Brookfield Asset Management Ltd. Q3 FY2026 earnings call

• Record Fundraising and Capital Base: Raised $123 billion in the first nine months of 2026, driven by strong demand across infrastructure, private equity, and credit. Fee-bearing capital reached $682 billion, up 13% over the last 12 months.
• Business Model Resilience: Emphasized durability through recurring fee-related earnings anchored in long-term/perpetual capital. Diversification across five market-leading platforms and over 60 strategies provides resilience against geopolitical, interest rate, and market volatility.
• Infrastructure Leadership: Exceptional momentum in infrastructure fundraising, with ~$50 billion committed over the past year. The flagship Core Plus global infrastructure fund is on track to exceed its $30 billion target, potentially becoming the largest closed-end infrastructure fund ever raised.
• AI Infrastructure Strategy: Investing in AI infrastructure using the same disciplined approach as other real assets: securing long-term contracts with top-tier corporate counterparties, obtaining permits before capital deployment, and leveraging operational expertise in land acquisition, power procurement, and compute integration.
• Credit Platform Growth: Strong performance in credit strategies, aided by higher financing costs creating attractive deployment opportunities. Full ownership of Oaktree enhances counter-cyclical capabilities and client coverage.
• Carried Interest Realization: Achieved first meaningful net realized carry of $48 million for BAM since the spin-out, driven by early monetization of outperforming private equity investments. Future visibility includes additional realizations in Q4 and beyond.

Fee-bearing capital increased 13% year-over-year to $682 billion. Fee-related earnings (FRE) rose 15% to $864 million ($0.54 per share), and distributable earnings (DE) also grew 15% to $763 million ($0.47 per share). The firm raised $25 billion in the third quarter, contributing to a total of $123 billion raised in the first three quarters of 2026. Infrastructure and private equity led fundraising efforts, with significant contributions from credit strategies.

• Fundraising: Expects 2026 to be a record year for fundraising. Baseline annual fundraising expectations have structurally increased to north of $100 billion, with 2027 expected to meet or slightly exceed this run rate.
• Earnings: Anticipates earnings to be in line with long-term targets, though modestly below initial internal expectations due to timing shifts rather than underlying weakness.
• Timing Adjustments: Fees from the sixth vintage of the flagship infrastructure fund will begin January 1st, 2027 (later than planned), which delays some fee recognition but does not reduce total expected fees. Performance fees from BBU are deferred, not lost, pending price recovery.
• Carry Outlook: Projected to realize approximately $3 billion of net carried interest between 2029 and 2031, scaling to average more than $2 billion annually from 2032 through 2037 if funds hit targets.

• Regulatory and Permitting Delays: While Brookfield mitigates this by securing permits and community support before capital deployment, broader regulatory disruptions could impact project timelines for competitors or speculative developers.
• Corporate Credit Counterparty Risk: The primary risk in AI infrastructure projects is the financial stability of the counterparties backing long-term revenue contracts; however, Brookfield limits exposure to top-tier global corporations and sovereigns.
• Operational and Construction Risk: Mitigated by Brookfield’s decades of experience in large-scale infrastructure development, centralized procurement, and supply chain relationships.
• Market Volatility: Geopolitical dynamics, energy cost volatility, and interest rate environments create uncertainty, though the diversified platform is designed to navigate these cycles.

Q: Sherilyn Radborn (TD Cowan) asked about the partnership approach in AI factories and the specific risks that must be managed before deploying capital.

A: CEO Connor Teskey explained that Brookfield differentiates itself by partnering only with the best corporate credit counterparties, leveraging platform diversity for global opportunities, and applying their decades of infrastructure discipline. They de-risk development by securing off-take agreements, equipment supply, and permits before putting capital in the ground, ensuring returns of and on capital during the initial contract period.

Q: Craig Siegenthaler (Bank of America) questioned how Brookfield's push into AI aligns with its traditional contrarian, value-oriented DNA, given the sector's hype and potential downside risks like construction delays.

A: Teskey clarified that they treat AI infrastructure exactly like any other real asset class, focusing on high-quality assets with long-term contracts from investment-grade tenants. He emphasized that the bottleneck in the AI sector is not demand or capital, but the operational capability to execute complex projects at scale—a strength where Brookfield is "second to none," distinguishing them from generic players.

Q: Bart Buzarski (RBC Capital Markets) sought clarity on the 2027 fundraising outlook, specifically regarding the balance between cyclical and counter-cyclical components.

A: Teskey stated that while 2026 is a record year, the structural baseline for fundraising has risen to over $100 billion annually. For 2027, he highlighted the completion of PE and infrastructure flagships, plus the launch of new real estate and Oaktree Opportunistic Credit flagships. The latter is particularly valuable as a counter-cyclical tool amid current credit market uncertainty.

Q: Ken Worthington (JP Morgan) asked about the specific risks in AI infrastructure contracts that might not be protected, and what would need to go wrong to miss return targets.

A: Teskey identified two main risks: corporate credit counterparty risk and operational/construction risk. He noted that counterparty risk is minimized by dealing only with the world's strongest corporations or sovereigns. Operational risk is managed through Brookfield’s leading infrastructure expertise, including centralized procurement and deep supply chain relationships, which few peers can match.

Q: Dan Weldon (Wells Fargo) inquired about the capital markets build-out, asking what investments are needed to scale and where Brookfield intends to win or avoid participation.

A: Teskey revealed that most investments in capital markets capabilities have already been made, so the business is largely burdened with costs ahead of revenue growth. He emphasized that future growth comes from increasing involvement in the capital markets activities of their own portfolio companies—low-hanging fruit within their control—rather than relying solely on external market volumes.