, plays directly into Brookfield's strengths. The firm can monetize mature, de-risked assets into a strong demand environment while deploying capital into attractive opportunities that require significant equity injections for growth.

Outlook and Growth Trajectory

Brookfield's management is highly optimistic about its future, projecting significant growth driven by the accelerating megatrends and its expanding capabilities. The firm aims to double its business over the next five years, targeting $1 trillion in fee-bearing capital and a 15% annual growth in cash flow on a per-share basis.

Key guidance and assumptions include:

• Fundraising Acceleration: Fundraising in 2025 is expected to exceed 2024, driven by flagship funds (with the latest rounds projected to be over 15% larger than previous vintages), a growing suite of complementary strategies, and expanding insurance and private wealth channels.
• Private Wealth and Insurance: Brookfield Wealth is on track to raise over $30 billion in 2025 from private wealth and insurance annuity channels. The firm is launching new private equity and asset-based finance offerings for these channels. Furthermore, the acquisition of Just Group (JUST) in the U.K. is expected to add stable, incremental fee-related revenue, with Brookfield Asset Management potentially managing a significant portion of Just Group's $36 billion portfolio. The firm targets $50 billion of external partner capital from its insurance SMA strategy over the next five years.
• AI Infrastructure Investment: The pace of investment activity in AI infrastructure is not expected to slow down, with management anticipating trillions in capital investment across data centers, towers, fiber, liquid cooling, and semiconductor capacity. Brookfield sees an emerging opportunity for long-term private capital to fund this next wave of AI build-out, including GPU Infrastructure-as-a-Service.
• Credit Business Expansion: The credit business is targeted to more than double in size over the next five years, leveraging its diversified strategies and origination capabilities.
• Margin Expansion: Operating expenses are expected to grow around 10% as the firm continues strategic building, but operating leverage is anticipated to drive margin expansion, with 2025 margins expected to be higher than 2024.
• Dividend Policy: The firm expects to pay out north of 90% of its distributable earnings, with strong earnings growth providing confidence for future dividend increases.

Risks and Mitigating Factors

While the outlook is strong, Brookfield acknowledges inherent risks. Forward-looking statements are subject to known and unknown risks, and future events may differ materially.

• Market Volatility: Broader market volatility can impact asset valuations and investor sentiment. However, Brookfield's focus on essential assets with inflation-linked revenues or regulated pricing structures provides resilience against short-term headwinds.
• Regulatory and Policy Changes: Shifts in government policies, such as tariffs or tax credit treatments, could affect operations. Brookfield proactively restructures supply chains and procurement strategies to bolster resilience against protectionist policies. For instance, the firm is confident in securing legacy tax credit treatment for its U.S. renewables pipeline despite changes in the "One Big Beautiful Bill," and its investments in advanced manufacturing, nuclear, hydro, and batteries are well-protected.
• Competition in Private Credit: The private credit market, particularly sponsor direct lending, can become commoditized with spread compression. Brookfield mitigates this by focusing on less commoditized areas like asset-backed finance and real assets, where its specialized underwriting capabilities and deep domain expertise provide a competitive advantage.
• Deployment Risk: While uncalled commitments are substantial, almost 90% do not expire until after 2028, and the bulk of capital not yet generating fees is in actively deploying credit products, minimizing fee expiration risk.

Conclusion

Brookfield Asset Management is not merely participating in the evolving global economy; it is actively shaping it. Through a disciplined, long-term investment strategy anchored in the powerful megatrends of digitalization, decarbonization, and de-globalization, the firm has built an unparalleled platform in real assets and essential services. Its unique technological capabilities in AI infrastructure and nuclear energy, combined with a rapidly expanding private credit business and growing access to individual investors, provide a robust foundation for sustained growth.

The firm's consistent financial performance, strong liquidity, and strategic partnerships underscore its competitive leadership. While challenges such as market volatility and regulatory shifts persist, Brookfield's operational depth, integrated solutions, and proactive risk mitigation strategies position it to convert these into opportunities. For discerning investors, Brookfield Asset Management represents a compelling opportunity to invest in a company that is not only delivering strong returns today but is also strategically positioned to capitalize on the fundamental forces driving global capital formation for decades to come, with technological leadership playing a pivotal role in its continued market outperformance.