BAM

Connor Teske mentioned 2026 will be a record year with strong first quarter, fee-related earnings up, capital raised, and strategic developments like Brookfield Wealth Solutions buying Just Group and nearing Oaktree acquisition. Armin Panossian spoke on Oak Tree integration strengthening credit platform, private credit environment, and investing through cycles. Hadley Pierre-Marshall discussed financial results, margins, share repurchases, fundraising details including by business segments, deployment and monetization, and balance sheet.

Expect 2026 to be largest fundraising year ever. Anticipate strong demand for flagship private equity and infrastructure funds. Fee-related earnings expected to grow with operating leverage across businesses. Post-Oaktree acquisition, consolidated margin will include 100% of Oak Tree, but partner managers are accretive and strategically beneficial.

Fee-related earnings for the quarter were up 11% to $772 million. Distributable earnings were $702 million. Fee-bearing capital increased 12% over the last 12 months to $614 billion. In infrastructure, raised $3.4 billion including $800 million for super core and $800 million for infrastructure private wealth. In private equity, raised $1.4 billion including $1 billion for private equity special situation. In credit, raised $13 billion including $4.7 billion of long-term private funds and $3.8 billion from Brookfield Wealth Solutions. Seventeen Capital completed final close of Credit Fund 2 adding $2.5 billion.

Geopolitical uncertainty remains elevated, trade and energy markets adjusting, investors assessing growth, inflation, rates and AI disruption. Concerns around certain parts of private credit like rising impairments, valuations, leverage, liquidity mismatches, refinancing risk and software exposure in AI-driven world.

Q: Dig further into Oaktree and distressed market, how much money Oak Tree has to invest and deployment if distress window opens; A: Oak Tree has considerable funds under management, sees sector-specific distress, expects to deploy tens of billions in next couple of years.

Q: Quantify impact of Brookfield's acquisitions of partner capital companies on fundraising and client relationships; A: Acquiring market leaders accelerates growth, partner managers driving earnings growth.

Q: Touch on AI fundraising, differentiation vs peers, balancing act; A: AI infrastructure is largest theme, first deal with Bloom Energy representative, remain balanced by being selective.

Q: Broader outlook for rest of year, fundraising backdrop; A: Expect record fundraising, driven by flagship funds, infrastructure and energy growth.

Q: Capital allocation, buybacks and debt issuance; A: Buybacks opportunistic when stock undervalued, issued debt to add liquidity, have excess debt capacity.

Q: Retail ambitions, rethinking based on recent events; A: Private wealth business growing, individual market penetration accelerating, approach continues.

Q: Energy transition, marketing strategy, demand for energy; A: Energy demand unprecedented, need all types of energy solutions, Brookfield leading across them.

Q: Management fee cadence, catch-up fees; A: Flagship private equity and infrastructure strategies will have fees turn on shortly, catch-up fees build throughout year.

Q: Stock-based comp, its role in compensation; A: Used as primary compensation for senior leadership and across investment professionals, aligns firm.

Q: Oak Tree integration, low-hanging fruit for FRE; A: Revenue synergies, tailored solutions, balance sheet optimization, cost synergy in credit platform.

Q: Real estate recovery, opportunities and office outlook; A: Real estate transaction activity increasing in alternative forms, office fundamentals strong with no new supply, deal activity to come.