Brookfield Asset Management Q3 profit rises to $2.65B
Certain Oaktree sellers may receive future cash payments tied to specified incentive-based performance metrics through 2031.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Rhea-AI Filing Summary
Brookfield Asset Management Ltd. (BAM) reported third-quarter 2026 revenue of $2.149 billion, compared with $1.252 billion in 2025, and net income attributable to common stockholders of $2.645 billion, compared with $724 million. Diluted earnings per share were $1.64, versus $0.44. Other income, net was $1.741 billion, compared with an expense of $107 million; investment income was $764 million, including $604 million of unrealized carried-interest allocations, versus $112 million and $112 million, respectively, in 2025.
Operating cash flow was $554 million, compared with $745 million a year earlier. On July 31, 2026, Brookfield completed the acquisition of the remaining approximate 26% common equity interest in Oaktree and its affiliates for aggregate consideration of approximately $2.9 billion, of which approximately $2.2 billion was attributable to BAM. BAM acquired the remaining interest in Oaktree’s asset management business, bringing its ownership to 100%; Oaktree’s operations contributed $308 million in revenue and $34 million in net income from August 1, 2026 to September 30, 2026.
3 points · 0 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue: $2.149 billion versus $1.252 billion in 2025.
- Moderate pointNet income attributable to common stockholders: $2.645 billion versus $724 million.
- Minor pointOaktree operations contributed $34 million in net income.
Negative
- Moderate pointOperating cash flow: $554 million, versus $745 million in 2025.
Filing Explained
Two hundred forty-eight million dollars of contingent consideration depends on specified performance metrics through 2031; it is not a fixed payment due at closing.
The completed Oaktree acquisition includes contingent cash consideration with an acquisition-date fair value of
Goodwill remains preliminary; BAM says it expects to finalize the purchase-price allocation within one year of the acquisition date.
Key Figures
Revenue: $2.149 billion; $1.252 billion in 2025
Net income attributable to common stockholders: $2.645 billion; $724 million in 2025
Diluted earnings per share: $1.64; $0.44 in 2025
+4 more
7 metrics
Revenue
$2.149 billion; $1.252 billion in 2025
Three months ended September 30
Net income attributable to common stockholders
$2.645 billion; $724 million in 2025
Three months ended September 30
Diluted earnings per share
$1.64; $0.44 in 2025
Three months ended September 30
Operating cash flow
$554 million; $745 million in 2025
Three months ended September 30
Consideration attributable to BAM
Approximately $2.2 billion
Oaktree acquisition; Brookfield aggregate consideration was approximately $2.9 billion
Oaktree contributed revenue
$308 million
August 1, 2026 to September 30, 2026
Oaktree contributed net income
$34 million
August 1, 2026 to September 30, 2026
Key Terms
Carried interest, Contingent consideration, Purchase price allocation, Pro forma revenue, +1 more
5 terms
Carried interest financial
"unrealized carried interest allocations"
Carried interest is a share of the profits earned by investment managers from the investments they oversee, serving as their reward for successful performance. It functions like a bonus that motivates managers to maximize returns for investors, similar to earning a commission based on performance. This income is often taxed at a lower rate than regular income, making it a significant aspect of investment compensation.
Contingent consideration financial
"acquisition includes contingent consideration arrangements"
Contingent consideration is an additional payment agreed when one company buys another that will be paid later only if specific future targets are met, such as revenue, profit, or regulatory milestones. It matters to investors because it shifts risk between buyer and seller and affects the acquiring company's future cash flow and reported value — like promising a bonus after results are proven.
Purchase price allocation financial
"The purchase price allocation remains preliminary"
Purchase price allocation is the accounting process that breaks down the total amount paid for an acquired business into specific pieces—like tangible assets, identifiable intangible assets (brands, patents, customer lists) and goodwill—based on their estimated fair values. Investors care because this breakdown affects future earnings, tax costs and reported asset values: higher allocations to amortizable intangibles or goodwill can change profit volatility, depreciation and potential impairment charges, similar to splitting a restaurant bill to see what you actually bought versus what you paid extra for goodwill.
Pro forma revenue financial
"consolidated unaudited pro forma revenue and net income"
An adjusted measure of a company’s sales that shows what revenue would have been after removing one-time items or applying certain assumptions—for example, treating a recent acquisition as if it had existed for the whole period. It matters to investors because it aims to reveal the business’s underlying trend by smoothing out irregular events, like showing a photo with distractions removed; however, the adjustments can vary, so compare how the number was calculated before relying on it.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were BAM's third-quarter 2026 revenue and net income?
For the three months ended September 30, 2026, BAM reported revenue of $2.149 billion and net income attributable to common stockholders of $2.645 billion, compared with $1.252 billion and $724 million, respectively, in 2025.
What contingent payments are part of BAM's Oaktree acquisition?
The acquisition-date fair value of contingent consideration attributable to BAM was $248 million. Certain sellers may be entitled to future cash payments based on specified incentive-based performance metrics over future measurement periods through 2031.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the quarterly period ended September 30, 2026
or
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the transition period from ___ to ___
Commission file number: 001-41563
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 5, 2026, the registrant had 1,597,856,916 Class A Limited Voting Shares and 21,280 Class B Limited Voting Shares outstanding.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION | |||||||||||
| Item 1. | Financial Statements | 8 | |||||||||
| Unaudited Condensed Consolidated Financial Statements: | |||||||||||
Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025 | 8 | ||||||||||
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2026 and 2025 | 9 | ||||||||||
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2026 and 2025 | 10 | ||||||||||
Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2026 and 2025 | 11 | ||||||||||
Condensed Consolidated Statements of Cash Flows for the Three and Nine Months Ended September 30, 2026 and 2025 | 13 | ||||||||||
Notes to the Condensed Consolidated Financial Statements | 15 | ||||||||||
| Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 59 | |||||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 113 | |||||||||
| Item 4. | Controls and Procedures | 114 | |||||||||
PART II - OTHER INFORMATION | |||||||||||
| Item 1. | Legal Proceedings | 114 | |||||||||
| Item 1A. | Risk Factors | 114 | |||||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 114 | |||||||||
| Item 3. | Defaults Upon Senior Securities | 115 | |||||||||
| Item 4. | Mine Safety Disclosures | 115 | |||||||||
| Item 5. | Other Information | 115 | |||||||||
| Item 6. | Exhibits and Financial Statement Schedules | 116 | |||||||||
SIGNATURES | 117 | ||||||||||
3
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of other relevant securities legislation, including applicable securities laws in Canada, which reflect our current views with respect to, among other things, our operations and financial performance (collectively, “forward-looking statements”). Forward-looking statements include statements that are predictive in nature, depend upon or refer to future results, events or conditions, and include, but are not limited to, statements which reflect management’s current estimates, beliefs and assumptions regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies, capital management and outlook of Brookfield Asset Management Ltd. (“BAM”) and its subsidiaries, as well as the outlook for North American and international economies for the current fiscal year and subsequent periods, and which are in turn based on our experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. The estimates, beliefs and assumptions of BAM are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change. Forward-looking statements are typically identified by words such as “outlook”, “believe”, “think”, “expect”, “potential”, “continue”, “may”, “should”, “seek”, “approximately”, “predict”, “intend”, “will”, “plan”, “estimate”, “anticipate”, the negative version of these words, other comparable words or other statements that do not relate strictly to historical or factual matters. Such forward-looking statements are subject to risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity.
We believe these factors include those described in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 (our “Annual Report”). These factors should be read in conjunction with the other cautionary statements that are included in this report and in our other filings with the U.S. Securities and Exchange Commission (the “SEC”). We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
CERTAIN TERMS USED IN THIS REPORT
In this report, “BAM”, “we”, “our”, “us”, or the “Company” refers to Brookfield Asset Management Ltd. For accounting purposes and for periods prior to the closing date of the 2025 Arrangement (as defined below), references to the historical financial information of BAM are to the historical financial statements of Brookfield Asset Management ULC (the “Asset Management Company”) as the “Predecessor” of BAM. The term “BN” means Brookfield Corporation and its subsidiaries (including the perpetual affiliates, as defined below), other than BAM and its subsidiaries, and does not, for greater certainty, include BWS (as defined below) or Oaktree (as defined below) and their respective affiliates. The term “Brookfield” means BAM and BN, collectively.
Additional information about BAM is available on our website at https://bam.brookfield.com and on the EDGAR section of the SEC website at www.sec.gov. The information on our website is not, and shall not be deemed to be, a part of this report or incorporated by reference into any other filings we make with the SEC. Information is also available on the Canadian Securities Administrators’ (“CSA”) website at www.sedarplus.ca.
Unless the context suggests otherwise:
•“17Capital” means 17Capital LLP;
•“2022 Arrangement” means the court-approved plan of arrangement involving BN as a result of which (i) the shareholders of BN, while retaining their shares of BN, became shareholders of BAM, which acquired a 25% interest in our asset management business through common shares of the Asset Management Company, and (ii) BN changed its name from “Brookfield Asset Management Inc.” to “Brookfield Corporation”;
•“2025 Arrangement” has the meaning ascribed thereto in “Part I—Item 1. Financial Statements”;
•“AEL” means American Equity Investment Life Holding Company;
•“AI” means artificial intelligence;
•“Angel Oak” means the October 1, 2025 acquisition of a 51.3% economic interest in Angel Oak Companies, LLC, a leading asset manager specializing in innovative mortgage and consumer products;
•“Assets Under Management” or “AUM” has the meaning ascribed thereto under “Part I - Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures”;
•“BAIIF” means Brookfield AI Infrastructure Fund;
•“BBUC” means Brookfield Business Corporation, the successor of Brookfield Business Partners L.P. following the completion of a corporate simplification transaction effective March 27, 2026;
4
•“BCP” means Brookfield Capital Partners;
•“BEP” means Brookfield Renewable Partners L.P., together with its subsidiaries including its paired corporation, Brookfield Renewable Corporation;
•“BGTF” means Brookfield Global Transition Fund;
•“BIF” means Brookfield Infrastructure Fund;
•“BII” means Brookfield Infrastructure Income Fund;
•“BIP” means Brookfield Infrastructure Partners L.P., together with its subsidiaries including its paired corporation, Brookfield Infrastructure Corporation;
•“BISS” means Brookfield Infrastructure Structured Solutions Fund;
•“BMEP” means Brookfield Middle East Partners;
•“BN Class A Shares” means the class A limited voting shares of BN;
•“BN Exchangeable Units” means exchangeable preferred units issued by a subsidiary of the Company in connection with the Oaktree Acquisition that are exchangeable into BN Class A Shares, or securities exchangeable therefor, on a one-to-one basis, subject to transfer and exchange restrictions;
•“BPE” means Brookfield Private Equity Fund;
•“BPG” means Brookfield Property Group, including BPY and BN’s directly held, wholly-owned real estate entities;
•“BPY” means Brookfield Property Partners L.P., together with its subsidiaries;
•“BREVA-H” means Brookfield Real Estate Value Add Housing Fund;
•“BSI” means Brookfield Special Investments;
•“BSREP” means Brookfield Strategic Real Estate Partners;
•“BWS” means Brookfield Wealth Solutions Ltd., a paired entity to BN which offers a range of retirement services, wealth protection products and tailored capital solutions;
•“Castlelake” means our 51% economic interest in Fee-Related Earnings, 7.5% interest in carried interest, 20% of returns from general partner (“GP”) commitments of Castlelake Group TopCo L.P., 51% of GP commitments for in-market and future Castlelake funds, and our 43% indirect and direct ownership interest in Concora;
•“CODM” means Chief Operating Decision Maker;
•“Concora” means our 43% indirect and direct ownership interest in Concora Super Holdco, L.P.;
•“Class A Shares” means the class A limited voting shares in the capital of BAM;
•“Class B Shares” means the class B limited voting shares in the capital of BAM;
•“consolidated funds” means certain funds in which BAM is the primary beneficiary, as defined under U.S. GAAP, and therefore consolidates their balance sheets and results of operations;
•“corporate liquidity” consists of cash, short-term financial assets, as well as the undrawn portions of any BAM revolving credit facilities, excluding consolidated funds;
•“CORRA” means the Canadian Overnight Repo Rate Average;
•“CP Notes” means senior unsecured commercial paper notes of BAM;
•“CP Program” means the commercial paper program of BAM established in March 2026;
•“CTF” means Catalytic Transition Fund;
•“Distributable Earnings”, a non-GAAP measure, has the meaning ascribed thereto under “Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures”;
•“DoubleLine” means DoubleLine Capital L.P.;
•“Energy” refers to one of the Company’s principal strategies, formerly referred to as “Renewable Power and Transition”;
•“Exchange Act” means the Securities Exchange Act of 1934, as amended;
5
•“Fee-Bearing Capital”, a supplemental financial measure, has the meaning ascribed thereto under “Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures”;
•“Fee-Related Earnings”, a non-GAAP measure, has the meaning ascribed thereto under “Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures”;
•“Fee Revenues”, a non-GAAP measure, has the meaning ascribed thereto under “Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures”;
•“GDP” means Gross Domestic Product;
•“GEMS Education” means the investment in a Dubai-based international education provider, Global Education Management Systems, acquired on July 12, 2024, as part of a Brookfield-led consortium of investors including BAM, BSI, BWS, and certain co-investors;
•“LCM” means LC Financial Holdings Limited;
•“mature fund” means a fund which had already significantly deployed capital upon completion of the 2022 Arrangement;
•“NAV” means net asset value;
•“new sponsored fund” or “new fund” means a Brookfield fund launched on or after the date of the 2022 Arrangement;
•“Oaktree” means Oaktree Capital Management, L.P., together with its affiliates, Oaktree Capital II, L.P., Oaktree AIF Investments, L.P., Oaktree Capital Management (Cayman) L.P. and Oaktree Investment Holdings, L.P. and their consolidated subsidiaries;
•“Oaktree Acquisition” means the transaction whereby Brookfield acquired the approximate 26% interest in Oaktree and its affiliates that it did not already own, which was completed on July 31, 2026;
•“OLAF” means Oaktree Loan Acquisition Fund;
•“partner managers” means Angel Oak, Castlelake, LCM, Primary Wave and 17Capital;
•“perpetual affiliates” means BEP, BIP, BBUC and BPG;
•“Pinegrove Fund” means Pinegrove Opportunity Partners I LP;
•“Pretium” means our economic interest in Pretium Holdings, LP and Pretium CV Holdings, LP acquired on June 29, 2024;
•“Primary Wave” means PWMP Ventures LLC;
•"Realized carried interest, Net", a non-GAAP measure, has the meaning ascribed thereto under “Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures”;
•“Relationship Agreement” means the agreement dated November 8, 2022 among BN, BAM and the Asset Management Company to govern aspects of their relationship following the 2022 Arrangement, as further described under Note 1 “Organization” of the condensed consolidated financial statements of BAM;
•“Securities Act” means the Securities Act of 1933, as amended;
•“Segment Earnings”, a key metric, are computed as Segment Revenues less Segment Expenses;
•“Segment Expenses”, a key metric, are direct costs associated with Segment Revenues, which include compensation and benefits, facilities, technology, professional fees and travel and other operating expenses. Depreciation and amortization, taxes, interest expense, mark-to-market gains (losses), transaction related costs, non-recurring gains (losses), deferred compensation, and expenses of consolidated funds are excluded from Segment Expenses. In addition, Segment Expenses include our share of segment related expenditures of our partner managers;
•“Segment Revenues”, a key metric, include base management fees, advisory fees, performance fees and transaction fees, but excludes incentive distributions, certain incentive fees, carried interest and revenues of consolidated funds. In addition, Segment Revenues include our share of Segment Revenues of our partner managers;
•“Services Agreement” means the agreement dated December 9, 2025 among BN, BAM and the Asset Management Company in which the parties provide services to each other in support of their respective day-to-day corporate activities. BAM also provides to BN, upon request and on a cost recovery basis, services of its investment personnel to assist in acquisitions, investments and other transactions undertaken by BN. This agreement was previously referred to as the “Transition Services Agreement” or “TSA”;
6
•“SOFR” means the Secured Overnight Financing Rate published by the Federal Reserve Bank of New York (or a successor administrator);
•“Spring Education” means Spring Education Group Inc.;
•“Uncalled Fund Commitments”, a supplemental financial measure, has the meaning ascribed thereto under “Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures”; and
•“U.S. Manufactured Housing” represents an acquisition of a U.S. manufactured housing portfolio.
BAM prepares its financial statements in conformity with the accounting principles generally accepted in the United States (“U.S. GAAP”). This report discloses a number of non-GAAP financial and supplemental financial measures which are utilized in monitoring our asset management business, including for performance measurement, capital allocation and valuation purposes. BAM believes that providing these performance measures is helpful to investors in assessing the overall performance of our asset management business. These non-GAAP financial measures should not be considered as the sole measure of BAM’s or our asset management business’ performance and should not be considered in isolation from, or as a substitute for, similar financial measures calculated in conformity with U.S. GAAP. These non-GAAP financial measures are not standardized financial measures and may not be comparable to similar financial measures used by other issuers. Non-GAAP measures include, but are not limited to: (i) Distributable Earnings, (ii) Fee Revenues, (iii) Fee-Related Earnings, and (iv) Realized Carried Interest, Net. Supplemental financial measures include Fee-Bearing Capital, AUM and Uncalled Fund Commitments.
For more information on non-GAAP measures and other financial metrics, see “Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures”. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP, where applicable, are included in “Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of U.S. GAAP to Non-GAAP Measures” in this report.
The financial information contained in this report is presented in U.S. dollars and, unless otherwise indicated, all references to “$” are to U.S. dollars. All references to C$ are to Canadian dollars. All information in this report is presented as of September 30, 2026, unless otherwise noted.
7
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BROOKFIELD ASSET MANAGEMENT LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AS OF SEPTEMBER 30, AND DECEMBER 31, (MILLIONS, EXCEPT SHARE AMOUNTS) | 2026 | 2025 | |||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Cash of consolidated funds | |||||||||||
| Accounts receivable and other, net | |||||||||||
| Financial assets | |||||||||||
| Due from affiliates | |||||||||||
| Investments | |||||||||||
| Investments of consolidated funds | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Right-of-use assets | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Deferred income tax assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities | |||||||||||
| Accounts payable and other, net | $ | $ | |||||||||
| Operating lease liabilities | |||||||||||
| Financial liabilities | |||||||||||
| Due to affiliates | |||||||||||
| Due to affiliates of consolidated funds | |||||||||||
| Corporate borrowings | |||||||||||
| Borrowings of subsidiaries | |||||||||||
| Borrowings of consolidated funds | |||||||||||
| Deferred income tax liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Preferred shares redeemable non-controlling interest | |||||||||||
| Redeemable non-controlling interest in consolidated funds | |||||||||||
| Equity | |||||||||||
| Common stock: | |||||||||||
Class A, no par value, unlimited authorized, | |||||||||||
Class A held in treasury, no par value, | ( | ( | |||||||||
Class B, no par value, unlimited authorized, | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings (deficit) | ( | ||||||||||
| Accumulated other comprehensive income | |||||||||||
| Non-controlling interest in consolidated entities | |||||||||||
| Non-controlling interest in consolidated funds | |||||||||||
| Total equity | |||||||||||
| Total liabilities, redeemable non-controlling interest and equity | $ | $ | |||||||||
See notes to condensed consolidated financial statements
8
BROOKFIELD ASSET MANAGEMENT LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | Three Months Ended | Nine Months Ended | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Base management and advisory fees | $ | $ | $ | $ | |||||||||||||||||||
| Incentive fees | |||||||||||||||||||||||
| Investment income | |||||||||||||||||||||||
| Carried interest allocations | |||||||||||||||||||||||
| Realized | |||||||||||||||||||||||
| Unrealized | |||||||||||||||||||||||
| Total investment income | |||||||||||||||||||||||
| Interest and dividend revenue | |||||||||||||||||||||||
| Interest and dividend revenue of consolidated funds | |||||||||||||||||||||||
| Other revenues | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Compensation, operating, and general and administrative expenses | |||||||||||||||||||||||
| Compensation and benefits | ( | ( | ( | ( | |||||||||||||||||||
| Other operating expenses | ( | ( | ( | ( | |||||||||||||||||||
| General, administrative and other | ( | ( | ( | ( | |||||||||||||||||||
| Total compensation, operating, and general and administrative expenses | ( | ( | ( | ( | |||||||||||||||||||
| Carried interest allocation (compensation) recovery | |||||||||||||||||||||||
| Realized | ( | ( | ( | ( | |||||||||||||||||||
| Unrealized | ( | ( | ( | ||||||||||||||||||||
Total carried interest allocation (compensation) recovery | ( | ( | ( | ||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Interest expense of consolidated funds | ( | ( | ( | ( | |||||||||||||||||||
| Total expenses | ( | ( | ( | ( | |||||||||||||||||||
| Other income (expenses), net | ( | ( | |||||||||||||||||||||
| Share of income from equity method investments | |||||||||||||||||||||||
| Other income, net of consolidated funds | |||||||||||||||||||||||
| Income before taxes | |||||||||||||||||||||||
| Income tax expense | ( | ( | ( | ( | |||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Net (income) loss attributable to: | |||||||||||||||||||||||
| Preferred shares redeemable non-controlling interest | $ | ( | $ | $ | $ | ||||||||||||||||||
| Redeemable non-controlling interest in consolidated funds | ( | ( | |||||||||||||||||||||
| Non-controlling interest in consolidated entities | ( | ( | ( | ( | |||||||||||||||||||
| Non-controlling interests in consolidated funds | ( | ( | ( | ( | |||||||||||||||||||
| Net income attributable to the common stockholders | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per share | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted-average shares | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See notes to condensed consolidated financial statements
9
BROOKFIELD ASSET MANAGEMENT LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Equity method investments | ( | ( | |||||||||||||||||||||
| Currency translation | ( | ( | |||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
| Comprehensive (income) loss attributable to: | |||||||||||||||||||||||
| Preferred shares redeemable non-controlling interest | $ | ( | $ | $ | $ | ||||||||||||||||||
| Redeemable non-controlling interest in consolidated funds | ( | ( | |||||||||||||||||||||
| Non-controlling interest in consolidated entities | ( | ( | ( | ( | |||||||||||||||||||
| Non-controlling interests in consolidated funds | ( | ( | ( | ( | |||||||||||||||||||
| Comprehensive income attributable to the common stockholders | $ | $ | $ | $ | |||||||||||||||||||
See notes to condensed consolidated financial statements
10
BROOKFIELD ASSET MANAGEMENT LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
| AS OF (MILLIONS, EXCEPT SHARE AMOUNTS) | Shares of Brookfield Asset Management Ltd. | Brookfield Asset Management Ltd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock | Class B common stock | Common stock | Common stock held in treasury | Additional paid-in capital | Retained earnings (deficit) | Accumulated other comprehensive income | Total common equity | Non-controlling interest in consolidated entities | Non-controlling interest in consolidated funds | Total equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share subscriptions | — | ( | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of treasury shares, net | — | — | ( | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | — | ( | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | ( | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AS OF (MILLIONS, EXCEPT SHARE AMOUNTS) | Shares of Brookfield Asset Management Ltd. | Brookfield Asset Management Ltd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock | Class B common stock | Common stock | Common stock held in treasury | Additional paid-in capital | Retained earnings (deficit) | Accumulated other comprehensive income | Total common equity | Non-controlling interest in consolidated entities | Non-controlling interest in consolidated funds | Total equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share subscriptions | — | — | ( | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of treasury shares, net | ( | — | — | ( | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | — | ( | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deconsolidation of consolidated funds | — | — | — | — | — | ( | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
See notes to condensed consolidated financial statements
11
BROOKFIELD ASSET MANAGEMENT LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
| AS OF (MILLIONS, EXCEPT SHARE AMOUNTS) | Shares of Brookfield Asset Management Ltd. | Brookfield Asset Management Ltd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock | Class B common stock | Common stock | Common stock held in treasury | Additional paid-in capital | Retained earnings (deficit) | Accumulated other comprehensive income | Total common equity | Non-controlling interest in consolidated entities | Non-controlling interest in consolidated funds | Total equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share subscriptions | — | ( | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of treasury shares, net | ( | — | — | ( | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | — | ( | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | ( | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AS OF (MILLIONS, EXCEPT SHARE AMOUNTS) | Shares of Brookfield Asset Management Ltd. | Brookfield Asset Management Ltd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock | Class B common stock | Common stock | Common stock held in treasury | Additional paid-in capital | Retained earnings (deficit) | Accumulated other comprehensive income | Total common equity | Non-controlling interest in consolidated entities | Non-controlling interest in consolidated funds | Total equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share subscriptions | — | — | ( | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of treasury shares, net | ( | — | — | ( | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 Arrangement | — | — | ( | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | — | ( | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deconsolidation of consolidated funds | — | — | — | — | — | ( | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
See notes to condensed consolidated financial statements
12
BROOKFIELD ASSET MANAGEMENT LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Operating activities | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Adjustments to reconcile net income to net cash from operating activities: | |||||||||||||||||||||||
| Other (income) expenses, net | ( | ( | |||||||||||||||||||||
| Other income, net of consolidated funds | ( | ( | ( | ( | |||||||||||||||||||
| Share of income from equity method investments, net of cash distributions | ( | ( | ( | ( | |||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Deferred income taxes | ( | ( | |||||||||||||||||||||
| Stock-based equity awards | |||||||||||||||||||||||
| Unrealized carried interest allocation, net | ( | ( | ( | ( | |||||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||||||
| Purchases of investments of consolidated funds | ( | ( | ( | ||||||||||||||||||||
| Proceeds from disposition of investments of consolidated funds | |||||||||||||||||||||||
| Changes in other working capital and non-cash operating items | ( | ( | ( | ||||||||||||||||||||
| Investing activities | |||||||||||||||||||||||
| Acquisitions | |||||||||||||||||||||||
| Investments | ( | ( | ( | ( | |||||||||||||||||||
| Acquisition of subsidiaries, net of cash acquired | ( | ( | |||||||||||||||||||||
| Other assets | ( | ( | ( | ( | |||||||||||||||||||
| Cash assumed on consolidation of funds | |||||||||||||||||||||||
| Dispositions and distributions received | |||||||||||||||||||||||
| Investments | |||||||||||||||||||||||
| Disposition of subsidiaries, net of cash | |||||||||||||||||||||||
| Investments held for sale | |||||||||||||||||||||||
| Advances to related parties | ( | ( | |||||||||||||||||||||
| ( | ( | ( | ( | ||||||||||||||||||||
| Financing activities | |||||||||||||||||||||||
| Distributions to common stockholders | ( | ( | ( | ( | |||||||||||||||||||
| Purchase of treasury shares | ( | ( | ( | ( | |||||||||||||||||||
| Deposits and loans from related parties | |||||||||||||||||||||||
| Repayment of related party loans | ( | ( | |||||||||||||||||||||
| Issuance of corporate borrowings, net | |||||||||||||||||||||||
| Deferred financing costs | ( | ( | ( | ||||||||||||||||||||
| Borrowings of subsidiaries repayment | ( | ( | |||||||||||||||||||||
| Distributions to and settlement of non-controlling and redeemable non-controlling interests | ( | ( | ( | ( | |||||||||||||||||||
| Capital raised from non-controlling interests and contributions from parent | |||||||||||||||||||||||
| Issuances of borrowings by consolidated funds | |||||||||||||||||||||||
| Repayment of borrowings by consolidated funds | ( | ( | ( | ||||||||||||||||||||
| Capital raised from redeemable non-controlling interest in consolidated funds | |||||||||||||||||||||||
| Redemption of redeemable non-controlling interest in consolidated funds | ( | ( | |||||||||||||||||||||
| Preferred equity issuances | |||||||||||||||||||||||
| ( | ( | ( | ( | ||||||||||||||||||||
| Cash and cash equivalents and cash of consolidated funds | |||||||||||||||||||||||
| Net increase (decrease) | ( | ( | |||||||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||||||||||||||
| Balance, beginning of period | |||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | |||||||||||||||||||
See notes to condensed consolidated financial statements
13
BROOKFIELD ASSET MANAGEMENT LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Supplemental cash flow disclosures | |||||||||||||||||||||||
| Other working capital and non-cash operating items | |||||||||||||||||||||||
| Accounts receivable and other, net | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Accounts payable and other, net | ( | ||||||||||||||||||||||
| Due from affiliates | ( | ( | ( | ||||||||||||||||||||
| Due to affiliates | ( | ( | ( | ( | |||||||||||||||||||
| Other non-cash operating items | |||||||||||||||||||||||
| $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||
| Supplemental disclosure of cash flow information | |||||||||||||||||||||||
| Total income taxes paid | $ | $ | $ | $ | |||||||||||||||||||
| Interest paid | $ | $ | $ | $ | |||||||||||||||||||
| Supplemental disclosure of non-cash investing and financing activities | |||||||||||||||||||||||
| Non-cash investing and financing activities related to 2025 Arrangement | $ | $ | $ | $ | |||||||||||||||||||
| Non-cash exchange of DSUs | $ | $ | $ | $ | |||||||||||||||||||
| Non-cash investment of consolidated funds by non-controlling interests | $ | $ | $ | $ | |||||||||||||||||||
| Non-cash disposition of investment | $ | $ | $ | $ | |||||||||||||||||||
| Non-cash investing and financing activities related to Oaktree Acquisition | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Non-cash investing activities related to Oaktree Acquisition | $ | $ | $ | $ | |||||||||||||||||||
See notes to condensed consolidated financial statements
14
BROOKFIELD ASSET MANAGEMENT LTD.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION
Brookfield Asset Management Ltd. (“BAM”, “we”, “our”, “us”, or the “Company”) is an alternative asset manager headquartered in New York, NY, and listed on the New York Stock Exchange (“NYSE”) and Toronto Stock Exchange (“TSX”) under the symbol BAM. BAM focuses on infrastructure, energy, private equity, real estate and credit, operating in various markets globally.
BAM was incorporated on July 4, 2022 and its head office is located at Brookfield Place, 225 Liberty Street, 8th Floor, New York, NY, 10281-1048 and its registered office is located at 1055 West Georgia Street, 1500 Royal Centre, P.O. Box 11117, Vancouver, British Columbia V6E 4N7.
On July 4, 2022, the date of its incorporation, the Company entered into certain agreements and arrangements, including the Relationship Agreement under which carried interest generated by BAM is allocated to BN at 100 % with respect to mature funds and at 33.3 % with respect to current funds, new funds and open-end funds, through the Company’s non-controlling interest and preferred shares redeemable non-controlling interest held by BN. Further, certain employee share-based and performance-based compensation costs are recovered from BN. See discussion of the accounting for this agreement in the Other Revenues accounting policy in Note 2.
On February 4, 2025, BAM and BN completed a transaction by way of a plan of arrangement whereby BN and certain of its subsidiaries exchanged all of their common shares in Brookfield Asset Management ULC (the “Asset Management Company”) for newly-issued Class A Shares on a one-for-one basis (the “2025 Arrangement”). As a result of the 2025 Arrangement, BAM issued approximately 1,194 million Class A Shares to BN for approximately 1,194 million outstanding common shares of the Asset Management Company. Immediately following the completion of the 2025 Arrangement, (i) BAM held, directly and indirectly, 100 % of the outstanding common shares of the Asset Management Company, (ii) BN held approximately 73 % of the Class A Shares of BAM, and (iii) the shareholders of BAM prior to effecting the 2025 Arrangement held the remaining approximately 27 % of the Class A Shares of BAM.
The financial statements of BAM for the periods prior to February 4, 2025, the closing date of the 2025 Arrangement, reflect historical financial information of Brookfield Asset Management ULC (other than legal share capital), the accounting acquirer, as the “Predecessor” entity. For the periods thereafter, the financial statements reflect the financial position and results of the combined entity.
On July 31, 2026, BAM and BN completed the Oaktree Acquisition, which was originally announced on October 13, 2025. BAM's portion of the transaction was funded through a combination of cash and non-cash consideration. In connection with the transaction, certain existing Oaktree investments were sold to BWS. Oaktree's results are included in BAM's condensed consolidated financial statements beginning July 31, 2026. Refer to Note 3 for additional information on the transaction.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of BAM have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and are presented in U.S. dollars. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. The condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented in accordance with U.S. GAAP. The results reported in these condensed consolidated financial statements should not necessarily be regarded as indicative of results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements of BAM for the year ended December 31, 2025, as filed in our Form 10-K dated March 2, 2026.
Certain of the comparative figures have been reclassified to conform with the current year's presentation. This includes changes in the presentation of right-of-use assets and operating lease liabilities which have been presented as separate financial statement captions in the condensed consolidated balance sheets. Further, the Company revised the presentation of its partner managers' results within segment reporting to present its share of revenues and expenses on a gross basis, rather than presenting its share of net earnings within Segment Revenues. Comparative segment information has been recast to conform with the revised presentation, with no impact on total Segment Earnings.
15
Use of Estimates
The preparation of the condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Management believes that estimates utilized in the preparation of the condensed consolidated financial statements are reasonable. Such estimates include those used in determining the fair value of investments and financial instruments, the measurement of deferred tax balances (including valuation allowances), accrued carried interest, incentive distributions and the accounting for share-based and performance-based compensation. Actual results may differ from those estimates and such differences may be material.
Consolidation
The Company consolidates all entities which it controls through a majority voting interest and all variable interest entities (“VIE”) for which it is the primary beneficiary. An enterprise is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a variable interest entity and reconsiders that conclusion upon certain events. In determining whether the Company is the primary beneficiary, the Company evaluates its control rights as well as economic interests in the entity held either directly or indirectly by the Company. Assets of a consolidated VIE can only be used to settle obligations of the consolidated VIE and creditors and other beneficial interest holders do not have recourse to the Company with respect to liabilities of its consolidated VIEs. For more information, the Company’s other disclosures regarding VIEs are discussed in Note 5.
The Company also consolidates the balance sheet and results of operations of certain funds in which it is the primary beneficiary.
All intercompany balances and transactions have been eliminated on consolidation.
Business Combinations
The Company accounts for business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”), under which the consideration transferred, including the acquisition-date fair value of contingent consideration, is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. Any excess of the consideration transferred over the fair value of the net identifiable assets acquired is recognized as goodwill.
Determining the fair value of assets acquired and liabilities assumed requires management to make estimates and assumptions, particularly in valuing identifiable intangible assets. Significant estimates may include projected future cash flows, expected retention rates, expected useful lives and discount rates.
For business combinations achieved in stages, the Company remeasures its previously held equity interest in the acquiree to its acquisition-date fair value and recognizes any resulting gain or loss in other income (expenses), net in the condensed consolidated statements of operations. The Company may adjust provisional amounts recognized for a business combination during the measurement period, which cannot exceed one year from the acquisition date, as additional information becomes available about facts and circumstances that existed at the acquisition date. Acquisition-related costs are expensed as incurred.
Preferred Shares Redeemable Non-Controlling Interest
The Company has various outstanding special tracking preferred shares of certain subsidiaries of the Company (“Tracking Shares”) which provide BN with a redemption right, upon a liquidation or redemption event, to receive a preferred amount equal to the fair value of carried interest entitlement from certain tracked assets, net of any compensation related costs. The carried interest entitlement is determined based on the hypothetical liquidation at book value method of valuation (“HLBV”) being applied to each such mature fund at each reporting date, which calculates the accrued carried interest that would be due to the Company pursuant to fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. These returns are realized through the payment of cumulative dividends, as and when declared by the board of directors of the relevant BAM subsidiaries. The Tracking Shares are entitled to vote, together with the common shares owned indirectly by the Company, in respect of those subsidiaries and are presented as preferred shares redeemable non-controlling interest within the condensed consolidated balance sheets, outside of permanent equity.
The first series of Tracking Shares issued by Brookfield US Holdings Inc. (“BUSHI”), a subsidiary of the Company, provides BN with an economic interest equal to effectively 100% of the carried interest earned in mature funds. The first series of Tracking Shares also includes all economic interest associated with the Company's investment in BSREP III. Any economics relating to the limited partnership interest in BSREP III are attributed to the preferred shares within the preferred shares redeemable non-controlling interest financial statement line item on the condensed consolidated statement of operations. Carried interest entitlement on BSREP III is also determined using the HLBV method.
16
The second series of Tracking Shares issued by Brookfield Manager Holdings Ltd. (“BMHL”), a subsidiary of the Company, provides BN with an economic interest equal to effectively a 33.3 % share of similar distributions on open-end funds.
The third series of Tracking Shares issued by BUSHI provides BN with an economic interest equal to 1.5 % of certain investments held by Oaktree, an equity method investment of BAM, excluding any fee earnings, carried interest, incentive fees and performance fees of that equity method investee. In connection with the Oaktree Acquisition, the third series of Tracking Shares was redeemed for cash consideration.
Each series of Tracking Shares has a redemption clause whereby BUSHI for the first and third series and BMHL for the second series, each of whose board is controlled by BN, may elect to redeem the Tracking Shares upon the tenth anniversary of issuance. While each series of Tracking Shares is not currently redeemable, the Company believes that each series of Tracking Shares will become redeemable as the redemption requirement is only through the passage of time. As such the relevant redeemable non-controlling interest recognized outside of permanent equity requires remeasurement at each reporting period. Once the first and second series of Tracking Shares are redeemed, the holder retains no further economic entitlement to the carried interest of the funds, and for the first series, the limited partner investment interest included within those respective Tracking Shares. Once the third series of Tracking Shares are redeemed, the holder retains no further economic entitlement to the certain investments held by Oaktree included within those respective Tracking Shares.
BUSHI's issued share capital includes class B senior preferred shares, all of which are held by BN. The class B senior preferred shares entitle the holder to cumulative preferential cash dividends at $1.36375 per share per annum and are ranked senior to the BUSHI Tracking Shares, class B preferred shares and common shares. The class B senior preferred shares were issued in December 2022 in conjunction with the 2022 Arrangement and are held by BN. The class B senior preferred shares are redeemable by the issuer, whose board is controlled by BN, upon the tenth anniversary of issuance at a redemption amount of $25 per share plus accrued and unpaid dividends. While the class B senior preferred shares are not currently redeemable, the Company considers that it is probable such shares will become redeemable as the redemption requirement is only through the passage of time.
BUSHI's issued share capital includes class B preferred shares, all of which are held by BN. The class B preferred shares of BUSHI are redeemable at the option of both the holder and the issuer at a redemption amount of $25 per share plus declared and unpaid dividends, and entitle the holder to non-cumulative preferential cash dividends at 6.7 % per annum on the redemption amount. These class B preferred shares are non-voting and rank junior to the class B senior preferred shares and the BUSHI Tracking Shares and senior to common shares of the entity. In connection with the Oaktree Acquisition, the Class B preferred shares were redeemed for cash consideration.
Due to the currently exercisable holder redemption option, the class B senior preferred shares and class B preferred shares are presented as a part of preferred shares redeemable non-controlling interest within the Company’s condensed consolidated balance sheets, outside of permanent equity and are measured at their redemption amount plus any dividends declared and unpaid at each reporting period.
Additionally, BUSHI, as part of BAM's various share-based compensation arrangements, has issued class A preferred shares to BN. The shares rank junior to the Class B senior preferred and Tracking Shares and are redeemable at the option of the holder and the issuer at a redemption amount of $25 per share plus accrued and unpaid dividends and are non-voting. Due to the currently exercisable holder redemption option, these shares are presented as part of preferred shares redeemable non-controlling interest within the Company’s condensed consolidated balance sheets, outside of permanent equity and are measured at their redemption amount plus any dividends declared and unpaid at each reporting period.
In connection with the Oaktree Acquisition, Exchange LP, a subsidiary of the Company, issued exchangeable preferred units. The BN Exchangeable Units entitle the holders to receive distributions that are economically equivalent to the distributions paid on BN Class A Shares and are exchangeable into BN Class A Shares subject to transfer and exchange restrictions, including a lock-up period following issuance, after which the holders may exchange the BN Exchangeable Units for BN Class A Shares. While the BN Exchangeable Units are not currently exchangeable, the Company believes the units will become exchangeable as the restriction lapses solely through the passage of time. As such, the BN Exchangeable Units are presented as preferred shares redeemable non-controlling interest within the condensed consolidated balance sheets, outside of permanent equity and are remeasured at each reporting period.
The Company recognizes any change in the carrying amount of its preferred shares redeemable non-controlling interest in net (income) loss attributable to preferred shares redeemable non-controlling interest in its condensed consolidated statements of operations. Distributions on the preferred shares redeemable non-controlling interest are made periodically as carried interest is realized. Distributions are not deferred until a redemption event occurs. These distributions are presented within distributions in Note 15, “Redeemable non-controlling interest”.
Redeemable Non-Controlling Interest in Consolidated Funds
The Company has various outstanding classes of non-controlling interests issued by its consolidated funds, including interests held by BN, other related parties and third-party limited partners. These interests are redeemable upon events that are not solely within the
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Non-Controlling Interest in Consolidated Entities
The Company has various outstanding classes of equity interests, issued by the Company’s subsidiaries and held by BN, which have rights to priority distributions. Net (income) loss and other comprehensive (income) loss, if applicable, generated by the respective subsidiaries is allocated to non-controlling interest in consolidated entities based on the substantive contractual terms of the subsidiaries’ governing agreements that specify the allocation of income or loss. Non-controlling interest includes BN's entitlement, pursuant to the Relationship Agreement, to 33.3 % of all carried interest generated on new funds prior to any carried interest compensation costs.
Non-Controlling Interest in Consolidated Funds
Non-controlling interests in consolidated funds represent the equity in consolidated funds held by third-party investors and related parties. Net (income) loss and other comprehensive (income) loss, if applicable, generated by the respective funds is allocated to non-controlling interest in consolidated funds based on the substantive contractual terms of the funds' governing agreements that specify the allocation of income or loss, such as fees allocable to BAM.
Revenue Recognition
Revenue is measured based on the amount the Company expects to be entitled to under the contract with the customer and excludes amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service (or a bundle of goods and services) to the customer and is the unit of account in ASC 606 Revenue from Contracts with Customers (“ASC 606”). In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue, as, or when, the performance obligation is satisfied. The Company recognizes revenue when it transfers control of a product or service to a customer.
Revenues primarily consist of base management and advisory fees and incentive fees (including incentive distributions and performance fees).
Base management and advisory fees — Base management and advisory fees are comprised of base management fees and transaction, advisory and other fees and are accounted for as contracts with customers.
The Company earns base management fees from its customers at a fixed percentage of a calculation base that varies by fund or vehicle and may include committed capital, contributed capital, invested capital, drawn capital, cost basis, net asset value, gross assets, or the aggregate par value of collateral assets and principal cash, depending on the applicable governing documents. The Company identifies its customers on a fund-by-fund basis in accordance with the terms and circumstances of the individual fund. Generally, the customer is identified as the investor in its managed funds and investment vehicles, but for certain widely held funds or vehicles, the fund or vehicle itself may be identified as the customer. These customer contracts require the Company to provide investment management services over a period of time, which represents a performance obligation that the Company satisfies over time. Management fees are a form of variable consideration because the fees that the Company is entitled to vary based on fluctuations in the basis for the management fee. The amount recorded as revenue is generally determined at the end of the reporting period because these management fees are payable on a regular basis (typically quarterly) and are not subject to clawback once paid. The Company is reimbursed by certain funds for expenses incurred or paid on behalf of the funds in connection with its investment advisory and administrative services. The Company evaluates the nature of these arrangements and, where applicable, whether it acts as principal or agent in determining the appropriate presentation of such amounts in its condensed consolidated statement of operations. In cases where the investor in its managed funds and investment vehicles is determined to be the customer, placement fees may be capitalized as a cost to acquire a customer contract. Capitalized placement fees are amortized over the life of the customer contract.
Transaction, advisory and other fees are principally fees charged to the investors of funds indirectly through the managed funds and portfolio companies. These fees are based on a fixed percentage of enterprise value or equity value of pooled capital raised and are
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earned generally when the capital is called. These fees are not tied to performance or ongoing investment management services, are not subject to clawback and are recorded in the reporting period in which the related transaction closes.
Accrued but unpaid base management and advisory fees, net of management fee reductions and management fee offsets, as of the reporting date are included in accounts receivable and other, net or due from affiliates in the condensed consolidated balance sheets.
Deferred revenue represents consideration received or due in advance of the Company's satisfaction of its performance obligations under contracts with customers, including certain management, advisory and other fees. Deferred revenue is recognized as revenue over the period in which the related services are provided and is included in accounts payable and other, net in the condensed consolidated balance sheets.
Incentive fees — Incentive fees include incentive distributions and performance fees and are accounted for as revenue from contracts with customers.
Incentive fees are incentive payments to reward the Company for meeting or exceeding certain performance thresholds of managed entities, as determined by the terms of the underlying arrangements. These include BBUC performance fees earned above a high watermark, income-based incentive fees earned from certain managed funds and investment vehicles, including business development companies, and other performance-based fees that may be subject to contractual hurdles or performance thresholds.
Incentive distributions paid to us by our permanent capital vehicles BIP and BEP are determined by contractual arrangements and represent a portion of distributions paid above a predetermined hurdle. These amounts are accrued as revenue on the respective affiliates’ distribution record dates only if the predetermined hurdle has been achieved.
Certain incentive fee arrangements may be subject to clawback provisions, while incentive distributions are not subject to clawback.
Incentive fees, incentive distributions and performance fees will not be recognized until (a) it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable consideration is subsequently resolved.
Accrued but unpaid incentive distributions and performance fees are recorded within due from affiliates in the condensed consolidated balance sheets as of the reporting date.
Investment income (loss) — Investment income (loss) represents the unrealized and realized gains and losses on carried interest and movements in the fair value of the Company's principal investments and is accounted for outside of ASC 606.
Carried interest is a performance fee arrangement in which the Company receives a percentage of investment returns, generated within a private fund on carry eligible capital, based on a contractual formula. We are eligible to earn carried interest from a fund once returns exceed the fund’s contractually defined performance hurdles, at which point we earn an accelerated percentage of the additional fund profit until we have earned the percentage of total fund profit, net of fees and expenses, to which we are entitled. At the end of each reporting period, the Company calculates the balance of accrued carried interest that would be due to the Company for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as accrued carried interest to reflect either (a) positive performance resulting in an increase in the accrued carried interest to the general partner or (b) negative performance that would cause the amount due to the Company to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the accrued carried interest to the general partner. These adjustments are recorded in the condensed consolidated statements of operations as unrealized carried interest allocations in investment income. In each scenario, it is necessary to calculate the accrued carried interest on cumulative results compared to the accrued carried interest recorded to date and make the required positive or negative adjustments. The Company ceases to record negative carried interest once previously accrued carried interest for such funds has been fully reversed. The Company is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative carried interest over the life of a fund. Accrued carried interest as of the reporting date is reflected in investments on the condensed consolidated balance sheets.
Carried interest is realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return or, in limited instances, after certain thresholds for return of capital are met. Carried interest is subject to clawback to the extent that the carried interest received to date exceeds the amount due to the Company based on cumulative results. The accrual for potential repayment of previously received carried interest would represent amounts previously paid to the Company that would need to be repaid if these funds accruing carry were to be liquidated based on the fair value of their underlying investments. This amount is estimated to be $nil for all periods presented and as a result no clawback provision has been recognized in the condensed consolidated financial statements.
Fair value gains (losses) on principal investments include the unrealized and realized gains and losses on the Company’s principal investments, including its investments in the funds that are not consolidated and receive pro-rata allocations and other principal investments. Gain (loss) on principal investments is realized when the Company redeems all or a portion of its investment or when the
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Company receives cash income, such as dividends or distributions. Unrealized gain (loss) on principal investments results from changes in the fair value of the underlying investment as well as the reversal of unrealized gain (loss) at the time an investment is realized.
Interest and dividend revenue — Interest and dividend revenue consists primarily of interest and dividend income earned on principal investments not accounted for under the equity method held by the Company.
Other revenues
Other revenues arise from the Relationship Agreement between BAM and BN. Under the Relationship Agreement, certain employee share-based and performance-based compensation costs are recovered from BN. Income generated under the Relationship Agreement relating to these instruments is recognized as other revenues in the condensed consolidated statements of operations on a gross basis as the instruments vest or are incurred.
Certain liability classified share-based awards covered by the Relationship Agreement are required to be revalued at each balance sheet date. As a result, where the revaluation results in an increase in the share-based award liability, BN will reimburse BAM while conversely, where the revaluation results in a decrease in the share-based award liability, BAM will be responsible for reimbursing the difference to BN.
Fair Value of Financial Instruments
U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.
Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:
•Level I — Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of financial instruments in Level I include listed equities and mutual funds with quoted prices. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.
•Level II — Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. The types of financial instruments in Level II include equity securities and derivative instruments where the fair value is based on observable inputs.
•Level III — Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. The types of financial instruments in Level III include certain contingent consideration arrangements and put and call arrangements associated with partner manager investments, and privately held equity, preferred and debt investments held directly and through consolidated funds. For certain investments where the fair value is not readily determinable, NAV is applied as a practical expedient.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.
Level II Valuation Techniques
Financial instruments classified within Level II of the fair value hierarchy are comprised of certain equity securities and derivative instruments.
The valuation techniques used to value financial instruments classified within Level II of the fair value hierarchy are as follows:
•Equity securities and derivative instruments are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, the Company may use certain information with respect to quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments. The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction that is embodied in the security.
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Level III Valuation Techniques
In the absence of observable market prices, the Company values its investments using valuation methodologies applied on a consistent basis. For some investments where little market activity may exist, management’s determination of fair value is then based on the best information available in the circumstances and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks.
Certain contingent consideration arrangements and put and call arrangements associated with partner manager investments are valued using Monte Carlo simulation models that incorporate significant unobservable inputs, including projected earnings, volatility assumptions and discount rates, which reflect assumptions that market participants would use in pricing the instruments.
The Company uses the discounted cash flow method or the direct capitalization method to value the investments held in consolidated funds. Valuations may be derived by referencing observable valuation measures for comparable assets and recent market transactions, adjusted for asset specific factors. Where a discounted cash flow method is used, projected cash flows are estimated using assumptions that market participants would use in pricing the investment, including assumptions regarding future operating performance, capital expenditures, working capital requirements, discount rate, and terminal values, which are derived by reference to a stabilized exit earnings before interest, taxes, depreciation and amortization (“EBITDA”) and a capitalization rate. The Company may also utilize multiple valuation approaches and considers the results obtained from each approach in determining fair value.
Net Asset Value
Investment funds are typically measured using NAV as a practical expedient in determining fair value and are not classified in the fair value hierarchy. The carrying value reflects a pro rata ownership percentage as indicated by NAV in the investment fund financial statements, which may be adjusted if it is determined NAV is not calculated consistent with investment company fair value principles. The underlying investments of the investment funds may have significant unobservable inputs, which may include but are not limited to, comparable multiples and weighted average cost of capital (“WACC”) rates applied in valuation models or a discounted cash flow model.
Leases
The Company determines whether an arrangement contains a lease at inception. A lease is a contract that conveys the right to control the use of an identified asset for a period of time in exchange for consideration. For identified leases, the Company determines whether the lease should be classified as an operating or finance lease in accordance with ASC 842, Leases (“ASC 842”).
Operating leases are included in right-of-use assets and operating lease liabilities in the condensed consolidated balance sheets. Right-of-use assets and operating lease liabilities are recognized at the commencement date and measured based on the present value of lease payments over the lease term. Right-of-use assets also include any deferred rent liabilities and lease incentives. As the Company's lease arrangements generally do not provide an implicit rate, the Company uses its incremental borrowing rate at the commencement date to determine the present value of lease payments.
The lease term includes renewal or termination options when it is reasonably certain that the Company will exercise such options. Operating lease expense is recognized on a straight-line basis over the lease term in general, administrative and other in the condensed consolidated statements of operations. Lease and non-lease components are generally accounted for separately.
Financial Assets and Financial Liabilities
In the normal course of business, the Company and certain consolidated funds are exposed to certain risks relating to their ongoing operations and use various types of derivative instruments primarily to mitigate against interest rate and foreign exchange risk. These generally include foreign currency forward contracts, total return swaps and interest rate swaps. The derivative instruments are not designated as hedging instruments under ASC 815, Derivatives and Hedging (“ASC 815”).
Derivative instruments under ASC 815 held by the Company are recognized on a gross basis as either financial assets or financial liabilities in the condensed consolidated balance sheets at fair value with changes in fair value recognized in net income.
Derivative instruments are marked-to-market at the end of each reporting period based upon quotations from pricing services or by the Company and the change in value, if any, is recorded as an unrealized gain (loss). Upon settlement of the instrument, the Company records any realized gain (loss). Unrealized gains (losses) and realized gains (losses) are reflected within other income (expenses), net within the condensed consolidated statements of operations.
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For certain derivative instruments, the Company enters into agreements subject to enforceable master netting arrangements that allow the Company to offset derivative assets and liabilities in the same currency by specific derivative type or, in the event of default by the counterparty, to offset derivative assets and derivative liabilities with the same counterparty. While these derivatives are eligible to be offset in accordance with applicable accounting guidance, the Company has elected to present derivative assets and liabilities based on gross fair value in its condensed consolidated balance sheets.
Derivative instruments under ASC 815 held by certain consolidated funds are recognized on a gross basis as either investments of consolidated funds or accounts payable and other of consolidated funds in the condensed consolidated balance sheets at fair value with unrealized and realized gains or losses being recognized in other income, net of consolidated funds within the condensed consolidated statements of operations.
Purchased or written options on equity interests of several of the Company's equity method investments that do not meet the definition of a derivative are recognized on the condensed consolidated balance sheets on a gross basis as financial assets or financial liabilities, respectively. These financial instruments are measured at fair value with changes in fair value recognized in other income (expenses), net within the condensed consolidated statements of operations.
Investments
Investments include (i) investments held by funds which the Company controls and consolidates and (ii) the Company’s ownership interests (typically general partner interests) in nonconsolidated funds and other asset management businesses which are accounted for as equity method investments.
(i) Investments at fair value under Consolidated Funds
Investments held in consolidated funds, which are investment companies under ASC 946, Financial Services - Investment Companies, are measured at fair value as disclosed in Note 4.
(ii) The Company’s ownership interests in funds and other asset management businesses accounted for as equity method investments
Investments in which the Company is deemed to exert significant influence, but not control, are accounted for using the equity method of accounting. The Company has significant influence over certain Brookfield funds in which it invests but does not consolidate. Therefore, its investments in such Brookfield funds, which include both a proportionate and disproportionate allocation of the profits and losses, are accounted for under the equity method. The Company also has investments in equity interests of other asset management businesses that provide it with significant influence and therefore accounts for such investments using the equity method for its proportionate share of the investees' net income or losses.
When the Company acquires an additional interest in an existing equity method investment, resulting in a step-up in basis, the difference between the purchase price and the Company's proportionate share of the book value of the investee’s net assets is identified and allocated to the fair value of the identifiable assets and liabilities of the investee at the acquisition date. The excess of the purchase price over the book value of the net assets acquired is allocated to intangible assets and goodwill. The basis difference is generally amortized over the remaining useful lives of the intangible assets, while any amount allocated to goodwill is not amortized but is tested for impairment annually. The amortization of the basis difference affects the Company’s share of the investee’s net income or loss and is included in the “Share of Income from Equity Method Investments” line item in the condensed consolidated statements of operations. The amortization periods for the intangible assets to which the basis difference is allocated are consistent with the estimated useful lives of those assets. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.
In cases where the Company’s equity method investments provide for a disproportionate allocation of the profits and losses, the Company’s share of income (losses) from equity method investments is determined using a balance sheet approach referred to as the HLBV method. Under the HLBV method, at the end of each reporting period the Company calculates the accrued carried interest that would be due to the Company pursuant to fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of the underlying investments varies between reporting periods, it is necessary to make adjustments to the amounts recorded as carried interest to reflect either a positive performance resulting in an increase in the carried interest allocated to the general partner or a negative performance that would cause the amount due to the Company to be less than the amount previously recognized, resulting in a negative adjustment to carried interest allocated to the general partner. In each case, such accrued carried interest will be recognized in the condensed consolidated statements of operations.
The Company has elected to account for certain equity method investments such as equity securities through the election of the fair value option under ASC 825, Financial Instruments. These are investments in limited partnerships that represent more than a minor interest in the investees where the Company does not have the practical ability to exert significant influence.
Refer to Note 4 for further details in relation to equity method investments.
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Cash and Cash Equivalents
Cash and cash equivalents represents cash on hand, cash held in banks, demand deposits, money market funds and liquid investments with original maturities of three months or less. Interest income from cash and cash equivalents is recorded in interest and dividend revenue in the condensed consolidated statements of operations. The Company is subject to credit risk in the event a financial institution is unable to fulfil its obligations, including with respect to balances held in excess of applicable insured limits.
Restricted cash consists of balances that are not readily available for the Company's general operating needs, typically due to collateral, escrow, or legal requirements. The Company presents restricted cash in accounts receivable and other, net in the condensed consolidated balance sheets.
Cash of Consolidated Funds
Cash held at the consolidated funds represents cash that, although not legally restricted, is not available to support the general liquidity needs of the Company as the use of such amounts is generally limited to the activities of the consolidated funds.
Intangibles and Goodwill
Identifiable finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from eight to fifteen years, reflecting the contractual or economic lives of such assets. Finite-lived intangible assets primarily include acquired closed-end fund customer relationships and trade names. Amortization expense is included within general, administrative and other in the condensed consolidated statements of operations. Finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Indefinite life intangible assets are not amortized and are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. Indefinite life intangible assets primarily include certain acquired open-end and evergreen fund management contracts.
Goodwill is reviewed for impairment at least annually utilizing a qualitative or quantitative approach, and more frequently if circumstances indicate impairment may have occurred. The impairment testing for goodwill under the qualitative approach is based first on a qualitative assessment to determine if it is more likely than not that the fair value of the Company’s operating segments is less than their respective carrying values. In most circumstances, the operating segments are considered the reporting units for purposes of goodwill impairment testing; however, in certain cases, reporting units may be identified at a lower level when an underlying strategy is determined to not have similar economic characteristics. If it is determined that it is more likely than not that a reporting unit's fair value is less than its carrying value or when the quantitative approach is used, an impairment loss is recognized to the extent by which the carrying value exceeds the fair value, not to exceed the total amount of goodwill allocated to that reporting unit.
Impairment losses on goodwill and intangible assets are recognized within other income (expenses), net in the condensed consolidated statements of operations.
Property, Plant and Equipment, net
Property, plant and equipment, net consist primarily of leasehold improvements, furniture, fixtures and equipment, computer hardware and software, corporate aircraft and other operating assets and are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the assets’ estimated useful economic lives. Leasehold improvements are depreciated over the lesser of the lease term or the useful life of the asset, generally ten to fifteen years. Furniture, fixtures, equipment, computer hardware and software are generally depreciated over three to seven years. Corporate aircraft are depreciated over their estimated useful lives, generally twenty years. Depreciation and amortization expense is recorded within general, administrative and other in the condensed consolidated statements of operations. The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Compensation, benefits and carried interest compensation
Compensation — Compensation consists of (a) salary and bonus, deferred compensation and benefits paid and payable to employees, and (b) share-based compensation associated with the grants of share-based awards to employees. Compensation costs relating to the issuance of share-based awards to senior management and employees are accounted for in accordance with ASC 718, Compensation — Stock Compensation. These awards are measured at fair value at the grant date and expensed over the vesting period, except in the case of share-based awards that do not require future service, which are expensed immediately. Cash settled share-based awards and awards settled in a variable number of shares for a fixed monetary amount are classified as liabilities and are remeasured at the end of each reporting period. The Company accounts for forfeitures as they occur.
Refer to Note 14 for further details of the Company's share-based compensation.
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Carried Interest Compensation — Unrealized and realized carried interest compensation is performance-based compensation based on performance of investments on a fund-by-fund basis. Such compensation expense is subject to both positive and negative adjustments. For certain carried interest compensation costs recognized in accordance with ASC 710 Compensation - General, BAM is not entitled to the associated carried interest income. Substantially all of these costs are recoverable from BN, with the recoveries being presented in other revenues in the condensed consolidated statement of operations. As the expense is recorded as carried interest compensation costs and the recovery is recorded as other revenues, we note the movement in carried interest allocation compensation and carried interest allocations on a gross basis may not have a direct correlation.
Other income (expenses), net
Other income (expenses), net — Other income (expenses), net includes net unrealized gains (losses) resulting from changes in the fair value of the Company’s investments in common shares, financial instruments associated with options to acquire additional interests in various investments, and investments in its sponsored funds. Other income (expenses), net also includes gains (losses) arising from the remeasurement of previously held equity interests in connection with business combinations achieved in stages, goodwill impairment losses, and non-asset management related expenses.
Other income, net of consolidated funds — Other income, net of consolidated funds include net unrealized gains (losses) resulting from changes in the fair value of the Company's underlying investments and other financial instruments in its consolidated funds. Upon disposition of an investment, unrealized gains or losses are reversed and an offsetting realized gain or loss is recognized in the current period.
Income taxes
The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. Income taxes as presented attribute deferred income taxes of the Company's standalone condensed consolidated financial statements in a manner that is systematic, rational, and consistent with the asset and liability method.
The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of the Company's assets and liabilities and are adjusted for changes in tax rates and tax laws when such changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.
The Company analyzes its tax filing positions in all jurisdictions where it is required to file income tax returns, as well as for all open tax years in these jurisdictions. Tax benefits associated with actual or expected income tax positions are recognized when the “more likely than not” recognition threshold is met. The tax benefits are measured at the largest amount of benefit that is greater than 50% likely to be realized upon settlement with the related tax authority.
The Company recognizes accrued interest and penalties related to uncertain tax positions within the provision for income taxes in the condensed consolidated statements of operations.
Related parties
In the normal course of operations, the Company enters into various transactions, including certain deposit arrangements, on market terms with related parties with amounts being recorded in due from/to affiliates. In accordance with ASC 850 Related Party Disclosures, BAM considers the nature of the relationship in assessing whether the related party meets the definition of an affiliate. Any entity that shares a common parent with BAM is considered an affiliate. This primarily includes BN, certain new and mature funds and perpetual affiliates. All other entities where either BAM or BN can exercise significant influence are considered related parties. This primarily includes BAM's or BN's equity method investees such as Castlelake and BWS. Amounts owed to and by equity method investments and joint ventures are not eliminated on consolidation.
The Company has certain loans receivable and payable within due from/to affiliates which are long-term in nature. These receivables and payables are initially recognized at fair value and subsequently measured at their amortized cost bases with interest recognized using the effective interest method.
In addition to the Relationship Agreement, BN, BAM and the Asset Management Company have entered into a services agreement (the “Services Agreement”), which replaced the Transition Services Agreement upon its expiration. Pursuant to the Services Agreement; (i) the parties agree to provide certain services to support day-to-day corporate activities (including services relating to finance, treasury, accounting, legal and regulatory, marketing, communications, human resources, internal audit and information technology); and (ii) upon the request of BN, making the services of BAM investment personnel available for purposes of assisting on acquisitions, investments and other transactions (collectively, the “Services”). The Services are provided, at cost, and shall continue until terminated by written agreement by each of BN, BAM and the Asset Management Company.
See Note 21 for further detail on related party transactions.
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Common control transactions
Transfers of assets, liabilities, businesses, or subsidiaries between entities under common control are accounted for at the transferring entity's carrying values at the transfer date. Accordingly, no gains or losses are recognized when assets and liabilities are transferred between entities under common control. ASC 805 Business Combinations would also not apply to transfers of businesses or subsidiaries between entities under common control. As such, no step-up in fair value or new goodwill would be recognized upon such transfers. Any difference between the consideration exchanged and the carrying value of the net assets transferred is recorded as an adjustment to additional paid‑in capital.
Transfers of Financial Assets
Transfers of financial assets are accounted for as sales when (i) the transferred asset has been legally isolated from the transferor; (ii) the transferee has the right to pledge or exchange the transferred asset; and (iii) the Company does not maintain effective control over the transferred asset. If the criteria for sale accounting are met, the transferred asset is derecognized and a gain or loss is recognized upon sale, taking into account any retained interests. Transfers of financial assets that do not meet the criteria for sales are accounted for as financing transactions, with the proceeds received classified as secured borrowings.
Recent accounting pronouncements
The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on the Company's condensed consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, which requires public business entities to disclose specific information about existing costs and expenses in the notes to its financial statements. This ASU is intended to provide users with useful information about expenses critical to understanding an entity's performance. This standard requires that a public business entity disclose key expenses including, but not limited to, employee compensation, depreciation and amortization, and associated qualitative disclosures about the nature of expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Company is currently assessing the impact of this update, but it is not expected to have a material impact.
In September 2026, the FASB issued ASU 2026-03, which amends the fair value measurement guidance under ASC 820 for investment companies within the scope of ASC 946. The ASU requires investment companies to consider the effect of contractual sale restrictions when measuring the fair value of equity securities and to disclose the amount of any discount attributable to such restrictions. The amendments are effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently assessing the impact of this update on its condensed consolidated financial statements.
3. OAKTREE TRANSACTION
On July 31, 2026, Brookfield acquired the remaining approximate 26 % common equity interest in Oaktree and its affiliates, for aggregate consideration of approximately $2.9 billion, inclusive of cash and non-cash consideration, of which approximately $2.2 billion is attributable to BAM. As part of the transaction, BAM acquired the remaining interest in Oaktree's asset management business, which entitles it to Fee-Related Earnings and legacy and new fund carried interest, increasing its ownership to 100 % and resulting in BAM obtaining a controlling financial interest in Oaktree. Accordingly, the acquisition was accounted for as a business combination achieved in stages under ASC 805 and BAM's previously held equity method investment was remeasured to its acquisition-date fair value.
The acquired business operations of Oaktree contributed revenues of $308 million and net income of $34 million to BAM for the period from August 1, 2026 to September 30, 2026. Had the acquisition occurred on January 1, 2025, BAM's consolidated unaudited pro forma revenue and net income would be: (i) $2.7 billion and $1.2 billion, respectively, for the three months ended September 30, 2026; (ii) $6.7 billion and $3.0 billion, respectively, for the nine months ended September 30, 2026; (iii) $1.6 billion and $691 million, respectively, for the three months ended September 30, 2025; and (iv) $4.7 billion and $2.0 billion, respectively, for the nine months ended September 30, 2025. The pro forma amounts include adjustments for depreciation, amortization, financing, transaction costs and related tax effects. The information is presented for comparative purposes only and is not necessarily indicative of actual results.
25
Consideration Transferred:
The following summarizes the consideration transferred, fair value of assets acquired and liabilities assumed as of the acquisition date:
| (In $ millions, unless otherwise noted) | |||||
| Fair value of consideration transferred: | |||||
| Cash | $ | ||||
| Due from affiliates | ( | ||||
| Replacement awards attributable to pre-combination service | |||||
| BN Exchangeable Units | |||||
| Contingent consideration | |||||
| Fair value of the Company’s pre-existing interest in Oaktree | |||||
| Fair value of pre-existing relationships effectively settled | ( | ||||
| Total consideration | $ | ||||
| Assets acquired: | |||||
| Cash and cash equivalents | $ | ||||
| Cash of consolidated funds | |||||
| Accounts receivable and other, net | |||||
| Due from affiliates | |||||
| Investments | |||||
| Investments of consolidated funds | |||||
| Right-of-use assets | |||||
| Property, plant and equipment, net | |||||
| Intangible assets | |||||
| Total assets acquired | |||||
| Liabilities assumed: | |||||
| Accounts payable and other, net | |||||
| Due to affiliates | |||||
| Operating lease liabilities | |||||
| Borrowings of subsidiaries | |||||
| Borrowings of consolidated funds | |||||
| Deferred tax liabilities | |||||
| Total liabilities assumed | |||||
| Net assets acquired | |||||
| Goodwill | $ | ||||
Preliminary Purchase Price Allocation
The accounting for the Oaktree Acquisition remains preliminary as the Company continues to finalize certain acquisition-date valuations and related accounting assessments, including, but not limited to, those associated with identifiable intangible assets and deferred income taxes. The purchase price allocation reflects management's current best estimates of the amounts recognized as of the acquisition date and remains subject to adjustment as additional information becomes available. The Company expects to finalize the purchase price allocation within the measurement period, which will not exceed one year from the acquisition date. As a result, the amount of goodwill recognized may be adjusted in future periods.
Due From Affiliates
The purchase price allocation reflects a receivable from affiliates in connection with a post-closing true-up between Brookfield entities, as contemplated under the transaction agreement. The amount is expected to be settled in a subsequent period.
Replacement Awards Attributable to Pre-combination Service
In connection with the acquisition, the Company replaced certain outstanding equity-based awards of Oaktree with awards issued under the Company's Restricted Share Unit (“RSU”) Plan. The replacement awards were measured at fair value as of the acquisition date.
26
Contingent Consideration
The acquisition includes contingent consideration arrangements pursuant to which certain sellers may be entitled to future cash payments based on the achievement of specified incentive-based performance metrics over future measurement periods through 2031. The acquisition-date fair value of the contingent consideration attributable to BAM's acquisition was $248 million and was estimated using a Monte Carlo simulation that incorporated projected future performance, expected timing of earnout elections, volatility assumptions and discount rates. This amount has been recorded in financial liabilities on the condensed consolidated balance sheets.
BN Exchangeable Units
As part of the consideration transferred, a subsidiary of the Company issued BN Exchangeable Units to certain sellers, with the exchange obligations to be settled by BN. The BN Exchangeable Units were measured at fair value on the acquisition date based on the fair value of the underlying BN Class A Shares and were included as a component of consideration transferred.
Pre-existing Interest in Oaktree
Pursuant to the guidance under ASC 805 in connection with a business combination achieved in stages, the Company remeasured its previously held 74 % interest in Oaktree from $3.9 billion to its acquisition-date fair value of $5.9 billion, recognizing a gain of $2.0
Pre-existing Relationship Effectively Settled
Prior to the Oaktree Acquisition, the Company and Oaktree were parties to a deposit agreement pursuant to which the Company had recorded a liability at fair value. Upon closing of the acquisition, the pre-existing relationship was effectively settled and the related liability was eliminated. In accordance with ASC 805, the effective settlement of the deposit agreement reduced consideration transferred by $558 million, which was also excluded from the measurement of net assets acquired. No gain or loss was recognized as a result of the effective settlement.
Acquisition-Related Costs
Acquisition-related costs of $4 million and $12 million for the three and nine months ended September 30, 2026 were recognized as general, administrative and other in the condensed consolidated statements of operations.
Intangible Assets
The fair value and weighted average useful lives of the acquired identifiable intangible assets as of the acquisition date consist of the following:
AS OF SEPTEMBER 30, 2026 (MILLIONS) | Fair Value | Valuation Methodology | Estimated Average Useful Life (in years) | ||||||||||||||
| Customer relationships | $ | Multi-period excess earnings method (“MEEM”) | |||||||||||||||
| Management contracts | MEEM | Indefinite life | |||||||||||||||
| Trade name | Relief from royalty method | ||||||||||||||||
| Fair value of intangible assets acquired | $ | ||||||||||||||||
Management contracts related to open-end and evergreen funds were determined to have indefinite useful lives because the contracts are expected to contribute to cash flows indefinitely and are not subject to foreseeable legal, contractual, regulatory or economic limitations.
Goodwill
The goodwill of $1.8 billion arising from the acquisition consists primarily of expected synergies, assembled workforce, and anticipated growth opportunities that can be achieved from combining the operations of BAM and Oaktree. All of the goodwill was assigned to BAM’s Credit segment.
$295 million of the goodwill recognized is expected to be deductible for income tax purposes.
Deferred Tax Liabilities
Deferred tax liabilities recognized in connection with the acquisition primarily reflect differences between the carrying amounts and tax bases of certain acquired assets and liabilities.
27
Disposition of Certain Oaktree Investments
On July 31, 2026, immediately prior to the Oaktree Acquisition, BAM completed the disposition to BWS of a portion of its existing equity method investment in Oaktree, representing its 74 % economic interest in certain Oaktree corporate investments, for aggregate consideration of approximately $890 million, and reflects post-closing purchase price adjustments. Outstanding consideration receivable of $48 million in connection with these transactions is recorded within due from affiliates in the condensed consolidated balance sheets. A gain on disposition of $88 million was recognized in share of income from equity method investments in the condensed consolidated statements of operations associated with the disposal.
4. INVESTMENTS
AS OF SEPTEMBER 30, AND DECEMBER 31, (MILLIONS) | 2026 | 2025 | |||||||||
| Common and preferred shares (a) | $ | $ | |||||||||
| Investments in affiliates (b) | |||||||||||
| Accrued carried interest - mature funds (c) | |||||||||||
| Accrued carried interest - new funds (c) | |||||||||||
| Equity method investments (d) | |||||||||||
| Equity interest in Oaktree | |||||||||||
| Equity interest in Castlelake | |||||||||||
| Equity interest in DoubleLine | |||||||||||
| Equity interest in Primary Wave | |||||||||||
| Equity interest in Pretium | |||||||||||
| Equity interest in LCM | |||||||||||
| Equity interest in Angel Oak | |||||||||||
| Equity interest in 17Capital | |||||||||||
| Equity interest in other affiliates | |||||||||||
| $ | $ | ||||||||||
Where appropriate, the accounting for the Company’s investments incorporates the changes in fair value of those investments.
a.As of September 30, 2026, common and preferred shares were $134 million (2025 – $337 million). Preferred shares primarily represents an investment of $40 million made in The Boring Company during the three months ended September 30, 2026. Common shares primarily represents investments of $64 million (2025 – $64 million) in Brookfield Renewable Energy L.P. and $28 million (2025 – $27 million) in Brookfield Infrastructure Income Fund Inc. Common and preferred share investments are carried at either fair value or cost less impairment. Changes in fair value of investments are recorded in other income (expenses), net in the condensed consolidated statements of operations, and investments measured at cost are assessed for impairment with losses recognized in other income (expenses), net. During the three months ended September 30, 2026, BAM redeemed its common share investment in Oaktree Strategic Credit Fund of $79 million. During the nine months ended September 30, 2026, BAM sold its preferred share investments in GEMS Education (2025 – $188 million) and Cherry Parent, LLC (2025 – $58 million) to BMEP and BPE, respectively. As a result of these transactions, BAM determined that it is the primary beneficiary of a sleeve of BMEP and BPE and will therefore consolidate both. Accordingly, the investments in GEMS Education and Cherry Parent, LLC are included within investments in consolidated funds in the condensed consolidated balance sheets.
b.As of September 30, 2026, investments in affiliates is primarily comprised of an interest in BSREP III, a fund which BAM manages, of $578 million (2025 – $700 million) which is accounted for as an equity investment measured at its NAV in accordance with ASC 321, Investments – Equity Securities. The change in fair value of the Company’s interest in BSREP III was $4 million (2025 – $74 million) and $31 million (2025 – $152 million) for the three and nine months ended September 30, 2026, respectively and is recorded within other income (expenses), net in the condensed consolidated statements of operations.
c.Accrued carried interest represents the disproportionate allocation of capital from our private funds to the extent that such interest is provided for in the relevant fund agreements. Accrued carried interest is accounted for using the equity method of accounting based on the Company’s entitlement to the funds’ net assets as if all investments were liquidated at fair value and all liabilities were satisfied, net of the cumulative amounts that have already been realized. As stipulated in the Relationship Agreement, accrued carried interest in mature funds, as defined therein, is all attributed to BN and accrued carried interest in new funds, including current funds and open-end funds, as defined therein, is attributed to BN at 33.3 %. Such attribution is achieved via Tracking Shares and non-controlling interests in certain subsidiaries that are entitled to such carried interest.
28
The change in BAM’s accrued carried interest for mature funds during the three and nine months ended September 30, 2026 and 2025 is as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Balance, beginning | $ | $ | $ | $ | |||||||||||||||||||
| Changes in fund fair values | ( | ( | ( | ||||||||||||||||||||
| Realized carried interest | ( | ( | |||||||||||||||||||||
| Oaktree Acquisition | |||||||||||||||||||||||
| Balance, ending | $ | $ | $ | $ | |||||||||||||||||||
All mature carried interest is due to BN, therefore BAM's net amount of mature carried interest retained is $nil
The change in BAM’s accrued carried interest for new funds during the three and nine months ended September 30, 2026 and 2025 is as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Balance, beginning | $ | $ | $ | $ | |||||||||||||||||||
| Changes in fund fair values | |||||||||||||||||||||||
| Realized carried interest | ( | ( | |||||||||||||||||||||
| Oaktree Acquisition | |||||||||||||||||||||||
| Balance, ending | $ | $ | $ | $ | |||||||||||||||||||
New fund carried interest is partially due to BN, who is entitled to 33.3 %. After allocating this interest to BN, BAM's net interest in new fund accrued carried interest as of September 30, 2026 is $2.2 billion (December 31, 2025 – $1.1 billion).
d.The Company has significant influence, but not control, over the operating and financial policies of its equity method investees by virtue of having the ability to appoint members of these investees' governing bodies. The Company recognized its share of earnings from all of its equity method investments of $261 million (2025 – $110 million) and $530 million (2025 – $349 million) for the three and nine months ended September 30, 2026, respectively, within the share of income from equity method investments in its condensed consolidated statements of operations. The Company’s equity method investments include our:
i.economic interest in Castlelake of $735 million (2025 – $720 million);
ii.20.0 % economic interest in DoubleLine of $604 million (2025 – $nil );
iii.economic interest in Primary Wave of $427 million (2025 – $261 million);
iv.49.9 % economic interest in LCM of $231 million (2025 – $221 million);
v.51.3 % economic interest in Angel Oak of $133 million (2025 – $133 million);
vi.48.4 % economic interest in 17Capital of $112 million (2025 – $nil );
vii.approximate 8 % (2025 – 11 %) economic interest in Pretium of $260 million (2025 – $330 million) for which BAM has elected the fair value option under ASC 825 Financial Instruments upon initial recognition with changes in fair value recognized in net income. During the nine months ended September 30, 2026, BAM sold a partial interest in Pretium for cash consideration of $70 million, resulting in a realized gain of $4 million. In the same period, a $4 million decrease in the fair value of the remaining investment has been recognized, primarily reflecting lower market valuation multiples;
viii.limited partner interests in funds of $474 million (2025 – $368 million) include Pinegrove Fund (2026 – $330 million; 2025 – $230 million), and BGTF II (2026 – $65 million; 2025 – $36 million). During the nine months ended September 30, 2026, the Company determined that it is the primary beneficiary of BPE and therefore consolidates the fund. As a result, the Company derecognized its limited partner interests in BPE of $88 million (2025 - $92 million); and
ix.general partner interests in a number of our private funds.
29
Oaktree Equity Method Investments Acquired
During the three months ended September 30, 2026, in connection with the Oaktree Acquisition discussed in Note 3 “Oaktree Transaction,” the Company acquired a 20.0 % economic interest in DoubleLine and a 48.4 % economic interest in 17Capital. The Company accounts for these interests as equity method investments.
The acquisition resulted in a step-up in the basis of these investments, reflecting their acquisition-date fair values. The excess of the acquisition-date fair values over the Company's proportionate share of the underlying net assets was allocated to identifiable assets and liabilities and goodwill. The basis differences attributable to identifiable assets and liabilities are amortized over their respective useful lives.
As of September 30, 2026, the carrying values of the Company's investments in DoubleLine and 17Capital were $604 million and $112 million, respectively.
Primary Wave
During the three months ended September 30, 2026, the Company purchased an additional 9 % interest in Primary Wave for approximately $125 million. The step-up transaction did not change the existing governance structure of Primary Wave, and BAM does not have a controlling financial interest. BAM continues to account for the interest in Primary Wave as an equity method investment.
Investments of Consolidated Funds
The summary of the Company's investments held in consolidated funds as of September 30, 2026 and December 31, 2025, is as follows:
AS OF SEPTEMBER 30, AND DECEMBER 31, (MILLIONS) | Fair value | % of total investments | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Equity securities, at fair value | $ | $ | % | % | |||||||||||||||||||
| Debt, at fair value | % | % | |||||||||||||||||||||
| Freestanding derivatives | % | % | |||||||||||||||||||||
| Total investments, at fair value | $ | $ | % | % | |||||||||||||||||||
As of September 30, 2026 and December 31, 2025, no single issuer or investment, including derivative instruments and underlying portfolio investments of the consolidated funds, had a fair value that exceeded 5% of BAM’s total assets.
As of September 30, 2026, BAM consolidates BSI II, BPE, a sleeve of BMEP, BREVA-H and OLAF. The investments in consolidated funds are accounted for at their fair value under ASC 946 Financial Services – Investment Companies.
Other income, net of consolidated funds in the condensed consolidated statements of operations, consists primarily of realized and unrealized gains and losses on the consolidated funds’ investments (including foreign exchange gains and losses attributable to foreign-denominated investments and related activities) and other financial instruments. For the three and nine months ended September 30, 2026, there were $94 million (2025 – $10 million) and $175 million (2025 – $37 million) of income recognized, respectively, within other income, net of consolidated funds on the condensed consolidated statements of operations.
BSI II
BAM continues to be the primary beneficiary of and consolidates BSI II. During the nine months ended September 30, 2026, BSI II sold a portion of its debt and equity interests in Spring Education to BWS, a limited partner in the fund, in exchange for cash consideration of $129 million.
BPE
During the nine months ended September 30, 2026, BAM increased its economic interest in BPE and determined it was the primary beneficiary of the fund. As a result, BAM was required to consolidate the fund and derecognize its equity method investment in BPE of $88 million beginning on March 1, 2026. Upon consolidation, the Company recognized approximately $104 million of cash of consolidated funds, $1.7 billion of investments of consolidated funds, and $143 million of due to affiliates of consolidated funds. The interests of related party and third-party investors were recorded as redeemable non-controlling interest in consolidated funds, and management fees and other transactions with BPE were eliminated upon consolidation.
30
During the nine months ended September 30, 2026, Spring Education was transferred to BPE from BSI II, both of which are consolidated funds of BAM. The Spring Education investment is therefore still consolidated by BAM. In accordance with ASC 810, BAM will consolidate the Spring Education co-investment holding entities as part of the consolidated fund total. This resulted in the recognition of an additional $483 million of consolidated fund investments and non-controlling interest beyond the original Spring Education investment on BAM's condensed consolidated balance sheets, with no impact to net income.
BMEP
During the nine months ended September 30, 2026, BAM increased its economic interest in a sleeve of BMEP and determined it was the primary beneficiary of the fund. As a result, BAM was required to consolidate the fund beginning on January 30, 2026. Upon consolidation, the Company recognized approximately $245 million of investments of consolidated funds and $211 million of borrowings of consolidated funds. The interests of third-party investors were recorded as non-controlling interests in consolidated funds, and management fees and other transactions with BAM's sleeve in BMEP were eliminated upon consolidation.
BREVA-H
During the nine months ended September 30, 2026, BAM provided approximately $217 million of temporary warehouse funding in connection with the acquisition of U.S. Manufactured Housing, pending funding by committed investors. During the period, the warehouse positions were syndicated to the underlying investors, including approximately $125 million transferred to BREVA-H, while the remaining warehouse positions were settled with third-party investors.
During the nine months ended September 30, 2026, BAM committed $200 million to BREVA-H and determined it was the primary beneficiary of the fund. As a result, BAM was required to consolidate the fund beginning on June 25, 2026. Following consolidation, BREVA-H drew approximately $125 million under its subscription credit facility to fund its investment in U.S. Manufactured Housing, which had previously been warehoused by BAM.
During the three months ended September 30, 2026, BREVA-H invested $108 million into a real estate investment, funded through a drawdown on the fund's subscription credit facility. The investment is measured at fair value in accordance with ASC 946, and is included in investments of consolidated funds on the condensed consolidated balance sheets.
OLAF
During the three months ended September 30, 2026, BAM acquired control of Oaktree and, as a result, consolidated OLAF beginning on July 31, 2026. As part of the acquisition, the Company recognized $1.0 billion of assets and $1.0 billion of liabilities related to OLAF. Oaktree continues to be the primary beneficiary of the fund and owns 100 % of the fund interests. Management fees and other transactions with OLAF were eliminated upon consolidation.
31
5. VARIABLE INTEREST ENTITIES
The Company consolidates VIEs for which it is the primary beneficiary, either directly or indirectly through another consolidated entity. The Company’s consolidated VIEs most notably include Oaktree, which the Company began consolidating during the three months ended September 30, 2026, as well as certain consolidated funds. These VIEs primarily consist of operating entities through which the Company conducts its asset management activities, entities established to allocate performance-based fees between the Company and BN, and certain investment funds managed by the Company. The primary risks associated with these VIEs include the loss of invested capital and fluctuations in management fees and performance-based earnings. The Company does not provide performance guarantees and has no other financial obligation to provide funding to consolidated VIEs. The assets of consolidated VIEs may only be used to settle obligations of these entities. In addition, there is no recourse to the Company for the consolidated VIEs’ liabilities. As of September 30, 2026, the Company had unfunded commitments of $1.3 billion to the consolidated funds.
AS OF SEPTEMBER 30, AND DECEMBER 31, (MILLIONS) | 2026 | 2025 | |||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Cash of consolidated funds | |||||||||||
| Accounts receivable and other, net | |||||||||||
| Due from affiliates | |||||||||||
| Investments | |||||||||||
| Investments of consolidated funds | |||||||||||
| Property, plant, equipment, and other | |||||||||||
| Right-of-use assets | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Total Assets | $ | $ | |||||||||
| Accounts payable and other, net | $ | $ | |||||||||
| Operating lease liabilities | |||||||||||
| Due to affiliates | |||||||||||
| Due to affiliates of consolidated funds | |||||||||||
| Borrowings of subsidiaries | |||||||||||
| Borrowings of consolidated funds | |||||||||||
| Deferred income tax liabilities | |||||||||||
| Total Liabilities | $ | $ | |||||||||
The Company holds variable interests in certain VIEs which are not consolidated as it has been determined that the Company is not the primary beneficiary. VIEs that are not consolidated predominantly include investment funds sponsored by or managed by the Company. The Company's investment strategies differ by investment fund; however, the fundamental risks have similar characteristics, including loss of invested capital and loss of management and performance income. The Company's maximum exposure to loss as a result of its investments in the unconsolidated investment funds is the carrying value of such investments, including the Company's capital interest and any unrealized carried interest. For the three and nine months ended September 30, 2026 and 2025, the Company did not provide any financial or other support to unconsolidated VIEs other than its obligated commitments.
The assets and liabilities recognized in the Company's condensed consolidated balance sheets related to its maximum exposure to loss of those VIEs of which the Company is determined not to be the primary beneficiary, the non-consolidated VIEs, are as follows:
| AS OF SEPTEMBER 30, AND DECEMBER 31, (MILLIONS) | 2026 | 2025 | |||||||||
| Investments | $ | $ | |||||||||
| Due from affiliates | |||||||||||
| VIE related assets | |||||||||||
| Maximum exposure to loss | $ | $ | |||||||||
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6. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS
Fair value approximates carrying value for the following financial instruments that are not measured at fair value in the condensed consolidated financial statements: cash, cash of consolidated funds, accounts receivable and other, net, accounts payable and other, net, due to affiliates, due to affiliates of consolidated funds, and due from affiliates.
Financial Instruments
The following tables summarize the fair value hierarchy of financial assets and liabilities of the Company that are measured at fair value as of September 30, 2026 and December 31, 2025:
AS OF SEPTEMBER 30, 2026 (MILLIONS) | Level I | Level II | Level III | NAV | Total | ||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Cash equivalents | $ | $ | — | $ | — | $ | — | $ | |||||||||||||||||||||
| Financial assets | — | — | |||||||||||||||||||||||||||
| Investments: | |||||||||||||||||||||||||||||
| Common and preferred shares | — | — | |||||||||||||||||||||||||||
| Investments in affiliates | — | — | — | ||||||||||||||||||||||||||
| Equity method investments under fair value option | — | — | — | ||||||||||||||||||||||||||
| Total assets at fair value | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Financial liabilities | $ | — | $ | $ | $ | — | $ | ||||||||||||||||||||||
| Total liabilities at fair value | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
AS OF DECEMBER 31, 2025 (MILLIONS) | Level I | Level II | Level III | NAV | Total | ||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Cash equivalents | $ | $ | — | $ | — | $ | — | $ | |||||||||||||||||||||
| Financial assets | — | — | |||||||||||||||||||||||||||
| Investments: | |||||||||||||||||||||||||||||
| Common and preferred shares | — | — | |||||||||||||||||||||||||||
| Investments in affiliates | — | — | — | ||||||||||||||||||||||||||
| Equity method investments under fair value option | — | — | — | ||||||||||||||||||||||||||
| Total assets at fair value | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Financial liabilities | $ | — | $ | $ | $ | — | $ | ||||||||||||||||||||||
| Total liabilities at fair value | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Level III Measurements
The fair value measurement of items categorized in Level III of the fair value hierarchy is subject to valuation uncertainty arising from the use of significant unobservable inputs. The significant unobservable inputs used in the fair value measurement of financial assets and liabilities measured at fair value on a recurring basis are discount rates, volatility assumptions, and inputs to prescribed settlement formulas on certain of our options. Significant changes in these inputs in isolation would have resulted in a significantly higher or lower fair value measurement.
33
The following tables summarize the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as of September 30, 2026 and December 31, 2025:
AS OF SEPTEMBER 30, 2026 (MILLIONS) | ||||||||||||||||||||||||||||||||||||||
| Asset/Liability | Fair Value | Valuation Techniques | Unobservable Inputs | Ranges | Weighted Average (a) | Impact to Valuation from an Increase in Input | ||||||||||||||||||||||||||||||||
| Financial assets (b) | $ | Option pricing model | Volatility | % | Higher | |||||||||||||||||||||||||||||||||
| Discount rate | % | Lower | ||||||||||||||||||||||||||||||||||||
| Common and preferred shares (c) | Market approach | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||
| Equity method investments under fair value option (d) | Market approach | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||
| Financial liabilities (e) | Option pricing model | Volatility | % | Higher | ||||||||||||||||||||||||||||||||||
| Discount rate | % | Lower | ||||||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2025 (MILLIONS) | ||||||||||||||||||||||||||||||||||||||
| Asset/Liability | Fair Value | Valuation Techniques | Unobservable Inputs | Ranges | Weighted Average (a) | Impact to Valuation from an Increase in Input | ||||||||||||||||||||||||||||||||
| Financial assets (b) | $ | Option pricing model | Volatility | % | Higher | |||||||||||||||||||||||||||||||||
| Discount rate | % | Lower | ||||||||||||||||||||||||||||||||||||
| Common and preferred shares (c) | Market approach | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||
| Equity method investments under fair value option (d) | Market approach | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||
| Financial liabilities (e) | Option pricing model | Volatility | % | Higher | ||||||||||||||||||||||||||||||||||
| Discount rate | % | Lower | ||||||||||||||||||||||||||||||||||||
(a)Unobservable inputs were weighted based on the fair value of the investments included in the range.
(b)Financial assets relate to call options held by the Company to acquire additional shares of Primary Wave, LCM, Angel Oak and Castlelake from other investors of the investee using a prescribed valuation methodology in exchange for cash, Class A Shares or BN Class A Shares or other forms of consideration at the discretion of the Company. Financial assets also includes a financial guarantee that ensures a pre-determined return is earned on the economic interest in Pretium. The fair value of these instruments is determined quarterly using a Monte Carlo simulation and various inputs prepared by management.
(c)Preferred shares represent $40 million of preferred shares in The Boring Company (2025 – $nil ), $nil of preferred shares in GEMS Education (2025 – $188 million) and $nil preferred shares of Cherry Parent, LLC (2025 – $58 million). Preferred share investments are carried at fair value with changes in fair value recorded in the condensed consolidated statements of operations.
(d)Equity method investments under fair value option represents an approximate 8 % (2025 – 11 %) economic interest in Pretium of $260 million (2025 – $330 million) for which BAM has elected the fair value option under ASC 825 Financial Instruments upon initial recognition with changes in fair value recognized in the condensed consolidated statements of operations.
(e)Financial liabilities relate to put options held by other investors of Castlelake, LCM and Primary Wave under which the Company may be required to purchase additional shares of these investees using a prescribed valuation methodology in exchange for cash, Class A Shares or BN Class A Shares or other forms of consideration at the discretion of the Company. The balance also includes contingent consideration agreed to as part of the Oaktree Acquisition, certain investments and other financial derivatives. The fair value of these instruments is determined quarterly using a Monte Carlo simulation and various inputs prepared by management.
34
Level III Changes in Fair Value
During the three and nine months ended September 30, 2026 and 2025, there have been no changes in valuation techniques within Level III that have had a material impact on the valuation of financial instruments.
The following tables summarize the changes in financial assets and liabilities measured at fair value for which the Company has used Level III inputs to determine fair value. Total realized and unrealized gains and losses recorded for Level III investments are reported in other income (expenses), net in the condensed consolidated statements of operations.
AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026 (MILLIONS) | Financial assets | Common and preferred shares | Equity method investments under fair value option | Financial liabilities | |||||||||||||||||||
| Balance, beginning | $ | $ | $ | $ | |||||||||||||||||||
| Fair value changes in net income | ( | ( | |||||||||||||||||||||
| Additions | |||||||||||||||||||||||
| Payments | ( | ||||||||||||||||||||||
| Balance, ending | $ | $ | $ | $ | |||||||||||||||||||
AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 (MILLIONS) | Financial assets | Common and preferred shares | Equity method investments under fair value option | Financial liabilities | |||||||||||||||||||
| Balance, beginning | $ | $ | $ | $ | |||||||||||||||||||
| Fair value changes in net income | ( | ||||||||||||||||||||||
| Additions | |||||||||||||||||||||||
| Disposals | ( | ||||||||||||||||||||||
| Transfers | ( | ||||||||||||||||||||||
| Payments | ( | ||||||||||||||||||||||
| Balance, ending | $ | $ | $ | $ | |||||||||||||||||||
AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 (MILLIONS) | Financial assets | Common and preferred shares | Equity method investments under fair value option | Financial liabilities | |||||||||||||||||||
| Balance, beginning | $ | $ | $ | $ | |||||||||||||||||||
| Fair value changes in net income | ( | ||||||||||||||||||||||
| Purchases and other | ( | ||||||||||||||||||||||
| Transfers | ( | ( | |||||||||||||||||||||
| Payments | ( | ||||||||||||||||||||||
| Balance, ending | $ | $ | $ | $ | |||||||||||||||||||
AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (MILLIONS) | Financial assets | Common and preferred shares | Equity method investments under fair value option | Financial liabilities | |||||||||||||||||||
| Balance, beginning | $ | $ | $ | $ | |||||||||||||||||||
| Fair value changes in net income | ( | ||||||||||||||||||||||
| Purchases and other | ( | ||||||||||||||||||||||
| Transfers | ( | ( | |||||||||||||||||||||
| Payments | ( | ||||||||||||||||||||||
| Balance, ending | $ | $ | $ | $ | |||||||||||||||||||
35
Financial Instruments of Consolidated Funds
The following tables summarize the fair value hierarchy of financial assets and liabilities measured at fair value for the Company's consolidated funds as of September 30, 2026 and December 31, 2025:
2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
AS OF SEPTEMBER 30, AND DECEMBER 31, (MILLIONS) | Level I | Level II | Level III | Total | Level I | Level II | Level III | Total | |||||||||||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||||||||||||||
| Investments in equity securities | $ | — | $ | — | $ | $ | $ | — | $ | — | $ | $ | |||||||||||||||||||||||||||||||||||
| Investments in debt | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Freestanding derivatives | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Total assets at fair value | $ | — | $ | $ | $ | $ | — | $ | — | $ | $ | ||||||||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
| Revolving credit facilities | $ | $ | — | $ | — | $ | $ | $ | — | $ | — | $ | |||||||||||||||||||||||||||||||||||
| Secured borrowings | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Total liabilities at fair value | $ | $ | — | $ | $ | $ | $ | — | $ | — | $ | ||||||||||||||||||||||||||||||||||||
Level III Measurements of Consolidated Funds
AS OF SEPTEMBER 30, 2026 (MILLIONS) | ||||||||||||||||||||||||||||||||||||||
| Level III Asset/Liability | Fair Value | Valuation Techniques | Unobservable Inputs | Ranges | Weighted Average (a) | Impact to Valuation from an Increase in Input | ||||||||||||||||||||||||||||||||
| Investments in equity securities | $ | Discounted cash flows | WACC | % | Lower | |||||||||||||||||||||||||||||||||
| Terminal multiple | Higher | |||||||||||||||||||||||||||||||||||||
| Hypothetical liquidation approach | EBITDA multiple | Higher | ||||||||||||||||||||||||||||||||||||
| Market approach | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||
| Investments in debt | Par (net of amortized discount) plus accrued interest | Discount rate | % | Lower | ||||||||||||||||||||||||||||||||||
| Discounted cash flows | WACC | % | Lower | |||||||||||||||||||||||||||||||||||
| Market approach | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||
| Secured borrowings | Discounted cash flows | WACC | Lower | |||||||||||||||||||||||||||||||||||
| Market approach | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2025 (MILLIONS) | ||||||||||||||||||||||||||||||||||||||
| Level III Asset/Liability | Fair Value | Valuation Techniques | Unobservable Inputs | Ranges | Weighted Average (a) | Impact to Valuation from an Increase in Input | ||||||||||||||||||||||||||||||||
| Investments in equity securities | $ | Market approach | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||
| Investments in debt | Par (net of amortized discount) plus accrued interest | Discount rate | Lower | |||||||||||||||||||||||||||||||||||
Level III Changes in Fair Value of Investments of Consolidated Funds
36
AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026 (MILLIONS) | Investments in debt | Investments in equity securities | ||||||||||||
| Balance, beginning | $ | $ | ||||||||||||
| Fair value changes in net income | ||||||||||||||
| Oaktree Acquisition | ||||||||||||||
| Purchases, net | ||||||||||||||
| Dispositions, net | ( | |||||||||||||
| Balance, ending | $ | $ | ||||||||||||
AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 (MILLIONS) | Investments in debt | Investments in equity securities | ||||||||||||
| Balance, beginning | $ | $ | ||||||||||||
| Fair value changes in net income | ||||||||||||||
| Oaktree Acquisition | ||||||||||||||
| Initial consolidation of funds | ||||||||||||||
| Purchases, net | ||||||||||||||
| Dispositions, net | ( | ( | ||||||||||||
| Balance, ending | $ | $ | ||||||||||||
AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 (MILLIONS) | Investments in debt | Investments in equity securities | ||||||||||||
| Balance, beginning | $ | $ | ||||||||||||
| Fair value changes in net income | ||||||||||||||
| Deconsolidation of consolidated funds | ( | |||||||||||||
| Purchases, net | ( | |||||||||||||
| Balance, ending | $ | $ | ||||||||||||
AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (MILLIONS) | Investments in debt | Investments in equity securities | ||||||||||||
| Balance, beginning | $ | $ | ||||||||||||
| Fair value changes in net income | ||||||||||||||
| Deconsolidation of consolidated funds | ( | |||||||||||||
| Purchases, net | ||||||||||||||
| Balance, ending | $ | $ | ||||||||||||
Level III Changes in Fair Value of Secured Borrowings of Consolidated Funds
FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | ||||||||||||
| Balance, beginning | $ | $ | ||||||||||||
| Fair value changes in net income | ||||||||||||||
| Oaktree Acquisition | ||||||||||||||
| Interest expense | 11 | |||||||||||||
| Settlements, net | ( | |||||||||||||
| Balance, ending | $ | $ | ||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | ||||||||||||
| Balance, beginning | $ | $ | ||||||||||||
| Fair value changes in net income | ||||||||||||||
| Oaktree Acquisition | ||||||||||||||
| Interest expense | 11 | |||||||||||||
| Settlements, net | ( | |||||||||||||
| Balance, ending | $ | $ | ||||||||||||
37
7. CORPORATE BORROWINGS
BAM established a $750 million five-year revolving credit facility on August 29, 2024 through bilateral agreements with a group of lenders. On September 5, 2025, BAM upsized its revolving credit facility by $300 million to $1.1 billion. The facility is available in U.S. and Canadian dollars, where U.S. dollar draws are subject to the U.S. Base Rate or SOFR plus a margin of 80 basis points, while Canadian dollar draws are subject to the Canadian Prime Rate or CORRA plus a margin of 80 basis points. The margins are subject to change based on the Company's credit rating.
On April 17, 2026, BAM issued $550 million of five-year senior unsecured notes due April 15, 2031 at a fixed interest rate of 4.832 %, and completed a $450 million re-opening of its existing 5.298 % senior unsecured notes due January 15, 2036.
BAM established a commercial paper program on March 3, 2026 under which it may issue senior unsecured short-term commercial paper notes up to a maximum aggregate amount outstanding at any time of $1.0 billion. The Company did not have any commercial paper borrowings during the nine months ended September 30, 2026 and there were no borrowings outstanding as of September 30, 2026.
The following debt obligations are outstanding:
AS OF SEPTEMBER 30, AND DECEMBER 31, (MILLIONS) | 2026 | 2025 | Remaining Maturity | ||||||||||||||||||||||||||
| Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||||||||
Senior unsecured notes BAM(a) | |||||||||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||||||||
| Corporate borrowings | $ | $ | $ | $ | |||||||||||||||||||||||||
| Deferred financing costs | ( | ( | ( | ( | N/A | ||||||||||||||||||||||||
| Total corporate borrowings | $ | $ | $ | $ | |||||||||||||||||||||||||
(a) All or a portion of the senior unsecured notes may be redeemed at BAM's option in whole or in part, at any time and from time to time, prior to the stated maturity, at the redemption price set forth in the agreement. If a change of control triggering event occurs, subject to certain conditions, BAM will be required to make an offer to repurchase all outstanding senior unsecured notes in cash equal to | ||
Fair value is determined by broker quote and BAM notes are classified as level II within the fair value hierarchy.
Repayment Schedule
Scheduled principal payments for corporate borrowings as of September 30, 2026 were as follows:
AS OF SEPTEMBER 30, 2026 (MILLIONS) | ||||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
BAM's borrowings include customary representations, covenants and events of default. Financial covenants consist of a ratio of consolidated obligations to distributable earnings and a requirement to keep a minimum amount of fee-bearing capital, each tested quarterly. BAM was in compliance with all financial covenants associated with its borrowings as of September 30, 2026 and December 31, 2025.
38
8. BORROWINGS OF SUBSIDIARIES
On July 31, 2026, in connection with the Oaktree Acquisition discussed in Note 3, “Oaktree Transaction,” the Company began consolidating Oaktree’s existing borrowings and recognized $945 million of borrowings of subsidiaries, which are non-recourse to BAM.
The following debt obligations are outstanding:
AS OF SEPTEMBER 30, AND DECEMBER 31, (MILLIONS) | 2026 | 2025 | Remaining Maturity | ||||||||||||||||||||||||||
| Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||||||||
Senior unsecured notes Oaktree(a) | |||||||||||||||||||||||||||||
| $ | $ | N/A | N/A | ||||||||||||||||||||||||||
| N/A | N/A | ||||||||||||||||||||||||||||
| N/A | N/A | ||||||||||||||||||||||||||||
| N/A | N/A | ||||||||||||||||||||||||||||
| N/A | N/A | ||||||||||||||||||||||||||||
| N/A | N/A | ||||||||||||||||||||||||||||
| Borrowings of subsidiaries | $ | $ | $ | — | $ | — | |||||||||||||||||||||||
| Deferred financing costs | N/A | N/A | N/A | ||||||||||||||||||||||||||
| Total borrowings of subsidiaries | $ | $ | $ | — | $ | — | |||||||||||||||||||||||
(a) Oaktree’s outstanding senior unsecured notes were remeasured to their acquisition-date fair value in connection with the Oaktree Acquisition. | ||
During the three months ended September 30, 2026, $100 million of assumed Oaktree Series B senior unsecured notes were repaid upon their maturity on September 3, 2026. The notes bore interest at 4.01 %.
During the three months ended September 30, 2026, the closing of the Oaktree Acquisition triggered a change of control provision requiring mandatory prepayment of the September 2029, July 2031, and December 2032 notes. Subsequent to quarter-end, Oaktree repaid $321.5 million of senior unsecured notes in connection with the change of control. The remaining $128.5 million of the December 2032 notes were refinanced at 6.230 %, with no change in contractual maturity.
Fair value is determined by using estimated rates, and Oaktree notes are classified as level III within the fair value hierarchy.
Repayment Schedule
Scheduled principal payments for borrowings of subsidiaries as of September 30, 2026 were as follows:
AS OF SEPTEMBER 30, 2026 (MILLIONS) | ||||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
As of September 30, 2026, Oaktree is in compliance with all financial maintenance covenants associated with its senior unsecured notes.
39
9. BORROWINGS OF CONSOLIDATED FUNDS
Certain consolidated funds also maintain revolving credit facilities that are secured by the limited partner commitments of the respective fund. The consolidated funds of BAM have the following borrowings:
AS OF SEPTEMBER 30, AND DECEMBER 31, (MILLIONS) | 2026 | 2025 | Facility Capacity | Weighted Average Interest Rate | Weighted Average Remaining Maturity | Commitment fee rate | |||||||||||||||||||||||||||||
| Consolidated funds | |||||||||||||||||||||||||||||||||||
| Revolving credit facilities | $ | $ | $ | ||||||||||||||||||||||||||||||||
Secured borrowings(a) | N/A | $ | — | % | |||||||||||||||||||||||||||||||
| Total borrowings of consolidated funds | $ | $ | |||||||||||||||||||||||||||||||||
As of September 30, 2026, OLAF, the consolidated fund consolidated as part of the Oaktree Acquisition has secured borrowings of $890 million. OLAF accounts for transfers of investments to affiliated funds as secured borrowings, which are presented within borrowings of consolidated funds on the condensed consolidated balance sheets. The related carrying amount of the transferred assets and secured borrowings was $890 million as of September 30, 2026. These transfers did not meet the criteria for sale accounting under ASC 860, Transfers and Servicing, and therefore did not qualify for derecognition of the transferred assets.
Repayment Schedule
Scheduled principal payments for borrowings as of September 30, 2026 were as follows:
AS OF SEPTEMBER 30, 2026 (MILLIONS) | ||||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
10. DERIVATIVES
Freestanding derivatives are instruments that the Company and certain consolidated funds have entered into in the normal course of business to achieve certain risk management objectives as part of their overall risk management and investment strategies. These derivative contracts are not designated as hedging instruments for accounting purposes. Such contracts may include interest rate swaps, total return swaps, and foreign currency forward contracts. As a result of the use of derivative contracts, the Company and certain consolidated funds are exposed to the risk that counterparties will fail to fulfill their contractual obligations. To mitigate such counterparty risk, the Company and certain consolidated funds enter into contracts with certain major financial institutions, all of which have investment grade ratings. Counterparty credit risk is evaluated in determining the fair value of derivative instruments.
The table below summarizes the aggregate notional amount and fair value of the derivative instruments. The notional amount represents the absolute value of all outstanding derivative contracts.
AS OF SEPTEMBER 30, 2026 (MILLIONS) | Assets | Liabilities | |||||||||||||||||||||
Notional Amount | Fair Value | Notional Amount | Fair Value | ||||||||||||||||||||
| Freestanding derivatives | |||||||||||||||||||||||
| Foreign-currency forward contracts | $ | $ | $ | $ | |||||||||||||||||||
| Total return swap contracts | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
40
| AS OF DECEMBER 31, 2025 (MILLIONS) | Assets | Liabilities | |||||||||||||||||||||
Notional Amount | Fair Value | Notional Amount | Fair Value | ||||||||||||||||||||
| Freestanding derivatives | |||||||||||||||||||||||
| Foreign-currency forward contracts | $ | $ | $ | $ | |||||||||||||||||||
| Total return swap contracts | |||||||||||||||||||||||
| Interest rate swap contracts | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
The table below summarizes the aggregate notional amount and fair value of the derivative instruments held in consolidated funds. The notional amount represents the absolute value of all outstanding derivative contracts.
AS OF SEPTEMBER 30, 2026 (MILLIONS) | Assets | Liabilities | |||||||||||||||||||||
Notional Amount | Fair Value | Notional Amount | Fair Value | ||||||||||||||||||||
| Investments of consolidated funds | |||||||||||||||||||||||
| Foreign-currency forward contracts | $ | $ | $ | $ | |||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
Nominal realized and unrealized gains and losses arising from freestanding derivatives were recorded in the condensed consolidated statements of operations for the three and nine months ended September 30, 2026 and 2025, respectively.
There were no derivatives outstanding that were designated as hedging instruments for accounting purposes as of September 30, 2026 and December 31, 2025.
11. REVENUE
The Company offers investment products on a number of strategies, specifically energy, infrastructure, private equity, real estate and credit, operating in more than 50 countries. The majority of base management and advisory fees are earned from customers located in the U.S.
The following table sets out revenue disaggregated by investment strategy and geography.
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026 (MILLIONS) | Infrastructure(a) | Energy | Private equity | Real estate | Credit | Total | ||||||||||||||||||||||||||||||||
| Base management and advisory fees | ||||||||||||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| United Kingdom | ||||||||||||||||||||||||||||||||||||||
| Canada | ||||||||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||||||||
| Incentive fees | ||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
(a) Reflects the reclassification of certain performance fees from base management and advisory fees to incentive fees.
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 (MILLIONS) | Infrastructure | Energy | Private equity | Real estate | Credit | Total | ||||||||||||||||||||||||||||||||
| Base management and advisory fees | ||||||||||||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| United Kingdom | ||||||||||||||||||||||||||||||||||||||
| Canada | ||||||||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||||||||
| Incentive fees | ||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
41
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 (MILLIONS) | Infrastructure(a) | Energy | Private equity | Real estate | Credit | Total | ||||||||||||||||||||||||||||||||
| Base management and advisory fees | ||||||||||||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| United Kingdom | ||||||||||||||||||||||||||||||||||||||
| Canada | ||||||||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||||||||
| Incentive fees | ||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
(a) Reflects the reclassification of certain performance fees from base management and advisory fees to incentive fees.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (MILLIONS) | Infrastructure | Energy | Private equity | Real estate | Credit | Total | ||||||||||||||||||||||||||||||||
| Base management and advisory fees | ||||||||||||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| United Kingdom | ||||||||||||||||||||||||||||||||||||||
| Canada | ||||||||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||||||||
| Incentive fees | ||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
The Company’s statutory federal income tax rate is 15%.
The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by U.S. and other local tax authorities. As of September 30, 2026, certain of the Company’s U.S. and non-U.S. income tax returns for 2018 through 2025 are open to or are under examination.
As of September 30, 2026, a valuation allowance of $218 million (2025 – $197 million) has been recorded against deferred tax assets related to net operating loss carryforwards in the U.S. that are not more likely than not to be utilized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased.
13. EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. BAM applies the two-class method in calculating earnings per share for each of its two classes of shares and participating securities, based on their pro-rata share of earnings. Class A Shares held under the ES Plans in one or more private wholly owned subsidiaries of BAM are classified as treasury shares and have been excluded from the calculation of earnings per share. BAM has certain dilutive securities relating to outstanding escrowed stock and management share options held by employees and non-employees that have been reflected accordingly in diluted earnings per share figures. Basic and diluted net income per share of common stock for the three and nine months ended September 30, 2026, and 2025 was calculated as follows:
FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | |||||||||||||||||||||
Class A Shares | Class B Shares | Class A Shares | Class B Shares | ||||||||||||||||||||
| Numerator | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Denominator | |||||||||||||||||||||||
| Weighted average of common stock outstanding - basic | |||||||||||||||||||||||
| Dilutive effect of conversion of management share options and escrowed stock using treasury stock method | |||||||||||||||||||||||
| Weighted average of common stock outstanding - diluted | |||||||||||||||||||||||
| Net Income per Share | |||||||||||||||||||||||
| Earnings per share - basic | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per share - diluted | $ | 1.64 | $ | $ | $ | ||||||||||||||||||
42
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | |||||||||||||||||||||
Class A Shares | Class B Shares | Class A Shares | Class B Shares | ||||||||||||||||||||
| Numerator | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Denominator | |||||||||||||||||||||||
| Weighted average of common stock outstanding - basic | |||||||||||||||||||||||
| Dilutive effect of conversion of management share options and escrowed stock using treasury stock method | |||||||||||||||||||||||
| Weighted average of common stock outstanding - diluted | |||||||||||||||||||||||
| Net Income per Share | |||||||||||||||||||||||
| Earnings per share - basic | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per share - diluted | $ | $ | $ | $ | |||||||||||||||||||
The following weighted average potentially dilutive securities were evaluated under the treasury stock method for potentially dilutive effects and have been excluded in the above computation of diluted net income per share attributable to common shareholders for the period presented due to their anti-dilutive effect:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Management share options of BAM | |||||||||||||||||||||||
| Escrowed stock of BAM | |||||||||||||||||||||||
| Total | |||||||||||||||||||||||
14. SHARE-BASED COMPENSATION
BAM and BN have granted share-based compensation awards to certain employees and directors of BAM, under a number of compensation plans (the “Equity Plans”). The Equity Plans provide for the granting of share options, restricted stock, escrowed shares, deferred share units, and restricted share units which contain certain service or performance requirements of BAM or BN.
The expense recognized for share-based compensation is summarized in the following table:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Expense arising from equity-settled share-based payment transactions | |||||||||||||||||||||||
| Management Share Option Plan | $ | $ | $ | $ | |||||||||||||||||||
| Escrowed Stock Plan | |||||||||||||||||||||||
| Restricted Stock Plan | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
| (Recovery) / Expense arising from cash-settled share-based payment transactions | |||||||||||||||||||||||
| Deferred Share Unit Plan | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Restricted Share Unit Plan | |||||||||||||||||||||||
| $ | ( | $ | $ | ( | $ | ||||||||||||||||||
The share-based payment plans are described below.
Management Share Option Plan
BAM recognizes any awards associated with the existing Equity Plans for its employees irrespective of whether the awards were granted by BN or BAM. Options issued under the Management Share Option Plan (“MSOP”) of both BN and BAM vest over a period of up to five years , expire ten years after the grant date and are settled through issuance of Class A Shares or BN Class A Shares. The exercise price is equal to the market price at the grant date.
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During the nine months ended September 30, 2026, BAM granted 7.7 million (2025 – 4.8 million) share options at a weighted average exercise price of $52.04 (2025 – $59.62 ). The compensation expense was calculated using the Black-Scholes method of valuation, assuming an average 7.5 year term (2025 – 7.5 ), 30.4 % volatility (2025 – 29.9 %), a weighted average expected dividend yield of 4.8 % (2025 – 3.7 %) annually, a risk-free rate of 3.9 % (2025 – 4.4 %) and a liquidity discount of 25 %, with a fair value of $8.09 per unit (2025 – $11.18 ). The total fair value of the share options granted was $62 million (2025 – $53 million).
For the three and nine months ended September 30, 2026, the total expense incurred with respect to MSOP totaled $12 million and $36 million, respectively (2025 – $11 million and $33 million).
Escrowed Stock Plan
The Escrowed Stock (“ES”) shares generally vest over five years and must be held to the fifth anniversary of the grant date. At a date no more than ten years from the grant date, all outstanding ES shares will be exchanged for Class A Shares or BN Class A Shares based on the respective market value at the time of the exchange. The number of Class A Shares or BN Class A Shares issued on exchange will be less than the number of shares purchased under the ES Plan resulting in a net reduction in the number of Class A Shares or BN Class A Shares.
During the nine months ended September 30, 2026, BAM granted 3.2 million (2025 – 3.5 million) ES shares at a weighted average exercise price of $51.45 (2025 – $59.62 ). The compensation expense was calculated using the Black-Scholes method of valuation, assuming an average 7.5 year term (2025 – 7.5 years), 31.3 % volatility (2025 – 29.9 %), a weighted average expected dividend yield of 4.9 % (2025 – 3.7 %) annually, a risk-free rate of 3.9 % (2025 – 4.4 %) and a liquidity discount of 25 %, with a fair value of $8.05 per unit (2025 – $11.18 ). The total fair value of the ES shares granted was $26 million (2025 – $40 million).
During the nine months ended September 30, 2026, BN granted 8.9 million (2025 – 0.8 million) ES shares at a weighted average exercise price of $47.11 (2025 – $40.19 ) to BAM employees. The compensation expense was calculated using the Black-Scholes method of valuation, assuming an average 7.5 year term (2025 – 7.5 years), 30.7 % volatility (2025 – 31.3 %), a weighted average expected dividend yield of 0.8 % (2025 – 0.8 %) annually, a risk-free rate of 3.9 % (2025 – 4.4 %) and a liquidity discount of 25 %, with a fair value of $13.40 per unit (2025 – $11.89 ). The total fair value of the ES shares granted was $119 million (2025 – $9 million).
For the three and nine months ended September 30, 2026, the total expense incurred with respect to the ES Plan totaled $29 million and $84 million, respectively (2025 – $16 million and $45 million).
Restricted Stock Plan
The Restricted Stock Plan awards certain employees with Class A Shares and BN Class A Shares purchased on the open market (“Restricted Shares”). Under the Restricted Stock Plan, Restricted Shares awarded vest over a period of up to five years , except for Restricted Shares awarded in lieu of a cash bonus, which may vest immediately. Vested and unvested Restricted Shares are subject to a hold period of up to five years . Holders of Restricted Shares are entitled to vote and to receive associated dividends. Employee compensation expense for the Restricted Stock Plan is charged against income over the vesting period.
For the three and nine months ended September 30, 2026, the total expense incurred with respect to Restricted Shares totaled $19 million and $59 million, respectively (2025 – $14 million and $43 million).
Deferred Share Unit Plan
The Deferred Share Unit (“DSU”) Plan provides for the issuance of DSUs. Under the DSU Plan, qualifying employees and directors receive varying percentages of their annual incentive bonus or directors’ fees in the form of DSUs. The DSUs vest over periods of up to five years , and accumulate additional DSUs at the same rate as dividends on Class A Shares and BN Class A Shares based on the market value of the shares at the time of the dividend. Participants are not allowed to convert vested DSUs into cash until retirement or cessation of employment.
The value of the DSUs, when converted to cash, will be equivalent to the market value of the Class A Shares or BN Class A Shares at the time the conversion takes place. During the nine months ended September 30, 2026, the DSU Plan of BN was partially settled, and participating employees of BAM exchanged their DSUs for new DSUs that track a fixed value preferred share in a subsidiary of BN, with a redemption value equal to the value of their DSUs on the settlement date, for a total amount of $458 million. These tracking DSUs vest over a period but fall outside the scope of ASC 718, Compensation — Stock Compensation as they are not based on Class A Shares or BN Class A Shares and therefore are accounted for in accordance with ASC 710 - Compensation General. As the DSU Plan was a plan of BN, BAM was entitled to recover the costs from BN. As a result of the settlement, a due from affiliates amount of $458 million has been derecognized.
The fair value of the vested DSUs as of September 30, 2026 was $165 million (December 31, 2025 – $701 million).
Employee compensation expense for these plans is charged against net income over the vesting period of the DSUs. For those awards issued as part of the 2022 Arrangement, the mark-to-market movement is recoverable from BN. The amount payable in respect of vested DSUs changes as a result of dividends and share price movements. All of the amounts attributable to changes in the amounts
44
payable by the Company are recorded as employee compensation expense in the period of the change. For the three and nine months ended September 30, 2026, employee compensation recovery totaled $14 million and $6 million, respectively (2025 – expense of $68 million and $89 million).
Restricted Share Unit Plan
The RSU Plan provides for the issuance of RSUs to certain employees, including in replacement of outstanding equity-based incentive awards. RSUs generally vest over a period of up to five years , unless otherwise specified in the applicable award agreement, and are settled in cash, Class A Shares, or a combination thereof. Employee compensation expense for the RSU Plan is recognized over the vesting period of the awards. RSUs accumulate additional RSUs at the same rate as dividends on Class A shares. The fair value of the vested RSUs as of September 30, 2026 was $29 million (December 31, 2025 – $nil ). For the three and nine months ended September 30, 2026, the total expense incurred with respect to the RSU Plan was nominal.
15. REDEEMABLE NON-CONTROLLING INTEREST
Preferred Shares Redeemable Non-Controlling Interest
As of September 30, 2026, subsidiaries of the Company have issued and outstanding certain classes of preferred shares which are outlined below:
| 2026 | 2025 | ||||||||||||||||||||||
AS OF SEPTEMBER 30, AND DECEMBER 31, (MILLIONS, EXCEPT SHARE AMOUNTS) | Number of Shares | Value | Number of Shares | Value | |||||||||||||||||||
| BUSHI Preferred Shares | |||||||||||||||||||||||
| BUSHI Tracking Shares | $ | $ | |||||||||||||||||||||
| Class B senior preferred | |||||||||||||||||||||||
| Class B preferred | |||||||||||||||||||||||
| Class A preferred | |||||||||||||||||||||||
| BMHL Tracking Shares | |||||||||||||||||||||||
| BN Exchangeable Units | |||||||||||||||||||||||
| $ | $ | ||||||||||||||||||||||
The movement in the carrying value of the preferred shares redeemable non-controlling interest is as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
AS OF AND FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Balance, beginning | $ | $ | $ | $ | |||||||||||||||||||
| Issuances | |||||||||||||||||||||||
| Distributions | ( | ( | ( | ( | |||||||||||||||||||
| Deemed settlement of Class A preferred shares as a result of 2025 Arrangement | ( | ||||||||||||||||||||||
| Redemption of BUSHI Tracking Shares as a result of the Oaktree Acquisition | ( | ( | |||||||||||||||||||||
| Redemption of Class B preferred shares as a result of the Oaktree Acquisition | ( | ( | |||||||||||||||||||||
| Changes in redemption value included in net income attributable to preferred shares non-controlling interest | ( | ( | ( | ||||||||||||||||||||
| Other | ( | ( | ( | ||||||||||||||||||||
| Balance, ending | $ | $ | $ | $ | |||||||||||||||||||
BUSHI and BMHL Tracking Shares
During the three and nine months ended September 30, 2026, BUSHI paid BN a $17 million and $80 million cash dividend, respectively, on the BUSHI Tracking Shares, BMHL paid BN a $3 million and $11 million cash dividend on the BMHL Tracking Shares, respectively, and $2 million and $7 million on the Class A Preferred Shares, respectively.
During the three months ended September 30, 2026, in connection with the Oaktree Acquisition, the third series of BUSHI Tracking Shares was redeemed for cash consideration of $26 million.
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BUSHI Class B senior preferred and preferred shares
In addition to the Tracking Shares, BUSHI has also issued class B senior preferred shares and had issued class B preferred shares. The class B senior preferred shares entitle the holder to cumulative preferential cash dividends at $1.36375 per share per annum and are ranked senior to the Tracking Shares, class B preferred shares and common shares. The class B senior preferred shares are redeemable by the issuer, whose board is controlled by BN, upon the tenth anniversary of issuance at a redemption amount of $25 per share plus accrued and unpaid dividends. The class B preferred shares were redeemable at the option of both the holder and the issuer at $25 per share (the redemption amount) plus unpaid dividends. These preferred shares were non-voting and ranked junior to the BUSHI Tracking Shares and senior to common shares of the entity, and were entitled to non-cumulative cash dividends at 6.7 % per annum on their redemption amount. During the three months ended September 30, 2026, in connection with the Oaktree Acquisition, all 2,520,571 outstanding BUSHI class B preferred shares were redeemed for cash consideration of $63 million. As of September 30, 2026, there were no class B preferred shares outstanding (December 31, 2025 – $63 million).
Class A preferred shares
The class A preferred shares were issued by a subsidiary of BAM to BN, are redeemable at the option of the holder and the issuer at a redemption amount of $25 per share plus accrued and unpaid dividends and these preferred shares are non-voting. As of September 30, 2026, $148 million of class A preferred shares remained outstanding (2025 – $148 million).
The Company accounts for the changes in the value of the redeemable non-controlling interest in accordance with ASC 480, Distinguishing Liabilities from Equity. The Company elects for the BUSHI Tracking Shares and class B senior preferred shares to recognize changes in the redemption value immediately as they occur and adjust the carrying amount to equal the redemption value at the end of each reporting period. Similarly, BAM recognizes changes in the redemption value of the BMHL Tracking Shares by adjusting the carrying amount to equal the redemption value at the end of each reporting period.
BN exchangeable units
In connection with the Oaktree Acquisition discussed in Note 3, “Oaktree Transaction,” a subsidiary of the Company issued BN Exchangeable Units to certain Oaktree sellers as consideration, of which $147 million was attributable to the Company’s acquisition of Oaktree, with the remaining $83 million attributable to interests held by affiliates through a subsidiary of the Company. The BN Exchangeable Units entitle holders to distributions that are economically equivalent to dividends on BN Class A Shares and are exchangeable into BN Class A Shares following the expiration of certain transfer and exchange restrictions.
The BN Exchangeable Units were initially recognized at a total fair value of $230 million and are subsequently remeasured to their redemption value at each reporting date. During the three months ended September 30, 2026, the Company recognized a $33 million adjustment to the redemption value of the BN Exchangeable Units, reflecting changes in the underlying BN Class A Share price. As of September 30, 2026, the carrying value of the BN Exchangeable Units was $197 million.
Redeemable Non-Controlling Interest in Consolidated Funds
The redeemable non-controlling interest in consolidated funds amount of $1.5 billion is made up of Class D units, Class I units, Class S units, Class CA-1, Class CA-2 and Class CA-3 (“Investor Units”), Class B-1 and Class E-1, Class B-2 and Class E-2 units in BPE, a fund consolidated by BAM. These units are held by either related parties or third parties and due to the nature and terms of the units are classified and presented as redeemable non-controlling interest in consolidated funds within the condensed consolidated balance sheets, outside of permanent equity.
| 2026 | |||||||||||
| AS OF SEPTEMBER 30, (MILLIONS, EXCEPT SHARE AMOUNTS) | Number of Shares | Value | |||||||||
| BPE Redeemable Non-Controlling Interests | |||||||||||
| Class B-1 and E-1 | $ | ||||||||||
| Class B-2, Class E-2 and Investor Units | |||||||||||
| $ | |||||||||||
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| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
AS OF AND FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Balance, beginning | $ | $ | $ | $ | |||||||||||||||||||
| Amount assumed on consolidation of fund | |||||||||||||||||||||||
| Issuances | |||||||||||||||||||||||
| Redemptions | ( | ( | |||||||||||||||||||||
| Contributions | |||||||||||||||||||||||
| Other | (6) | — | (6) | — | |||||||||||||||||||
| Changes in redemption value included in net income attributable to redeemable non-controlling interest | |||||||||||||||||||||||
| Balance, ending | $ | $ | $ | $ | |||||||||||||||||||
Class B-1 and E-1 Units
Class B-1 and Class E-1 units of BPE were issued to related parties in connection with seed investments and are subject to a monthly redemption arrangement at the discretion of the general partner of BPE. Redemptions, if any, are determined as of the last calendar day of each month. During an initial period, the redemption price is based on the lesser of net asset value and a discounted value of the underlying seed investments, with any excess retained by the fund.
Class B-1 and Class E-1 units that have been redeemed but not yet settled are reflected as due to affiliates of consolidated funds on the condensed consolidated balance sheets. From the date of consolidation March 1, 2026 to September 30, 2026, 4,473,910 Class B-1 and Class E-1 units were redeemed for an aggregate of $108 million.
Investor Units, Class B-2 Units and Class E-2 Units
BPE has established a redemption program pursuant to which holders of Investor Units and Class B-2 Units may request redemptions on a quarterly basis. The general partner of BPE retains sole discretion to accept or reject redemption requests, in whole or in part, and may impose limitations on the amount of units redeemed in any given period, including the deferral of redemptions in excess of such limitations.
No holders of Investor Units, Class B-2 Units or Class E-2 Units have requested redemption as of September 30, 2026.
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16. NON-CONTROLLING INTEREST
Non-Controlling Interests in Consolidated Entities
Net income (loss) generated by the respective subsidiaries is allocated to non-controlling interest in consolidated entities based on the substantive contractual terms of the subsidiaries’ governing agreements that specify the allocation of income or loss. The majority of income attributable to non-controlling interest is comprised of BN's 33.3 % share of carried interest revenue generated on new funds.
The movement in the carrying value of non-controlling interest is as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
AS OF AND FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Balance, beginning | $ | $ | $ | $ | |||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Contributions | |||||||||||||||||||||||
| 2025 Arrangement | |||||||||||||||||||||||
| Distributions | ( | ( | ( | ( | |||||||||||||||||||
| Balance, ending | $ | $ | $ | $ | |||||||||||||||||||
Non-Controlling Interests in Consolidated Funds
The following table sets forth a summary of changes in the non-controlling interests in consolidated funds.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
AS OF AND FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Balance, beginning | $ | $ | $ | $ | |||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Contributions | |||||||||||||||||||||||
| Deconsolidation of consolidated funds | ( | ( | |||||||||||||||||||||
| Balance, ending | $ | $ | $ | $ | |||||||||||||||||||
Contributions of $562 million for the nine months ended September 30, 2026, include non-controlling interests of the Spring Education co-investment holding entities that were consolidated during the nine months ended September 30, 2026 as disclosed in Note 4, “Investments”.
17. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant, and equipment primarily consist of leasehold improvements, furniture, fixtures and equipment, computer hardware and software, and other operating assets.
AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 (MILLIONS) | 2026 | 2025 | |||||||||
| Property, plant, and equipment, net | $ | $ | |||||||||
| $ | $ | ||||||||||
48
18. LEASES
The Company has entered into operating leases primarily related to office space and equipment, with terms expiring within one year through 2043. Lease agreements may include options to extend the leases for up to five years , as well as options to terminate the leases within one year. These options are considered in determining the lease term when it is reasonably certain that BAM will exercise them. The right-of-use assets balance was $232 million as of September 30, 2026 (2025 - $49 million). The operating lease liabilities balance was $252 million as of September 30, 2026 (2025 - $67 million). The increase in right-of-use assets and operating lease liabilities during the nine months ended September 30, 2026 was primarily attributable to the Oaktree Acquisition discussed in Note 3, “Oaktree Transaction”. The right-of-use assets and the operating lease liabilities are presented separately within the condensed consolidated balance sheets. As of September 30, 2026, operating lease liabilities associated with related parties totalled $26 million (2025 - $29 million).
The components of lease expenses were as follows:
FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | |||||||||
Operating lease cost(a) | $ | $ | |||||||||
| Less: Sublease income | |||||||||||
| Total Operating Lease Cost | $ | $ | |||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | |||||||||
Operating lease cost(a) | $ | $ | |||||||||
| Less: Sublease income | |||||||||||
| Total Operating Lease Cost | $ | $ | |||||||||
| (a) Measured on a straight-line basis. | ||
Supplemental cash flow information related to leases was as follows:
AS OF SEPTEMBER 30, 2026 (MILLIONS) | 2026 | |||||||
| Operating cash flows for operating leases | $ | |||||||
| Weighted average remaining lease term for operating leases (in years) | ||||||||
| Weighted average discount rate for operating leases | % | |||||||
As of September 30, 2026, maturities of operating lease liabilities were as follows:
2026(a) | $ | ( | ||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 | ||||||||
| Thereafter | ||||||||
| Total lease payments | ||||||||
| Less: imputed interest | ( | |||||||
| Present value of operating lease liabilities | $ | |||||||
(a) The negative amount for the remaining undiscounted payments of 2026 reflects tenant improvement allowance reimbursements in excess of contractual lease payments during the period.
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19. GOODWILL AND INTANGIBLE ASSETS, NET
BAM's intangible assets consist primarily of acquired contractual rights to earn future fee income, including management and advisory fees, and customer relationships, which have a weighted-average amortization period of 13 years as well as indefinite life intangible assets. The Company tests indefinite life intangible assets for impairment at the asset level.
Amortization of finite-lived intangible assets held was $54 million (2025 – $7 million) and $68 million (2025 – $14 million) for the three and nine months ended September 30, 2026, respectively and is recorded within general, administrative and other in the condensed consolidated statements of operations.
Intangible assets, net consists of the following:
AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 (MILLIONS) | 2026 | 2025 | |||||||||
| Gross intangible assets | $ | $ | |||||||||
| Accumulated amortization and impairment | ( | ( | |||||||||
| Intangible assets, net | $ | $ | |||||||||
Changes in intangible assets, net consists of the following:
AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 (MILLIONS) | |||||||||||
| 2026 | 2025 | ||||||||||
| Balance, beginning of period | $ | $ | |||||||||
| 2025 Arrangement | |||||||||||
| Oaktree Acquisition | |||||||||||
| Additions | |||||||||||
| Amortization | ( | ( | |||||||||
| Other | |||||||||||
| Balance, end of period | $ | $ | |||||||||
The carrying value of goodwill was $1.9 billion as of September 30, 2026 (2025 – $236 million). Goodwill represents the excess of the consideration transferred over the fair value of the identifiable net assets acquired in a business combination. In accordance with ASC 350 Intangibles — Goodwill and Other, management reviews its goodwill for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable, and considers factors including, but not limited to, expected cash flows from its interest in future management fees and the ability to raise new funds.
During the three months ended September 30, 2026, the Company recognized a goodwill impairment charge of $140 million related to the Public Securities Group (“PSG”) reporting unit within the Credit segment. The impairment resulted from changes in the organizational structure and expected future operations of the reporting unit, which reduced the future cash flows attributable to PSG and the estimated fair value of the reporting unit. The fair value assessment reflected the expected cash flows attributable to the reporting unit following the organizational changes, together with estimated realizable values of its remaining business activities.
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Goodwill, net of accumulated impairment consists of the following:
AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 (MILLIONS) | 2026 | 2025 | |||||||||
| Gross goodwill | $ | $ | |||||||||
| Accumulated impairment | ( | ( | |||||||||
| Goodwill | $ | $ | |||||||||
The following table summarizes the carrying value of the Company's goodwill:
AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 (MILLIONS) | 2026 | 2025 | |||||||||
| Balance, beginning of period | $ | $ | |||||||||
| Oaktree Acquisition | |||||||||||
| Impairment | ( | ( | |||||||||
| Other | |||||||||||
| Balance, end of period | $ | $ | |||||||||
20. CASH AND CASH EQUIVALENTS
The balances in cash and cash equivalents are reflected below:
AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 (MILLIONS) | 2026 | 2025 | |||||||||
| Cash | $ | $ | |||||||||
| Cash equivalents | |||||||||||
| $ | $ | ||||||||||
The carrying value of cash and cash equivalents approximates their fair value and include amounts held on deposit with BN of $nil (2025 – $1.1 billion).
21. RELATED PARTY TRANSACTIONS
In the normal course of business, BAM enters into transactions and derives substantially all of its revenue from the provision of asset management services to affiliates and related parties. During the three and nine months ended September 30, 2026, the Company recorded revenues of $2.1 billion (2025 – $1.2 billion) and $5.2 billion (2025 – $3.4 billion) respectively, with affiliates and related parties on its condensed consolidated statements of operations.
BAM also has investment management agreements with the funds that it manages. In accordance with these agreements, these funds may bear certain operating costs and expenses which are initially paid by BAM and subsequently reimbursed by the funds.
As outlined in the Relationship Agreement, BN is responsible for costs associated with certain share-based awards for certain employees, some of which are subject to revaluation at each balance sheet date, and will also bear the cost of the employee entitlement to carried interest on mature funds either directly or indirectly through reimbursement to the Company. Income generated from BN under the Relationship Agreement relating to these instruments is recognized as other revenues in the condensed consolidated statements of operations on a gross basis as the instruments vest or are incurred. During the three and nine months ended September 30, 2026, BAM recognized recoveries of $17 million (2025 – $69 million recharge) and recharges of $252 million (2025 – $233 million), respectively, in the condensed consolidated statements of operations in other revenues under this arrangement.
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Due from affiliates and due to affiliates consisted of the following:
AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 (MILLIONS) | 2026 | 2025 | |||||||||
| Due from affiliates | |||||||||||
| Operating and loan receivables | $ | $ | |||||||||
| Receivables from affiliates related to share and cash-based compensation | |||||||||||
| $ | $ | ||||||||||
| Due to affiliates | |||||||||||
| Operating and loan payables | $ | $ | |||||||||
| Payables to affiliates related to share and cash-based compensation | |||||||||||
| $ | $ | ||||||||||
Due from affiliates
Due from affiliates of $3.9 billion (2025 – $3.3 billion) consists of $2.8 billion (2025 – $1.7 billion) of receivables from affiliates and related parties which are primarily comprised of base management fees and fund expense reimbursements which are earned in accordance with underlying agreements of the respective funds that BAM is the general partner of or manages.
Due from affiliates also includes deposits, working capital facilities, and other outstanding credit facilities provided in the normal course of business. Loans to affiliates are unsecured with floating rates of SOFR plus 235 basis points or a fixed interest rate of 0.9 % to 4.2 %. Maturities on loans to related parties range from 2026 to 2057. The loans were generally issued to finance acquisitions and fund commitments. In the normal course of business, BAM may periodically assign or transfer balances to related parties.
During the nine months ended September 30, 2026, BAM placed a $250 million cash deposit with BN as part of the Oaktree Acquisition, with the corresponding receivable from BN recorded in due from affiliates. As of September 30, 2026, the due from affiliates balance attributable to the deposit with BN is $315 million (2025 – $nil ).
The remaining $1.1 billion (2025 – $1.6 billion) represents receivables from affiliates related to share and cash-based compensation.
Due to affiliates
Due to affiliates of $739 million (2025 – $720 million) consists of operating and loan payables to affiliates and related parties and payables to affiliates related to share and cash-based compensation. Operating payables are for services received in the normal course of business. The payables to affiliates related to share and cash-based compensation relate to certain adjustments to share and cash-based compensation amounts under the Relationship Agreement as described above.
For the three and nine months ended September 30, 2026 the Company recognized tax attributes purchased from a related party of $38 million (2025 – $37 million) and $85 million (2025 – $106 million), respectively.
During the nine months ended September 30, 2026 BAM established an $850 million senior secured revolving warehouse facility with a related party that matures on June 29, 2029 and bears interest at SOFR plus 125 basis points. The facility can be drawn on to fund short term warehousing needs of the Company. During the three and nine months ended September 30, 2026, a subsidiary of BAM drew $338 million and $438 million, respectively, under the facility to fund temporary warehousing obligations. As of September 30, 2026, $372 million remained outstanding under the facility.
Due to affiliates of consolidated funds
Due to affiliates of consolidated funds of $39 million (2025 - $nil ) represents amounts owed to other affiliated funds in connection with BPE's participation in their investments, where such investments have been funded through draws on the respective funds' subscription credit facilities.
Other related party transactions
Accounts payable include amounts payable under a tax receivable agreement with Oaktree for $116 million as of September 30, 2026 (December 31, 2025 – $116 million).
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BAM incurs certain facilities and technology expenses in the normal course of business that are charged by BN. These costs are included within the other operating expenses in BAM's condensed consolidated statement of operations.
During the nine months ended September 30, 2026, BAM acquired certain notes from an affiliate and subsequently transferred these notes to another affiliate for cash consideration.
In addition, BAM does business with and on behalf of certain of its affiliates and investees; all such arrangements are conducted on a negotiated basis.
22. COMMITMENTS AND CONTINGENCIES
Commitments
On January 31, 2019, a subsidiary of the Company committed $2.8 billion to BSREP III, of which $2.0 billion has been funded as of September 30, 2026 (December 31, 2025 – $2.2 billion). The remainder of the commitment will be funded by BN.
In the normal course of business, the Company enters into contractual obligations which include commitments to provide bridge financing and other equity commitments. These other equity commitments primarily include signed investment commitments for bridging portfolio company acquisitions and limited partner commitments with third parties and funds and/or entities managed by BAM. The Company earns fees in connection with bridge financing and bears the risk associated with syndicating the commitment. As of September 30, 2026, the Company had $8.8 billion of such commitments outstanding (December 31, 2025 – $6.6 billion).
The Company established a $750 million five-year revolving credit facility on August 29, 2024 through bilateral agreements with a group of lenders. On September 5, 2025, BAM increased its revolving credit facility by $300 million to $1.1 billion. The facility is available in U.S. and Canadian dollars, where U.S. dollar draws are subject to the U.S. Base Rate or SOFR plus a margin of 80 basis points, while Canadian dollar draws are subject to the Canadian Prime Rate or CORRA plus a margin of 80 basis points. As of September 30, 2026, the Company has drawn $nil on the $1.1 billion facility.
On November 8, 2022, a $300 million revolving credit facility was established, with BN as lender. U.S. dollar draws are subject to the U.S. Base Rate or SOFR plus a margin of 165 basis points, while Canadian dollar draws are subject to the Canadian Prime Rate or CORRA plus a margin of 165 basis points. As of September 30, 2026, the facility is undrawn.
In connection with the Oaktree Acquisition, the Company began consolidating a subordinated revolving credit facility between Oaktree and a subsidiary of BN with a commitment of $250 million. The facility was established on May 19, 2020, with borrowings bearing interest at SOFR plus 160 basis points or an alternative base rate plus 50 basis points, and matures on October 6, 2028. As of September 30, 2026, the facility is undrawn.
On October 4, 2024, Oaktree Capital Management (“OCM”), Oaktree Capital I, Oaktree Capital II and Oaktree AIF amended their revolving credit facility to extend its maturity date to October 4, 2029, with options to extend for up to additional years. Based on OCM's current credit ratings, borrowings under the facility bear interest at term SOFR plus 1.10 % per annum, with a commitment fee of 0.10 % per annum on unused amounts. The facility is subject to customary financial covenants, including leverage and minimum fee-generating assets under management requirements. As of September 30, 2026, there were no outstanding borrowings under the facility.
BAM established a commercial paper program on March 3, 2026, the CP Program, under which it may issue senior unsecured short-term commercial paper notes up to a maximum aggregate amount outstanding at any time of $1.0 billion. The Company did not have any commercial paper borrowings outstanding as of September 30, 2026.
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Guarantees
BAM may enter into guarantees in respect of certain co-investments in which there is carried interest. The amount guaranteed is up to the carried interest amount paid to the general partners of the respective funds, net of taxes. In the event that the general partners default on their carried interest clawback obligations, BAM will make payments under the guarantees. As of September 30, 2026 and December 31, 2025, BAM has not recognized any liabilities with respect to such guarantees as no carried interest has been paid in the relevant funds.
The Company may also enter into guarantees and indemnification arrangements on behalf of or in support of funds and related fund structures, where BAM serves as the general partner, and where the fund is able to benefit from the creditworthiness of BAM due to it being a publicly listed entity. These arrangements may be provided to assist the general partners of specific funds in securing financing or to provide capital support or other investment-related commitments, and may involve both related and third-party counterparties. These arrangements may include obligations to fund or acquire interests in investment vehicles or to indemnify counterparties for certain losses arising from the performance of underlying investments. It is expected that these guarantees are there to support the respective general partners or funds and it is not expected that they would be called upon to provide funding. In the event that the general partners, funds, or other counterparties default on their obligations, or specified conditions are met, the Company may be liable for payments under these guarantees or indemnities. As of September 30, 2026, the Company had $502 million of such guarantees outstanding (December 31, 2025 – $179 million).
Contingencies
Carried interest clawback
Carried interest is realized when an underlying investment is profitably disposed of after the fund’s cumulative returns have met a certain threshold for return of capital. When applicable, the Company records a liability for potential clawback obligations due to changes in the unrealized value of a fund’s remaining investments and where the Company has previously received carried interest distributions.
The actual clawback liability, however, generally does not become payable until the end of a fund’s life. No liability for potential clawback obligations has been recorded associated with any of our funds as of September 30, 2026 and December 31, 2025.
Litigation
The Company may from time to time be involved in litigation and claims incidental to the conduct of its business. The Company’s businesses are also subject to extensive regulation, which may result in regulatory proceedings against the Company. As of September 30, 2026 and December 31, 2025 there was no material outstanding litigation.
The Company accrues a liability for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be exposure to loss in excess of any amounts accrued. Although there can be no assurance of the outcome of such legal actions, based on information known by management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, balance sheet or cash flows.
23. SEGMENT REPORTING
The Company operates through five
•Infrastructure: Primarily includes managing our flagship infrastructure fund series focused on investing in high-quality infrastructure assets on a value basis. In addition, we manage permanent capital vehicles and perpetual strategies which include BIP, listed on the NYSE and TSX.
•Energy: Primarily includes managing our flagship renewable power and transition fund series focused on investments aimed at accelerating the global transition to a net-zero carbon economy and driving clean energy investments in emerging markets. In addition, we manage BEP, which is listed on the NYSE and TSX.
•Private Equity: Includes managing our global opportunistic flagship funds, special investments strategy, secondaries strategy, thematic private equity strategies and regional private equity strategies. In addition, we manage BBUC which is a publicly traded global business services and industrials company focused on owning and operating high-quality providers of essential products and services listed on the NYSE and TSX.
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•Real Estate: Includes the management of our opportunistic real estate flagship fund series and secondaries strategy. In addition, we manage BPG and certain other perpetual funds focused on core plus assets and a non-traded REIT, Brookfield Real Estate Income Trust Inc.
•Credit: Includes managing our private credit strategies, opportunistic credit strategies, structured credit strategies, and liquid credit strategies. These products seek to provide flexible, specialized capital solutions to borrowers and deliver attractive risk-adjusted returns to our clients across a range of debt strategies.
Asset information by segment is not disclosed because this information is not used by the CODM to make resource deployment decisions or evaluate the performance of the Company's segments.
Segment Revenues
Segment Revenues is a key metric analyzed by the CODM to determine the growth in recurring cash flows from our asset management business. Segment Revenues include base management fees, advisory fees, performance fees and transaction fees, but exclude incentive distributions, certain incentive fees, carried interest and revenues of consolidated funds. Effective in the third quarter of 2026, to align with the financial information reviewed by the CODM, we revised the presentation of our partner managers' results to include our share of their revenues in Segment Revenues with the corresponding expenses in Segment Expenses. Prior periods have been recast to conform to the revised presentation. See below for our reconciliation of total revenues as presented on the condensed consolidated statements of operations to Segment Revenues.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Total Revenues | $ | $ | $ | $ | |||||||||||||||||||
| Add: Fee revenues of equity method investments | |||||||||||||||||||||||
| Less: Incentive distributions | ( | ( | ( | ( | |||||||||||||||||||
Less: Carried interest allocations(a) | ( | ( | ( | ( | |||||||||||||||||||
| Less: Interest and dividend revenue | ( | ( | ( | ( | |||||||||||||||||||
| Less: Interest and dividend revenue of consolidated funds | ( | ( | ( | ( | |||||||||||||||||||
Less: Other revenues(b) | ( | ( | ( | ||||||||||||||||||||
Less: Costs recovered from affiliates(c) | ( | ( | ( | ( | |||||||||||||||||||
| Total Segment Revenues | $ | $ | $ | $ | |||||||||||||||||||
| (a) This adjustment removes the impact of both unrealized and realized carried interest allocations. | ||
| (b) This adjustment removes other revenues earned that are non-cash in nature, which include certain cost recoveries and reimbursements from affiliates. | ||
| (c) This adjustment removes the impact of compensation costs that will be borne by affiliates. | ||
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Segment Expenses
Segment Expenses reflect direct costs associated with earning Segment Revenues, which include compensation and benefits, facilities, technology, professional fees and travel and other operating expenses. Expenses such as depreciation and amortization, taxes, interest expense, mark-to-market gains (losses), transaction related costs, non-recurring gains (losses), deferred compensation, and expenses of consolidated funds are not reflective of segment performance and are therefore excluded from Segment Expenses. In addition, effective in the third quarter of 2026, we revised the presentation of our partner managers' results to include our share of segment related expenditures of our partner managers. See below for our reconciliation of total expenses as presented on the condensed consolidated statements of operations to Segment Expenses.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Total Expenses | $ | $ | $ | $ | |||||||||||||||||||
Add: Expenses of equity method investments(a) | |||||||||||||||||||||||
Less: Costs recovered from affiliates(b) | ( | ( | ( | ( | |||||||||||||||||||
Less: Total carried interest allocation (compensation) recovery(c) | ( | ( | ( | ||||||||||||||||||||
| Less: Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Less: Other costs(d) | ( | ( | ( | ( | |||||||||||||||||||
| Less: Interest expense of consolidated funds | ( | ( | ( | ( | |||||||||||||||||||
| Total Segment Expenses | $ | $ | $ | $ | |||||||||||||||||||
| (a) This adjustment adds expenses associated with Segment Revenues of equity method investments. | ||
| (b) This adjustment removes the impact of compensation costs that will be borne by affiliates. | ||
| (c) These adjustments remove the impact of both unrealized and realized carried interest compensation expense. | ||
| (d) This adjustment removes the impact of depreciation and amortization and certain capital depreciation costs recharged from BAM's affiliates as well as the impact of non-asset management costs related to non-recurring costs not core to the asset management business. | ||
Total Segment Expenses are comprised of the following major categories:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Total segment compensation and benefits | $ | $ | $ | $ | |||||||||||||||||||
| Total segment facilities, technology and professional fees | |||||||||||||||||||||||
| Total segment travel and other operating expenses | |||||||||||||||||||||||
| Total Segment Expenses | $ | $ | $ | $ | |||||||||||||||||||
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Segment Earnings
Segment Earnings are computed as Segment Revenues less Segment Expenses and are used to provide additional insight into the operating profitability of our asset management activities. These earnings are recurring in nature and not based on future realization events.
The following tables present the financial data for the Company’s five segments for the three and nine months ended September 30, 2026 and 2025:
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026 (MILLIONS) | Infrastructure | Energy | Private equity | Real estate | Credit | Total Segments | |||||||||||||||||||||||||||||
| Segment Revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Segment Expenses | |||||||||||||||||||||||||||||||||||
| Compensation and benefits | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Facilities, technology and professional fees | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Travel and other operating expenses(a) | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Segment Earnings | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 (MILLIONS) | Infrastructure | Energy | Private equity | Real estate | Credit | Total Segments | |||||||||||||||||||||||||||||
| Segment Revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Segment Expenses | |||||||||||||||||||||||||||||||||||
| Compensation and benefits | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Facilities, technology and professional fees | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Travel and other operating expenses(a) | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Segment Earnings | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 (MILLIONS) | Infrastructure | Energy | Private equity | Real estate | Credit | Total Segments | |||||||||||||||||||||||||||||
| Segment Revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Segment Expenses | |||||||||||||||||||||||||||||||||||
| Compensation and benefits | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Facilities, technology and professional fees | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Travel and other operating expenses(a) | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Segment Earnings | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (MILLIONS) | Infrastructure | Energy | Private equity | Real estate | Credit | Total Segments | |||||||||||||||||||||||||||||
| Segment Revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Segment Expenses | |||||||||||||||||||||||||||||||||||
| Compensation and benefits | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Facilities, technology and professional fees | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Travel and other operating expenses(a) | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Segment Earnings | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| (a) Travel and other operating expenses include travel, sales commissions, insurance, marketing and conferences, and general and administrative costs; none of which individually is 10% or more of total Segment Expenses. | ||
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See below for our reconciliation of income before taxes as presented on the condensed consolidated statements of operations to Segment Earnings:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Income before taxes | $ | $ | $ | $ | |||||||||||||||||||
Depreciation and amortization(a) | |||||||||||||||||||||||
Carried interest allocations, net of carried interest allocation compensation(b) | ( | ( | ( | ||||||||||||||||||||
Other income and expenses, net of other costs and non-asset management related items(c) | ( | ( | |||||||||||||||||||||
| Other income, net of consolidated funds | ( | ( | ( | ( | |||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Interest expense of consolidated funds | |||||||||||||||||||||||
| Interest and dividend revenue | ( | ( | ( | ( | |||||||||||||||||||
| Interest and dividend revenue of consolidated funds | ( | ( | ( | ( | |||||||||||||||||||
Other revenues(d) | ( | ( | ( | ||||||||||||||||||||
Share of income from equity method investments(e) | ( | ( | ( | ( | |||||||||||||||||||
Segment Earnings from equity method investments(e) | |||||||||||||||||||||||
| Incentive distributions | ( | ( | ( | ( | |||||||||||||||||||
| Total Segment Earnings | $ | $ | $ | $ | |||||||||||||||||||
| (a) This adjustment removes the depreciation and amortization on property, plant and equipment and intangible assets as well as certain capital depreciation costs recharged from BAM's affiliates. | ||
| (b) This adjustment removes the impact of both unrealized and realized carried interest allocations and the associated compensation expense. | ||
| (c) This adjustment removes other expenses associated with fair value changes as well as the impact of other costs and non-asset management related items such as non-recurring costs that are not considered part of the ongoing asset management business. | ||
| (d) This adjustment removes other revenues earned that are non-cash in nature, excluding certain cost recoveries and reimbursements from affiliates. | ||
| (e) These adjustments remove our share of income from equity method investments, included in items (a) to (d) above and include our share of Segment Earnings from equity method investments. | ||
24. SUBSEQUENT EVENTS
Quarterly Dividend
On November 5, 2026, the board of directors of BAM declared a quarterly dividend of $0.5025 per share, payable on December 31, 2026 to shareholders of record as of the close of business on November 30, 2026.
Commercial Paper Issuances
Subsequent to quarter-end, BAM issued $275 million of senior unsecured commercial paper under its $1.0 billion commercial paper program in the normal course of business. The notes bear interest at a weighted-average rate of 4.33 % and mature in November 2026.
Acquisition of LXP Industrial Trust
On October 29, 2026, Brookfield, through Brookfield Real Estate Value Add Logistics Venture (“BREVA-L”), a newly established fund that will be consolidated by the Company, together with Brookfield-sponsored investment vehicles and Canada Pension Plan Investment Board (“CPP Investments”), completed the acquisition of LXP Industrial Trust (“LXP”), a U.S. industrial real estate investment trust, for approximately $5.2 billion, including debt and preferred equity. The acquisition was completed through a joint venture owned 50.5 % by BREVA-L and Brookfield-sponsored investment vehicles and 49.5 % by CPP Investments.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with BAM's condensed consolidated financial statements and the related notes included within this Quarterly Report on Form 10-Q. In this report, references to "BAM", the "Company", "we", "us", or "our" refer to Brookfield Asset Management Ltd.
Amounts and percentages presented throughout our discussion and analysis of financial condition and results of operations may reflect rounded results in millions (unless otherwise indicated) and consequently, totals may not appear to sum. In addition, illustrative charts may not be presented at scale.
The changes from current period compared to prior period may be deemed to be not meaningful and are designated as “NM” within this discussion and analysis.
Business Overview
We are a leading global alternative asset manager, headquartered in New York, NY, with over $1 trillion of Assets Under Management across infrastructure, energy, private equity, real estate, and credit. We invest client capital for the long-term with a focus on real assets and essential service businesses that form the backbone of the global economy.
We offer a range of alternative investment products to over 2,500 institutional clients around the world—including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors which also continues to grow with approximately 69,000 clients. We earn asset management income for doing so and ensure strong alignment of interests with our clients by investing Brookfield capital alongside them. Our deep operating expertise, global reach and access to large-scale flexible capital enable us to identify attractive investment opportunities and make investments on a proprietary basis in sizable, premier assets and businesses across geographies and asset classes that we believe few others can.
To do this, we leverage our team of over 5,800 investment and asset management professionals and employees, including over 300 client service professionals across 32 global offices, to ensure that the business exceeds our clients’ service expectations. We also have a dedicated team of approximately 150 people that are focused on distributing and developing catered products to the private wealth channel. Our disciplined investment approach and strong track record have been the foundation and driver of our growth. We draw on Brookfield’s heritage as an owner and operator to invest for value and generate strong returns for our clients, across economic cycles.
We provide a highly diversified suite of alternative investment strategies to our clients and are constantly seeking to innovate new strategies to meet their needs. We have 60 unique active strategies that span a wide range of risk-adjusted returns, including opportunistic, value-add, core, super-core, and credit. We evaluate the performance of these product offerings and our investment strategies using a number of non-GAAP measures, including Fee-Bearing Capital, Fee Revenues, Fee-Related Earnings and Distributable Earnings.
Our guiding principle is to operate our business and conduct our relationships with the highest level of integrity. Our emphasis on a culture of collaboration allows us to attract and retain top talent.
The Class A Shares are co-listed on the New York Stock Exchange (“NYSE”) and the Toronto Stock Exchange (“TSX”) under the symbol “BAM”.
Business Environment
Our business remains well-positioned within the alternative asset management landscape by leveraging a strategic and agile approach to investment opportunities. As investors seek diversification and innovative solutions, we are equipped to navigate market complexities and evolving government policies, by delivering value through disciplined strategies. Our ability to adapt to shifting economic conditions and capitalize on emerging trends ensures we remain a trusted partner in achieving long-term financial outcomes.
In terms of economic conditions in the U.S., real GDP is estimated to have grown by 3.6% for the quarter ended September 30, 2026, compared to an increase of 2.2% for the quarter ended June 30, 2026. The U.S. inflation rate increased to 3.7% as of September 30, 2026. The U.S. unemployment rate remained unchanged at 4.2% in September 2026 compared to June 2026, according to data from the U.S. Bureau of Labor Statistics. As of October 2026, the International Monetary Fund estimated that the U.S. economy will remain flat at a growth rate of 2.3% in 2026 and 2.3% in 2027 compared to 2.3% in 2025, on account of the solid consumer demand and continued AI related investments neutralizing the impact of geopolitical tensions.
The U.S. Federal Reserve raised the Federal Funds target range to 3.75%–4.00% in September 2026, the first rate hike following a series of rate cuts in late 2025. The Federal Open Market Committee acknowledged that inflation remains above its 2% objective, and would require some further monetary tightening to bring inflation closer to target levels given ongoing supply-side pressures, particularly from higher energy prices. The September Summary of Economic Projections nudged the median 2026 GDP growth forecast back up and raised inflation projections again, while the Fed lifted rates, reinforcing its data-dependent, inflation-focused
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stance. The Fed continues to indicate that future policy decisions will depend on incoming economic data and evolving risks to both inflation and growth. During the quarter ended September 30, 2026, the 10-year government bond yields increased 0.82% in the United States.
Outside the U.S., GDP growth in the Eurozone is expected to be robust over the third quarter of 2026, as uncertainty recedes, confidence improves and the energy supply shock stemming from the Middle East conflict is assumed to gradually ease. At its September meeting, the European Central Bank raised its three key policy rates by 25 basis points, bringing the deposit facility rate to 2.50%, in response to increased and persistent inflationary pressures stemming from the conflict in the Middle East. In China, real GDP increased to 4.5% for the quarter ended September 30, 2026, up from 4.3% in the second quarter of 2026, as production, supply and foreign trade momentum grew. The 1-year prime rate set by the People's Bank of China was 3.00% as of September 30, 2026, unchanged from June 30, 2026.
For the quarter ended September 30, 2026, the S&P 500 was up by 2.03%, the MSCI Europe Index was down by 1.33%, the MSCI Asia Index was up 0.91%, and the MSCI World Index increased by 1.60%. During the quarter ended September 30, 2026, U.S. investment grade corporate bond spreads widened by 8 basis points, and the high yield credit spreads widened by 37 basis points.
Our asset management business is affected by the financial market and economic conditions in the various countries and regions in which we operate. Price fluctuations within equity, credit, interest rates and foreign exchange markets can be volatile and mixed across the various geographies, which can have a substantial impact on the performance of our business in various ways.
Products and Principal Strategies
Our products broadly fall into one of three categories: (i) long-term private funds, (ii) permanent capital vehicles and perpetual strategies, and (iii) liquid strategies. These are invested across five principal strategies: (i) infrastructure, (ii) energy, (iii) private equity, (iv) real estate, and (v) credit.
As of September 30, 2026 | Size ($ billions) | Personnel (approx.) | ||||||||||||||||||
| Platform | AUM | Fee-Bearing Capital2 | Investment and asset management professionals1 | Operating employees | ||||||||||||||||
Infrastructure One of the world’s largest investment managers in infrastructure | $267 | $113 | ~230 | ~64,000 | ||||||||||||||||
Products: Infrastructure Core Plus; Infrastructure Structured Solutions; Artificial Intelligence Infrastructure; Brookfield Infrastructure Partners; Perpetual Super-Core Infrastructure; Infrastructure Income Fund | ||||||||||||||||||||
Energy One of the largest investors in energy investments | $155 | $71 | ~175 | ~20,100 | ||||||||||||||||
Products: Global Transition; Catalytic Transition; Brookfield Renewable Partners | ||||||||||||||||||||
Private Equity One of the best long-term track records for investing in private equity | $166 | $53 | ~260 | ~136,900 | ||||||||||||||||
Products: Opportunistic Private Equity; Special Investments; Venture Secondaries; Regional Private Equity; Thematic Private Equity; Brookfield Business Corporation; Brookfield Private Equity | ||||||||||||||||||||
Real Estate One of the world’s largest investment managers in real estate | $280 | $104 | ~2,150 | ~23,900 | ||||||||||||||||
Products: Real Estate Opportunistic; Real Estate Secondaries; Brookfield Property Group; Perpetual Core Plus Real Estate; Brookfield REIT | ||||||||||||||||||||
Credit One of the world’s largest and most experienced credit managers | $426 | $341 | ~1,800 | ~4,900 | ||||||||||||||||
Products: Opportunistic Credit; Global Private Debt; Infrastructure Debt; Real Estate Debt; Oaktree Specialty Lending Corporation; Insurance Capital | ||||||||||||||||||||
1. Includes Oaktree employees that have become BAM employees following the completion of the Oaktree Acquisition and approximately 1,500 fully-dedicated Brookfield operating employees, that are integral to the business, including individuals focused on our core investment strategies and those undertaking various corporate activities.
2. Beginning in the quarter ended September 30, 2026, BAM revised its Fee-Bearing Capital presentation which include Fee-Bearing Capital associated with assets for which its partner managers receive servicing fees, in order to better align the presentation of Fee-Bearing Capital with Fee-Revenues. See “Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures”, in this report.
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Infrastructure
Overview
•We are one of the world’s largest investment managers in infrastructure, with $267 billion of AUM and $113 billion of Fee-Bearing Capital as of September 30, 2026.
•We focus on acquiring high-quality real assets and operating businesses on behalf of our clients that deliver essential goods and services, diversified across the utilities, transport, midstream and data sectors. We partner closely with management teams to enable long-term success through operational and other improvements.
•We have approximately 230 investment and asset management professionals globally that are focused on our infrastructure strategy, supported by approximately 64,000 operating employees in the infrastructure operating businesses that we manage.
Our Products
Long-term Private Funds
•Brookfield Infrastructure Fund (“BIF”) is our flagship infrastructure fund series. In this product offering, we invest on behalf of our clients in high-quality infrastructure assets on a value basis and seek to add value through the investment life cycle by utilizing our operations-oriented approach.
•Brookfield AI Infrastructure Fund (“BAIIF”), our strategy focused on the development of AI infrastructure, is designed to meet the growing demand from hyperscalers, enterprises, and governments for scalable, integrated solutions.
•Brookfield Infrastructure Structured Solutions Fund (“BISS”) seeks to invest structured equity and non-control common equity in the infrastructure mid-market. The fund is focused on deploying our capabilities to partner with sponsors, developers, and corporates to access attractive development opportunities.
Permanent Capital Vehicles and Perpetual Strategies
•We manage Brookfield Infrastructure Partners L.P. (“BIP”), one of the largest, pure-play, publicly traded global infrastructure platforms, which is listed on the NYSE and TSX and had a market capitalization of $27.7 billion as of September 30, 2026.
•We manage Brookfield Super-Core Infrastructure Partners, which is our perpetual infrastructure private fund strategy. In this product offering, we invest on behalf of our clients in core infrastructure assets in developed markets, with a focus on yield, diversification, and inflation-protection.
•We also manage Brookfield Infrastructure Income Fund (“BII”), a semi-liquid infrastructure strategy, offering private wealth investors access to our best-in-class infrastructure platform.
The infrastructure investments that we manage provide a diversified exposure for our clients to scarce, high-quality businesses that benefit from significant barriers to entry and deliver essential goods and services to generate resilient and inflation-protected cash flow streams. Through the various products outlined, we have invested in:
•Regulated or contracted businesses that earn a return on an asset base, including electricity and gas connections, natural gas pipelines and electricity transmission lines;
•Systems involved in the movement of freight, commodities and passengers, including rail operations, toll roads, terminal and export facilities;
•Assets that handle the movement and storage of commodities from a source of supply to a demand center, including transmission pipelines, natural gas process plants and natural gas storage; and
•Businesses that provide essential services and critical infrastructure to transmit and store data globally, including telecom towers and active rooftop sites, fiber optic cable and data centers.
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Energy
Overview
•We are one of the largest investors in energy investments, with $155 billion of AUM and $71 billion of Fee-Bearing Capital as of September 30, 2026.
•We believe that the growing global demand for low-cost, low-carbon energy, especially amongst corporate off-takers, will lead to continued growth opportunities for us in the future. The investment environment for energy remains favorable and we expect to continue to advance our substantial pipeline of energy opportunities on behalf of our clients and managed assets.
•We have approximately 175 investment and asset management professionals globally that are focused on our energy strategy, supported by approximately 20,100 operating employees in the energy operating businesses that we manage. Our extensive experience and knowledge in this industry enable us to be a leader in all major technologies with deep operating and development capabilities.
Our Products
Long-term Private Funds
•Brookfield Global Transition Fund (“BGTF”) is our flagship transition fund series which is focused on investments aimed at accelerating the global transition to a net-zero carbon economy. The mandate of this product is to assist utility, energy and industrial businesses to reduce carbon dioxide emissions, expand low-carbon and renewable energy production and advance sustainable solutions.
•Our recently launched Catalytic Transition Fund (“CTF”) focuses on directing capital into clean energy and transition assets in emerging markets in South and Central America, South and Southeast Asia, the Middle East, and Eastern Europe. CTF will help drive clean energy investment in emerging markets.
Permanent Capital Vehicles and Perpetual Strategies
•We also manage Brookfield Renewable Partners L.P. (“BEP”), one of the world’s largest publicly traded renewable power platforms, which is listed on the NYSE and TSX and had a market capitalization of over $19.2 billion as of September 30, 2026.
Across our energy products, we have invested on behalf of our clients in:
•Hydroelectric operations, through river systems and facilities that provide electricity and have grid stabilizing capabilities;
•Utility-scale solar operations that harness energy from the sun to generate electricity;
•Distributed energy and storage, which provides small-scale generation that can be locally installed, and pump storage facilities;
•Battery energy storage systems;
•Wind operations that use turbines to create electricity; and
•Sustainable solutions including nuclear services, renewable natural gas, carbon capture and storage, recycling, cogeneration, biomass, power transformation, and sustainable aviation fuel.
Private Equity
Overview
•We have one of the best long-term track records for investing in private equity with $166 billion of AUM and $53 billion of Fee-Bearing Capital as of September 30, 2026.
•We focus on high-quality businesses that provide essential products and services, diversified across business services and industrials sectors. We partner closely with management teams to enable long-term success through operational and other improvements.
•We have approximately 260 investment and asset management professionals globally that are focused on our private equity strategy, supported by approximately 136,900 operating employees in the businesses that we manage.
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Our Products
Long-term Private Funds
•Our global opportunistic flagship fund series, Brookfield Capital Partners (“BCP”), is our leading private equity offering. The series of funds focuses on cash-flowing industrial and essential service businesses. We seek investments that benefit from high barriers to entry and enhance their cash flow capabilities by improving strategy and execution.
•Our thematic private equity strategy, Brookfield Financial Infrastructure Partners ("BFIP"), focuses on investments in asset-light financial infrastructure companies that underpin the global financial system.
•Our regional private equity strategy, Brookfield Middle East Partners (“BMEP”), is focused on opportunistically investing across sectors and countries in the Middle East by drawing on Brookfield’s global footprint and value-add as a strategic partner.
•Our special investments strategy, Brookfield Special Investments (“BSI”), is focused on structured, large-scale, non-control investments. This product capitalizes on transactions that do not fit our traditional control-oriented flagship private equity fund series. Situations may include recapitalization or strategic growth capital where we expect to generate equity-like returns while ensuring downside protection through contracted returns.
•Our venture capital strategy, Pinegrove Ventures, manages investments in the innovation economy and is uniquely positioned to access highly sought-after opportunities in high quality venture-backed companies and funds.
Permanent Capital Vehicles and Perpetual Strategies
•We manage Brookfield Business Corporation (“BBUC”), which is a publicly traded global business services and industrials company focused on owning and operating high-quality providers of essential products and services. BBUC is listed on the NYSE and TSX and had a market capitalization of $5.8 billion as of September 30, 2026.
•We also manage Brookfield Private Equity Fund (“BPE”), which is an evergreen semi-liquid fund offering individual investors streamlined, diversified access to Brookfield’s global private equity platform through a single vehicle.
Our private equity vehicles acquire high-quality operations globally. The broad investment mandate provides us with the flexibility to invest on behalf of our clients across multiple industries through many forms. Through the various products outlined above, we have invested on behalf of our clients in:
•Operationally intense industrial businesses that benefit from a strong competitive position, including a leading global provider of advanced automotive battery technology, and a manufacturer of engineered components for industrial trailers and other towable equipment providers, among others;
•Leading service providers to large-scale infrastructure assets, including a provider of work access services, modular building leasing services, and a global provider of lottery services and technology solutions; and
•Leading essential services providers, including the largest private sector residential mortgage insurer in Canada, one of the largest private school operators globally, and an American private education company.
Real Estate
Overview
•We are one of the world’s largest investment managers in real estate, with over $280 billion of AUM and $104 billion of Fee-Bearing Capital as of September 30, 2026.
•We have invested, on behalf of clients, in iconic properties in the world’s most dynamic markets with the goal of generating stable and growing distributions for our investors while protecting them against downside risk.
•We have approximately 2,150 investment and asset management professionals and employees that are focused on generating superior returns across our real estate strategies, supported by approximately 23,900 operating employees in the real estate operating businesses that we manage.
Our Products
Long-term Private Funds
•Our opportunistic real estate flagship fund series is Brookfield Strategic Real Estate Partners (“BSREP”). Through this product, we invest globally across various sectors and geographies on behalf of our clients in high-quality real estate with a focus on large, complex, distressed assets, turnarounds, and recapitalizations.
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•We also manage a real estate secondaries strategy, Brookfield Real Estate Secondaries, with a focus on providing liquidity solutions for other real estate general partners.
•We also manage a real estate value add strategy, Real Estate Value-Add ("BREVA-H"), with a focus on the housing sector.
Permanent Capital Vehicles and Perpetual Strategies
•We manage $20 billion of Fee-Bearing Capital in Brookfield Property Group (“BPG”) as of September 30, 2026, which we invest, on behalf of BN, directly in real estate assets. BPG owns, operates, and develops iconic properties in the world’s most dynamic markets with a global portfolio of retail, multifamily, logistics, office, hospitality, land and housing, triple net lease, manufactured housing, and student housing assets on five continents.
•We also manage capital in our perpetual private fund real estate strategy, Brookfield Premier Real Estate Partners (“BPREP”). This is a core plus strategy that invests in high-quality, stabilized real assets located primarily in the U.S. with a focus on retail, multifamily, office, and logistics real estate assets. We also have two regional BPREP strategies that are dedicated specifically to investments in Australia and Europe.
•We also manage a non-traded REIT, Brookfield Real Estate Income Trust, which is a semi-liquid strategy catering specifically to the private wealth channel. This product invests in high quality income-producing opportunities globally through equity or real estate-related debt.
Through the various products outlined, we have invested in multiple asset classes including:
•High-quality retail destinations that are central gathering places for the communities they serve, combining shopping, dining, entertainment and other activities;
•Full-service hotels and leisure-style hospitality assets in high-barrier markets across North America, the U.K. and Australia;
•High-quality assets with operational upside across multifamily, alternative living, life sciences and logistics sectors globally; and
•Office properties in key gateway cities in the U.S., Canada, the U.K., Germany, Australia, Brazil and India.
Credit
Overview
•We are one of the world’s largest and most experienced credit managers, with $426 billion of AUM and $341 billion of Fee-Bearing Capital as of September 30, 2026.
•We seek to provide flexible, specialized capital solutions to borrowers and delivering attractive risk-adjusted returns to our clients across a range of debt strategies.
•Following completion of the Oaktree Acquisition on July 31, 2026, our credit platform includes Oaktree, one of the world's premier credit investors. We have approximately 1,800 investment and asset management professionals globally that are focused on our credit strategies. These professionals invest across a broad spectrum of credit strategies, combining capabilities we have built organically with those of the leading credit managers with whom we partner. Our partner managers where we have significant non-controlling ownership stakes include:
◦Castlelake, a private credit investor specializing in asset based, aviation, and specialty finance;
◦Angel Oak, a mortgage and consumer credit manager with a vertically integrated origination platform;
◦LCM, a leader in European consumer and small and medium-sized enterprise loan markets;
◦Primary Wave, a leading music rights investor; and
◦17Capital, a leader in NAV finance.
Our Products
•Our flagship opportunistic credit strategy, Global Opportunities, aims to generate consistently strong risk-adjusted returns by investing in a diverse set of opportunities including distressed liquid credit, rescue financings, debtor-in-possession loans, bankruptcy exits, loan portfolios, platform investments, and opportunistic capital solutions in key economic regions across the globe.
•Brookfield Infrastructure Debt is our infrastructure debt fund series, which invests on behalf of our clients in mezzanine debt investments in high-quality, infrastructure and energy assets.
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•Brookfield Real Estate Finance Fund is our commercial real estate debt fund series, which targets investments in transactions that are senior to traditional equity and subordinate to first mortgages or investment-grade corporate debt.
•In addition to several other credit strategies, we also provide tailored separately managed accounts for our clients, with private credit investment programs designed for each of our clients’ specific risk, return, and prudential requirements. Each client’s private credit investment portfolio can be customized across multiple dimensions, including asset class, credit quality, duration, sector, and geography, with proprietary access to our broad-based private credit origination capabilities.
The credit investments managed by BAM and our partner managers enable our clients to have exposure to a broad range of credit strategies, including:
•Private Credit strategies focusing on underwriting and managing directly sourced credit investments on behalf of our clients, across various sectors, including infrastructure, energy, real estate, corporate credit, royalties, aviation, equipment finance, as well as consumer and SME credit;
•Opportunistic Credit strategies that are designed to capitalize on market dislocations and inefficiencies to generate high returns. These strategies typically involve investing in distressed or special situations where credit is undervalued or overlooked by traditional investors;
•Structured Credit strategies investing across structured and asset-backed finance opportunities in infrastructure, energy, real estate, fund finance, aviation, consumer and corporate credit and more; and
•Liquid Credit strategies investing across a broad spectrum of public debt securities, from investment-grade to high-yield.
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Review of Financial Results
Income Statement Analysis
Condensed Consolidated Statements of Operations
The following table summarizes the condensed consolidated statements of operations for BAM for the three and nine months ended September 30, 2026 and 2025:
FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | Three Months Ended | 2026 vs. 2025 | Nine Months Ended | 2026 vs. 2025 | |||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Base management and advisory fees | $ | 1,092 | $ | 859 | $ | 233 | 27 | % | $ | 2,871 | $ | 2,511 | $ | 360 | 14 | % | |||||||||||||||||||||||||||||||
| Incentive fees | 191 | 115 | 76 | 66 | % | 449 | 348 | 101 | 29 | % | |||||||||||||||||||||||||||||||||||||
| Investment income | |||||||||||||||||||||||||||||||||||||||||||||||
| Carried interest allocations | |||||||||||||||||||||||||||||||||||||||||||||||
| Realized | 160 | — | 160 | NM | 176 | — | 176 | NM | |||||||||||||||||||||||||||||||||||||||
| Unrealized | 604 | 112 | 492 | NM | 1,253 | 51 | 1,202 | NM | |||||||||||||||||||||||||||||||||||||||
| Total investment income | 764 | 112 | 652 | NM | 1,429 | 51 | 1,378 | NM | |||||||||||||||||||||||||||||||||||||||
| Interest and dividend revenue | 24 | 24 | — | — | % | 72 | 71 | 1 | 1 | % | |||||||||||||||||||||||||||||||||||||
| Interest and dividend revenue of consolidated funds | 24 | 7 | 17 | NM | 41 | 22 | 19 | 86 | % | ||||||||||||||||||||||||||||||||||||||
| Other revenues | 54 | 135 | (81) | (60) | % | 378 | 420 | (42) | (10) | % | |||||||||||||||||||||||||||||||||||||
| Total revenues | 2,149 | 1,252 | 897 | 72 | % | 5,240 | 3,423 | 1,817 | 53 | % | |||||||||||||||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||||||||||||||||||
| Compensation, operating, and general and administrative expenses | |||||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits | (513) | (379) | (134) | 35 | % | (1,273) | (1,042) | (231) | 22 | % | |||||||||||||||||||||||||||||||||||||
| Other operating expenses | (157) | (87) | (70) | 80 | % | (373) | (247) | (126) | 51 | % | |||||||||||||||||||||||||||||||||||||
| General, administrative and other | (75) | (23) | (52) | 226 | % | (122) | (47) | (75) | 160 | % | |||||||||||||||||||||||||||||||||||||
| Total compensation, operating, and general and administrative expenses | (745) | (489) | (256) | 52 | % | (1,768) | (1,336) | (432) | 32 | % | |||||||||||||||||||||||||||||||||||||
| Carried interest allocation (compensation) recovery | |||||||||||||||||||||||||||||||||||||||||||||||
| Realized | (37) | (26) | (11) | 42 | % | (66) | (76) | 10 | (13) | % | |||||||||||||||||||||||||||||||||||||
| Unrealized | (50) | 46 | (96) | NM | (283) | (66) | (217) | NM | |||||||||||||||||||||||||||||||||||||||
Total carried interest allocation (compensation) recovery | (87) | 20 | (107) | NM | (349) | (142) | (207) | 146 | % | ||||||||||||||||||||||||||||||||||||||
| Interest expense | (58) | (20) | (38) | NM | (148) | (54) | (94) | NM | |||||||||||||||||||||||||||||||||||||||
| Interest expense of consolidated funds | (25) | (6) | (19) | NM | (42) | (22) | (20) | 91 | % | ||||||||||||||||||||||||||||||||||||||
| Total expenses | (915) | (495) | (420) | 85 | % | (2,307) | (1,554) | (753) | 48 | % | |||||||||||||||||||||||||||||||||||||
| Other income (expenses), net | 1,741 | (107) | 1,848 | NM | 1,722 | (244) | 1,966 | NM | |||||||||||||||||||||||||||||||||||||||
| Share of income from equity method investments | 261 | 110 | 151 | NM | 530 | 349 | 181 | 52 | % | ||||||||||||||||||||||||||||||||||||||
| Other income, net of consolidated funds | 94 | 10 | 84 | NM | 175 | 37 | 138 | NM | |||||||||||||||||||||||||||||||||||||||
| Income before taxes | 3,330 | 770 | 2,560 | NM | 5,360 | 2,011 | 3,349 | 167 | % | ||||||||||||||||||||||||||||||||||||||
| Income tax expense | (331) | (78) | (253) | NM | (603) | (228) | (375) | 164 | % | ||||||||||||||||||||||||||||||||||||||
| Net income | $ | 2,999 | $ | 692 | $ | 2,307 | 333 | % | $ | 4,757 | $ | 1,783 | $ | 2,974 | 167 | % | |||||||||||||||||||||||||||||||
| Net (income) loss attributable to: | |||||||||||||||||||||||||||||||||||||||||||||||
| Preferred shares redeemable non-controlling interest | $ | (33) | $ | 165 | $ | (198) | NM | $ | 40 | $ | 391 | $ | (351) | (90) | % | ||||||||||||||||||||||||||||||||
| Redeemable non-controlling interest in consolidated funds | (42) | — | (42) | NM | (66) | — | (66) | NM | |||||||||||||||||||||||||||||||||||||||
| Non-controlling interest in consolidated entities | (256) | (127) | (129) | NM | (526) | (229) | (297) | NM | |||||||||||||||||||||||||||||||||||||||
| Non-controlling interests in consolidated funds | (23) | (6) | (17) | NM | (39) | (20) | (19) | 95 | % | ||||||||||||||||||||||||||||||||||||||
| Net income attributable to the common stockholders | $ | 2,645 | $ | 724 | $ | 1,921 | 265 | % | $ | 4,166 | $ | 1,925 | $ | 2,241 | 116 | % | |||||||||||||||||||||||||||||||
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BAM primarily generates revenue from fees earned pursuant to contractual arrangements with funds, publicly traded vehicles, and investors, as well as transaction and advisory fees. These fees include base management fees, incentive fees, and certain advisory fees. Base management fees are long-term, recurring in nature, and correspond to fundraising activity, NAVs of certain of our funds, and market capitalizations of our publicly traded vehicles, specifically BIP, BEP and BBUC. Incentive fees are incentive payments to reward the Company for meeting or exceeding certain performance thresholds of managed entities, as determined by the terms of the underlying arrangements. These include BBUC performance fees earned above a high watermark, income-based incentive fees earned from certain managed funds and investment vehicles, including business development companies, and other performance-based fees that may be subject to contractual hurdles or performance thresholds and may be subject to clawback provisions. Incentive fees also include incentive distributions which are performance fees earned from BIP and BEP for exceeding predetermined distribution thresholds, are long-term, and are not subject to clawback.
BAM is entitled to carried interest allocations assuming certain investment returns are achieved, as well as incentive management fees in certain of our structures where we are entitled to contractual fees from an investment fund based on achieving prescribed investment returns.
The composition of our revenues will vary based on market conditions and the cyclical nature of our businesses. Carried interest allocations generated by our funds and associated carried interest compensation are driven by the performance of the underlying investments, as well as overall market conditions. Fair values are affected by changes in the fundamentals of our investments, the industries in which they operate, the overall economy, and other market conditions. The impact of fair values of our underlying investments throughout market cycles may result in material increases or decreases to carried interest generated, net of expenses.
Expenses primarily include employee base compensation, bonuses, and share-based compensation. Period over period changes in employee base compensation and bonuses generally result from changes in headcount and annual salary changes. Share-based awards are granted in the first quarter of each year and generally vest over 5 years. Equity settled compensation awards vest on a graded basis over the vesting period and cash settled share-based compensation awards are recorded at fair value quarterly based on the trading price of Class A Shares. Therefore, for cash settled share-based compensation, an increase or decrease in the share price of BAM will result in share-based compensation expense or recovery.
For the three months ended September 30, 2026 and 2025
Net income for the three months ended September 30, 2026 was $3.0 billion, of which $2.6 billion was attributable to common stockholders. This compares to net income of $692 million for the three months ended September 30, 2025, of which $724 million was attributable to common stockholders.
Revenues
Revenues for the three months ended September 30, 2026 were $2.1 billion, which represents an increase of $897 million or 72% compared to $1.3 billion of revenue for the three months ended September 30, 2025.
Base Management and Advisory Fees
Base management and advisory fees for the three months ended September 30, 2026 were $1.1 billion, which represents an increase of $233 million or 27% compared to the three months ended September 30, 2025. Management fee revenue increased by $33 million due to net inflows from BWS, $28 million attributable to inflows and NAV increases from our infrastructure and energy perpetual strategies and $14 million from higher trading prices of BIP, BEP, and BBUC. In addition, base management and advisory fees increased due to the inclusion of Oaktree's revenues of $227 million due to the completion of the Oaktree Acquisition in the period. The remaining increase was attributable to fundraising and capital deployments across various long-term private funds and complementary strategies. These increases were partially offset by $46 million in lower catch-up fees compared to the prior period from the second vintage of our global transition flagship fund and realizations within earlier vintages of our flagship infrastructure funds, as well as the reclassification of certain performance fees to incentive fees.
Incentive Fees
Incentive fees for the three months ended September 30, 2026, were $191 million, an increase of $76 million or 66% from the three months ended September 30, 2025. The increase was primarily attributable to the reclassification of certain performance fees from base management and advisory fees to incentive fees, as well as $12 million resulting from increases in BEP and BIP's quarterly distributions of 5% and 6% respectively, compared to the prior period.
Carried Interest Allocations
Carried interest allocations are a performance fee arrangement which is earned from those arrangements where BAM has a general partner capital interest and is entitled to a disproportionate allocation of investment income. Each of these general partners is generally entitled to a carried interest that allocates to it 20% of the net profits realized by the limited partners from the fund’s investment subject to the return of contributed capital and a preferred return of typically 8% per annum to the limited partners. At the end of each
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reporting period, the Company calculates the balance of accrued carried interest that would be due to BAM for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized.
Realized carried interest allocations were $160 million for the three months ended September 30, 2026, and $nil for the three months ended September 30, 2025 predominantly due to dispositions within the sixth vintage of our private equity flagship fund and certain complementary private equity and credit fund strategies.
The unrealized carried interest allocations of $604 million for the three months ended September 30, 2026 represents an increase of $492 million compared to the three months ended September 30, 2025. This increase is due to changes in fund valuations associated with the first and second vintages of our global transition flagship fund for $386 million, $30 million of credit funds and $15 million in the sixth vintage of our private equity flagship fund relative to the prior period. In addition, certain real estate other long-term funds saw increases of $30 million, and a $237 million increase related to unrealized carried interest losses recognized in the prior period on earlier vintages of our flagship real estate funds. This was partially offset by $146 million in lower unrealized carried interest generated in various private equity fund strategies and $51 million in lower unrealized carried interest generated in the fifth vintage of our Infrastructure flagship fund relative to the prior period.
Carried interest allocations generated by new funds are 66.7% attributable to BAM and 33.3% to BN. Within the condensed consolidated statements of operations, carried interest allocations are presented on a 100% basis and the portion attributable to BN is presented in net (income) loss attributable to non-controlling interest in consolidated entities. Unrealized carried interest allocations attributable to BAM were $494 million for the three months ended September 30, 2026, compared to $241 million for the three months ended September 30, 2025.
The following table presents the carried interest in new funds, and related performance compensation by investment strategy.
Net New Fund Carried Interest | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | Carried interest allocations1 | Carried interest compensation | Carried interest, net | Carried interest allocations1 | Carried interest compensation | Carried interest, net | |||||||||||||||||||||||||||||
Infrastructure | $ | 144 | $ | (8) | $ | 136 | $ | 192 | $ | (5) | $ | 187 | |||||||||||||||||||||||
Energy | 517 | (62) | 455 | 131 | (3) | 128 | |||||||||||||||||||||||||||||
Private equity | 30 | (15) | 15 | 36 | — | 36 | |||||||||||||||||||||||||||||
Real estate | 20 | (5) | 15 | 2 | (1) | 1 | |||||||||||||||||||||||||||||
Credit | 30 | (18) | 12 | — | — | — | |||||||||||||||||||||||||||||
| $ | 741 | $ | (108) | $ | 633 | $ | 361 | $ | (9) | $ | 352 | ||||||||||||||||||||||||
1. Carried interest generated within our partner managers in Credit is presented within the investment balance of our partner managers rather than accrued carried interest and as a result is excluded from the table above.
The following table presents the change in accrued carried interest in new funds by investment strategy for the three months ended September 30, 2026.
| June 30, 2026 | Activity during the period | September 30, 2026 | |||||||||||||||||||||||||||
| AS OF (MILLIONS) | Accrued carried interest allocations | Oaktree Acquisition | Unrealized | Realized | Accrued carried interest allocations | ||||||||||||||||||||||||
Infrastructure | $ | 689 | $ | — | $ | 144 | $ | — | $ | 833 | |||||||||||||||||||
Energy | 933 | — | 517 | — | 1,450 | ||||||||||||||||||||||||
Private equity | 678 | — | 30 | (119) | 589 | ||||||||||||||||||||||||
Real estate | 113 | — | 20 | — | 133 | ||||||||||||||||||||||||
Credit | — | 312 | 30 | — | 342 | ||||||||||||||||||||||||
| $ | 2,413 | $ | 312 | $ | 741 | $ | (119) | $ | 3,347 | ||||||||||||||||||||
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Interest and Dividend Revenue
Interest and dividend revenue for the three months ended September 30, 2026 was $24 million, consistent with the three months ended September 30, 2025 of $24 million. Interest and dividend revenue is primarily earned from interest income on our deposit with BN.
Other Revenues
Other revenues are largely comprised of recoveries from BN related to share and performance-based compensation as defined by the Services Agreement and fund expense recharges. Share-based and performance-based award expenses that are recoverable from BN are recognized in other revenues with the offsetting expense recognized in compensation and benefits, and carried interest allocation compensation, respectively. Other revenues were $54 million for the three months ended September 30, 2026, a decrease of $81 million compared to the three months ended September 30, 2025. The decrease was primarily attributable to lower recoveries of $95 million related to share and performance-based compensation due to a lower trading price of BAM Class A Shares in the period and lower recoveries related to carried interest compensation.
Expenses
Total expenses for the three months ended September 30, 2026 were $915 million, an increase of $420 million or 85% compared to the three months ended September 30, 2025.
Compensation and Benefits
Compensation and benefits for the three months ended September 30, 2026 was $513 million, which represents an increase of $134 million compared to the three months ended September 30, 2025. This increase was primarily attributable to the inclusion of Oaktree’s compensation expenses of $130 million following the completion of the Oaktree Acquisition, in addition to higher compensation costs of $46 million from the ongoing growth of our business. This was partially offset by a $43 million decrease in share-based compensation related to our share and performance-based awards due to a lower trading price of BAM Class A Shares during the period.
Other Operating Expenses
Other operating expenses are comprised of professional fees, facilities costs, as well as costs directly associated with our fundraising and investment functions. Other operating expenses for the three months ended September 30, 2026 were $157 million, which represents an increase of $70 million compared to the three months ended September 30, 2025. This increase was driven by higher operating costs from our growing business and $43 million of additional operating expenses recognized following the completion of the Oaktree Acquisition in the period.
Carried Interest Allocation (Compensation) Recovery
Compensation expenses related to carried interest allocation compensation was $87 million for the three months ended September 30, 2026, which represents a change of $107 million compared to the three months ended September 30, 2025. This was primarily driven by higher relative valuations across certain Real Estate, Energy, and Credit funds compared to the prior period. The carried interest compensation expense associated with mature funds is fully recoverable from BN. Carried interest compensation expense on new funds was $108 million during the three months ended September 30, 2026.
Interest Expense
Interest expense for three months ended September 30, 2026 was $58 million, which represents an increase of $38 million compared to the three months ended September 30, 2025. This was primarily driven by BAM's incremental debt offerings relative to the prior period and additional interest expense following the completion of the Oaktree Acquisition in the period.
Interest Expense of Consolidated Funds
Interest expense of consolidated funds for the three months ended September 30, 2026 was $25 million, which was primarily driven by borrowings of OLAF, BSI II, BMEP and BREVA-H in which BAM holds a sufficient interest to require the consolidation of the funds.
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Other Income (Expenses), net
Other income for the three months ended September 30, 2026 was $1.7 billion, compared to other expenses of $107 million in the prior period. This gross increase of $1.8 billion was driven by a $2.0 billion gain following the completion of the Oaktree Acquisition due to the remeasurement of our previously held 74% interest in Oaktree from $3.9 billion to its acquisition-date fair value of $5.9 billion. Unrealized mark-to-market movements on partner manager puts and calls compared to the prior period also contributed to the increase. Additionally the mark-to-market loss of $4 million on our investment in BSREP III during the three months ended September 30, 2026 decreased compared to $74 million during the three months ended September 30, 2025. This increase was partially offset by the impairment of $140 million of goodwill within certain operating groups as a result of the integration of Oaktree.
Other Income, net of Consolidated Funds
Other income, net of consolidated funds for the three months ended September 30, 2026 was $94 million compared to $10 million in the prior period. BAM holds a sufficient interest to require the consolidation of OLAF, BPE, BMEP, BSI II, and BREVA-H. The increase is mainly driven by the fair value changes of investments held by BPE and BMEP which were newly consolidated funds in Q1 2026 and therefore not consolidated in the comparative period.
Share of Income from Equity Method Investments
Our share of income from equity method investments for the three months ended September 30, 2026 was $261 million compared to $110 million in the prior period, an increase of $151 million. The increase was driven by higher earnings from Castlelake of $16 million and $18 million higher earnings from Pinegrove Fund and Pinegrove Ventures. Additionally, an approximate $88 million gain on the disposition of Oaktree corporate investments to BWS as part of the Oaktree Acquisition was recognized in share of income from equity method investments in the period.
Income Tax Expense
Income tax expense was $331 million for the three months ended September 30, 2026, which represents an increase of $253 million compared to the three months ended September 30, 2025. The increase in income tax expense was predominantly driven by a higher taxable income compared to the prior period.
Net Income Attributable to Preferred Share Redeemable Non-Controlling Interest
BAM recognizes carried interest income and associated carried interest allocation expense on mature funds within our condensed consolidated statements of operations on a gross basis. As the net carried interest generated on mature funds is attributable to BN, the net income or loss attributable to BN via the preferred shares primarily represents the change in carried interest, net of carried interest allocation expense and taxes on mature funds owing to BN.
Net income attributable to preferred redeemable non-controlling interest was $33 million for the three months ended September 30, 2026 primarily due to carried interest earned on mature funds within our credit and infrastructure strategies partially offset by losses in valuations for certain mature real estate funds.
Net Income Attributable to Redeemable Non-Controlling Interest in Consolidated Funds
Net income attributable to redeemable non-controlling interest in consolidated funds reflects net income or loss generated by the respective fund that is allocated to non-controlling interest based on the substantive contractual terms of the funds governing agreements that specify the allocation of income or loss, such as fees allocable to BAM. Net income attributable to redeemable non-controlling interest in consolidated funds of $42 million for the three months ended September 30, 2026 was driven by units held in BPE by BN, BBUC, BWS and third parties during the period.
Net Income Attributable to Non-Controlling Interest in Consolidated Entities
Net income attributable to non-controlling interest in consolidated entities was $256 million for the three months ended September 30, 2026. BAM recognizes carried interest allocations on new funds within our condensed consolidated statements of operations on a gross basis. On new funds, 33.3% of carried interest allocations are attributable to BN. This balance is primarily the carried interest generated on new funds that is attributable to BN and fluctuates depending on the carried interest generated on new funds during the period.
Net Income Attributable to Non-Controlling Interest in Consolidated Funds
For income earned by certain funds in which BAM holds a sufficient interest to require the consolidation of the funds, a portion of the income or losses earned is attributable to other parties invested in the funds. Net income attributable to non-controlling interest of consolidated funds of $23 million for the three months ended September 30, 2026 was driven by fair value changes on debt and equity securities held in BPE.
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For the nine months ended September 30, 2026 and 2025
Net income for the nine months ended September 30, 2026 was $4.8 billion, of which $4.2 billion was attributable to common stockholders. This compares to net income of $1.8 billion for the nine months ended September 30, 2025, of which $1.9 billion was attributable to common stockholders.
Revenues
Revenues for the nine months ended September 30, 2026 were $5.2 billion, which represents an increase of $1.8 billion or 53% compared to $3.4 billion of revenue for the nine months ended September 30, 2025.
Base Management and Advisory Fees
Base management and advisory fees for the nine months ended September 30, 2026 were $2.9 billion, which represents an increase of $360 million or 14% compared to the nine months ended September 30, 2025. Management fee revenues increase was driven by $144 million of incremental fee revenue from our listed affiliates as a result of higher share prices of BIP, BEP, and BBUC and $227 million due to the inclusion of Oaktree's revenues due to the Oaktree Acquisition. Additionally, fee revenue increased by $85 million due to net inflows from BWS, and $85 million attributable to inflows and NAV increases from our infrastructure and energy perpetual strategies. The remaining increase was attributable to fundraising and capital deployments across various other long-term private funds and complementary strategies. These increases were partially offset by $85 million in lower catch-up fees compared to the prior period from both the fifth vintage of our flagship real estate fund and the second vintage of our flagship global transition fund. Further reductions in management fees of $71 million were due to realizations within earlier vintages of our flagship real estate and infrastructure funds, as well as the reclassification of certain performance fees to incentive fees.
Incentive Fees
Incentive fees for the nine months ended September 30, 2026, were $449 million, an increase of $101 million or 29% from the nine months ended September 30, 2025. This increase was primarily attributable to the reclassification of certain performance fees from base management and advisory fees to incentive fees, as well as $37 million resulting from increases in BEP and BIP's quarterly distributions of 5% and 6% respectively, compared to the prior period.
Carried Interest Allocations
Carried interest allocations are a performance fee arrangement which is earned from those arrangements where BAM has a general partner capital interest and is entitled to a disproportionate allocation of investment income. Each of these general partners is generally entitled to a carried interest that allocates to it 20% of the net profits realized by the limited partners from the fund’s investment subject to the return of contributed capital and a preferred return of typically 8% per annum to the limited partners. At the end of each reporting period, the Company calculates the balance of accrued carried interest that would be due to BAM for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized.
Realized carried interest allocations were $176 million for the nine months ended September 30, 2026, which were predominantly due to dispositions within the sixth vintage of our private equity flagship fund and certain complementary private equity and credit fund strategies.
The unrealized carried interest allocations of $1.3 billion for the nine months ended September 30, 2026 represents an increase of $1.2 billion compared to the nine months ended September 30, 2025. This increase is due to changes in fund valuations associated with the first and second vintages of our global transition flagship fund of $681 million, the sixth vintage of our private equity flagship fund of $85 million, and $30 million in our credit strategies following the completion of the Oaktree Acquisition. In addition, certain real estate other long-term funds generated $46 million of incremental carried interest in the period. Unrealized carried interest allocations also benefitted from a $441 million reduction in the reversal of unrealized carried interest compared to the prior period in earlier vintages of our flagship real estate funds. This was partially offset by $57 million in lower unrealized carried interest generated in the fifth vintage of our Infrastructure flagship fund relative to the prior period.
Carried interest allocations generated by new funds are 66.7% attributable to BAM and 33.3% to BN. Within the condensed consolidated statements of operations, carried interest allocations are presented on a 100% basis and the portion attributable to BN is presented in net (income) loss attributable to non-controlling interest in consolidated entities. Unrealized carried interest allocations attributable to BAM were $1.0 billion for the nine months ended September 30, 2026, compared to $421 million for the nine months ended September 30, 2025.
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The following table presents the carried interest in new funds, and related performance compensation by investment strategy.
Net New Fund Carried Interest | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | Carried interest allocations1 | Carried interest compensation | Carried interest, net | Carried interest allocations1 | Carried interest compensation | Carried interest, net | |||||||||||||||||||||||||||||
Infrastructure | $ | 263 | $ | (30) | $ | 233 | $ | 311 | $ | (9) | $ | 302 | |||||||||||||||||||||||
Energy | 916 | (95) | 821 | 236 | (13) | 223 | |||||||||||||||||||||||||||||
Private equity | 259 | (73) | 186 | 79 | (14) | 65 | |||||||||||||||||||||||||||||
Real estate | 64 | (17) | 47 | 5 | (5) | — | |||||||||||||||||||||||||||||
Credit | 30 | (20) | 10 | — | (1) | (1) | |||||||||||||||||||||||||||||
| $ | 1,532 | $ | (235) | $ | 1,297 | $ | 631 | $ | (42) | $ | 589 | ||||||||||||||||||||||||
1. Carried interest generated within our partner managers in Credit is presented within the investment balance of our partner managers rather than accrued carried interest and as a result is excluded from the table above.
The following table presents the change in accrued carried interest in new funds by investment strategy for the nine months ended September 30, 2026.
| December 31, 2025 | Activity during the period | September 30, 2026 | |||||||||||||||||||||||||||
| AS OF (MILLIONS) | Accrued carried interest allocations1 | Oaktree Acquisition | Unrealized | Realized | Accrued carried interest allocations | ||||||||||||||||||||||||
Infrastructure | $ | 570 | $ | — | $ | 263 | $ | — | $ | 833 | |||||||||||||||||||
Energy | 534 | — | 916 | — | 1,450 | ||||||||||||||||||||||||
Private equity | 463 | — | 259 | (133) | 589 | ||||||||||||||||||||||||
Real estate | 69 | — | 64 | — | 133 | ||||||||||||||||||||||||
Credit | — | 312 | 30 | — | 342 | ||||||||||||||||||||||||
| $ | 1,636 | $ | 312 | $ | 1,532 | $ | (133) | $ | 3,347 | ||||||||||||||||||||
Interest and Dividend Revenue
Interest and dividend revenue for the nine months ended September 30, 2026 was $72 million, which represents an increase of $1 million compared to the nine months ended September 30, 2025. The increase in interest and dividend revenue was primarily attributable to higher interest income earned on our deposit with BN, partially offset by lower interest revenue following the sale of the GEMS investment to our consolidated fund BPE.
Other Revenues
Other revenues are largely comprised of recoveries from BN related to share and performance-based compensation as defined by the Services Agreement and fund expense recharges. Share-based and performance-based award expenses that are recoverable from BN are recognized in other revenues with the offsetting expense recognized in compensation and benefits, and carried interest allocation compensation, respectively. Other revenues were $378 million for the nine months ended September 30, 2026, a decrease of $42 million compared to the nine months ended September 30, 2025. The decrease was primarily attributable to the partial settlement of BN DSU awards during the period and lower recoveries of $17 million related to share and performance-based compensation due to a lower trading price of BAM Class A Shares in the period.
Expenses
Total expenses for the nine months ended September 30, 2026 were $2.3 billion, an increase of $753 million or 48% compared to the nine months ended September 30, 2025.
Compensation and Benefits
Compensation and benefits for the nine months ended September 30, 2026 was $1.3 billion, which represents an increase of $231 million compared to the nine months ended September 30, 2025. The increase was primarily attributable to the inclusion of Oaktree's compensation expenses of $130 million following the completion of the Oaktree Acquisition and higher compensation costs of $102 million from the ongoing growth of our business.
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Other Operating Expenses
Other operating expenses are comprised of professional fees, facilities costs, as well as costs directly associated with our fundraising and investment functions. Other operating expenses for the nine months ended September 30, 2026 were $373 million, which represents an increase of $126 million compared to the nine months ended September 30, 2025. This increase was primarily driven by $43 million of incremental operating expenses recognized following the completion of the Oaktree Acquisition in the period.
Carried Interest Allocation (Compensation) Recovery
Compensation expenses related to carried interest allocation compensation was $349 million for the nine months ended September 30, 2026, which represents a change of $207 million compared to the nine months ended September 30, 2025. This was primarily driven by higher relative valuations across certain Private Equity and Infrastructure funds compared to the prior year. The carried interest compensation expense associated with mature funds is fully recoverable from BN. Carried interest compensation expense on new funds was $235 million during the period.
Interest Expense
Interest expense for nine months ended September 30, 2026 was $148 million, which represents an increase of $94 million compared to the nine months ended September 30, 2025. This was primarily driven by BAM's increased borrowings from our debt offerings relative to the prior period and additional interest expense recognized following the Oaktree Acquisition.
Interest Expense of Consolidated Funds
Interest expense of consolidated funds for the nine months ended September 30, 2026 was $42 million, which was primarily driven by borrowings of BSI II, OLAF, BMEP and BREVA-H in which BAM holds a sufficient interest to require the consolidation of the funds.
Other Income (Expenses), net
Other income for the nine months ended September 30, 2026 was $1.7 billion, compared to other expenses of $244 million in the prior period. This gross increase of $2.0 billion was driven by a $2.0 billion gain following the completion of the Oaktree Acquisition due to the remeasurement of our previously held 74% interest in Oaktree from $3.9 billion to its acquisition-date fair value of $5.9 billion. Unrealized mark-to-market movements on partner manager puts and calls compared to the prior period also contributed to the increase. Additionally, the mark-to market loss on our BSREP III investment of $31 million during the nine months ended September 30, 2026 decreased compared to a loss of $152 million during the nine months ended September 30, 2025. This increase was partially offset by the impairment of $140 million of goodwill within certain operating groups as a result of the integration of Oaktree.
Other Income, net of Consolidated Funds
Other income, net of consolidated funds for the nine months ended September 30, 2026 was $175 million compared to $37 million in the prior period. BAM holds a sufficient interest to require the consolidation of OLAF, BPE, BMEP, BSI II, and BREVA-H. The increase is mainly driven by the fair value changes of investments held by BPE and BMEP which were newly consolidated funds in Q1 2026 and therefore were not consolidated in the comparative period.
Share of Income from Equity Method Investments
Our share of income from equity method investments was $530 million compared to $349 million in the prior period, an increase of $181 million. The increase was driven by higher earnings from Castlelake of $35 million, $33 million higher earnings from Pinegrove Fund and Pinegrove Ventures, and $23 million of earnings from U.S. Manufactured Housing following its acquisition during the period. Additionally, an $88 million gain on the disposition of Oaktree corporate investments to BWS as part of the Oaktree Acquisition was recognized in share of income from equity method investments in the period. This was partially offset by two fewer months of Oaktree share of income pickup once Oaktree was derecognized as an equity method investment on July 31, 2026 due to the Oaktree Acquisition.
Income Tax Expense
Income tax expense was $603 million for the nine months ended September 30, 2026, which represents an increase of $375 million compared to the nine months ended September 30, 2025. The increase in income tax expense was predominantly driven by a higher taxable income compared to the prior period.
Net Loss Attributable to Preferred Share Redeemable Non-Controlling Interest
BAM recognizes carried interest income and associated carried interest allocation expense on mature funds within our condensed consolidated statements of operations on a gross basis. As the net carried interest generated on mature funds is attributable to BN, the net income or loss attributable to BN via the preferred shares primarily represents the change in carried interest, net of carried interest allocation expense and taxes on mature funds owing to BN.
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Net loss attributable to preferred redeemable non-controlling interest was $40 million for the nine months ended September 30, 2026 primarily due losses in valuations for certain mature real estate funds and a $33 million adjustment to the redemption value of the BN Exchangeable Units which reflects changes in the underlying BN Class A Share price, partially offset by carried interest earned in our credit and infrastructure strategies.
Net Income Attributable to Redeemable Non-Controlling Interest in Consolidated Funds
Net income attributable to redeemable non-controlling interest in consolidated funds reflects net income or loss generated by the respective fund that is allocated to non-controlling interest based on the substantive contractual terms of the funds governing agreements that specify the allocation of income or loss, such as fees allocable to BAM. Net income attributable to redeemable non-controlling interest in consolidated funds was $66 million for the nine months ended September 30, 2026.
Net Income Attributable to Non-Controlling Interest in Consolidated Entities
Net income attributable to non-controlling interest in consolidated entities was $526 million for the nine months ended September 30, 2026. BAM recognizes carried interest allocations on new funds within our condensed consolidated statements of operations on a gross basis. On new funds, 33.3% of carried interest allocations are attributable to BN. This balance is primarily the carried interest generated on new funds that is attributable to BN and fluctuates depending on the carried interest generated on new funds during the period.
Net Income Attributable to Non-Controlling Interest in Consolidated Funds
For income earned by certain funds in which BAM holds a sufficient interest to require the consolidation of the funds, a portion of the income or losses earned is attributable to other parties invested in the funds. Net income attributable to non-controlling interest of consolidated funds was $39 million for the nine months ended September 30, 2026.
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Balance Sheet Analysis
Condensed Consolidated Balance Sheets
The following table presents the condensed consolidated balance sheets of BAM as of September 30, 2026 and December 31, 2025:
| 2026 vs. 2025 | |||||||||||||||||||||||
AS OF SEPTEMBER 30, AND DECEMBER 31, (MILLIONS, EXCEPT SHARE AMOUNTS) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 657 | $ | 1,583 | $ | (926) | (58) | % | |||||||||||||||
| Cash of consolidated funds | 31 | — | 31 | NM | |||||||||||||||||||
| Accounts receivable and other, net | 462 | 333 | 129 | 39 | % | ||||||||||||||||||
| Financial assets | 499 | 417 | 82 | 20 | % | ||||||||||||||||||
| Due from affiliates | 3,915 | 3,280 | 635 | 19 | % | ||||||||||||||||||
| Investments | 8,859 | 9,795 | (936) | (10) | % | ||||||||||||||||||
| Investments of consolidated funds | 4,365 | 505 | 3,860 | NM | |||||||||||||||||||
| Property, plant and equipment, net | 203 | 43 | 160 | NM | |||||||||||||||||||
| Right-of-use assets | 232 | 49 | 183 | NM | |||||||||||||||||||
| Intangible assets, net | 6,019 | 234 | 5,785 | NM | |||||||||||||||||||
| Goodwill | 1,868 | 236 | 1,632 | NM | |||||||||||||||||||
| Deferred income tax assets | 299 | 572 | (273) | (48)% | |||||||||||||||||||
| Total assets | $ | 27,409 | $ | 17,047 | $ | 10,362 | 61 | % | |||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Accounts payable and other, net | $ | 4,332 | $ | 2,392 | $ | 1,940 | 81 | % | |||||||||||||||
| Operating lease liabilities | 252 | 67 | $ | 185 | NM | ||||||||||||||||||
| Financial liabilities | 678 | 449 | 229 | 51% | |||||||||||||||||||
| Due to affiliates | 739 | 720 | 19 | 3% | |||||||||||||||||||
| Due to affiliates of consolidated funds | 39 | — | 39 | NM | |||||||||||||||||||
| Corporate borrowings | 3,466 | 2,478 | 988 | 40% | |||||||||||||||||||
| Borrowings of subsidiaries | 845 | — | 845 | NM | |||||||||||||||||||
| Borrowings of consolidated funds | 1,676 | 462 | 1,214 | NM | |||||||||||||||||||
| Deferred income tax liabilities | 653 | 169 | 484 | NM | |||||||||||||||||||
| Total liabilities | 12,680 | 6,737 | 5,943 | 88 | % | ||||||||||||||||||
| Commitments and contingencies | |||||||||||||||||||||||
| Preferred shares redeemable non-controlling interest | 1,390 | 1,398 | (8) | (1) | % | ||||||||||||||||||
| Redeemable non-controlling interest in consolidated funds | 1,529 | — | 1,529 | NM | |||||||||||||||||||
Class A, no par value, unlimited authorized, 1,638,516,273 (December 31, 2025 - 1,637,942,656) issued and 1,597,837,429 (December 31, 2025 - 1,608,492,642) outstanding as of September 30, 2026 | 9,165 | 9,153 | 12 | — | % | ||||||||||||||||||
Class A held in treasury, no par value, 40,678,844 (December 31, 2025 - 29,450,014) shares as of September 30, 2026 | (1,120) | (526) | (594) | NM | |||||||||||||||||||
Class B, no par value, unlimited authorized, 21,280 (December 31, 2025 - 21,280) issued and outstanding as of September 30, 2026 | — | — | — | NM | |||||||||||||||||||
| Additional paid-in capital | 321 | 154 | 167 | NM | |||||||||||||||||||
| Retained earnings (deficit) | 884 | (851) | 1,735 | NM | |||||||||||||||||||
| Accumulated other comprehensive income | 176 | 188 | (12) | (6) | % | ||||||||||||||||||
| Non-controlling interest in consolidated entities | 1,762 | 773 | 989 | NM | |||||||||||||||||||
| Non-controlling interest in consolidated funds | 622 | 21 | 601 | NM | |||||||||||||||||||
| Total equity | 11,810 | 8,912 | 2,898 | 33 | % | ||||||||||||||||||
| Total liabilities, redeemable non-controlling interest and equity | $ | 27,409 | $ | 17,047 | $ | 10,362 | 61 | % | |||||||||||||||
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As of September 30, 2026 and December 31, 2025
Assets
Total assets were $27.4 billion as of September 30, 2026, an increase of $10.4 billion or 61% compared to December 31, 2025.
Cash and Cash Equivalents
Cash and cash equivalents were $657 million as of September 30, 2026, a decrease of $926 million from December 31, 2025. The decrease was primarily attributable to cash consideration of $1.8 billion paid for the acquisition of Oaktree, share repurchases of $586 million, distributions of $2.4 billion, and funding of working capital requirements during the nine months ended September 30, 2026. The decrease was partially offset by cash raised from BAM’s $1.0 billion debt offering, disposition of a portion of BAM's existing equity method investment in Oaktree to BWS for $842 million and $232 million of cash acquired through the completion of the Oaktree Acquisition.
Financial Assets
Financial assets of $499 million primarily consists of call options to acquire additional interests in Primary Wave, Castlelake, LCM and Angel Oak in the future and financial instruments associated with various other investments. The increase of $82 million from December 31, 2025 was largely driven by mark-to-market valuation increases on certain call options.
Due from Affiliates
Due from affiliates of $3.9 billion primarily relates to management fees earned but not collected from our managed funds, receivables for expenses paid on behalf of certain of our funds, as well as reimbursements due from BN for long-term compensation awards. The increase of $635 million from December 31, 2025 was primarily due to the $250 million cash deposit with BN as part of the Oaktree Acquisition, $245 million due from affiliates assumed related to Oaktree upon the completion of the Oaktree Acquisition, $112 million loan extended to a related party and the timing of collection of management fees and recoverable expenses from funds. This increase was partially offset by a $458 million decrease in recoveries from BN related to the partial settlement of BN DSU awards.
Investments
Investments are mainly comprised of our:
•accumulated unrealized carried interest in our mature and new funds of $1.3 billion (2025 - $197 million) and $3.3 billion (2025 - $1.6 billion), respectively;
•economic interest in Castlelake of $735 million (2025 – $720 million);
•20.0% economic interest in DoubleLine of $604 million (2025 – $nil);
•limited partnership interest in BSREP III of $578 million (2025 - $700 million);
•economic interest in Primary Wave of $427 million (2025 – $261 million);
•approximate 8% (2025 - 11%) economic interest in Pretium of $260 million (2025 - $330 million);
•49.9% economic interest in LCM of $231 million (2025 – $221 million);
•51.3% economic interest in Angel Oak of $133 million (2025 - $133 million);
•48.4% economic interest in 17Capital of $112 million (2025 – $nil); and
•limited partner interests in funds of $474 million (2025 - $368 million) including Pinegrove Fund (2026 – $330 million; 2025 – $230 million), and BGTF II (2026 – $65 million; 2025 – $36 million);
The investment in BSREP III and carried interest generated on mature funds are fully attributable to BN through their preferred shares redeemable non-controlling interest and does not impact net income attributable to common stockholders. Accrued carried interest in new funds, including current funds and open-end funds, as defined therein, is attributed to BN at 33.3%. The remaining accrued carried interest in new funds, net of associated compensation is attributable to common stockholders.
During the nine months ended September 30, 2026, investments decreased by $936 million, primarily due to the derecognition of our $4.7 billion equity method investment in Oaktree following the completion of the Oaktree Acquisition and the $246 million sale of GEMS Education and Cherry Parent, LLC to BMEP and BPE, respectively, both of which are consolidated by BAM as of September 30, 2026. The decrease was further driven by the derecognition of BAM's equity method investment in BPE of $92 million due to consolidation of the fund. These decreases were partially offset by an increase in accumulated unrealized carried interest on new funds of $1.7 billion, including $916 million from the first and second vintages of our global transition flagship funds, $342 million from
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credit funds following the completion of the Oaktree Acquisition, $255 million from the fifth vintage of our infrastructure flagship fund and $121 million from various private equity fund strategies, including the sixth vintage of our private equity flagship fund. Investments also increased due to the recognition of $1.2 billion of accrued carried interest in Oaktree's mature funds and $1.0 billion in Credit equity method investments as a result of the Oaktree Acquisition primarily attributable to DoubleLine and 17Capital for $604 million and $112 million, respectively, upon the completion of the Oaktree Acquisition, as well as BAM’s acquisition of an additional 9% interest in Primary Wave for $125 million.
Investments of Consolidated Funds
Investments of consolidated funds represents investments held in BPE, OLAF, BMEP, BSI II and BREVA-H in which BAM holds a sufficient interest to require the consolidation of the fund. Investments in these consolidated funds are measured at fair value. The increase of $3.9 billion compared to December 31, 2025 was primarily driven by the consolidation of BPE, OLAF, BMEP and BREVA-H during the period.
Intangible Assets, Net
Intangible assets, net was $6.0 billion as of September 30, 2026, an increase of $5.8 billion from December 31, 2025, primarily attributable to the recognition of $5.8 billion of intangible assets following the completion of the Oaktree Acquisition, including closed-end customer relationships, evergreen fund management contracts, open-end fund management contracts, and the Oaktree trade name. The remaining $222 million relates to intangible assets recognized upon the completion of the 2025 Arrangement.
Goodwill
Goodwill was $1.9 billion as of September 30, 2026, an increase of $1.6 billion from December 31, 2025, primarily attributable to $1.8 billion of goodwill identified as part of the Oaktree Acquisition consisting primarily of expected synergies, assembled workforce, expanded investment capabilities and anticipated growth opportunities that can be achieved from combining the operations of BAM and Oaktree. This increase was partially offset by a $140 million impairment charge taken as part of the integration of Oaktree during the nine months ended September 30, 2026.
Liabilities
Total liabilities were $12.7 billion as of September 30, 2026, an increase of $5.9 billion or 88% compared to December 31, 2025.
Accounts Payable and Other, Net
Accounts payable and other, net primarily consists of accrued bonus compensation, performance and cash-settled share-based compensation. The increase of $1.9 billion compared to December 31, 2025 was primarily driven by the recognition of $2.0 billion of Oaktree's accounts payable and carried interest allocation compensation following the completion of the Oaktree Acquisition, partially offset by a decrease of $458 million attributable to the partial settlement of BN DSU awards.
Financial Liabilities
Financial liabilities of $678 million primarily consist of contingent consideration associated with our investment in Castlelake as well as Oaktree, and the mark-to-market of derivatives associated with put options on certain of our other partner managers. The increase of $229 million compared to December 31, 2025, was primarily attributable to the recognition of a $248 million earnout liability in connection with the Oaktree Acquisition, partially offset by the change in value of the various other options during the period.
Due to Affiliates
Due to affiliates of $739 million reflects amounts payable to related parties for share and cash-based compensation, as well as for services received in the normal course of business including operating expenses payable. The increase of $19 million or 3% relative to December 31, 2025 was due to draws on a related party facility, partially offset by the repayment of a $201 million loan with BWS that was used to fund the initial acquisition of GEMS Education.
Corporate Borrowings
Corporate borrowings of $3.5 billion as of September 30, 2026, represent the amount raised from BAM's debt offerings, net of deferred financing costs of $29 million. The increase compared to December 31, 2025 primarily reflects the current period's $1.0 billion debt offering, net of deferred financing costs.
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Borrowings of Subsidiaries
Borrowings of subsidiaries of $845 million as of September 30, 2026, represent the borrowings acquired upon the completion of the Oaktree Acquisition. The increase compared to December 31, 2025 reflects the recognition of $845 million of Oaktree's borrowings following the Oaktree Acquisition. These borrowings are non-recourse to BAM.
Borrowings of Consolidated Funds
Borrowings of consolidated funds represent borrowings used to finance investments within OLAF ($963 million), BSI II ($243 million), BMEP ($232 million) and BREVA-H ($239 million) where BAM is required to consolidate the funds due to our economic interests in these funds. The increase of $1.2 billion compared to December 31, 2025 was primarily driven by the recognition of borrowings associated with OLAF following the completion of the Oaktree Acquisition, an increase in borrowings from the consolidation of BMEP and the consolidation of BREVA-H in the current period, partially offset by a decrease in borrowings of BSI II by $228 million.
Preferred Shares Redeemable Non-Controlling Interest
BAM recognizes carried interest generated and associated carried interest allocation expense on mature funds within our condensed consolidated statements of operations. As the net carried interest generated on mature funds is all attributable to BN, this balance primarily represents the accumulated unrealized carried interest, net of carried interest allocation expense and taxes on mature funds owing to BN.
Preferred shares redeemable non-controlling interest was broadly consistent with the prior period at $1.4 billion as of September 30, 2026. During the period there were decreases in unrealized carried interest on mature real estate flagship funds, as well as settlements of amounts owed to BN during the period, partially offset by the issuance of $230 million BN Exchangeable Units as part of the Oaktree Acquisition.
Redeemable Non-Controlling Interest in Consolidated Funds
Redeemable non-controlling interest in consolidated funds of $1.5 billion represents units held in BPE by BN, BBUC, BWS and third parties. Due to the terms of these units, they are recognized as mezzanine equity and presented separately from non-controlling interest in consolidated funds.
Non-Controlling Interest in Consolidated Entities
Non-controlling interest in consolidated entities was $1.8 billion as of September 30, 2026, an increase of $989 million compared to $773 million as of December 31, 2025. This increase was primarily due to carried interest generated across the latest vintages of our flagship funds of which 33.3% is owed to BN, $369 million related to contributions from related parties as part of the Oaktree Acquisition, non-controlling interests associated with our equity-settled share-based compensation and other non-controlling interests associated with various entities within BAM.
Non-Controlling Interest in Consolidated Funds
Non-controlling interest in consolidated funds was $622 million as of September 30, 2026, which represents the net portion of balances associated with consolidated funds that are attributable to third parties. The increase of $601 million compared to $21 million as of December 31, 2025 was primarily due to the consolidation of Spring Education within consolidated funds.
Cash Flow Statement Analysis
Review of Condensed Consolidated Statements of Cash Flows
Refer to the following table that summarizes the condensed consolidated statements of cash flows for BAM for the three and nine months ended September 30, 2026 and 2025:
FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Operating activities | $ | 554 | $ | 745 | $ | (191) | (26) | % | |||||||||||||||
| Investing activities | (1,135) | (8) | (1,127) | NM | |||||||||||||||||||
| Financing activities | (234) | (161) | (73) | 45 | % | ||||||||||||||||||
| Change in cash and cash equivalents | $ | (815) | $ | 576 | $ | (1,391) | (241) | % | |||||||||||||||
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FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Operating activities | $ | 1,437 | $ | 1,395 | $ | 42 | 3 | % | |||||||||||||||
| Investing activities | (1,386) | (263) | (1,123) | NM | |||||||||||||||||||
| Financing activities | (941) | (482) | (459) | 95 | % | ||||||||||||||||||
| Change in cash and cash equivalents | $ | (890) | $ | 650 | $ | (1,540) | (237) | % | |||||||||||||||
This statement reflects activities within our condensed consolidated operations and therefore excludes activities within non-consolidated entities.
For the three months ended September 30, 2026 and 2025
Operating Activities
During the three months ended September 30, 2026, the Company's operating activities generated cash inflows of $554 million, compared to cash inflows of $745 million in the prior period. Cash flows from operating activities primarily include the receipt of base management and advisory fees, incentive fees, realized carried interest, interest and dividend revenue, and net investment activity within consolidated funds offset by the payment of operating expenses incurred in the normal course of business, including compensation, operating and general and administrative expenses, and income tax payments. Operating cash flows decreased by $191 million in the current period relative to the prior period primarily driven by higher investments made in consolidated funds and net changes in working capital. These decreases have been partially offset by higher cash generated from fee revenues.
Investing Activities
Net cash outflows from investing activities totaled $1.1 billion, compared to outflows of $8 million in the prior period. Net outflows of $1.1 billion during the three months ended September 30, 2026 were primarily attributable to the Oaktree Acquisition, our step-up in ownership of Primary Wave, warehousing short-term investments and investments related to limited partner commitments in funds managed by BAM and affiliates, and advances to related parties. These outflows were partially offset by the disposition of a portion of its existing equity method investment in Oaktree to BWS.
Financing Activities
Net cash outflows from financing activities totaled $234 million, compared to outflows of $161 million in the prior period. Net cash outflows of $234 million during the three months ended September 30, 2026 were primarily attributable to $802 million of dividend distributions, $187 million repayments of related party loans, borrowings of subsidiaries, and consolidated funds, and $149 million of distributions to and settlement of non-controlling and redeemable non-controlling interests. This is partially offset by $341 million of deposits and loans from related parties, $417 million of capital raised from non-controlling interests and contributions from parent and $130 million of debt issued by consolidated funds.
For the nine months ended September 30, 2026 and 2025
Operating Activities
During the nine months ended September 30, 2026, the Company's operating activities generated cash inflows of $1.4 billion, compared to cash inflows of $1.4 billion in the prior period. Cash flows from operating activities primarily include the receipt of base management and advisory fees, incentive fees, realized carried interest, interest and dividend revenue, and net investment activity within consolidated funds offset by the payment of operating expenses incurred in the normal course of business, including compensation, operating and general and administrative expenses, and income tax payments. Operating cash flows increased by $42 million in the current period relative to the prior period primarily driven by higher cash generated from fee revenues, net dispositions from consolidated funds, partially offset by net changes in working capital.
Investing Activities
Net cash outflows from investing activities totaled $1.4 billion, compared to outflows of $263 million in the prior period. Net outflows of $1.4 billion during the nine months ended September 30, 2026 were primarily attributable to the Oaktree Acquisition, our step-up in ownership of Primary Wave, warehousing short-term investments, investments related to limited partner commitments in funds managed by BAM and affiliates, and cash assumed on the consolidation of BPE, partially offset by warehouse amounts syndicated, and the partial disposition of our interest in Pretium. Net outflows of $263 million for the nine months ended September 30, 2025 were primarily attributable to our step-up in ownership of Oaktree, Primary Wave and participation in Castlelake's acquisition of Concora, partially offset by the disposition of our interest in Redwood Evergreen Fund LP.
Financing Activities
Net cash outflows from financing activities totaled $941 million, compared to outflows of $482 million in the prior period. Net cash outflows of $941 million during the nine months ended September 30, 2026 were primarily attributable to $2.4 billion of dividend
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distributions, $586 million of share repurchases, $272 million of related party loan repayments, $225 million of distributions to and settlement of non-controlling and redeemable non-controlling interests and repayment of borrowings of subsidiaries and borrowings by consolidated funds. These outflows were partially offset by inflows of $995 million from the issuance of borrowings, $996 million in deposits and loans from related parties, $519 million of capital raised from non-controlling interests and contributions from parent, $190 million of capital raised from redeemable non-controlling interest in consolidated funds and $468 million of issuance of borrowings by consolidated funds.
Key Financial and Operating Measures
BAM prepares its financial statements in conformity with U.S. GAAP. This report discloses a number of non-GAAP financial and supplemental financial measures which are utilized in monitoring our asset management business, including for performance measurement, capital allocation and valuation purposes. In addition, BAM believes that providing these performance measures is helpful to investors in assessing the overall performance of our asset management business. Effective in the third quarter of 2026, BAM has revised its presentation of Fee Revenues, a non-GAAP financial measure, presentation of expenses within Fee Related Earnings, a non-GAAP financial measure, and Fee-Bearing Capital, a supplemental financial measure. Specifically, the revised presentation will provide additional detail with respect to BAM’s partner managers by presenting BAM’s proportionate share of fee revenues and expenses attributable to such partner managers, rather than presenting BAM’s share of fee-related earnings from such partner managers on a net basis. BAM will include Fee-Bearing Capital associated with assets for which its partner managers receive servicing fees, in order to better align the presentation of Fee-Bearing Capital with Fee Revenues. We believe this enhanced presentation will provide greater transparency into the revenue and expense profile of these businesses, which have become a larger contributor to BAM’s credit business, and assist our investors in understanding and modeling BAM’s results. Prior periods presented have been recast to conform to the revised presentation.
These non-GAAP financial measures should not be considered as the sole measure of BAM’s performance and should not be considered in isolation from, or as a substitute for, similar financial measures calculated in conformity with U.S. GAAP financial measures. These non-GAAP financial measures are not standardized financial measures and may not be comparable to similar financial measures used by other issuers. See “Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of U.S. GAAP to Non-GAAP Measures”, in this report.
Non-GAAP Measures Utilized by BAM
Fee Revenues
Fee Revenues is a key metric analyzed by management to determine the growth in recurring cash flows from our asset management business. Fee Revenues include base management fees, incentive distributions, performance fees and transaction fees, but exclude such fees from consolidated funds. Fee Revenues also include our share of Fee Revenues of the partner managers. The most directly comparable measure of Fee Revenues disclosed in the financial statements is base management and advisory fees. See “Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of U.S. GAAP to Non-GAAP Measures” for our reconciliation of Fee Revenues.
Fee-Related Earnings
Fee-Related Earnings is used to provide additional insight into the operating profitability of our asset management activities. Fee-Related Earnings are recurring in nature and not based on future realization events. Fee-Related Earnings is comprised of Fee Revenues less direct costs associated with earning those fees, which may include employee compensation and professional fees as well as business related technology costs, and other shared services costs. Fee-Related Earnings exclude revenues and expenses of consolidated funds but include our share of Fee Revenues and expenses attributable to our partner managers. The most directly comparable measure of Fee-Related Earnings disclosed in the primary financial statements is net income. See “Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of U.S. GAAP to Non-GAAP Measures” for our reconciliation of Fee-Related Earnings.
Distributable Earnings
BAM intends to pay out at least approximately 90% of its Distributable Earnings to shareholders quarterly and reinvest the balance back into the business.
Distributable Earnings provides insight into earnings that are available for distribution or to be reinvested by BAM. It is calculated as the sum of its Fee-Related Earnings, realized carried interest, returns from our corporate cash and financial assets, interest expense, and cash taxes, excluding equity-based compensation expenses. The most directly comparable measure disclosed in the primary financial statements of our asset management business for Distributable Earnings is net income. See “Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of U.S. GAAP to Non-GAAP Measures” for our reconciliation of Distributable Earnings.
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Realized Carried Interest, Net
Realized carried interest, Net is used by management to evaluate the carried interest earned by BAM from realization events, net of the costs of earning it. It is calculated as Carried interest allocations – Realized, less amounts attributable to non-controlling interests and redeemable preferred shares in consolidated entities, less associated carried interest allocation compensation. Under U.S. GAAP, Carried interest allocations – Realized is recognized when it is realized. For non-GAAP purposes, compensation is accrued in the period the related carried interest allocation on new funds is realized, so that expense is aligned with the related revenue. Realized carried interest, Net is a component of Distributable Earnings. The most directly comparable measures disclosed in the primary financial statements are Carried interest allocations - Realized and Carried Interest Allocation Compensation - Realized. See “Part I—Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of U.S. GAAP to Non-GAAP Measures” for our reconciliation of Realized carried interest, Net.
Supplemental Financial Measures Utilized by BAM
Assets Under Management
AUM refers to the total fair value of assets managed, calculated as follows:
•Investments that Brookfield, which includes BAM, BN, or their affiliates, either:
◦Consolidates for accounting purposes (generally, investments in respect of which Brookfield has a significant economic interest and unilaterally directs day-to-day operating, investing and financing activities), or
◦Does not consolidate for accounting purposes but over which Brookfield has significant influence by virtue of one or more attributes (e.g., being the largest investor in the investment, having the largest representation on the investment’s governance body, being the primary manager and/or operator of the investment, and/or having other significant influence attributes),
◦Are calculated at 100% of the total fair value of the investment taking into account its full capital structure — equity and debt — on a gross asset value basis, even if Brookfield does not own 100% of the investment, with the exception of investments held through our perpetual and liquid funds, which are calculated at their proportionate economic share of the investment’s NAV.
•All other investments are calculated at Brookfield’s proportionate economic share of the total fair value of the investment taking into account its full capital structure — equity and debt — on a gross asset value basis.
Our methodology for determining AUM differs from the methodology that is employed by other alternative asset managers as well as the methodology for calculating regulatory AUM that is prescribed for certain regulatory filings (e.g., Form ADV and Form PF).
Fee-Bearing Capital
Fee-Bearing Capital represents the capital committed, pledged, or invested in our perpetual affiliates, private funds and liquid strategies that we manage which entitles us to earn Fee Revenues, as well as such capital associated with assets for which our partner managers receive servicing fees. Fee-Bearing Capital includes both called (“invested”) and uncalled (“pledged” or “committed”) amounts.
When reconciling period amounts, we utilize the following definitions:
•Inflows include capital commitments and contributions to our private funds and liquid strategies, and capital issuances in our perpetual affiliates.
•Outflows represent distributions and redemptions of capital from liquid and perpetual capital.
•Distributions represent quarterly distributions from perpetual affiliates as well as returns of committed capital (excluding market valuation adjustments), redemptions and expiry of uncalled commitments within our private funds.
•Market valuation includes gains (losses) on portfolio investments, perpetual affiliates and liquid strategies based on market prices.
•Other primarily reflects changes in net non-recourse leverage included in the determination of the permanent capital vehicle capitalizations as well as reclassifications, strategic activity, foreign exchange translation, and changes in fee-bearing status.
Uncalled Fund Commitments
Total Uncalled Fund Commitments includes capital callable from fund investors, including funds outside of their investment period, for which capital is callable for follow-on investments.
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Fee-Bearing Capital Diversification
AS OF SEP 30, 2026 AND DEC 31, 2025 (BILLIONS)
Long-term Private Funds
As of September 30, 2026, we managed approximately $314 billion of Fee-Bearing Capital across a diverse range of long-term private funds that target opportunistic (20%+, gross), value-add (15%-16%, gross), core and core plus (9%-13%, gross) returns. These funds are generally closed-end and have a long duration, typically committed for 10 years with 2 one-year extension options.
On these products, we earn:
•Diversified and long-term base management fees, typically on committed capital or invested capital, depending on the nature of the fund and where the fund is in its life,
•Transaction and advisory fees on co-investment capital that we raise and deploy alongside our long-term private funds, which vary based on transaction agreements, and
•Carried interest or performance fees, which entitle us to a portion of overall fund profits, provided that investors receive a minimum prescribed preferred return. Carried interest is typically paid towards the end of the life of a fund after capital has been returned to investors and may be subject to “clawback” until all investments have been monetized and minimum investment returns are sufficiently assured. BN is entitled to receive 33.3% of the carried interest on new sponsored funds of BAM and will retain all of the carried interest earned on our existing mature funds.
Permanent Capital and Perpetual Strategies
As of September 30, 2026, we managed approximately $288 billion of Fee-Bearing Capital across our permanent capital vehicles, perpetual core, and core plus private funds.
On these products, we earn:
•Long-term perpetual base management fees, which are based on the market capitalization or NAV of our permanent capital vehicles and on the NAV of our perpetual private funds.
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•Stable incentive distribution fees from BEP and BIP, which are linked to the growth in cash distributions paid to investors above a predetermined hurdle. Both BEP and BIP have a long-standing track record of growing distributions annually within their target range of 5-9%.
•Performance fees from BBUC are based on unit price performance above a prescribed high watermark price, which are not subject to clawback, as well as carried interest on our perpetual private funds.
Liquid Strategies
As of September 30, 2026, we managed approximately $80 billion of Fee-Bearing Capital across our liquid strategies, which included capital that we manage on behalf of our publicly listed funds and separately managed accounts, with a focus on fixed income and equity securities across real estate, infrastructure, and natural resources.
On these products, we earn:
•Base management fees, which are based on committed capital or fund NAV, and
•Performance income based on investment returns above a minimum prescribed return.
Analysis of Key Non-GAAP Financial and Operating Measures
The following section contains a discussion and analysis of key financial and operating measures utilized in managing our business, including for performance measurement, capital allocation, and valuation purposes. For further detail on our non-GAAP and performance measures, please refer to “Part I—Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures”, in this report.
Fee-Bearing Capital
The following tables summarize Fee-Bearing Capital as of September 30, 2026 and December 31, 2025:
AS OF (MILLIONS) | Long-term private funds | Permanent capital and perpetual strategies | Liquid strategies | Total | |||||||||||||||||||
| Infrastructure | $ | 50,120 | $ | 62,773 | $ | — | $ | 112,893 | |||||||||||||||
| Energy | 39,921 | 30,755 | — | 70,676 | |||||||||||||||||||
| Private equity | 44,100 | 8,515 | — | 52,615 | |||||||||||||||||||
| Real estate | 73,756 | 30,446 | — | 104,202 | |||||||||||||||||||
| Credit | 105,822 | 155,868 | 79,724 | 341,414 | |||||||||||||||||||
| September 30, 2026 | $ | 313,719 | $ | 288,357 | $ | 79,724 | $ | 681,800 | |||||||||||||||
| December 31, 2025 | $ | 307,617 | $ | 241,818 | $ | 77,388 | $ | 626,823 | |||||||||||||||
The changes in Fee-Bearing Capital are set out in the following tables for the three and nine months ended September 30, 2026:
FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | Infrastructure | Energy | Private equity | Real estate | Credit | Total | |||||||||||||||||||||||||||||
| June 30, 2026 | $ | 114,241 | $ | 74,309 | $ | 53,542 | $ | 104,190 | $ | 349,375 | $ | 695,657 | |||||||||||||||||||||||
| Inflows | 1,893 | 1,704 | 1,797 | 1,184 | 10,884 | 17,462 | |||||||||||||||||||||||||||||
| Outflows | — | — | — | — | (6,330) | (6,330) | |||||||||||||||||||||||||||||
| Distributions | (1,934) | (614) | (822) | (1,504) | (4,063) | (8,937) | |||||||||||||||||||||||||||||
| Market valuation | (619) | (4,841) | (1,107) | 241 | (1,679) | (8,005) | |||||||||||||||||||||||||||||
| Other | (688) | 118 | (795) | 91 | (6,773) | (8,047) | |||||||||||||||||||||||||||||
| Change | (1,348) | (3,633) | (927) | 12 | (7,961) | (13,857) | |||||||||||||||||||||||||||||
| September 30, 2026 | $ | 112,893 | $ | 70,676 | $ | 52,615 | $ | 104,202 | $ | 341,414 | $ | 681,800 | |||||||||||||||||||||||
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AS OF AND FOR THE NINE MONTHS ENDED (MILLIONS) | Infrastructure | Energy | Private equity | Real estate | Credit | Total | |||||||||||||||||||||||||||||
| December 31, 2025 | $ | 106,398 | $ | 67,245 | $ | 48,006 | $ | 101,682 | $ | 303,492 | $ | 626,823 | |||||||||||||||||||||||
| Inflows | 10,154 | 4,667 | 7,702 | 7,236 | 74,961 | 104,720 | |||||||||||||||||||||||||||||
| Outflows | — | — | — | — | (19,618) | (19,618) | |||||||||||||||||||||||||||||
| Distributions | (3,979) | (1,993) | (1,655) | (3,858) | (10,289) | (21,774) | |||||||||||||||||||||||||||||
| Market valuation | 1,212 | (229) | (1,276) | 149 | 1,563 | 1,419 | |||||||||||||||||||||||||||||
| Other | (892) | 986 | (162) | (1,007) | (8,695) | (9,770) | |||||||||||||||||||||||||||||
| Change | 6,495 | 3,431 | 4,609 | 2,520 | 37,922 | 54,977 | |||||||||||||||||||||||||||||
| September 30, 2026 | $ | 112,893 | $ | 70,676 | $ | 52,615 | $ | 104,202 | $ | 341,414 | $ | 681,800 | |||||||||||||||||||||||
For the three months ended September 30, 2026
Fee-Bearing Capital was $682 billion as of September 30, 2026 compared to $696 billion as of June 30, 2026, a net decrease of $13.9 billion, or 2%:
•Inflows of $17.5 billion include capital commitments and contributions to our long-term private funds and liquid strategies, and issuances from our perpetual affiliates. During the quarter, $1.9 billion of inflows from infrastructure were predominantly driven by $1.6 billion in NAV increases and inflows from our perpetual strategies as well as $171 million in capital deployments and fundraising for our long-term private funds. Inflows of $1.7 billion in energy were primarily comprised of inflows from our long-term private funds, capital issuances from BEP, and inflows from our perpetual strategies. Private equity inflows of $1.8 billion primarily related to fundraising within the seventh vintage of our flagship fund and other long-term private funds. Real estate inflows of $1.2 billion were primarily attributable to capital deployments and fundraising from the fifth vintage of our real estate flagship strategy and co-investment capital. Within our credit strategy, inflows of $10.9 billion were primarily driven by insurance capital inflows from BWS, as well as fundraising and capital deployed across our liquid strategies and long-term private funds, and fundraising associated with our partner managers.
•Outflows represent distributions and redemptions of capital from liquid and perpetual strategies. During the quarter, outflows of $6.3 billion were primarily due to distributions and redemptions within certain of our liquid and perpetual strategies, and insurance capital outflows from BWS.
•Distributions represent quarterly distributions from our perpetual affiliates as well as returns of committed capital, redemptions and expiry of uncalled commitments within our private funds. During the quarter, $8.9 billion of distributions were primarily driven by $3.7 billion from certain other long-term private funds and perpetual strategies, $2.9 billion from Credit funds, $1.2 billion across our other partner managers, and $1.1 billion from our perpetual affiliates.
•Market valuation includes gains (losses) on portfolio investments, perpetual affiliates and liquid strategies based on market prices. During the quarter, market valuation decreases of $8.0 billion were predominantly driven by $7.2 billion attributable to lower market prices of BEP, BBUC, and BIP, as well as $958 million related to certain long-term private funds and credit liquid and perpetual strategies.
•Other includes changes in net non-recourse leverage included in the determination of the permanent capital vehicle capitalizations and the impact of foreign exchange fluctuations on non-U.S. dollar commitments. During the quarter, net other movements of $8.0 billion were primarily attributable to a change in the presentation of Fee-Bearing Capital of a partner manager to be at our share following the completion of the Oaktree Acquisition.
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For the nine months ended September 30, 2026
Fee-Bearing Capital was $682 billion as of September 30, 2026 compared to $627 billion as of December 31, 2025, representing a net increase of $55.0 billion, or 9%:
•Inflows of $104.7 billion include capital commitments and contributions to our long-term private funds and liquid strategies, and issuances from our perpetual affiliates. During the nine months ended September 30, 2026, infrastructure inflows of $10.2 billion were driven by $6.1 billion of NAV increases and inflows from our perpetual strategies as well as $3.8 billion in capital deployments and fundraising for our long-term private funds. Inflows of $4.7 billion in energy were primarily comprised of inflows from our long-term private funds, inflows from our perpetual strategies, and capital issuances from BEP. Private equity inflows of $7.7 billion primarily related to fundraising within the seventh vintage of our flagship fund and other long-term private funds. Real estate inflows of $7.2 billion were primarily attributable to capital deployments and fundraising from the fifth vintage of our real estate flagship strategy and co-investment capital, as well as investments and debt repayments within our permanent real estate vehicle. Within the credit strategy, $75.0 billion of inflows were primarily driven by insurance capital inflows from BWS, as well as fundraising and capital deployed across our perpetual and liquid strategies and long-term private funds, and fundraising associated with our partner managers.
•Outflows represent distributions and redemptions of capital from liquid and perpetual strategies. During the nine months ended September 30, 2026, outflows of $19.6 billion were primarily due to redemptions within certain of our liquid and perpetual strategies, and insurance capital outflows from BWS.
•Distributions represent quarterly distributions from our perpetual affiliates as well as returns of committed capital and redemptions and expiry of uncalled commitments within our private funds. During the nine months ended September 30, 2026, distributions of $21.8 billion were primarily driven by $7.7 billion from certain other long-term private funds and perpetual strategies, $7.6 billion from Credit funds, $3.8 billion from our perpetual affiliates, and $2.7 billion across our partner managers.
•Market valuation includes gains (losses) on portfolio investments, perpetual affiliates and liquid strategies based on market prices. During the nine months ended September 30, 2026, increases of $1.4 billion were predominantly driven by $3.3 billion related to credit liquid and perpetual strategies, as well as certain long-term private funds. The increase was partially offset by $1.9 billion attributable to lower market prices of BBUC, BEP, and BIP.
•Other includes changes in net non-recourse leverage included in the determination of the permanent capital vehicle capitalizations and the impact of foreign exchange fluctuations on non-U.S. dollar commitments. During the nine months ended September 30, 2026, net other movements of $9.8 billion were primarily attributable to a change in the presentation of Fee-Bearing Capital of a partner manager to be at our share following the completion of the Oaktree Acquisition. Real estate changes of $1.0 billion were driven by certain net changes in the NAV of BPY, the impact of foreign exchange, and a change in fee basis on certain long-term private funds. These changes were partially offset by Energy movements of $986 million related to a credit facility drawdown by BEP.
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Distributable Earnings
FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
Base management fees1 | $ | 1,472 | $ | 1,307 | $ | 165 | 13 | % | |||||||||||||||
| Incentive distributions | 128 | 116 | 12 | 10 | % | ||||||||||||||||||
| Performance fees | 2 | — | 2 | NM | |||||||||||||||||||
| Transaction and advisory fees | 22 | 36 | (14) | (39) | % | ||||||||||||||||||
| Fee Revenues | 1,624 | 1,459 | 165 | 11 | % | ||||||||||||||||||
Less: direct costs1,2 | (748) | (685) | (63) | 9 | % | ||||||||||||||||||
| 876 | 774 | 102 | 13 | % | |||||||||||||||||||
| Less: Fee-Related Earnings not attributable to BAM | (12) | (20) | 8 | (40) | % | ||||||||||||||||||
Fee-Related Earnings3 | 864 | 754 | 110 | 15 | % | ||||||||||||||||||
| Realized carried interest, net | 48 | — | 48 | NM | |||||||||||||||||||
Investment and other income (net of interest expense)5 | (66) | (6) | (60) | NM | |||||||||||||||||||
Equity-based compensation costs4 | 14 | 11 | 3 | 27 | % | ||||||||||||||||||
| Cash taxes | (97) | (98) | 1 | (1) | % | ||||||||||||||||||
| Distributable Earnings | $ | 763 | $ | 661 | $ | 102 | 15 | % | |||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
Base management fees1 | $ | 4,219 | $ | 3,738 | $ | 481 | 13 | % | |||||||||||||||
| Incentive distributions | 386 | 349 | 37 | 11 | % | ||||||||||||||||||
| Performance fees | 5 | — | 5 | NM | |||||||||||||||||||
| Transaction and advisory fees | 108 | 64 | 44 | 69 | % | ||||||||||||||||||
| Fee Revenues | 4,718 | 4,151 | 567 | 14 | % | ||||||||||||||||||
Less: direct costs1,2 | (2,218) | (1,965) | (253) | 13 | % | ||||||||||||||||||
| 2,500 | 2,186 | 314 | 14 | % | |||||||||||||||||||
| Less: Fee-Related Earnings not attributable to BAM | (56) | (58) | 2 | (3) | % | ||||||||||||||||||
Fee-Related Earnings3 | 2,444 | 2,128 | 316 | 15 | % | ||||||||||||||||||
| Realized carried interest, net | 53 | — | 53 | NM | |||||||||||||||||||
Investment and other income (net of interest expense)5 | (87) | 41 | (128) | NM | |||||||||||||||||||
Equity-based compensation costs4 | 51 | 36 | 15 | 42 | % | ||||||||||||||||||
| Cash taxes | (289) | (277) | (12) | 4 | % | ||||||||||||||||||
| Distributable Earnings | $ | 2,172 | $ | 1,928 | $ | 244 | 13 | % | |||||||||||||||
1.Base management fees and direct costs are presented on a 100% basis for BAM and BAM's investment in Oaktree.
2.Direct costs include compensation expense, other operating expenses and general, administrative, and other expenses, and related Oaktree direct costs at 100%.
3.Fee-Related Earnings include Oaktree’s Fee-Related Earnings at our approximate 74% ownership interest for the period ended July 31, 2026 (September 30, 2025 – 74%).
4.This adjustment adds back equity-based compensation costs.
5.This adjustment adds back other income associated with our portion of partly owned subsidiaries’ investment income, interest income received and interest expense.
For the three months ended September 30, 2026
Fee Revenues for the three months ended September 30, 2026 were $1.6 billion, an increase of $165 million or 11% compared to the prior period. This increase was predominantly due to an increase in base management fees of $165 million or 13%, driven by $43 million of earnings from our partner managers, $33 million from net insurance capital inflows from BWS, $28 million attributable to inflows from our infrastructure and energy perpetual strategies, $16 million from fundraising from the seventh vintage of our flagship private equity fund, and $14 million of incremental fee revenue from our perpetual affiliates as a result of higher share prices and NAV during the period. The remaining increase was attributable to fundraising and capital deployments across various long-term private funds and complementary strategies. These increases were partially offset by $36 million in lower catch-up fees from the second vintage of our flagship global transition fund and $17 million of lower fees as a result of realizations from earlier vintages of our flagship real estate and infrastructure funds.
Incentive distributions increased by $12 million or 10% as a result of an increase in BEP and BIP's quarterly distributions over the prior period of 5% and 6%, respectively.
Transaction and advisory fees decreased by $14 million, or 39% due to fees earned in the comparative period that were associated with co-investments at our flagship and perpetual strategies.
86
Direct costs increased by $63 million or 9% from the prior period as a result of headcount growth and inflationary increases to support the ongoing growth of our business.
Fee-Related Earnings not attributable to BAM decreased by $8 million as a result of the consolidation of Oaktree during the period.
Distributable Earnings were $763 million for the three months ended September 30, 2026, an increase of $102 million or 15% compared to the prior period. The increase was primarily driven by higher Fee-Related Earnings, as well as realizations of carried interest from the sixth vintage of our private equity flagship fund and other private equity complementary strategies, partially offset by higher interest expense on our borrowings.
For the nine months ended September 30, 2026
Fee Revenues for the nine months ended September 30, 2026 were $4.7 billion, an increase of $567 million or 14% compared to the prior period. This increase was predominantly due to an increase in base management fees of $481 million or 13%, driven by $177 million of earnings from our partner managers, $99 million of incremental fee revenue from our perpetual affiliates as a result of higher share prices and NAV during the period, $79 million from net insurance capital inflows from BWS inclusive of the Just Group Plc. mandate, and $70 million attributable to inflows from our infrastructure and energy perpetual strategies. The remaining increase was attributable to fundraising and growth across various long-term private funds and complementary strategies. These increases were partially offset by $117 million in lower catch-up fees from the fifth vintage of our flagship real estate fund and the second vintage of our flagship global transition fund and $55 million of lower fees as a result of realizations from earlier vintages of our flagship real estate and infrastructure funds.
Incentive distributions increased by $37 million or 11% as a result of an increase in BEP and BIP's quarterly distributions over the prior period of 5% and 6%, respectively.
Transaction and advisory fees increased by $44 million primarily driven by higher fees from our partner managers as well as co-investment capital raised from certain of our real estate and infrastructure complementary strategies.
Direct costs increased by $253 million or 13% from the prior period as a result of headcount growth and inflationary increases to support the ongoing growth of our business.
Fee-Related Earnings not attributable to BAM decreased by $2 million due to the consolidation of Oaktree during the period.
Distributable Earnings were $2.2 billion for the nine months ended September 30, 2026, an increase of $244 million or 13% compared to the prior period. The increase was primarily driven by higher Fee-Related Earnings, as well as realizations of carried interest from the sixth vintage of our private equity flagship fund and other private equity complementary strategies, partially offset by higher interest expense on our borrowings and higher cash taxes on Fee-Related Earnings.
Investment Strategy Results
In each of our product categories, we invest globally in various investment strategies, each benefiting from strong secular tailwinds that provide an expanding multi-trillion dollar investable universe. Our investment strategies are (a) infrastructure, (b) energy, (c) private equity, (d) real estate, and (e) credit.
The following tables summarize Fee-Bearing Capital and Fee Revenues by investment strategy:
Fee-Bearing Capital
| 2026 vs. 2025 | |||||||||||||||||||||||
AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 (MILLIONS) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Infrastructure | $ | 112,893 | $ | 106,398 | $ | 6,495 | 6 | % | |||||||||||||||
| Energy | 70,676 | 67,245 | 3,431 | 5 | % | ||||||||||||||||||
| Private equity | 52,615 | 48,006 | 4,609 | 10 | % | ||||||||||||||||||
| Real estate | 104,202 | 101,682 | 2,520 | 2 | % | ||||||||||||||||||
| Credit | 341,414 | 303,492 | 37,922 | 12 | % | ||||||||||||||||||
| Total Fee-Bearing Capital | $ | 681,800 | $ | 626,823 | $ | 54,977 | 9 | % | |||||||||||||||
87
| 2026 vs. 2025 | |||||||||||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Balance, beginning | $ | 695,657 | $ | 587,714 | $ | 107,943 | 18 | % | |||||||||||||||
| Inflows | 17,462 | 26,095 | (8,633) | (33) | % | ||||||||||||||||||
| Outflows | (6,330) | (5,090) | (1,240) | 24 | % | ||||||||||||||||||
| Distributions | (8,937) | (6,171) | (2,766) | 45 | % | ||||||||||||||||||
| Market Valuations | (8,005) | 5,627 | (13,632) | (242) | % | ||||||||||||||||||
| Other | (8,047) | (3,955) | (4,092) | 103 | % | ||||||||||||||||||
| Change | (13,857) | 16,506 | (30,363) | (184) | % | ||||||||||||||||||
| Balance, ending | $ | 681,800 | $ | 604,220 | $ | 77,580 | 13 | % | |||||||||||||||
| 2026 vs. 2025 | |||||||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Balance, beginning | $ | 626,823 | $ | 560,030 | $ | 66,793 | 12 | % | |||||||||||||||
| Inflows | 104,720 | 68,681 | 36,039 | 52 | % | ||||||||||||||||||
| Outflows | (19,618) | (15,858) | (3,760) | 24 | % | ||||||||||||||||||
| Distributions | (21,774) | (19,292) | (2,482) | 13 | % | ||||||||||||||||||
| Market valuation | 1,419 | 15,140 | (13,721) | (91) | % | ||||||||||||||||||
| Other | (9,770) | (4,481) | (5,289) | 118 | % | ||||||||||||||||||
| Change | 54,977 | 44,190 | 10,787 | 24 | % | ||||||||||||||||||
| Balance, ending | $ | 681,800 | $ | 604,220 | $ | 77,580 | 13 | % | |||||||||||||||
Fee Revenues
FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Infrastructure | $ | 356 | $ | 335 | $ | 21 | 6 | % | |||||||||||||||
| Energy | 213 | 234 | (21) | (9) | % | ||||||||||||||||||
| Private equity | 143 | 110 | 33 | 30 | % | ||||||||||||||||||
| Real estate | 265 | 256 | 9 | 4 | % | ||||||||||||||||||
| Credit | 647 | 524 | 123 | 23 | % | ||||||||||||||||||
| Total Fee Revenues | $ | 1,624 | $ | 1,459 | $ | 165 | 11 | % | |||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Infrastructure | $ | 1,070 | $ | 957 | $ | 113 | 12 | % | |||||||||||||||
| Energy | 654 | 603 | 51 | 8 | % | ||||||||||||||||||
| Private equity | 413 | 329 | 84 | 26 | % | ||||||||||||||||||
| Real estate | 786 | 835 | (49) | (6) | % | ||||||||||||||||||
| Credit | 1,795 | 1,427 | 368 | 26 | % | ||||||||||||||||||
| Total Fee Revenues | $ | 4,718 | $ | 4,151 | $ | 567 | 14 | % | |||||||||||||||
88
Infrastructure
Fee-Bearing Capital
| 2026 vs. 2025 | |||||||||||||||||||||||
| AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 (MILLIONS) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Long-term private funds | $ | 50,120 | $ | 47,950 | $ | 2,170 | 5 | % | |||||||||||||||
| Permanent capital and perpetual strategies | 62,773 | 58,448 | 4,325 | 7 | % | ||||||||||||||||||
| Total Fee-Bearing Capital | $ | 112,893 | $ | 106,398 | $ | 6,495 | 6 | % | |||||||||||||||
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | |||||||||||
| 2026 | 2025 | ||||||||||
| Balance, beginning | $ | 114,241 | $ | 99,637 | |||||||
| Inflows | 1,893 | 3,266 | |||||||||
| Outflows | — | — | |||||||||
| Distributions | (1,934) | (1,647) | |||||||||
| Market valuation | (619) | (105) | |||||||||
| Other | (688) | (72) | |||||||||
| Change | (1,348) | 1,442 | |||||||||
| Balance, ending | $ | 112,893 | $ | 101,079 | |||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | |||||||||||
| 2026 | 2025 | ||||||||||
| Balance, beginning | $ | 106,398 | $ | 97,050 | |||||||
| Inflows | 10,154 | 4,595 | |||||||||
| Outflows | — | — | |||||||||
| Distributions | (3,979) | (3,380) | |||||||||
| Market valuation | 1,212 | 2,836 | |||||||||
| Other | (892) | (22) | |||||||||
| Change | 6,495 | 4,029 | |||||||||
| Balance, ending | $ | 112,893 | $ | 101,079 | |||||||
For the three months ended September 30, 2026
During the three months ended September 30, 2026, Fee-Bearing Capital decreased by $1.3 billion or 1% to $113 billion. The decrease was primarily due to market valuation movements of $619 million, which were driven by $1.1 billion related to a lower market capitalization of BIP due to a decrease in its share price, which was partially offset by $485 million related to NAV increases and inflows within our perpetual strategies. This was further decreased due to distributions of $1.9 billion paid to investors in our long-term private funds and perpetual strategies, as well as BIP unitholders. Other decreases of $688 million were predominantly related to the rebalancing of Fee-Bearing Capital between infrastructure and energy within our perpetual strategies based on investment mix and other movements. The decrease was offset by $1.9 billion of inflows which were primarily driven by perpetual strategies of $1.6 billion, equity issuances from BIP of $111 million and capital deployments and fundraising for our long-term private funds of $171 million.
For the nine months ended September 30, 2026
During the nine months ended September 30, 2026, Fee-Bearing Capital increased by $6.5 billion or 6% to $113 billion. The $10.2 billion of inflows were primarily driven by perpetual strategies of $6.1 billion as well as capital deployments and fundraising for our long-term private funds and co-investment vehicles of $3.8 billion. Market valuation movements of $1.2 billion were predominantly related to NAV increases and inflows within our perpetual strategies. These increases were partially offset by distributions of $4.0 billion paid to investors in our long-term private funds and perpetual strategies, as well as BIP unitholders. Other decreases of $892 million were predominantly related to the rebalancing of Fee-Bearing Capital between infrastructure and energy within our perpetual strategies based on investment mix, partially offset by credit facility drawdowns by BIP.
89
Fee Revenues
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Management and advisory fees | |||||||||||||||||||||||
| Long-term private funds | |||||||||||||||||||||||
Flagship funds | $ | 93 | $ | 92 | $ | 1 | 1 | % | |||||||||||||||
Co-investment and other funds | 6 | — | 6 | NM | |||||||||||||||||||
| 99 | 92 | 7 | 8 | % | |||||||||||||||||||
| Perpetual strategies | |||||||||||||||||||||||
BIP1 | 108 | 104 | 4 | 4 | % | ||||||||||||||||||
Co-investment and other funds | 62 | 44 | 18 | 41 | % | ||||||||||||||||||
| 170 | 148 | 22 | 15 | % | |||||||||||||||||||
| Transaction and advisory fees | — | 15 | (15) | (100) | % | ||||||||||||||||||
| Total management and advisory fees | 269 | 255 | 14 | 5 | % | ||||||||||||||||||
Incentive distributions2 | 87 | 80 | 7 | 9 | % | ||||||||||||||||||
| Total Fee Revenues | $ | 356 | $ | 335 | $ | 21 | 6 | % | |||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | |||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||
| Management and advisory fees | ||||||||||||||||||||||||||
| Long-term private funds | ||||||||||||||||||||||||||
| Flagship funds | $ | 277 | $ | 274 | $ | 3 | 1 | % | ||||||||||||||||||
| Co-investment and other funds | 10 | — | 10 | NM | ||||||||||||||||||||||
| 287 | 274 | 13 | 5 | % | ||||||||||||||||||||||
| Perpetual strategies | ||||||||||||||||||||||||||
BIP1 | 325 | 303 | 22 | 7 | % | |||||||||||||||||||||
| Co-investment and other funds | 177 | 125 | 52 | 42 | % | |||||||||||||||||||||
| 502 | 428 | 74 | 17 | % | ||||||||||||||||||||||
| Transaction and advisory fees | 20 | 15 | 5 | 33 | % | |||||||||||||||||||||
| Total management and advisory fees | 809 | 717 | 92 | 13 | % | |||||||||||||||||||||
Incentive distributions2 | 261 | 240 | 21 | 9 | % | |||||||||||||||||||||
| Total Fee Revenues | $ | 1,070 | $ | 957 | $ | 113 | 12 | % | ||||||||||||||||||
1.BIP Fee-Bearing Capital as of September 30, 2026 is $34.2 billion (September 30, 2025 – $33.0 billion) and includes $5.7 billion of net debt (September 30, 2025 - $5.6 billion).
2.Consists solely of incentive distributions earned from BIP.
For the three months ended September 30, 2026
Fee Revenues increased by $21 million or 6% for the three months ended September 30, 2026 relative to the three months ended September 30, 2025. The increase was primarily driven by $18 million of higher Fee Revenues due to NAV increases and inflows from our perpetual strategies and $4 million related to BIP as a result of a higher average market capitalization in the current period. Incentive distributions increased by $7 million due to a 6% increase in BIP's quarterly distributions. The increase was partially offset by $15 million of transaction and advisory fees earned in the comparative period that were associated with co-investments at our flagship and perpetual strategies.
For the nine months ended September 30, 2026
Fee Revenues increased by $113 million or 12% for the nine months ended September 30, 2026 relative to the nine months ended September 30, 2025. The increase was primarily driven by $52 million of higher Fee Revenues due to NAV increases and inflows from our perpetual strategies and $22 million related to BIP as a result of a higher average market capitalization in the current period. In addition, Fee Revenues benefited from $5 million of higher transaction and advisory fees associated with co-investments at our flagship and perpetual strategies. Incentive distributions increased by $21 million due to a 6% increase in BIP's quarterly distributions.
90
Segment Earnings
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Segment Revenues | $ | 268 | $ | 255 | $ | 13 | 5 | % | |||||||||||||||
| Segment Expenses | |||||||||||||||||||||||
| Compensation and benefits | (78) | (61) | (17) | 28 | % | ||||||||||||||||||
| Other operating expenses | (40) | (21) | (19) | 90 | % | ||||||||||||||||||
| Segment Earnings | $ | 150 | $ | 173 | $ | (23) | (13) | % | |||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Segment Revenues | $ | 808 | $ | 717 | $ | 91 | 13 | % | |||||||||||||||
| Segment Expenses | |||||||||||||||||||||||
| Compensation and benefits | (225) | (185) | (40) | 22 | % | ||||||||||||||||||
| Other operating expenses | (102) | (67) | (35) | 52 | % | ||||||||||||||||||
| Segment Earnings | $ | 481 | $ | 465 | $ | 16 | 3 | % | |||||||||||||||
For the three months ended September 30, 2026
Segment Earnings decreased by $23 million or 13% for the three months ended September 30, 2026 relative to the three months ended September 30, 2025. The decrease in Segment Earnings was primarily due to higher Segment Expenses to support the growth of the business. The decrease was partially offset by higher Segment Revenues driven by inflows from our perpetual strategies, as well as higher fee revenues from BIP as a result of a higher share price during the period.
For the nine months ended September 30, 2026
Segment Earnings increased by $16 million or 3% for the nine months ended September 30, 2026 relative to the nine months ended September 30, 2025. The increase in Segment Earnings was primarily due to higher Segment Revenues driven by inflows from our perpetual strategies, higher transaction and advisory fees associated with co-investments at our flagship and perpetual strategies, and higher fee revenues from BIP as a result of a higher share price during the period. These increases were partially offset by higher Segment Expenses to support the growth of the business.
91
Energy
Fee-Bearing Capital
| 2026 vs. 2025 | |||||||||||||||||||||||
| AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 (MILLIONS) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Long-term private funds | $ | 39,921 | $ | 39,068 | $ | 853 | 2 | % | |||||||||||||||
| Permanent capital and perpetual strategies | 30,755 | 28,177 | 2,578 | 9 | % | ||||||||||||||||||
| Total Fee-Bearing Capital | $ | 70,676 | $ | 67,245 | $ | 3,431 | 5 | % | |||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | |||||||||||
| 2026 | 2025 | ||||||||||
| Balance, beginning | $ | 74,309 | $ | 64,385 | |||||||
| Inflows | 1,704 | 4,759 | |||||||||
| Outflows | — | — | |||||||||
| Distributions | (614) | (379) | |||||||||
| Market valuation | (4,841) | 880 | |||||||||
| Other | 118 | (956) | |||||||||
| Change | (3,633) | 4,304 | |||||||||
| Balance, ending | $ | 70,676 | $ | 68,689 | |||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | |||||||||||
| 2026 | 2025 | ||||||||||
| Balance, beginning | $ | 67,245 | $ | 57,857 | |||||||
| Inflows | 4,667 | 9,206 | |||||||||
| Outflows | — | — | |||||||||
| Distributions | (1,993) | (1,804) | |||||||||
| Market valuation | (229) | 3,712 | |||||||||
| Other | 986 | (282) | |||||||||
| Change | 3,431 | 10,832 | |||||||||
| Balance, ending | $ | 70,676 | $ | 68,689 | |||||||
For the three months ended September 30, 2026
During the three months ended September 30, 2026, Fee-Bearing Capital decreased by $3.6 billion or 5% to $70.7 billion. This decrease was predominantly driven by market valuation decreases of $4.8 billion from a lower market capitalization of BEP due to a decrease in its share price during the period, as well as $614 million of distributions to BEP's unitholders and investors in our long-term private funds and perpetual strategies. This was partially offset by inflows of $1.7 billion, which were driven by $689 million attributable to our long-term private funds, $544 million related to capital issuances from BEP, and $471 million attributable to our perpetual strategies. In addition, Other movements of $118 million predominantly related to the rebalancing of Fee-Bearing Capital between infrastructure and energy within our perpetual strategies based on investment mix.
For the nine months ended September 30, 2026
During the nine months ended September 30, 2026, Fee-Bearing Capital increased by $3.4 billion or 5% to $70.7 billion. This increase was driven by $4.7 billion of inflows of which $1.8 billion was attributable to our long-term private funds, $1.7 billion was related to our perpetual strategies, and $1.2 billion was related to capital issuances from BEP. In addition, increases in other movements of $986 million were predominantly related to credit facility drawdowns by BEP and rebalancing of Fee-Bearing Capital between infrastructure and energy within our perpetual strategies based on investment mix. These increases were partially offset by $2.0 billion of distributions to BEP's unitholders and investors in our long-term private funds and perpetual strategies. Market valuation also decreased by $229 million, driven by lower market capitalization of BEP due to a decrease in its share price during the period.
92
Fee Revenues
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Management and advisory fees | |||||||||||||||||||||||
| Long-term private funds | |||||||||||||||||||||||
Flagship funds | $ | 76 | $ | 88 | $ | (12) | (14) | % | |||||||||||||||
Co-investment and other funds | 10 | 5 | 5 | 100 | % | ||||||||||||||||||
| 86 | 93 | (7) | (8) | % | |||||||||||||||||||
| Perpetual strategies | |||||||||||||||||||||||
BEP1 | 63 | 57 | 6 | 11 | % | ||||||||||||||||||
Co-investment and other funds | 18 | 10 | 8 | 80 | % | ||||||||||||||||||
| 81 | 67 | 14 | 21 | % | |||||||||||||||||||
| Catch-up fees | 5 | 37 | (32) | (86) | % | ||||||||||||||||||
| Transaction and advisory fees | — | 1 | (1) | (100) | % | ||||||||||||||||||
| Total management and advisory fees | 172 | 198 | (26) | (13) | % | ||||||||||||||||||
Incentive distributions2 | 41 | 36 | 5 | 14 | % | ||||||||||||||||||
| Total Fee Revenues | $ | 213 | $ | 234 | $ | (21) | (9) | % | |||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Management and advisory fees | |||||||||||||||||||||||
| Long-term private funds | |||||||||||||||||||||||
| Flagship funds | $ | 228 | $ | 244 | $ | (16) | (7) | % | |||||||||||||||
| Co-investment and other funds | 33 | 11 | 22 | 200 | % | ||||||||||||||||||
| 261 | 255 | 6 | 2 | % | |||||||||||||||||||
| Perpetual strategies | |||||||||||||||||||||||
BEP1 | 213 | 161 | 52 | 32 | % | ||||||||||||||||||
| Co-investment and other funds | 45 | 28 | 17 | 61 | % | ||||||||||||||||||
| 258 | 189 | 69 | 37 | % | |||||||||||||||||||
| Catch-up fees | 8 | 46 | (38) | (83) | % | ||||||||||||||||||
| Transaction and advisory fees | 2 | 4 | (2) | (50) | % | ||||||||||||||||||
| Total management and advisory fees | 529 | — | 494 | 35 | 7 | % | |||||||||||||||||
Incentive distributions2 | 125 | 109 | 16 | 15 | % | ||||||||||||||||||
| Total Fee Revenues | $ | 654 | $ | 603 | $ | 51 | 8 | % | |||||||||||||||
1.BEP Fee-Bearing Capital as of September 30, 2026 is $26.2 billion (September 30, 2025 – $24.3 billion) and includes net debt of $5.5 billion (September 30, 2025 - $4.2 billion).
2.Consists solely of incentive distributions earned from BEP.
For the three months ended September 30, 2026
Fee Revenues decreased by $21 million, or 9% for the three months ended September 30, 2026 relative to the three months ended September 30, 2025. This decrease was primarily driven by a $32 million decrease in catch-up fees relative to the comparative period, mainly from the second vintage of our global transition flagship fund, as well as $12 million of lower fee revenues from the earlier vintages of our flagship funds. The decreases were partially offset by $6 million of higher fee revenues attributable to BEP as a result of a higher average market capitalization in the current period. Incentive distributions from BEP also increased by $5 million due to a 5% increase in BEP's quarterly distributions compared to the comparative period.
For the nine months ended September 30, 2026
Fee Revenues increased by $51 million, or 8% for the nine months ended September 30, 2026 relative to the nine months ended September 30, 2025. This increase was primarily driven by $52 million of higher fee revenues attributable to BEP as a result of a higher average market capitalization in the current period. In addition, long-term private funds generated $22 million of incremental fee revenues from certain complementary strategies. Incentive distributions from BEP increased by $16 million due to a 5% increase in BEP's quarterly distributions compared to the comparative period. This was partially offset by a $38 million decrease in catch-up fees relative to the comparative period, mainly from the second vintage of our global transition flagship fund.
93
Segment Earnings
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Segment Revenues | $ | $ | 198 | $ | (19) | (10) | % | ||||||||||||||||
| Segment Expenses | |||||||||||||||||||||||
| Compensation and benefits | ( | (44) | (8) | 18 | % | ||||||||||||||||||
| Other operating expenses | (25) | (19) | (6) | 32 | % | ||||||||||||||||||
| Segment Earnings | $ | $ | 135 | $ | (33) | (24) | % | ||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Segment Revenues | $ | $ | $ | 45 | 9 | % | |||||||||||||||||
| Segment Expenses | |||||||||||||||||||||||
| Compensation and benefits | ( | ( | (33) | 27 | % | ||||||||||||||||||
| Other operating expenses | (65) | (45) | (20) | 44 | % | ||||||||||||||||||
| Segment Earnings | $ | 318 | $ | $ | (8) | (2) | % | ||||||||||||||||
For the three months ended September 30, 2026
Segment Earnings decreased by $33 million or 24% for the three months ended September 30, 2026 relative to the three months ended September 30, 2025. The decrease in Segment Earnings was primarily attributable to lower Segment Revenues due to a decrease in catch-up fees and higher Segment Expenses due to higher compensation and benefits as well as operating expenses.
For the nine months ended September 30, 2026
Segment Earnings decreased by $8 million or 2% for the nine months ended September 30, 2026 relative to the nine months ended September 30, 2025. The decrease in Segment Earnings was primarily attributable to higher Segment Expenses due to higher compensation and benefits as well as operating expenses. This was partially offset by higher Segment Revenues driven by a higher average market capitalization of BEP in the current period as well as growth in our other long-term private funds and perpetual strategies.
94
Private Equity
Fee-Bearing Capital
| 2026 vs. 2025 | |||||||||||||||||||||||
| AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 (MILLIONS) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Long-term private funds | $ | 44,100 | $ | 38,859 | $ | 5,241 | 13 | % | |||||||||||||||
| Permanent capital and perpetual strategies | 8,515 | 9,147 | (632) | (7) | % | ||||||||||||||||||
| Total Fee-Bearing Capital | $ | 52,615 | $ | 48,006 | $ | 4,609 | 10 | % | |||||||||||||||
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | |||||||||||
| 2026 | 2025 | ||||||||||
| Balance, beginning | $ | 53,542 | $ | 43,153 | |||||||
| Inflows | 1,797 | 3,356 | |||||||||
| Outflows | — | — | |||||||||
| Distributions | (822) | (264) | |||||||||
| Market valuation | (1,107) | 869 | |||||||||
| Other | (795) | (772) | |||||||||
| Change | (927) | 3,189 | |||||||||
| Balance, ending | $ | 52,615 | $ | 46,342 | |||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | |||||||||||
| 2026 | 2025 | ||||||||||
| Balance, beginning | $ | 48,006 | $ | 45,190 | |||||||
| Inflows | 7,702 | 4,422 | |||||||||
| Outflows | — | — | |||||||||
| Distributions | (1,655) | (818) | |||||||||
| Market valuation | (1,276) | 969 | |||||||||
| Other | (162) | (3,421) | |||||||||
| Change | 4,609 | 1,152 | |||||||||
| Balance, ending | $ | 52,615 | $ | 46,342 | |||||||
For the three months ended September 30, 2026
During the three months ended September 30, 2026, Fee-Bearing Capital decreased by $927 million or 2% to $52.6 billion. This was primarily driven by a $1.1 billion decrease in market valuation predominantly related to BBUC as a result of a lower share price during the period, as well as distributions of $822 million related to the fourth vintage of our private equity flagship fund and various long-term private funds. The decrease was partially offset by inflows of $1.8 billion, of which $1.2 billion was from fundraising for the seventh vintage of our private equity flagship fund and $597 million from fundraising for other long-term private funds and complementary strategies.
For the nine months ended September 30, 2026
During the nine months ended September 30, 2026, Fee-Bearing Capital increased by $4.6 billion or 10% to $53 billion. The increase was primarily driven by inflows of $7.7 billion, of which $4.3 billion was from fundraising of the seventh vintage of our private equity flagship fund and $3.4 billion from fundraising for other long-term private funds and complementary strategies. These inflows were partially offset by distributions of $1.7 billion from various long-term private funds and BBUC. Market valuation decreases of $1.3 billion were primarily driven by BBUC as a result of a lower share price during the period.
95
Fee Revenues
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Management and advisory fees | |||||||||||||||||||||||
| Long-term private funds | |||||||||||||||||||||||
Flagship funds | $ | 52 | $ | 39 | $ | 13 | 33 | % | |||||||||||||||
| Other long-term funds | 57 | 44 | 13 | 30 | % | ||||||||||||||||||
Co-investment and other funds | 2 | 2 | — | — | % | ||||||||||||||||||
| 111 | 85 | 26 | 31 | % | |||||||||||||||||||
| Perpetual strategies | |||||||||||||||||||||||
BBUC1 | 25 | 25 | — | — | % | ||||||||||||||||||
| 25 | 25 | — | — | % | |||||||||||||||||||
| Catch-up fees | 4 | — | 4 | NM | |||||||||||||||||||
| Transaction and advisory fees | 1 | — | 1 | NM | |||||||||||||||||||
| Total management and advisory fees | 141 | 110 | 31 | 28 | % | ||||||||||||||||||
| Performance fees | 2 | — | 2 | NM | |||||||||||||||||||
| Total Fee Revenues | $ | 143 | $ | 110 | $ | 33 | 30 | % | |||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Management and advisory fees | |||||||||||||||||||||||
| Long-term private funds | |||||||||||||||||||||||
| Flagship funds | $ | 136 | $ | 117 | $ | 19 | 16 | % | |||||||||||||||
| Other long-term funds | 167 | 130 | 37 | 28 | % | ||||||||||||||||||
| Co-investment and other funds | 7 | 6 | 1 | 17 | % | ||||||||||||||||||
| 310 | 253 | 57 | 23 | % | |||||||||||||||||||
| Perpetual strategies | |||||||||||||||||||||||
BBUC1 | 81 | 68 | 13 | 19 | % | ||||||||||||||||||
| 81 | 68 | 13 | 19 | % | |||||||||||||||||||
| Catch-up fees | 13 | — | 13 | NM | |||||||||||||||||||
| Transaction and advisory fees | 4 | 8 | (4) | (50) | % | ||||||||||||||||||
| Total management and advisory fees | 408 | 329 | 79 | 24 | % | ||||||||||||||||||
| Performance fees | 5 | — | 5 | NM | |||||||||||||||||||
| Total Fee Revenues | $ | 413 | $ | 329 | $ | 84 | 26 | % | |||||||||||||||
1.BBUC Fee-Bearing Capital as of September 30, 2026 was $8.1 billion (September 30, 2025 – $7.9 billion) and includes net debt of $1.5 billion (September 30, 2025 – $1.1 billion).
For the three months ended September 30, 2026
Fee Revenues increased by $33 million or 30% for the three months ended September 30, 2026 relative to the three months ended September 30, 2025. This increase was primarily driven by $17 million increase from the seventh vintage of our private equity flagship fund inclusive of catch-up fees, as well as $13 million increase related to our other long-term private funds.
For the nine months ended September 30, 2026
Fee Revenues increased by $84 million or 26% for the nine months ended September 30, 2026 relative to the nine months ended September 30, 2025. This increase was primarily driven by $50 million related to fundraising inclusive of catch-up fees for our other long-term private funds, $19 million primarily related to fundraising from the seventh vintage of our private equity flagship fund, as well as $13 million related to higher fee revenues attributable to BBUC as a result of a higher average market capitalization in the current period.
96
Segment Earnings
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
Segment Revenues | $ | 170 | $ | 108 | $ | 62 | 57 | % | |||||||||||||||
| Segment Expenses | |||||||||||||||||||||||
Compensation and benefits | (86) | (58) | (28) | 48 | % | ||||||||||||||||||
Other operating expenses | (25) | (20) | (5) | 25 | % | ||||||||||||||||||
| Segment Earnings | $ | 59 | $ | 30 | $ | 29 | 97 | % | |||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
Segment Revenues | $ | 419 | $ | 321 | $ | 98 | 31 | % | |||||||||||||||
| Segment Expenses | |||||||||||||||||||||||
Compensation and benefits | (218) | (172) | (46) | 27 | % | ||||||||||||||||||
Other operating expenses | (69) | (63) | (6) | 10 | % | ||||||||||||||||||
| Segment Earnings | $ | 132 | $ | 86 | $ | 46 | 53 | % | |||||||||||||||
For the three months ended September 30, 2026
Segment Earnings increased by $29 million or 97% for the three months ended September 30, 2026 relative to the three months ended September 30, 2025. The increase was primarily driven by higher Segment Revenues which reflected higher management fees from fundraising from the seventh vintage of our flagship private equity fund and other long-term private funds. The higher Segment Revenues were partially offset by higher Segment Expenses driven by higher compensation and benefits as the business continues to scale.
For the nine months ended September 30, 2026
Segment Earnings increased by $46 million or 53% for the nine months ended September 30, 2026 relative to the nine months ended September 30, 2025. The increase was primarily driven by higher Segment Revenues which reflected higher management fees from fundraising from the seventh vintage of our flagship private equity fund and other long-term private funds, as well as higher fees from BBUC as a result of a higher share price. The higher Segment Revenues were partially offset by higher Segment Expenses driven by higher compensation and benefits as the business continues to scale.
97
Real Estate
Fee-Bearing Capital
| 2026 vs. 2025 | |||||||||||||||||||||||
| AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 (MILLIONS) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Long-term private funds | $ | 73,756 | $ | 72,045 | $ | 1,711 | 2 | % | |||||||||||||||
| Permanent capital and perpetual strategies | 30,446 | 29,637 | 809 | 3 | % | ||||||||||||||||||
| Total Fee-Bearing Capital | $ | 104,202 | $ | 101,682 | $ | 2,520 | 2 | % | |||||||||||||||
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | |||||||||||
| 2026 | 2025 | ||||||||||
| Balance, beginning | $ | 104,190 | $ | 101,775 | |||||||
| Inflows | 1,184 | 1,474 | |||||||||
| Outflows | — | (10) | |||||||||
| Distributions | (1,504) | (2,121) | |||||||||
| Market valuation | 241 | (24) | |||||||||
| Other | 91 | 697 | |||||||||
| Change | 12 | 16 | |||||||||
| Balance, ending | $ | 104,202 | $ | 101,791 | |||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | |||||||||||
| 2026 | 2025 | ||||||||||
| Balance, beginning | $ | 101,682 | $ | 93,629 | |||||||
| Inflows | 7,236 | 13,742 | |||||||||
| Outflows | — | (242) | |||||||||
| Distributions | (3,858) | (5,040) | |||||||||
| Market valuation | 149 | (27) | |||||||||
| Other | (1,007) | (271) | |||||||||
| Change | 2,520 | 8,162 | |||||||||
| Balance, ending | $ | 104,202 | $ | 101,791 | |||||||
For the three months ended September 30, 2026
During the three months ended September 30, 2026, Fee-Bearing Capital was relatively consistent with the prior period at $104 billion. The increase was predominantly driven by $1.2 billion of inflows, of which $597 million was attributable to fundraising and deployments within our real estate flagship strategies, $398 million was attributable to capital investments within our permanent real estate vehicle, and co-investment capital, and $189 million was from capital deployments and fundraising across our complementary strategies. In addition, an increase of $241 million in market valuation was primarily related to valuation gains within our permanent real estate vehicle. These increases were partially offset by $1.5 billion of distributions from BPG, earlier vintages of our real estate flagship funds, and other long-term private funds.
For the nine months ended September 30, 2026
During the nine months ended September 30, 2026, Fee-Bearing Capital increased by $2.5 billion or 2% to $104 billion. The increase was predominantly driven by $7.2 billion of inflows, of which $4.2 billion was from capital deployments across our complementary strategies and $1.9 billion was attributable to fundraising and deployments across our real estate flagship strategies and co-investment capital, and $1.1 billion was attributable to capital investments within our permanent real estate vehicle. These increases were partially offset by $3.9 billion of distributions from BPG, earlier vintages of our flagship funds, and other long-term private funds. In addition, Other movements of $1.0 billion includes additional NAV from cash repatriation from certain LP investments of BPY, as well as the impact of foreign exchange and a change in fee basis for certain long-term private funds.
98
Fee Revenues
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Management and advisory fees | |||||||||||||||||||||||
| Long-term private funds | |||||||||||||||||||||||
Flagship funds | $ | 124 | $ | 127 | $ | (3) | (2) | % | |||||||||||||||
Co-investment and other funds | 55 | 54 | 1 | 2 | % | ||||||||||||||||||
| 179 | 181 | (2) | (1) | % | |||||||||||||||||||
| Perpetual strategies | |||||||||||||||||||||||
BPG1 | 52 | 49 | 3 | 6 | % | ||||||||||||||||||
Co-investment and other funds | 26 | 25 | 1 | 4 | % | ||||||||||||||||||
| 78 | 74 | 4 | 5 | % | |||||||||||||||||||
| Catch-up fees | 8 | 1 | 7 | 700 | % | ||||||||||||||||||
| Total Fee Revenues | $ | 265 | $ | 256 | $ | 9 | 4 | % | |||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Management and advisory fees | |||||||||||||||||||||||
| Long-term private funds | |||||||||||||||||||||||
| Flagship funds | $ | 367 | $ | 381 | $ | (14) | (4) | % | |||||||||||||||
| Co-investment and other funds | 161 | 165 | (4) | (2) | % | ||||||||||||||||||
| 528 | 546 | (18) | (3) | % | |||||||||||||||||||
| Perpetual strategies | |||||||||||||||||||||||
BPG1 | 155 | 151 | 4 | 3 | % | ||||||||||||||||||
| Co-investment and other funds | 77 | 65 | 12 | 18 | % | ||||||||||||||||||
| 232 | 216 | 16 | 7 | % | |||||||||||||||||||
| Catch-up fees | 17 | 73 | (56) | (77) | % | ||||||||||||||||||
| Transaction and advisory fees | 9 | — | 9 | NM | |||||||||||||||||||
| Total Fee Revenues | $ | 786 | $ | 835 | $ | (49) | (6) | % | |||||||||||||||
1.BPG Fee-Bearing Capital (of which BPY represents substantially all of the balance) as of September 30, 2026 is $19.6 billion (September 30, 2025 – $18.5 billion).
For the three months ended September 30, 2026
During the three months ended September 30, 2026, Fee Revenues increased by $9 million or 4% relative to the three months ended September 30, 2025, driven by an increase of $7 million in catch-up fees earned from fundraising within the fifth vintage of our real estate flagship fund and $3 million from increases in NAV of BPG. This was partially offset by a $3 million decrease in fee revenues from earlier vintages of our real estate flagship funds as a result of realizations.
For the nine months ended September 30, 2026
During the nine months ended September 30, 2026, Fee Revenues decreased by $49 million or 6% relative to the nine months ended September 30, 2025. This decrease was driven by $56 million of lower catch-up fees as the comparative period reflected subsequent closes for the fifth vintage of our real estate flagship fund, as well as $14 million lower Fee Revenues from earlier vintages of our flagship funds due to realizations. The decrease was partially offset by an increase of $12 million from other perpetual strategies as a result of the aforementioned growth in Fee-Bearing Capital. Additionally, transaction and advisory fees of $9 million were realized from certain complementary strategies during the period.
99
Segment Earnings
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Segment Revenues | $ | $ | 254 | $ | 29 | 11 | % | ||||||||||||||||
| Segment Expenses | |||||||||||||||||||||||
| Compensation and benefits | ( | (85) | (38) | 45 | % | ||||||||||||||||||
| Other operating expenses | (39) | (30) | (9) | 30 | % | ||||||||||||||||||
| Segment Earnings | $ | $ | 139 | $ | (18) | (13) | % | ||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Segment Revenues | $ | $ | $ | (37) | (4) | % | |||||||||||||||||
| Segment Expenses | |||||||||||||||||||||||
| Compensation and benefits | ( | ( | (46) | 17 | % | ||||||||||||||||||
| Other operating expenses | (105) | (91) | (14) | 15 | % | ||||||||||||||||||
| Segment Earnings | $ | 367 | $ | $ | (97) | (21) | % | ||||||||||||||||
For the three months ended September 30, 2026
Segment Earnings decreased by $18 million or 13% for the three months ended September 30, 2026 relative to the three months ended September 30, 2025. The decrease in Segment Earnings was primarily due to higher Segment Expenses driven by higher compensation and benefits and other operating expenses as the business continues to scale.
For the nine months ended September 30, 2026
Segment Earnings decreased by $97 million or 21% for the nine months ended September 30, 2026 relative to the nine months ended September 30, 2025. The decrease in Segment Earnings was primarily due to lower Segment Revenues as the prior period reflected higher catch-up fee revenues from the subsequent closes of the fifth vintage of our real estate flagship fund, as well as higher Segment Expenses driven by higher compensation and benefits and other operating expenses as the business continues to scale.
100
Credit
Fee-Bearing Capital
| 2026 vs. 2025 | |||||||||||||||||||||||
| AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 (MILLIONS) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Long-term private funds | $ | 105,822 | $ | 109,695 | $ | (3,873) | (4) | % | |||||||||||||||
| Permanent capital and perpetual strategies | 155,868 | 116,409 | 39,459 | 34 | % | ||||||||||||||||||
| Liquid strategies | 79,724 | 77,388 | 2,336 | 3 | % | ||||||||||||||||||
| Total Fee-Bearing Capital | $ | 341,414 | $ | 303,492 | $ | 37,922 | 12 | % | |||||||||||||||
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | |||||||||||
| 2026 | 2025 | ||||||||||
| Balance, beginning | $ | 349,375 | $ | 278,764 | |||||||
| Inflows | 10,884 | 13,240 | |||||||||
| Outflows | (6,330) | (5,080) | |||||||||
| Distributions | (4,063) | (1,760) | |||||||||
| Market valuation | (1,679) | 4,007 | |||||||||
| Other | (6,773) | (2,852) | |||||||||
| Change | (7,961) | 7,555 | |||||||||
| Balance, ending | $ | 341,414 | $ | 286,319 | |||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | |||||||||||
| 2026 | 2025 | ||||||||||
| Balance, beginning | $ | 303,492 | $ | 266,304 | |||||||
| Inflows | 74,961 | 36,716 | |||||||||
| Outflows | (19,618) | (15,616) | |||||||||
| Distributions | (10,289) | (8,250) | |||||||||
| Market valuation | 1,563 | 7,650 | |||||||||
| Other | (8,695) | (485) | |||||||||
| Change | 37,922 | 20,015 | |||||||||
| Balance, ending | $ | 341,414 | $ | 286,319 | |||||||
For the three months ended September 30, 2026
During the three months ended September 30, 2026, Fee-Bearing Capital decreased by $8.0 billion or 2% to $341.4 billion. The decrease was predominantly driven by other movements of $6.8 billion primarily attributable to a change in the presentation of Fee-Bearing Capital of a partner manager to be at our share following the completion of the Oaktree Acquisition. Fee-Bearing Capital further decreased by $6.3 billion, due to $3.5 billion of outflows associated with BWS insurance capital and $2.8 billion of redemptions within certain of our liquid and perpetual strategies. Distributions of $4.1 billion also reduced Fee-Bearing Capital primarily due to $2.9 billion of distributions from our long-term private funds and complementary strategies, as well as $1.2 billion from our partner managers. These decreases in Fee-Bearing Capital were offset by $10.9 billion of inflows, comprised of $5.8 billion of capital deployed within long-term private funds and perpetual and liquid credit strategies, $3.8 billion of insurance capital inflows from BWS, and $1.3 billion of capital raised within our partner managers.
For the nine months ended September 30, 2026
During the nine months ended September 30, 2026, Fee-Bearing Capital increased by $37.9 billion or 12% to $341.4 billion. The increase was predominantly driven by $75.0 billion of inflows, comprised of $52.4 billion of insurance capital inflows from BWS inclusive of the Just Group Plc. mandate, $18.8 billion of capital deployed within long-term private funds and perpetual and liquid credit strategies, and $3.8 billion of capital raised within our partner managers. In addition, we recognized $1.6 billion of market valuation increases associated with our liquid and perpetual strategies as well as certain long-term private funds. These increases were partially offset by $19.6 billion of outflows comprised of $10.4 billion of outflows associated with BWS insurance capital and $9.2 billion of redemptions within certain of our liquid and perpetual strategies. In addition, distributions of $10.3 billion also reduced Fee-Bearing Capital primarily due to $7.6 billion of distributions from our long-term private funds and complementary strategies, as well as $2.7 billion from our partner managers. Other movements primarily related to a change in the presentation of Fee-Bearing Capital of a partner manager to be at our share following the completion of the Oaktree Acquisition, as well as the partial disposition of our interest in Pretium as well as the impact of foreign exchange.
101
Fee Revenues
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Management and advisory fees | |||||||||||||||||||||||
| Long-term private funds | $ | 290 | $ | 240 | $ | 50 | 21 | % | |||||||||||||||
Permanent and perpetual strategies | 251 | 197 | 54 | 27 | % | ||||||||||||||||||
Liquid strategies1 | 85 | 67 | 18 | 27 | % | ||||||||||||||||||
| Transaction and advisory fees | 21 | 20 | 1 | 5 | % | ||||||||||||||||||
Total Fee Revenues2 | $ | 647 | $ | 524 | $ | 123 | 23 | % | |||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Management and advisory fees | |||||||||||||||||||||||
| Long-term private funds | $ | 824 | $ | 735 | $ | 89 | 12 | % | |||||||||||||||
| Permanent and perpetual strategies | 676 | 462 | 214 | 46 | % | ||||||||||||||||||
Liquid strategies1 | 222 | 193 | 29 | 15 | % | ||||||||||||||||||
| Transaction and advisory fees | 73 | 37 | 36 | 97 | % | ||||||||||||||||||
Total Fee Revenues2 | $ | 1,795 | $ | 1,427 | $ | 368 | 26 | % | |||||||||||||||
1.Represents open-end funds within our credit strategies, and Oaktree's investment in a fixed income manager, as well as in publicly listed securities.
2.Across the various categories, Fee-Bearing Capital from BWS as of September 30, 2026 was $150 billion which generated $250 million of Fee Revenues under the investment management agreement for the nine months ended September 30, 2026 (September 30, 2025 - Fee-Bearing Capital of $101 billion and Fee Revenues of $171 million).
For the three months ended September 30, 2026
Fee Revenues increased by $123 million or 23% for the three months ended September 30, 2026 relative to the three months ended September 30, 2025. Fee Revenues from our long-term private funds increased by $50 million primarily due to higher fees earned from our partner managers. Fee Revenues from permanent and perpetual strategies increased by $54 million attributable to insurance capital inflows from BWS inclusive of the Just Group Plc. mandate, and capital deployed across our private credit strategies. In addition, liquid strategies generated incremental fee revenues of $18 million driven by net inflows and positive valuation changes resulting in higher Fee-Bearing Capital.
For the nine months ended September 30, 2026
Fee Revenues increased by $368 million or 26% for the nine months ended September 30, 2026 relative to the nine months ended September 30, 2025. Fee Revenues from permanent and perpetual strategies increased by $214 million attributable to insurance capital inflows from BWS inclusive of the Just Group Plc. mandate, and capital deployed across our private credit strategies. Fee Revenues from our long-term private funds increased by $89 million primarily due to higher fees earned from our partner managers. In addition, liquid strategies generated incremental fee revenues of $29 million driven by net inflows and positive valuation changes resulting in higher Fee-Bearing Capital.
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Segment Earnings
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
Segment Revenues | $ | $ | 500 | $ | 62 | 12 | % | ||||||||||||||||
| Segment Expenses | |||||||||||||||||||||||
Compensation and benefits | ( | (202) | (19) | 9 | % | ||||||||||||||||||
Other operating expenses | (101) | (110) | 9 | (8) | % | ||||||||||||||||||
| Segment Earnings | $ | $ | 188 | $ | 52 | 28 | % | ||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (MILLIONS) | 2026 vs. 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
Segment Revenues | $ | $ | $ | 297 | 22 | % | |||||||||||||||||
| Segment Expenses | |||||||||||||||||||||||
Compensation and benefits | ( | ( | (66) | 11 | % | ||||||||||||||||||
Other operating expenses | (356) | (289) | (67) | 23 | % | ||||||||||||||||||
| Segment Earnings | $ | 631 | $ | $ | 164 | 35 | % | ||||||||||||||||
For the three months ended September 30, 2026
Segment Earnings increased by $52 million or 28% for the three months ended September 30, 2026 relative to the three months ended September 30, 2025. The increase in Segment Earnings was primarily driven by higher Segment Revenues as a result of incremental earnings from our partner managers as well as other complementary strategies. This increase was partially offset by higher compensation and benefits as the business continues to scale.
For the nine months ended September 30, 2026
Segment Earnings increased $164 million or 35% for the nine months ended September 30, 2026 relative to the nine months ended September 30, 2025. The increase in Segment Earnings was primarily driven by higher Segment Revenues as a result of incremental earnings from our partner managers as well as other complementary strategies. This increase was partially offset by higher operating expenses as well as compensation and benefits as the business continues to scale.
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Reconciliation of U.S. GAAP to Non-GAAP Measures
Reconciliations of Distributable Earnings, Fee-Related Earnings and Fee Revenues to the most directly comparable financial measures calculated and presented in conformity with U.S. GAAP are presented below. In addition to net income and revenue, management assesses the performance of its business based on these non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, net income or other financial measures presented in conformity with U.S. GAAP.
Reconciliation of Net Income to Fee-Related Earnings and Distributable Earnings
The following presents a reconciliation of net income to Fee-Related Earnings and Distributable Earnings for the three and nine months ended September 30, 2026 and 2025.
FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | Three Months Ended | Nine Months Ended | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net Income | $ | 2,999 | $ | 692 | $ | 4,757 | $ | 1,783 | |||||||||||||||
Add or subtract the following: | |||||||||||||||||||||||
Provision for taxes(a) | 331 | 78 | 603 | 228 | |||||||||||||||||||
Depreciation and amortization(b) | 66 | 30 | 106 | 44 | |||||||||||||||||||
Carried interest allocations(c) | (764) | (112) | (1,429) | (51) | |||||||||||||||||||
Carried interest allocation compensation(c) | 87 | (20) | 349 | 142 | |||||||||||||||||||
Other income and expenses(d) | (1,835) | 97 | (1,897) | 207 | |||||||||||||||||||
Interest expense(e) | 83 | 26 | 190 | 76 | |||||||||||||||||||
Interest and dividend revenue(e) | (48) | (31) | (113) | (93) | |||||||||||||||||||
Other revenues(f) | (54) | (143) | (378) | (455) | |||||||||||||||||||
Share of income from equity method investments(g) | (261) | (110) | (530) | (349) | |||||||||||||||||||
Fee-related earnings of equity method investments at our share(g) | 172 | 132 | 486 | 341 | |||||||||||||||||||
Compensation costs recovered from affiliates(h) | 71 | 121 | 239 | 250 | |||||||||||||||||||
Other adjustments(i) | 17 | (6) | 61 | 5 | |||||||||||||||||||
| Fee-Related Earnings | $ | 864 | $ | 754 | $ | 2,444 | $ | 2,128 | |||||||||||||||
Realized carried interest, net | 48 | — | 53 | — | |||||||||||||||||||
Investment and other income (net of interest expense)(j) | (66) | (6) | (87) | 41 | |||||||||||||||||||
Equity-based compensation expense(k) | 14 | 11 | 51 | 36 | |||||||||||||||||||
Cash taxes(l) | (97) | (98) | (289) | (277) | |||||||||||||||||||
| Distributable Earnings | $ | 763 | $ | 661 | $ | 2,172 | $ | 1,928 | |||||||||||||||
(a)This adjustment removes the impact of income tax provisions on the basis that we do not believe this item reflects the present value of the actual tax obligations that we expect to incur over the long term due to the substantial deferred tax assets of BAM.
(b)This adjustment removes the depreciation and amortization on property, plant and equipment and intangible assets, which are non-cash in nature and therefore excluded from Fee-Related Earnings as well as certain capital depreciation costs recharged from BAM's affiliates.
(c)These adjustments remove the impact of both unrealized and realized carried interest allocations and the associated compensation expense. Carried interest allocations and associated compensation costs are included in Distributable Earnings once realized.
(d)This adjustment removes other income and expenses associated with fair value changes for consolidated entities and funds.
(e)This adjustment removes interest and charges paid or received by consolidated entities and funds.
(f)This adjustment removes other revenues earned that are non-cash in nature.
(g)These adjustments remove our share of equity method investments' earnings, including items (a) to (f) above and include its share of equity method investments' Fee-Related Earnings.
(h)This item adds back compensation costs that will be borne by affiliates.
(i)This adjustment adds base management fees earned from funds that are eliminated upon consolidation and other items.
(j)This adjustment adds back other income associated with our portion of partly owned subsidiaries’ investment income, interest income received and interest expense.
(k)This adjustment adds back equity-based compensation costs.
(l)Represents the impact of cash taxes paid by the business.
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Reconciliation of Revenues to Fee Revenues
The following presents our reconciliation of base management and advisory fees to Fee Revenues for the three and nine months ended September 30, 2026 and 2025.
FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | Three Months Ended | Nine Months Ended | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Base management and advisory fees | $ | 1,092 | $ | 859 | $ | 2,871 | $ | 2,511 | |||||||||||||||
Incentive fees(a) | 174 | 116 | 432 | 349 | |||||||||||||||||||
Fee Revenues from equity method investments(b) | 365 | 483 | 1,400 | 1,307 | |||||||||||||||||||
Other adjustments(c) | (7) | 1 | 15 | (16) | |||||||||||||||||||
| Fee Revenues | $ | 1,624 | $ | 1,459 | $ | 4,718 | $ | 4,151 | |||||||||||||||
(a)This adjustment adds incentive distributions and certain performance fees that are included in Fee Revenues.
(b)This adjustment adds Oaktree management fees at 100% ownership for the period prior to the Oaktree Acquisition, and our proportionate share of earnings from other partner managers.
(c)This adjustment involves base management fees earned from funds that are eliminated upon consolidation and other items.
Reconciliation of Carried Interest Allocations - Realized and Carried Interest Allocation Compensation - Realized to Realized Carried Interest, Net
FOR THE PERIODS ENDED SEPTEMBER 30, (MILLIONS) | Three Months Ended | Nine Months Ended | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Carried Interest Allocations - Realized | $ | 160 | $ | — | $ | 176 | $ | — | |||||||||||||||
Carried interest allocations attributable to non-controlling interests(a) | (80) | — | (87) | — | |||||||||||||||||||
| Carried Interest Allocation Compensation - Realized | (37) | (26) | (66) | (76) | |||||||||||||||||||
Carried interest allocation compensation recovered from affiliates(b) | 26 | 26 | 55 | 76 | |||||||||||||||||||
Adjustment for compensation costs associated with Realized carried interest(c) | (21) | — | (25) | — | |||||||||||||||||||
| Realized Carried Interest, Net | $ | 48 | $ | — | $ | 53 | $ | — | |||||||||||||||
(a)This item adds back carried interest allocations attributable to non-controlling interest in consolidated entities and preferred shares redeemable non-controlling interest.
(b)This item adds back carried interest allocation compensation costs that will be borne by affiliates.
(c)This item accrues compensation costs associated with Realized carried interest that are recognized under U.S. GAAP only when it is realized, to align expense with the related revenue. These costs are expected to be paid in future periods.
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Fee Revenues by Geography
The majority of our revenues are earned in the U.S. The following tables set out Fee Revenues disaggregated by investment strategy and geography.
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026 (MILLIONS) | Infrastructure | Energy | Private equity | Real estate | Credit | Total | ||||||||||||||||||||||||||||||||
| Management and advisory fees, net | ||||||||||||||||||||||||||||||||||||||
| United States | $ | 51 | $ | 27 | $ | 61 | $ | 172 | $ | 517 | $ | 828 | ||||||||||||||||||||||||||
| United Kingdom | 62 | 64 | 24 | 50 | 112 | 312 | ||||||||||||||||||||||||||||||||
| Canada | 99 | 50 | 19 | 5 | 8 | 181 | ||||||||||||||||||||||||||||||||
| Other | 57 | 31 | 39 | 38 | 10 | 175 | ||||||||||||||||||||||||||||||||
| Incentive distributions | 87 | 41 | — | — | — | 128 | ||||||||||||||||||||||||||||||||
| $ | 356 | $ | 213 | $ | 143 | $ | 265 | $ | 647 | $ | 1,624 | |||||||||||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 (MILLIONS) | Infrastructure | Energy | Private equity | Real estate | Credit | Total | ||||||||||||||||||||||||||||||||
| Management and advisory fees, net | ||||||||||||||||||||||||||||||||||||||
| United States | $ | 140 | $ | 86 | $ | 177 | $ | 484 | $ | 1,445 | $ | 2,332 | ||||||||||||||||||||||||||
| United Kingdom | 174 | 190 | 69 | 136 | 287 | 856 | ||||||||||||||||||||||||||||||||
| Canada | 311 | 155 | 72 | 29 | 27 | 594 | ||||||||||||||||||||||||||||||||
| Other | 184 | 98 | 95 | 137 | 36 | 550 | ||||||||||||||||||||||||||||||||
| Incentive distributions | 261 | 125 | — | — | — | 386 | ||||||||||||||||||||||||||||||||
| $ | 1,070 | $ | 654 | $ | 413 | $ | 786 | $ | 1,795 | $ | 4,718 | |||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 (MILLIONS) | Infrastructure | Energy | Private equity | Real estate | Credit | Total | ||||||||||||||||||||||||||||||||
| Management and advisory fees, net | ||||||||||||||||||||||||||||||||||||||
| United States | $ | 46 | $ | 38 | $ | 51 | $ | 153 | $ | 427 | $ | 715 | ||||||||||||||||||||||||||
| United Kingdom | 57 | 64 | 21 | 44 | 85 | 271 | ||||||||||||||||||||||||||||||||
| Canada | 86 | 59 | 19 | 11 | 8 | 183 | ||||||||||||||||||||||||||||||||
| Other | 66 | 37 | 19 | 48 | 4 | 174 | ||||||||||||||||||||||||||||||||
| Incentive distributions | 80 | 36 | — | — | — | 116 | ||||||||||||||||||||||||||||||||
| $ | 335 | $ | 234 | $ | 110 | $ | 256 | $ | 524 | $ | 1,459 | |||||||||||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (MILLIONS) | Infrastructure | Energy | Private equity | Real estate | Credit | Total | ||||||||||||||||||||||||||||||||
| Management and advisory fees, net | ||||||||||||||||||||||||||||||||||||||
| United States | $ | 143 | $ | 97 | $ | 158 | $ | 508 | $ | 1,157 | $ | 2,063 | ||||||||||||||||||||||||||
| United Kingdom | 150 | 146 | 61 | 132 | 206 | 695 | ||||||||||||||||||||||||||||||||
| Canada | 274 | 165 | 54 | 39 | 26 | 558 | ||||||||||||||||||||||||||||||||
| Other | 150 | 86 | 56 | 156 | 38 | 486 | ||||||||||||||||||||||||||||||||
| Incentive distributions | 240 | 109 | — | — | — | 349 | ||||||||||||||||||||||||||||||||
| $ | 957 | $ | 603 | $ | 329 | $ | 835 | $ | 1,427 | $ | 4,151 | |||||||||||||||||||||||||||
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Assets by Geography
The majority of our consolidated assets are located in the U.S. The following table sets out consolidated assets disaggregated by geography.
AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 (MILLIONS) | 2026 | 2025 | ||||||||||||
| United States | $ | 20,968 | $ | 11,293 | ||||||||||
| Canada | 1,634 | 3,673 | ||||||||||||
| United Kingdom | 963 | 625 | ||||||||||||
| Other | 3,844 | 1,456 | ||||||||||||
| $ | 27,409 | $ | 17,047 | |||||||||||
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Liquidity and Capital Resources
Liquidity
BAM maintains sufficient liquidity at all times, enabling it to participate in investment opportunities as they arise, withstand sudden adverse changes in economic conditions, and sustain distributions. Typical cash flow activities include earning fees on managed assets, paying operating expenses, and paying cash dividends to shareholders. From time to time, BAM may draw on a revolving credit facility or issue commercial paper to bridge timing differences between the receipt and outflow of funds. It may also issue debt to finance growth through strategic investments. The primary sources of liquidity, which we refer to as corporate liquidity, consist of cash, short-term financial assets, as well as the undrawn portions of the revolving credit facilities.
As of September 30, 2026, corporate liquidity for BAM is $2.1 billion. This consists of $0.8 billion in cash and short term financial assets that are convertible to cash within twelve months, as well as $1.4 billion in undrawn credit facilities. This liquidity can be deployed for use without any material tax consequences to support BAM in funding strategic transactions as well as seeding new investment products. Over the long term, BAM expects to meet its cash requirements, including operating expenses, dividends, debt service and strategic investments, through cash generated from operations, available corporate liquidity and, where appropriate, access to the capital markets.
•On November 8, 2022, a $300 million revolving credit facility was established, with BN as lender. U.S. dollar draws are subject to the U.S. Base Rate or SOFR plus a margin of 165 basis points, while Canadian dollar draws are subject to the Canadian Prime Rate or CORRA plus a margin of 165 basis points. As of September 30, 2026, the facility was undrawn.
•On August 29, 2024, a $750 million five-year revolving credit facility was established through bilateral agreements with a group of lenders. On September 5, 2025, BAM finalized the upsize of the facility from $750 million to $1.1 billion. U.S. dollar draws are subject to the U.S. Base Rate or SOFR plus a margin of 80 basis points, while Canadian dollar draws are subject to the Canadian Prime Rate or CORRA plus a margin of 80 basis points. As of September 30, 2026, the facility was undrawn.
•In March 2026, BAM established a $1.0 billion senior unsecured commercial paper program that is fully backed by our five-year bilateral revolving credit facility. Net proceeds of commercial paper issuances, with maturities up to 364 days, are expected to be used for general corporate purposes. As of September 30, 2026, BAM had no outstanding commercial paper.
•On April 17, 2026, BAM completed a dual tranche debt offering, issuing $550 million of 5-year bonds due in April 2031, at a fixed annual coupon of 4.832% and reopening its January 2036 bonds to issue an additional $450 million at a fixed annual coupon of 5.298%.
The details of outstanding debt securities as of September 30, 2026, are summarized below:
| Issuance Date | Maturity Date | Original Term (in years) | Principal Amount (in US$ millions) | Fixed Annual Coupon Rate | ||||||||||
| Senior unsecured notes BAM | ||||||||||||||
| April 24, 2025 | April 24, 2035 | 10 | $ | 750 | 5.795 | % | ||||||||
| September 9, 2025 | September 15, 2055 | 30 | $ | 750 | 6.077 | % | ||||||||
November 18, 2025(a) | January 15, 2036 | 10 | $ | 850 | 5.298 | % | ||||||||
| November 18, 2025 | November 15, 2030 | 5 | $ | 600 | 4.653 | % | ||||||||
| April 17, 2026 | April 15, 2031 | 5 | $ | 550 | 4.832 | % | ||||||||
| Senior unsecured notes Oaktree | ||||||||||||||
September 3, 2014 (b) | September 3, 2029 | 15 | $ | 100 | 4.210 | % | ||||||||
July 12, 2016 (b) | July 12, 2031 | 15 | $ | 100 | 3.690 | % | ||||||||
December 18, 2017 (b) | December 18, 2032 | 15 | $ | 250 | 3.780 | % | ||||||||
| July 22, 2020 | July 22, 2030 | 10 | $ | 200 | 3.640 | % | ||||||||
| July 22, 2020 | July 22, 2035 | 15 | $ | 50 | 3.840 | % | ||||||||
| January 12, 2022 | January 12, 2037 | 15 | $ | 200 | 3.060 | % | ||||||||
(a) Re-opened in April 2026 to add $450 million at 5.298% coupon.
(b) The completion of the Oaktree Acquisition triggered a change of control provision requiring mandatory prepayment of the September 2029, July 2031, and December 2032 notes. On October 5, 2026, Oaktree repaid $321.5 million of senior unsecured notes in connection with the change of control, resulting in $579 million of senior unsecured notes remaining outstanding. The remaining $128.5 million of the December 2032 notes were refinanced at a rate of 6.230%, with no change to the contractual maturity date.
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The following table presents our deployable capital:
(a) Corporate deployable capital represents the corporate liquidity of BAM.
Corporate(a) | |||||||||||
| AS OF (MILLIONS) | September 30 2026 | December 31 2025 | |||||||||
| Cash and financial assets, net | $ | 774 | $ | 1,611 | |||||||
| Undrawn committed credit facilities | 1,350 | 1,350 | |||||||||
| Uncalled private fund commitments | — | — | |||||||||
| Total deployable capital | $ | 2,124 | $ | 2,961 | |||||||
Uncalled Fund Commitments
The following presents our Uncalled Fund Commitments as of September 30, 2026 by period and December 31, 2025:
AS OF SEPTEMBER 30, (MILLIONS) | 2026 | 2027 | 2028 | 2029 | 2030 + | Total 2026 | Dec. 2025 | ||||||||||||||||||||||||||||||||||
| Infrastructure | $ | — | $ | — | $ | 190 | $ | — | $ | 17,693 | $ | 17,883 | $ | 12,569 | |||||||||||||||||||||||||||
| Energy | — | — | 753 | — | 19,532 | 20,285 | 22,685 | ||||||||||||||||||||||||||||||||||
| Private equity | 131 | 112 | 506 | 462 | 18,970 | 20,181 | 13,223 | ||||||||||||||||||||||||||||||||||
| Real estate | 1,911 | — | — | 2,979 | 16,157 | 21,047 | 22,583 | ||||||||||||||||||||||||||||||||||
| Credit | 1,453 | 922 | 70 | 1,819 | 30,600 | 34,864 | 39,794 | ||||||||||||||||||||||||||||||||||
| $ | 3,495 | $ | 1,034 | $ | 1,519 | $ | 5,260 | $ | 102,952 | $ | 114,260 | $ | 110,854 | ||||||||||||||||||||||||||||
Approximately $68 billion of the Uncalled Fund Commitments are currently not earning fees, but will become fee-bearing once the capital is invested. Once invested, we expect these commitments will earn approximately $680 million of additional Fee Revenues.
Capital Resources
Clawback Obligations
Performance allocations are subject to clawback to the extent that the performance allocations received to date with respect to a fund exceed the amount due to BAM based on cumulative results of that fund. The amounts and nature of our clawback obligations are described in Part I—Item 1. Financial Statements, Note 2 “Summary of Significant Accounting Policies” of the condensed consolidated financial statements of BAM as of September 30, 2026, and December 31, 2025, and for the three and nine months ended September 30, 2026 and 2025.
Capital Requirements
Certain U.S. and non-U.S. entities of BAM are subject to various investment advisor and other financial regulatory rules and requirements that may include minimum net capital requirements. These requirements have been met for the nine months ended September 30, 2026.
Exposures to Financial Instruments
As discussed elsewhere in this report, we utilize derivatives and other financial instruments in our business to manage risk and optimize the use of our capital. The notional and fair values of these instruments are disclosed in Part I—Item 1. Financial Statements, Note 6 “Fair Value Measurements of Financial Instruments” and Note 10 “Derivatives” to the condensed consolidated financial statements of BAM as of September 30, 2026, and December 31, 2025 and for the three and nine months ended September 30, 2026, and 2025.
Off-Balance Sheet Arrangements
BAM may from time to time enter into guarantees given in respect of co-investments in which there is carried interest. The amount guaranteed is up to the carried interest amount paid to the General Partner, net of taxes. No known amounts are currently due or owed under these guarantees.
Related Party Transactions
BAM entered into a number of related party transactions with BN and other affiliates. See Part I—Item 1. Financial Statements, Note 21 “Related Party Transactions” of the condensed consolidated financial statements of BAM as of September 30, 2026 and December 31, 2025 and for the three and nine months ended September 30, 2026, and 2025.
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BAM Dividends
The dividends paid by BAM on outstanding securities for the three months ended September 30, 2026, and 2025 are summarized in the table below.
| Distribution per Security | |||||||||||
| 2026 | 2025 | ||||||||||
| Per Class A Share and Class B Share | $ | 0.5025 | $ | 0.4375 | |||||||
Subsidiary Public Issuers
BAM Finance LLC (the “U.S. Finco”) is a Delaware limited liability company formed on March 26, 2025 and is a subsidiary of the Company. As of September 30, 2026, the U.S. Finco had no debt outstanding.
BAM Finance (Canada) Inc. (the “Canadian Finco”) was incorporated on March 26, 2025 under the Business Corporations Act (Ontario) and is a subsidiary of the Company. As of September 30, 2026, the Canadian Finco had no debt outstanding.
The U.S. Finco and Canadian Finco (together, the “Finance Debt Issuers”) have no independent activities, assets or operations other than in connection with any securities that they may issue. Any debt securities issued by the Finance Debt Issuers will be fully and unconditionally guaranteed as to payment of principal, premium (if any), interest and certain other amounts by the Company.
As of September 30, 2026, all of BAM's existing senior notes under corporate borrowings were issued directly by BAM. Following the Oaktree Acquisition, BAM also consolidates senior notes issued by Oaktree which are separately disclosed as borrowings of subsidiaries in the condensed consolidated financial statements.
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The following tables contain summarized financial information of the Company, U.S. Finco, Canadian Finco and non-guarantor subsidiaries:
AS OF AND FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026 (MILLIONS) | BAM | U.S. Finco | Canadian Finco | Other subsidiaries of BAM(1) | Consolidating Adjustments(2) | BAM Consolidated | |||||||||||||||||||||||||||||
| Revenues | $ | 67 | $ | — | $ | — | $ | 3,024 | $ | (942) | $ | 2,149 | |||||||||||||||||||||||
| Net income (loss) attributable to shareholders | 854 | — | — | 2,581 | (790) | 2,645 | |||||||||||||||||||||||||||||
| Total assets | 14,210 | — | — | 56,795 | (43,596) | 27,409 | |||||||||||||||||||||||||||||
| Total liabilities | 4,784 | — | — | 18,764 | (10,868) | 12,680 | |||||||||||||||||||||||||||||
| Preferred shares redeemable non-controlling interest | — | — | — | 1,390 | — | 1,390 | |||||||||||||||||||||||||||||
| Redeemable non-controlling interest in consolidated funds | — | — | — | 1,529 | — | 1,529 | |||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2025 AND FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 (MILLIONS) | BAM | U.S. Finco | Canadian Finco | Other subsidiaries of BAM(1) | Consolidating Adjustments(2) | BAM Consolidated | |||||||||||||||||||||||||||||
| Revenues | $ | 28 | $ | — | $ | — | $ | 2,424 | $ | (1,200) | $ | 1,252 | |||||||||||||||||||||||
| Net income (loss) attributable to shareholders | 730 | — | — | 1,103 | (1,109) | 724 | |||||||||||||||||||||||||||||
| Total assets | 11,452 | — | — | 45,111 | (39,516) | 17,047 | |||||||||||||||||||||||||||||
| Total liabilities | 3,334 | — | — | 11,307 | (7,904) | 6,737 | |||||||||||||||||||||||||||||
| Preferred shares redeemable non-controlling interest | — | — | — | 1,398 | — | 1,398 | |||||||||||||||||||||||||||||
| Redeemable non-controlling interest in consolidated funds | — | — | — | — | — | — | |||||||||||||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 (MILLIONS) | BAM | U.S. Finco | Canadian Finco | Other subsidiaries of BAM(1) | Consolidating Adjustments(2) | BAM Consolidated | |||||||||||||||||||||||||||||
| Revenues | $ | 193 | $ | — | $ | — | $ | 7,112 | $ | (2,065) | $ | 5,240 | |||||||||||||||||||||||
| Net income (loss) attributable to shareholders | 2,551 | — | — | 3,240 | (1,625) | 4,166 | |||||||||||||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (MILLIONS) | BAM | U.S. Finco | Canadian Finco | Other subsidiaries of BAM(1) | Consolidating Adjustments(2) | BAM Consolidated | |||||||||||||||||||||||||||||
| Revenues | $ | 51 | $ | — | $ | — | $ | 5,756 | $ | (2,384) | $ | 3,423 | |||||||||||||||||||||||
| Net income (loss) attributable to shareholders | 2,179 | — | — | 1,856 | (2,110) | 1,925 | |||||||||||||||||||||||||||||
1. This column accounts for investments in all subsidiaries of BAM other than the Finance Debt Issuers, on a combined basis.
2. This column includes the necessary amounts to present BAM on a consolidated basis.
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Summary of Significant Accounting Policies
Critical Accounting Policies, Critical Accounting Estimates and Judgements
BAM prepares condensed consolidated financial statements in conformity with U.S. GAAP. The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates that affect the amounts reported. Management believes that estimates utilized in the preparation of the condensed consolidated financial statements are presented fairly, in all material respects. Such estimates include those used in the valuation of investments and the measurement of deferred tax balances (including valuation allowances) and the determination of control or significant influence. Actual results could differ from those estimates and such differences could be material. BAM believes the following critical accounting policies could potentially produce materially different results of BAM, if underlying assumptions, estimates and/or judgments were to be changed. For a full description of accounting policies, see Part I—Item 1. Financial Statements, Note 2 “Summary of Significant Accounting Policies” of the condensed consolidated financial statements as of September 30, 2026 and December 31, 2025 and for the three and nine months ended September 30, 2026 and 2025.
Equity Method Investments
Investments in which BAM is deemed to exert significant influence, but not control, are accounted for using the equity method of accounting. BAM has significant influence over our partner managers and therefore accounts for these investments under the equity method.
The carrying value of equity method investments is determined based on amounts invested by BAM, adjusted for the equity in earnings or losses of the investee allocated based on the relevant agreements, less distributions received. Under the equity method of accounting, BAM's share of earnings from equity investments is included in the share of income from equity investments in the condensed consolidated statements of operations. BAM evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.
Refer to Part I—Item 1. Financial Statements, Note 4 “Investments” of the condensed consolidated financial statements for further details of our equity method investments.
Business Combinations
The Company accounts for business combinations using the acquisition method of accounting, which requires management to make significant estimates and assumptions in determining the acquisition-date fair values of identifiable assets acquired and liabilities assumed, particularly identifiable intangible assets.
Significant estimates and assumptions used in determining the fair value of acquired intangible assets include projected future cash flows, expected retention rates, estimated useful lives and discount rates. These estimates require significant judgment and are based on historical information, management's expectations regarding future performance and available market information. The assumptions underlying these estimates are inherently uncertain, and changes in these assumptions could significantly affect the estimated fair values of acquired intangible assets and the resulting amount of goodwill recognized.
Control or Level of Influence
When determining the appropriate basis of accounting for BAM's investees, including funds and other entities, BAM makes judgments about the degree of influence that it exerts directly or through an arrangement over the investees’ relevant activities and whether it has a controlling financial interest under the voting interest or variable interest entity models. This may include the ability to elect investee directors or appoint management. A controlling financial interest is obtained when BAM has the power to direct the relevant investing, financing and operating decisions of an entity under the applicable voting interest or variable interest entity model and, for variable interest entities, when BAM is determined to be the primary beneficiary. BAM evaluates whether it acts in its capacity as principal rather than as an agent for other investors. Operating as a principal includes having sufficient capital at risk in any investee and exposure to the variability of the returns generated as a result of the decisions of BAM as principal. Judgment is used in determining the sufficiency of the capital at risk or variability of returns. In making these judgments, BAM considers the ability of other investors to remove BAM as a manager or general partner in a controlled partnership.
Carried Interest Allocations - Unrealized
The change in the fair value of investments is a significant input into carried interest allocations - unrealized. Estimates and assumptions are made when determining the fair value of the underlying investments within the funds. See “Fair Value” below for further discussion related to significant estimates and assumptions used for determining fair value of the underlying investments.
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Fair Value
BAM uses fair value throughout the reporting process. For details of our accounting policies related to fair value refer to Part I—Item 1. Financial Statements, Note 2. “Summary of Significant Accounting Policies — Fair Value of Financial Instruments” and “Summary of Significant Accounting Policies — Revenue Recognition” in the “Notes to the condensed consolidated financial statements”. The following discussion is intended to provide supplemental information about how the application of fair value principles impact our financial results, and management’s process for implementing those principles including areas of significant judgment.
The fair value of the investments held by BAM's funds is the primary input to the calculation of certain of our management fees, incentive fees, performance fees and the related compensation we recognize. In the absence of observable market prices, we utilize valuation methodologies applied on a consistent basis and assumptions that we believe market participants would use to determine the fair value of the investments. For investments where little market activity exists management’s determination of fair value is based on the best information available in the circumstances, which may incorporate management’s own assumptions and involves a significant degree of judgment, and the consideration of a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks.
Management has elected the fair value option for certain equity method investments. Additionally, management is required to measure specific financial instruments at fair value, including debt instruments, equity securities, and freestanding derivatives.
Our primary approach to determining the fair value of our investments is generally the income approach, which estimates fair value based on the present value of expected future cash flows generated by a business. The most commonly used method within this approach is the discounted cash flow method, which incorporates key assumptions about the investment’s projected net earnings or cash flows, discount rate, capitalization rate, and exit multiple.
Alternatively, management uses the market approach as a secondary methodology. This approach primarily relies on valuations of comparable public companies, transactions, or assets, requiring judgment in selecting appropriate comparables. Depending on the specific facts and circumstances of the investment, alternative primary and secondary methodologies may be applied, including option value, contingent claims or scenario analysis, yield analysis, projected cash flow through maturity or expiration, discount to sale, probability-weighted methods, or recent financing rounds.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk
The primary market risk exposure of BAM relates to its role as an asset manager of the publicly listed permanent capital vehicles and the sensitivity of base management fees earned from these affiliates due to movements in their underlying trading price, specifically with respect to the market risk related to base management fees earned based on the market capitalization of BEP, BIP and BBUC.
A 10% adverse movement in the market capitalization of BEP, BIP and BBUC as of September 30, 2026 could result in a reduction of up to $17 million to the base management fees earned from these vehicles.
Foreign Currency Risk
We have very limited exposure to foreign currency risk as a majority of our private funds are denominated in U.S. dollars. This means that a majority of the Fee Revenues that we earn are paid in U.S. dollars, irrespective of the local currency of our underlying investment base. Additionally, the majority of our revenues are earned in the U.S. We may from time to time reduce foreign currency risk by employing hedging techniques, including using forward contracts to reduce exposure to future changes in exchange rates when a meaningful amount of capital has been invested in foreign currencies.
Interest Rate Risk
BAM has $3.5 billion of senior unsecured notes outstanding, all of which bear interest at fixed rates. In addition, in connection with the Oaktree Acquisition, BAM began consolidating borrowings of Oaktree subsidiaries, which are non-recourse to BAM. As of September 30, 2026, these borrowings totaled $900 million in principal, comprising senior unsecured notes that also bear interest at fixed rates. Accordingly, interest expense on these notes is not subject to fluctuations in market interest rates; however, changes in market interest rates may impact their fair value.
BAM's interest rate exposure arises primarily from variable-rate instruments, including balances held with affiliates and external parties, borrowings under its internal and external revolving credit facilities, and its commercial paper program. As of September 30, 2026, BAM had no outstanding borrowings under its revolving credit facility or commercial paper program, limiting its exposure to fluctuations in interest rates on these financing arrangements.
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Credit Risk
Investors in our private funds make capital commitments to these vehicles via subscription agreements. When a private fund makes an investment, these capital commitments are then satisfied by our investors via capital contributions as prescribed under these subscription agreements. Investors in our private funds may default on their capital commitment obligations, which could have an adverse impact on our earnings or result in other negative implications to our businesses such as the requirement to deploy our own capital to cover such obligations. This impact would be magnified if the investor that does so is in multiple funds. Given the diversity and creditworthiness of our over 2,500 clients, including some of the world’s largest institutional investors, sovereign wealth funds and pension plans, we are of the view that there is not a material credit risk present in our asset management business.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired objectives.
Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are effective at the reasonable assurance level to accomplish their objectives of ensuring that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
No change in our internal control over financial reporting (as such term is defined in Rules 13a–15(f) and 15d–15(f) under the Exchange Act) occurred during our most recent quarter, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For a discussion of BAM's legal proceedings, see the section entitled “Litigation” appearing in Note 22, “Commitments and Contingencies” in BAM's condensed consolidated financial statements included elsewhere in this report, which is incorporated herein by reference.
ITEM 1A. RISK FACTORS
For a discussion of our potential risks and uncertainties, see the information under “Part I—Item 1A. Risk Factors” in our Annual Report. Other than as set out under “Part I—Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Environment” in this report, there were no material changes to the risk factors disclosed in our Annual Report.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Share Repurchases in the Third Quarter of 2026
BAM’s approved Normal Course Issuer Bid, which constitutes its current share repurchase program, authorizes BAM to repurchase up to 36,946,177 Class A Shares during the period from January 13, 2026 to January 12, 2027. As of September 30, 2026, BAM had repurchased 12,684,683 Class A Shares under the bid, leaving 24,261,494 Class A Shares available for repurchase.
Repurchases under the bid may be made from time to time through open market transactions on any of the NYSE, TSX, or alternative trading systems, subject to applicable law. The timing, manner, price and amount of any repurchases will be determined by BAM in its
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discretion and will depend on a variety of factors, including legal requirements, prevailing share price, economic and market conditions. The bid will remain in effect until January 12, 2027, unless BAM repurchases the maximum approved number of Class A Shares before that date. The bid does not require BAM to repurchase any specific number of Class A Shares and may be suspended, extended, modified or discontinued at any time.
| Issuer Purchases of Class A Shares (amounts in millions, except share and per share amounts) | ||||||||||||||
| Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Number of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||||
| July 1, 2026 to July 31, 2026 | — | $ | — | — | 24,479,718 | |||||||||
| August 1, 2026 to August 31, 2026 | — | $ | — | — | 24,479,718 | |||||||||
| September 1, 2026 to September 30, 2026 | 218,224 | $ | 45.82 | 218,224 | 24,261,494 | |||||||||
| 218,224 | 218,224 | |||||||||||||
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
| Exhibit Number | Exhibit Description | |||||||
| 10.1+ | Restricted Share Unit Plan (incorporated by reference to Exhibit 4.4 of BAM's Form S-8 filed with the SEC on July 31, 2026). | |||||||
| 22.1 | List of Subsidiary Guarantors (incorporated by reference to Exhibit 22.1 of BAM's Form 10-K filed with the SEC on March 2, 2026). | |||||||
| 31.1* | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a). | |||||||
| 31.2* | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a). | |||||||
| 32.1** | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.2** | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS* | Inline XBRL Instance Document. | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |||||||
____________________
* Filed herewith.
** Furnished herewith.
+ Management contract or compensatory plan or arrangement in which directors or executive officers are eligible to participate.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 6, 2026
| Brookfield Asset Management Ltd. | |||||||||||
| /s/ Hadley Peer Marshall | |||||||||||
| Name: | Hadley Peer Marshall | ||||||||||
| Title: | Chief Financial Officer | ||||||||||
| (Principal Financial Officer and Authorized Signatory) | |||||||||||
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