Brookfield announced that it will acquire the remaining 26% stake in Oaktree Capital Management for approximately $3 billion. This follows Brookfield’s initial majority stake acquisition in 2019 (~$5 billion) and is positioned to deepen the firm’s foothold in alternative credit and wealth management.
Oaktree Capital Management is widely regarded as one of the world’s leading credit-focused asset managers, particularly known for its expertise in distressed debt, high-yield bonds, and private credit. Founded in 1995 by Howard Marks, Bruce Karsh and a group of former TCW executives, Oaktree built its reputation on a disciplined, contrarian investment philosophy that emphasizes risk control, long-term thinking, and deep value investing.
What makes Oaktree special is its consistent success across credit cycles. The firm is known for stepping into distressed markets when others pull back: buying undervalued or impaired debt at attractive prices and riding recoveries as conditions improve. This approach has produced strong risk-adjusted returns over decades, earning the trust of institutional clients like pension funds and sovereign wealth funds. Beyond performance, Oaktree’s transparent, principle-driven culture, anchored by Marks’ influential memos on market psychology and risk, has made it a thought leader in credit investing and a key player in global alternative asset management.
Howard Marks is one of the greatest investors of modern times, measured not only by the returns he has generated over the course of his career, but also by the quality of his intellect and his humility. Warren Buffett famously said: “When I see memos from Howard Marks in my mail, they’re the first thing I open and read. I always learn something.”
That Howard Marks has chosen Brookfield Corporation to continue his Oaktree Capital legacy speaks volumes about his admiration for the quality of this particular alternative asset manager under the leadership of Bruce Flatt. An investor couldn't ask for more of an endorsement.
Howard Marks will remain on Brookfield’s board, while Oaktree co-CEOs Robert O’Leary and Armen Panossian will lead Brookfield’s credit business.
The funding breakdown for this acquisition places about $1.6 billion on Brookfield Asset Management (New York-based arm) and $1.4 billion on its parent entity.
The transaction is anticipated to close in Q1 of 2026.
This is a major coup for Brookfield Corporation. It isn't just another private credit firm - it is now possibly the best private credit firm in the world, in addition to being a leading global alternative asset manager. Brookfield expects the U.S. to become its largest market by assets, workforce and revenue, with Oaktree’s $209 billion in assets under management bolstering its scale.
"Oaktree will remain central to Brookfield's credit strategy, and we see significant opportunities to grow the franchise and expand what we can offer our clients together," said Howard Marks
Brookfield has delivered another strong quarter, but as with most Brookfield results, the headline earnings number only tells part of the story. Distributable earnings before realizations increased 15% per share to $0.61, while total distributable earnings rose to $1.55 billion. More importantly, the underlying earnings engine continues to strengthen. Asset management fee-related earnings increased 20%, wealth solutions earnings rose 23%, and the company raised a record $77 billion of new capital during the quarter. This is what makes Brookfield interesting: it is not simply an investment company generating returns on capital, but a capital-raising machine that increasingly earns fees, investment income and carried interest from the capital it puts to work.
The asset management business is particularly important. Fee-bearing capital reached $672 billion, up 19% year-on-year, with fundraising broad-based across strategies and geographies. Brookfield raised $7 billion for its seventh private equity flagship and $9 billion for its sixth infrastructure fund, both of which are on track to be the largest vintages in their respective series. The completion of the Oaktree acquisition further strengthens the platform by bringing one of the world's leading credit franchises fully into the group. The significance is not simply the additional assets. It is the ability to offer institutional and increasingly retail investors a broader range of products while leveraging the same distribution infrastructure, investment expertise and global network. That creates the kind of operating leverage that is very difficult for smaller alternative asset managers to replicate.
The other piece of the puzzle is wealth solutions, which is becoming an increasingly important source of permanent capital. Earnings increased 23%, while insurance assets reached $191 billion, including the contribution from the acquisition of Just Group in the UK. Brookfield is effectively building an ecosystem in which capital can move from pension and institutional investors into private markets, while insurance capital provides another source of long-duration funding. This matters because permanent or semi-permanent capital is strategically more valuable than capital that has to be raised and returned on a fixed timetable. It gives Brookfield greater flexibility over when to invest, when to hold and when to monetize. At the same time, its operating businesses continue to generate relatively resilient cash flows, supported by contracted and inflation-linked revenues across infrastructure, energy and other essential assets.
And this brings us to what I think is the most interesting number in the entire release: $210 billion of deployable capital. Brookfield raised $98 billion during the first six months of the year, deployed $100 billion and monetized another $40 billion of assets, while still ending the quarter with more capital available to invest than it had at the start. This is the capital cycle working in Brookfield's favour. It can buy assets, improve them, recycle capital through sales and redeploy the proceeds into the next opportunity. The company has already demonstrated this with $40 billion of year-to-date monetizations, including $10 billion each from infrastructure and real estate. Even the sale of One Churchill Place at Canary Wharf for £750 million is notable because it demonstrates that high-quality real estate can still command attractive valuations when the underlying asset is right.
The broader thesis, therefore, is becoming increasingly powerful. Brookfield is building a self-reinforcing system in which fundraising creates fee income, fee income supports the investment platform, investment performance creates carried interest, and asset monetizations recycle capital into new opportunities. It also has $12.5 billion of accumulated unrealized carried interest waiting to be crystallized. Meanwhile, the balance sheet remains conservatively funded, with $210 billion of deployable capital and no corporate debt maturities in 2026. The real question is not whether Brookfield can grow earnings next quarter. It is whether this compounding machine can continue to deploy ever-larger amounts of capital at attractive returns. If it can, the 15% increase in earnings is almost incidental. The real opportunity is the increasing scale and self-reinforcing nature of the platform.
Brookfield Corporation Q1 2026 results showed a business that is still compounding at scale, even in a volatile market. The headline numbers were strong, but the more important story is what sits underneath them: Brookfield continues to attract enormous amounts of capital, recycle assets at healthy valuations, and position itself directly in the middle of the biggest long-duration investment themes in the world.
The clearest signal was fundraising. Brookfield raised $21 billion in the quarter and $67 billion year-to-date. That is an enormous number even by Brookfield standards. Fee-bearing capital climbed 12% to $614 billion, which matters because those fees create highly recurring earnings streams that become more valuable as the platform scales.
What stands out is where the demand is coming from. Institutions continue allocating heavily to infrastructure, credit, energy transition, and real assets. Brookfield also highlighted a $40 billion mandate tied to Just Group and continued momentum in wealth and retail channels. Investors are looking for durable cash flowing assets in an uncertain world, and Brookfield is increasingly one of the default destinations for that capital.
The earnings profile reflects that shift. Asset management distributable earnings rose to $765 million for the quarter, while the wealth solutions business generated another $430 million. The insurance and wealth operation is becoming a much bigger contributor to the overall platform. This is strategically important because insurance float gives Brookfield permanent or very long-duration capital to invest across its ecosystem.
At the operating level, the company continues to look resilient. Brookfield emphasized stable cash flows across infrastructure, renewable power, and other operating businesses. These are not cyclical software assets or speculative growth ventures. Most of the portfolio sits in essential infrastructure, contracted assets, utilities, energy systems, transport networks, and hard assets tied to the real economy. That insulation is becoming more valuable in a world with persistent inflation, geopolitical fragmentation, and higher capital costs.
Another major takeaway was capital recycling. Brookfield sold $17 billion of assets during the quarter, largely at or above carrying values. That is important because it validates the marks on the balance sheet while also freeing up capital for redeployment into higher-return opportunities. Infrastructure and energy accounted for the bulk of the sales activity.
The balance sheet also remains a core strength. Brookfield ended the quarter with $188 billion of deployable capital, including cash, undrawn credit, and uncalled fund commitments. In practical terms, this means the company can stay aggressive when markets dislocate. Brookfield tends to perform best when capital is scarce and forced sellers emerge. The firm is effectively built for periods of stress.
Management also leaned into buybacks. Brookfield repurchased over $1 billion worth of BN and BAM shares year-to-date, arguing the stock trades materially below intrinsic value. BN shares were repurchased at an average price of around $41 versus management’s stated intrinsic value estimate of $66. That is a fairly direct statement from management that they see the market materially undervaluing the business.
Stepping back, the broader pattern is becoming clearer. Brookfield is evolving from a traditional alternative asset manager into a global capital allocation platform sitting at the intersection of infrastructure, insurance capital, private credit, AI infrastructure, energy transition, and real assets. Recent commentary around AI infrastructure, data centers, and power demand reinforces this direction.
The market environment is also helping separate winners from weaker players. Many alternative managers are struggling to raise capital, while Brookfield continues gathering money at scale. The company is one of the few firms benefiting from structural demand for infrastructure, credit, and hard assets rather than relying on traditional leveraged private equity alone.
The overall message from the quarter was simple: Brookfield is getting bigger, more diversified, more recurring in its earnings mix, and more deeply embedded in long-term global capital flows. The company is no longer just buying assets. It is building an ecosystem where insurance capital, private funds, infrastructure operations, and asset management reinforce each other at scale.
Blue Owl Capital (OWL) restricted investor withdrawals on a major private debt fund after selling $1.4 billion in loans. It is clearly facing a liquidity squeeze. Some alternative asset firms pushed aggressively into the private credit space, where they had little or no expertise, and are now facing a real stress test.
Meanwhile, others with a more prudent approach to making private credit investments will benefit. It's survival of the fittest.
My money is on Brookfield Corporation (BN) which now owns Howard Marks' Oak Tree Capital — arguably the best private credit firm out there, with over half a century of experience in this asset class.
Nick Goodman, President of Brookfield Corporation, said, “Our financial performance in the third quarter was strong, supported by record results in our asset management business, sustained organic growth across our wealth solutions platform, and the resilience of our operating businesses.”
He added, “We continue to successfully execute on our key initiatives, positioning Brookfield for our next phase of growth. Our agreement to acquire the remaining interest in Oaktree, as well as the continued global expansion of our wealth solutions business, mark important milestones in compounding long-term value for our shareholders.”
Distributable earnings before realizations were $1.3 billion ($0.56/share) for the quarter and $5.4 billion ($2.27/ share) over the last twelve months, representing an increase of 6% and 18% on a per share basis over the prior year periods. Total distributable earnings were $1.5 billion ($0.63/share) for the quarter and $6.0 billion ($2.54/share) over the last twelve months.
Asset Management
DE was $687 million ($0.29/share) in the quarter and $2.7 billion ($1.14/share) over the LTM.
Fee-related earnings increased by 17% from the prior year quarter to a record $754 million, supported by fee-bearing capital of $581 billion.
Total inflows during the quarter were $30 billion, the highest fundraising period in three years, including over $6 billion from our retail and wealth clients.
We held the final close of our second vintage global transition strategy, bringing total commitments to $20 billion, marking the largest private fund globally dedicated to energy transition, and we also launched the seventh vintage of our flagship private equity fund.
We recently announced an agreement to acquire the remaining 26% interest in Oaktree. The transaction expands our ownership in Oaktree’s carried interest, fee-related earnings, and balance sheet investments, and further enhances the scale of our global credit platform.
Wealth Solutions
DE was $420 million ($0.18/share) in the quarter and $1.7 billion ($0.70/share) over the LTM.
We originated $5 billion of retail and institutional annuity sales during the quarter, increasing insurance assets to $139 billion, with approximately 80% of new annuities written at five years or longer in duration.
We deployed $4 billion into Brookfield-managed strategies at an average net yield of 9%. Our investment portfolio generated an average yield of 5.7%, maintaining strong spread earnings, and contributing to a 15% return on equity.
We received shareholder approval for the acquisition of U.K.-based Just Group, expected to close in the first half of 2026, subject to regulatory approvals. Upon closing, the acquisition will increase the group’s total insurance assets to approximately $180 billion.
We signed our first Japan-based reinsurance agreement with Dai-ichi Frontier Life, a leading Japanese insurance company, further expanding our global presence in a key growth market.
Operating Businesses
DE was $366 million ($0.15/share) in the quarter and $1.7 billion ($0.72/share) over the LTM.
Our publicly listed private equity business announced plans to simplify its corporate structure through the conversion into a single-listed corporate entity ("BBU Inc."), aimed to broaden its investor base and enhance trading liquidity.
Subsequent to quarter end, we announced partnerships to advance next-generation power and AI initiatives, including with the U.S. Government, to expand nuclear capacity through Westinghouse to deliver $80 billion of new nuclear plants in the U.S.—and with Bloom Energy to install up to 1 GW of behind-the-meter power generation to support AI infrastructure globally.
Operating fundamentals across our real estate portfolio remain strong, with our super core assets maintaining 96% occupancy and our core plus portfolio ending the quarter at 95% occupancy, reflecting continued tenant demand for high-quality assets.
Earnings from the monetization of mature assets were $154 million ($0.07/share) for the quarter and $642 million ($0.27/share) over the LTM.
Year to date, we have advanced $75 billion of asset sales across the business, including over $35 billion since the second quarter. Substantially all sales were completed at or above our carrying values, monetizing significant value for our clients at attractive returns.
Monetization activity since the second quarter included $13 billion of real estate assets, $9 billion of infrastructure assets, including the successful IPO of Rockpoint Gas Storage, nearly $8 billion of renewable assets, and $6 billion of other diversified assets across our operating businesses.
Total accumulated unrealized carried interest was $11.5 billion at quarter end, net of $154 million realized into income in the quarter and $580 million over the LTM. As transaction activity continues to improve, we anticipate realizing significant carried interest into income over the next three years.
We ended the quarter with a record $178 billion of capital available to deploy into new investments.
We have record deployable capital of $178 billion, which includes $74 billion of cash, financial assets and undrawn credit lines at the Corporation, our affiliates and our wealth solutions business, as well as $104 billion of uncalled private fund commitments.
Our balance sheet remains conservatively capitalized, with corporate debt at the Corporation carrying a weighted-average term of 14 years, and today, we have no maturities through the end of 2025.
Capital markets remain highly supportive of real assets, facilitating a continued pickup in transaction activity. We executed $140 billion of financings so far this year across the franchise, including over $50 billion since the second quarter. A few recent highlights include:
- At the Corporation, we issued $650 million of 10-year senior notes, which was met with strong investor demand underscoring the strength of our credit profile.
- In real estate, we successfully refinanced a $1.9 billion five-year loan for a luxury resort in the Bahamas and completed two New York office financings, each over $1.25 billion, highlighting the continued flow of capital to high-quality assets.
During the quarter, we returned $180 million of capital to our shareholders via regular dividends and share repurchases. Year-to-date, we repurchased over $950 million of Class A shares in the open market at an average price of $36, which represents a 50% discount to our view of intrinsic value at quarter end of $69.
During the quarter, we announced a strategic partnership with Figure, further advancing Brookfield’s position at the forefront of integrating artificial intelligence to drive productivity across our real assets and operating businesses.
The Board declared a quarterly dividend for Brookfield Corporation of $0.06 per share, payable on December 31, 2025 to shareholders of record as at the close of business on December 16, 2025. On a post-split basis, the quarterly dividend is consistent with the previous quarter’s dividend. The Board also declared the regular monthly and quarterly dividends on our preferred shares.
"People always ask - Are there too many data centers?
I actually have the opposite view.
It’s not a bubble because it’s hard to do this... it’s not easy to build. You need to find the connectivity, you need to find the power, you need to build the buildings, you have to get the chips, and you need to have $50 billion per AI factory. This can’t be done by everybody... You’re not building enough data centers — first point. Second, the data centers: the shell, the chips inside, they go away in five years. You amortize those in five years. So that will go away, and the chips are going to change — but you’ve amortized them in five years.
So we’re not building enough.
As much as we’re building today, we’re not even building half of what we can. And you can’t build enough.”
1/ Total Debt: $234.8 billion with 8.04x debt-to-EBITDA multiple
2/ Current Ratio: 0.65x
3/ Only $46 billion in equity against $490 billion in assets
4/ $16.6 billion interest expense annually consumes 58% of operating income
if interest starts rising, or income drops (e.g. due to commercial real-estate defaults)- this would not end well.
i agree that being a business in a country where your ex-manager is an incumbent prime-minister - means you'd be able to dodge some bullets, but not stuff that is too big to sweep under the rug.
perhaps investors price it less than its parts - is because the investors price in the chance of a default.
Brookfield's financial profile with high debt levels, low current ratio, modest equity relative to assets, and a large interest burden is significantly influenced by its asset management business model.
Brookfield operates as a global alternative asset manager with around $450 billion in fee-bearing capital under management on behalf of third-party clients. The company invests both its own capital and clients' capital into long-term assets, generating revenue from management fees, performance fees to supplement its returns on its own invested capital.
The substantial total assets ($490 billion) include assets managed on behalf of clients, not just directly owned corporate assets. The relatively low equity of $46 billion against this asset base reflects the leveraged financing structure typical of asset management firms that deploy third-party capital alongside their own. The debt includes leverage used to acquire and operate these assets as well as capital supporting long-term private equity funds.
Brookfield's historical debt multiples have ranged between 6.12 to 10.20 over 13 years, so 8.04x is well within its normal range. The high interest expense consuming 58% of operating income partly reflects the costs of this leverage and financing strategy, which aims to generate attractive long-term returns for clients alongside shareholders. The current ratio of 0.65x also relates to this capital-intensive business model, where short-term liquidity is managed within a structure emphasizing long-term investments and fee income rather than traditional balance sheet strength.
Picture this, with exaggerated numbers to make the point clear. Let’s say I start with just $1 and can generate a 100% net annual return. A year later, I’ve turned that into $2. Now imagine others take notice of my impressive returns and decide to invest with me. Collectively, they give me $10 to manage, in exchange for a 10% fee on the profits. That gives me $11 to invest ($10 from others, plus my own $1).
A year later, I’ve doubled that pool to $22. My personal return is now $1 on my own capital, plus another $1 in fees earned on the profits generated for others. By managing third-party money, I’ve effectively doubled my earnings, all while only putting $1 of my own capital at risk.
However, on paper, my balance sheet looks less flattering. Of the $11 in earnings that I generated, $9 technically belongs to others, meaning I owe 82% of my earnings to third parties. By conventional accounting standards, that might not look healthy. But once you understand the economics, it’s actually a brilliant model - leveraging other people’s capital to amplify your own returns without taking on equivalent risk.
In short, Brookfield's business model leads to financial ratios that differ markedly from non-asset-management companies, reflecting the economics of managing alternative assets on a global scale rather than typical corporate balance sheet norms.
when you got the $10 to manage, what happened in your books?
you've written them as both an asset and a long term liability, right?
if so then debt/ assets would look worse as it moved from 0% to 91%.
2/
when the asset management tells you the $11 portfolio had 100% return ($11) - what happens in your books?
2.1/ assuming you don't return the managed assets to their owner, your assets and liabilities remains constant, right?
2.2/ as for the profit itself: you probably write a revenue of 11 and COGS of 9, right?
if so, the gross profitability would look worse than a year before (from 100% to 18%)
3/ why would any of those explain a bad current ratio?
the timing of the $2 of profit is the same as the payment to 3rd party who gave you assets to manage, no?
if so, and if the managed assets are registered as long term - then no significant short term debt should have been created. current ration should have been close to zero (unless the original $1 asset was purchased with a short term loan that ballooned to $1.3).
or am i missing something?
there's a famous buffet rule that he invests only in companies he fully understands, because only after you understand all aspects of the business do you know what metrics to watch to see how effective management is.
i'm asking questions as i'm trying to follow this advice :)
You mention Buffett's rule about only investing in businesses that you can understand. But how many investors in Berkshire Hathaway really understand that business? It's a super complex conglomerate with an insurance operation on top. If you ever read the excellent annual letters of the fund Semper Augustus written by Chris Bloomstran (an authority on Berkshire Hathaway), you'll start to understand just how complex it is. But it doesn't stop people investing.
In any event, back to your questions about Brookfield.
It operates a hybrid model that makes it look more complicated on paper than it really is. In simple terms, it invests its own money just like any other investor, but it also manages money on behalf of big institutions such as pension funds, sovereign funds, and insurance companies. That second part (managing other people’s money) creates an entirely separate revenue stream. Brookfield earns management and performance fees from these investors, which can be extremely profitable. But when it invests its own capital into the very same projects as its clients, it gets a double benefit: it earns the regular investment return plus a share of the fees from clients’ capital. This is what gives Brookfield such strong long-term compounding power.
The tricky part is that this model can make its accounts look confusing. When Brookfield reports revenue, not all of that income truly “belongs” to Brookfield’s own shareholders. A significant portion of what flows through its financial statements is generated by money that Brookfield manages for others.
This affects the balance sheet. Brookfield’s reported assets are massive because they include the investments it manages on behalf of clients. But those assets are matched by equally large liabilities, since Brookfield owes those returns back to third-party investors when the underlying investments pay out. It’s a bit like a bank that takes deposits: the deposits are technically liabilities - have you ever looked at the debt ratios of a bank? For idiosyncratic businesses like these, it requires a different approach to analysis. The bigger their asset base grows, the more their liabilities appear to balloon too, even when the underlying health of the enterprise is solid and that inflated asset base is being used to generate bigger returns. That’s why Brookfield’s financial statements can resemble those of a bank rather than a typical industrial firm.
Because of this structure, normal valuation metrics such as price-to-earnings, debt-to-equity, or return on assets can be misleading. A quick ratio analysis might make Brookfield look highly leveraged or low-margin, when in reality the balance sheet just reflects the way it handles client assets. Analysts who understand the business instead focus on measures like fee-related earnings (what Brookfield earns from managing assets) and distributable earnings (cash that can actually go to shareholders). Fortunately, Brookfield breaks these numbers out in its financial reports, which makes our job easier. These give a cleaner picture of how much true value the company is generating from its mix of asset management and investing.
my experience is that complex ownership structures are hiding unpleasant things. not always due to malicious intent, simply because the complex structure allows things to fester. so while i get your point about BAM - i think BN is more risky.
This is why you need to invest in quality management above all else. Trustworthy management with integrity. This brings us back full circle to why people are comfortable investing in Berkshire Hathaway - it was all about Buffett and Munger. But the same is true of Bruce Flat at Brookfield. He is in the same super league of managers. Add to that Howard Marks who is now part of the Brookfield group since it acquired Oaktree Capital (Buffett says that when he sees a memo or note published by Howard Marks, he drops everything else and reads that first - it gives you an idea how great these people are at what they do and how much respect they garner from other highly regarded individuals). If you are not familiar with Marks, see: https://rockandturner.substack.com/p/howard-marks-learn-from-the-best and https://rockandturner.substack.com/p/thinking-like-pabrai-marks-and-buffett
Brookfield partners with U.S. Government - Share price up on the news.
The U.S. government has entered a major strategic partnership with Westinghouse Electric, Cameco Corporation, and Brookfield Asset Management to build at least $80 billion worth of new nuclear reactors across the United States, using Westinghouse’s AP1000 reactor technology. This initiative is explicitly designed to scale up U.S. energy infrastructure, support national security goals, and meet the surging electricity demand driven by artificial intelligence and data centers.
The federal government will arrange financing and expedite regulatory permitting for the reactors, and the deal includes profit-sharing mechanisms, with the government entitled to a share of distributions. Brookfield and Cameco, as co-owners of Westinghouse, will be critical suppliers and investors.
Brookfield stands to benefit massively from this $80 billion U.S. reactor partnership, driving both direct profit growth and broader strategic positioning in infrastructure and energy sectors.
Once $80 billion in orders are cleared, Westinghouse can pocket up to $17.5 billion in distributions from the projects. After this $17.5 billion milestone, the U.S. government receives 20% of any further cash distributions generated by the partnership, but Brookfield remains the majority private beneficiary.
The deal allows Brookfield to double its infrastructure investment in the coming decade, further anchoring it as a dominant player in the U.S. and world energy markets. Brookfield’s annual infrastructure asset base, already valued above half a trillion dollars, will expand sharply with new capital flows and backed orders linked to the nuclear buildout.
The partnership is viewed as central to the Trump administration’s objectives to revitalize American energy sovereignty, build high-paying infrastructure jobs, and win in the global AI competition by securing stable, scalable power.
Alphyn Capital Management stated the following regarding Brookfield Corporation (NYSE:BN) in its third quarter 2025 investor letter:
"The Brookfield machine continues to compound intrinsic value, delivering robust Q2 results across its diversified platform. Distributable earnings (DE) before realizations grew 13% year-over-year, driven by nearly $100 billion in capital inflows over the last twelve months, demonstrating the strength of its ecosystem spanning real assets, insurance, and credit.
At its recent Investor Day, management once again laid out an ambitious plan targeting a 25% annualized growth in DE per share through 2030. This plan anticipates generating $53 billion in free cash flow, leaving $25 billion in excess cash available for opportunistic buybacks and M&A. Management is aggressively scaling the Wealth Solutions platform and investing insurance float, now calling itself an “investment-led insurance organization.” This makes sense as Brookfield’s long-dated, stable life insurance liabilities align well with its expertise in investing in long-duration, essential real assets like infrastructure and renewables. This matching of duration and risk profile enhances capital efficiency and supports the scaling of BAM’s funds without materially altering the overall risk profile.
Management is also leaning heavily into the multi-trillion-dollar capital requirements for AI infrastructure. In an environment where “AI” attracts significant hype and speculative investment, Brookfield’s approach is distinctly de-risked. They are building essential infrastructure such as data centers and the renewable power required to run them, underpinned by long-term commitments from the financially strong hyperscalers, such as a 3,000 MW hydroelectric framework with Google and a 10.5 GW renewable agreement with Microsoft.”
GPU-as-a-Service | An ingenious way to play the AI revolution
While AI providers are hemorrhaging cash simply to stay in the game, with little prospect of generating profits anytime soon, the real beneficiaries of the AI revolution are likely to be those providing the picks and shovels.
Brookfield Corporation ($BN) is playing a smart game and they're doing it in a way that’s entirely on-brand for them. Forget the typical venture capital approach of high-risk bets - Brookfield's strategy is all about treating GPU infrastructure as a long-term, stable asset.
Their plan is straightforward yet brilliant: provide GPU as a service to major clients like hyperscalers, large enterprises and governments. This isn't a simple rental agreement. It’s built on 4-5 year take-or-pay contracts, which are essentially a promise from a creditworthy counterparty to pay for the service whether they use it or not. For Brookfield, this means predictable, durable revenue streams - the same kind they generate from their pipelines and power grids. For their clients, it’s a way to access billions of dollars in AI compute power as an operational expense, freeing up their own balance sheets for other priorities.
But Brookfield isn't stopping at the data center. They understand the real value lies in the entire stack. That’s why they plan to own or co-own the hardware that powers these systems. By controlling the GPUs, along with the critical surrounding infrastructure - think advanced liquid cooling, high-speed interconnects, and the power systems themselves - they can capitalize on the strategic value of these assets. This integrated approach allows them to navigate the long build-out times and complex supply chains that are significant barriers to entry for others.
In essence, Brookfield is applying its core competency in building and managing large-scale, essential infrastructure to the most critical technology of our time. It’s a classic infrastructure play, set to position them as a dominant force in the AI ecosystem.
OAKTREE CAPITAL - HOWARD MARKS - BROOKFIELD CORP
Brookfield announced that it will acquire the remaining 26% stake in Oaktree Capital Management for approximately $3 billion. This follows Brookfield’s initial majority stake acquisition in 2019 (~$5 billion) and is positioned to deepen the firm’s foothold in alternative credit and wealth management.
Oaktree Capital Management is widely regarded as one of the world’s leading credit-focused asset managers, particularly known for its expertise in distressed debt, high-yield bonds, and private credit. Founded in 1995 by Howard Marks, Bruce Karsh and a group of former TCW executives, Oaktree built its reputation on a disciplined, contrarian investment philosophy that emphasizes risk control, long-term thinking, and deep value investing.
What makes Oaktree special is its consistent success across credit cycles. The firm is known for stepping into distressed markets when others pull back: buying undervalued or impaired debt at attractive prices and riding recoveries as conditions improve. This approach has produced strong risk-adjusted returns over decades, earning the trust of institutional clients like pension funds and sovereign wealth funds. Beyond performance, Oaktree’s transparent, principle-driven culture, anchored by Marks’ influential memos on market psychology and risk, has made it a thought leader in credit investing and a key player in global alternative asset management.
Howard Marks is one of the greatest investors of modern times, measured not only by the returns he has generated over the course of his career, but also by the quality of his intellect and his humility. Warren Buffett famously said: “When I see memos from Howard Marks in my mail, they’re the first thing I open and read. I always learn something.”
That Howard Marks has chosen Brookfield Corporation to continue his Oaktree Capital legacy speaks volumes about his admiration for the quality of this particular alternative asset manager under the leadership of Bruce Flatt. An investor couldn't ask for more of an endorsement.
Howard Marks will remain on Brookfield’s board, while Oaktree co-CEOs Robert O’Leary and Armen Panossian will lead Brookfield’s credit business.
The funding breakdown for this acquisition places about $1.6 billion on Brookfield Asset Management (New York-based arm) and $1.4 billion on its parent entity.
The transaction is anticipated to close in Q1 of 2026.
This is a major coup for Brookfield Corporation. It isn't just another private credit firm - it is now possibly the best private credit firm in the world, in addition to being a leading global alternative asset manager. Brookfield expects the U.S. to become its largest market by assets, workforce and revenue, with Oaktree’s $209 billion in assets under management bolstering its scale.
"Oaktree will remain central to Brookfield's credit strategy, and we see significant opportunities to grow the franchise and expand what we can offer our clients together," said Howard Marks
Brookfield has delivered another strong quarter, but as with most Brookfield results, the headline earnings number only tells part of the story. Distributable earnings before realizations increased 15% per share to $0.61, while total distributable earnings rose to $1.55 billion. More importantly, the underlying earnings engine continues to strengthen. Asset management fee-related earnings increased 20%, wealth solutions earnings rose 23%, and the company raised a record $77 billion of new capital during the quarter. This is what makes Brookfield interesting: it is not simply an investment company generating returns on capital, but a capital-raising machine that increasingly earns fees, investment income and carried interest from the capital it puts to work.
The asset management business is particularly important. Fee-bearing capital reached $672 billion, up 19% year-on-year, with fundraising broad-based across strategies and geographies. Brookfield raised $7 billion for its seventh private equity flagship and $9 billion for its sixth infrastructure fund, both of which are on track to be the largest vintages in their respective series. The completion of the Oaktree acquisition further strengthens the platform by bringing one of the world's leading credit franchises fully into the group. The significance is not simply the additional assets. It is the ability to offer institutional and increasingly retail investors a broader range of products while leveraging the same distribution infrastructure, investment expertise and global network. That creates the kind of operating leverage that is very difficult for smaller alternative asset managers to replicate.
The other piece of the puzzle is wealth solutions, which is becoming an increasingly important source of permanent capital. Earnings increased 23%, while insurance assets reached $191 billion, including the contribution from the acquisition of Just Group in the UK. Brookfield is effectively building an ecosystem in which capital can move from pension and institutional investors into private markets, while insurance capital provides another source of long-duration funding. This matters because permanent or semi-permanent capital is strategically more valuable than capital that has to be raised and returned on a fixed timetable. It gives Brookfield greater flexibility over when to invest, when to hold and when to monetize. At the same time, its operating businesses continue to generate relatively resilient cash flows, supported by contracted and inflation-linked revenues across infrastructure, energy and other essential assets.
And this brings us to what I think is the most interesting number in the entire release: $210 billion of deployable capital. Brookfield raised $98 billion during the first six months of the year, deployed $100 billion and monetized another $40 billion of assets, while still ending the quarter with more capital available to invest than it had at the start. This is the capital cycle working in Brookfield's favour. It can buy assets, improve them, recycle capital through sales and redeploy the proceeds into the next opportunity. The company has already demonstrated this with $40 billion of year-to-date monetizations, including $10 billion each from infrastructure and real estate. Even the sale of One Churchill Place at Canary Wharf for £750 million is notable because it demonstrates that high-quality real estate can still command attractive valuations when the underlying asset is right.
The broader thesis, therefore, is becoming increasingly powerful. Brookfield is building a self-reinforcing system in which fundraising creates fee income, fee income supports the investment platform, investment performance creates carried interest, and asset monetizations recycle capital into new opportunities. It also has $12.5 billion of accumulated unrealized carried interest waiting to be crystallized. Meanwhile, the balance sheet remains conservatively funded, with $210 billion of deployable capital and no corporate debt maturities in 2026. The real question is not whether Brookfield can grow earnings next quarter. It is whether this compounding machine can continue to deploy ever-larger amounts of capital at attractive returns. If it can, the 15% increase in earnings is almost incidental. The real opportunity is the increasing scale and self-reinforcing nature of the platform.
Brookfield Corporation Q1 2026 results showed a business that is still compounding at scale, even in a volatile market. The headline numbers were strong, but the more important story is what sits underneath them: Brookfield continues to attract enormous amounts of capital, recycle assets at healthy valuations, and position itself directly in the middle of the biggest long-duration investment themes in the world.
The clearest signal was fundraising. Brookfield raised $21 billion in the quarter and $67 billion year-to-date. That is an enormous number even by Brookfield standards. Fee-bearing capital climbed 12% to $614 billion, which matters because those fees create highly recurring earnings streams that become more valuable as the platform scales.
What stands out is where the demand is coming from. Institutions continue allocating heavily to infrastructure, credit, energy transition, and real assets. Brookfield also highlighted a $40 billion mandate tied to Just Group and continued momentum in wealth and retail channels. Investors are looking for durable cash flowing assets in an uncertain world, and Brookfield is increasingly one of the default destinations for that capital.
The earnings profile reflects that shift. Asset management distributable earnings rose to $765 million for the quarter, while the wealth solutions business generated another $430 million. The insurance and wealth operation is becoming a much bigger contributor to the overall platform. This is strategically important because insurance float gives Brookfield permanent or very long-duration capital to invest across its ecosystem.
At the operating level, the company continues to look resilient. Brookfield emphasized stable cash flows across infrastructure, renewable power, and other operating businesses. These are not cyclical software assets or speculative growth ventures. Most of the portfolio sits in essential infrastructure, contracted assets, utilities, energy systems, transport networks, and hard assets tied to the real economy. That insulation is becoming more valuable in a world with persistent inflation, geopolitical fragmentation, and higher capital costs.
Another major takeaway was capital recycling. Brookfield sold $17 billion of assets during the quarter, largely at or above carrying values. That is important because it validates the marks on the balance sheet while also freeing up capital for redeployment into higher-return opportunities. Infrastructure and energy accounted for the bulk of the sales activity.
The balance sheet also remains a core strength. Brookfield ended the quarter with $188 billion of deployable capital, including cash, undrawn credit, and uncalled fund commitments. In practical terms, this means the company can stay aggressive when markets dislocate. Brookfield tends to perform best when capital is scarce and forced sellers emerge. The firm is effectively built for periods of stress.
Management also leaned into buybacks. Brookfield repurchased over $1 billion worth of BN and BAM shares year-to-date, arguing the stock trades materially below intrinsic value. BN shares were repurchased at an average price of around $41 versus management’s stated intrinsic value estimate of $66. That is a fairly direct statement from management that they see the market materially undervaluing the business.
Stepping back, the broader pattern is becoming clearer. Brookfield is evolving from a traditional alternative asset manager into a global capital allocation platform sitting at the intersection of infrastructure, insurance capital, private credit, AI infrastructure, energy transition, and real assets. Recent commentary around AI infrastructure, data centers, and power demand reinforces this direction.
The market environment is also helping separate winners from weaker players. Many alternative managers are struggling to raise capital, while Brookfield continues gathering money at scale. The company is one of the few firms benefiting from structural demand for infrastructure, credit, and hard assets rather than relying on traditional leveraged private equity alone.
The overall message from the quarter was simple: Brookfield is getting bigger, more diversified, more recurring in its earnings mix, and more deeply embedded in long-term global capital flows. The company is no longer just buying assets. It is building an ecosystem where insurance capital, private funds, infrastructure operations, and asset management reinforce each other at scale.
Blue Owl Capital (OWL) restricted investor withdrawals on a major private debt fund after selling $1.4 billion in loans. It is clearly facing a liquidity squeeze. Some alternative asset firms pushed aggressively into the private credit space, where they had little or no expertise, and are now facing a real stress test.
Meanwhile, others with a more prudent approach to making private credit investments will benefit. It's survival of the fittest.
My money is on Brookfield Corporation (BN) which now owns Howard Marks' Oak Tree Capital — arguably the best private credit firm out there, with over half a century of experience in this asset class.
Brookfield Corporation Strong Q3 Results
Nick Goodman, President of Brookfield Corporation, said, “Our financial performance in the third quarter was strong, supported by record results in our asset management business, sustained organic growth across our wealth solutions platform, and the resilience of our operating businesses.”
He added, “We continue to successfully execute on our key initiatives, positioning Brookfield for our next phase of growth. Our agreement to acquire the remaining interest in Oaktree, as well as the continued global expansion of our wealth solutions business, mark important milestones in compounding long-term value for our shareholders.”
Distributable earnings before realizations were $1.3 billion ($0.56/share) for the quarter and $5.4 billion ($2.27/ share) over the last twelve months, representing an increase of 6% and 18% on a per share basis over the prior year periods. Total distributable earnings were $1.5 billion ($0.63/share) for the quarter and $6.0 billion ($2.54/share) over the last twelve months.
Asset Management
DE was $687 million ($0.29/share) in the quarter and $2.7 billion ($1.14/share) over the LTM.
Fee-related earnings increased by 17% from the prior year quarter to a record $754 million, supported by fee-bearing capital of $581 billion.
Total inflows during the quarter were $30 billion, the highest fundraising period in three years, including over $6 billion from our retail and wealth clients.
We held the final close of our second vintage global transition strategy, bringing total commitments to $20 billion, marking the largest private fund globally dedicated to energy transition, and we also launched the seventh vintage of our flagship private equity fund.
We recently announced an agreement to acquire the remaining 26% interest in Oaktree. The transaction expands our ownership in Oaktree’s carried interest, fee-related earnings, and balance sheet investments, and further enhances the scale of our global credit platform.
Wealth Solutions
DE was $420 million ($0.18/share) in the quarter and $1.7 billion ($0.70/share) over the LTM.
We originated $5 billion of retail and institutional annuity sales during the quarter, increasing insurance assets to $139 billion, with approximately 80% of new annuities written at five years or longer in duration.
We deployed $4 billion into Brookfield-managed strategies at an average net yield of 9%. Our investment portfolio generated an average yield of 5.7%, maintaining strong spread earnings, and contributing to a 15% return on equity.
We received shareholder approval for the acquisition of U.K.-based Just Group, expected to close in the first half of 2026, subject to regulatory approvals. Upon closing, the acquisition will increase the group’s total insurance assets to approximately $180 billion.
We signed our first Japan-based reinsurance agreement with Dai-ichi Frontier Life, a leading Japanese insurance company, further expanding our global presence in a key growth market.
Operating Businesses
DE was $366 million ($0.15/share) in the quarter and $1.7 billion ($0.72/share) over the LTM.
Our publicly listed private equity business announced plans to simplify its corporate structure through the conversion into a single-listed corporate entity ("BBU Inc."), aimed to broaden its investor base and enhance trading liquidity.
Subsequent to quarter end, we announced partnerships to advance next-generation power and AI initiatives, including with the U.S. Government, to expand nuclear capacity through Westinghouse to deliver $80 billion of new nuclear plants in the U.S.—and with Bloom Energy to install up to 1 GW of behind-the-meter power generation to support AI infrastructure globally.
Operating fundamentals across our real estate portfolio remain strong, with our super core assets maintaining 96% occupancy and our core plus portfolio ending the quarter at 95% occupancy, reflecting continued tenant demand for high-quality assets.
Earnings from the monetization of mature assets were $154 million ($0.07/share) for the quarter and $642 million ($0.27/share) over the LTM.
Year to date, we have advanced $75 billion of asset sales across the business, including over $35 billion since the second quarter. Substantially all sales were completed at or above our carrying values, monetizing significant value for our clients at attractive returns.
Monetization activity since the second quarter included $13 billion of real estate assets, $9 billion of infrastructure assets, including the successful IPO of Rockpoint Gas Storage, nearly $8 billion of renewable assets, and $6 billion of other diversified assets across our operating businesses.
Total accumulated unrealized carried interest was $11.5 billion at quarter end, net of $154 million realized into income in the quarter and $580 million over the LTM. As transaction activity continues to improve, we anticipate realizing significant carried interest into income over the next three years.
We ended the quarter with a record $178 billion of capital available to deploy into new investments.
We have record deployable capital of $178 billion, which includes $74 billion of cash, financial assets and undrawn credit lines at the Corporation, our affiliates and our wealth solutions business, as well as $104 billion of uncalled private fund commitments.
Our balance sheet remains conservatively capitalized, with corporate debt at the Corporation carrying a weighted-average term of 14 years, and today, we have no maturities through the end of 2025.
Capital markets remain highly supportive of real assets, facilitating a continued pickup in transaction activity. We executed $140 billion of financings so far this year across the franchise, including over $50 billion since the second quarter. A few recent highlights include:
- At the Corporation, we issued $650 million of 10-year senior notes, which was met with strong investor demand underscoring the strength of our credit profile.
- In real estate, we successfully refinanced a $1.9 billion five-year loan for a luxury resort in the Bahamas and completed two New York office financings, each over $1.25 billion, highlighting the continued flow of capital to high-quality assets.
During the quarter, we returned $180 million of capital to our shareholders via regular dividends and share repurchases. Year-to-date, we repurchased over $950 million of Class A shares in the open market at an average price of $36, which represents a 50% discount to our view of intrinsic value at quarter end of $69.
During the quarter, we announced a strategic partnership with Figure, further advancing Brookfield’s position at the forefront of integrating artificial intelligence to drive productivity across our real assets and operating businesses.
The Board declared a quarterly dividend for Brookfield Corporation of $0.06 per share, payable on December 31, 2025 to shareholders of record as at the close of business on December 16, 2025. On a post-split basis, the quarterly dividend is consistent with the previous quarter’s dividend. The Board also declared the regular monthly and quarterly dividends on our preferred shares.
Brookfield (BN) CEO Bruce Flatt:
"People always ask - Are there too many data centers?
I actually have the opposite view.
It’s not a bubble because it’s hard to do this... it’s not easy to build. You need to find the connectivity, you need to find the power, you need to build the buildings, you have to get the chips, and you need to have $50 billion per AI factory. This can’t be done by everybody... You’re not building enough data centers — first point. Second, the data centers: the shell, the chips inside, they go away in five years. You amortize those in five years. So that will go away, and the chips are going to change — but you’ve amortized them in five years.
So we’re not building enough.
As much as we’re building today, we’re not even building half of what we can. And you can’t build enough.”
thanks for the details analysis.
I think you've ignored some warning signs:
Balance Sheet Stress Signals (2024)
1/ Total Debt: $234.8 billion with 8.04x debt-to-EBITDA multiple
2/ Current Ratio: 0.65x
3/ Only $46 billion in equity against $490 billion in assets
4/ $16.6 billion interest expense annually consumes 58% of operating income
if interest starts rising, or income drops (e.g. due to commercial real-estate defaults)- this would not end well.
i agree that being a business in a country where your ex-manager is an incumbent prime-minister - means you'd be able to dodge some bullets, but not stuff that is too big to sweep under the rug.
perhaps investors price it less than its parts - is because the investors price in the chance of a default.
Brookfield's financial profile with high debt levels, low current ratio, modest equity relative to assets, and a large interest burden is significantly influenced by its asset management business model.
Brookfield operates as a global alternative asset manager with around $450 billion in fee-bearing capital under management on behalf of third-party clients. The company invests both its own capital and clients' capital into long-term assets, generating revenue from management fees, performance fees to supplement its returns on its own invested capital.
The substantial total assets ($490 billion) include assets managed on behalf of clients, not just directly owned corporate assets. The relatively low equity of $46 billion against this asset base reflects the leveraged financing structure typical of asset management firms that deploy third-party capital alongside their own. The debt includes leverage used to acquire and operate these assets as well as capital supporting long-term private equity funds.
Brookfield's historical debt multiples have ranged between 6.12 to 10.20 over 13 years, so 8.04x is well within its normal range. The high interest expense consuming 58% of operating income partly reflects the costs of this leverage and financing strategy, which aims to generate attractive long-term returns for clients alongside shareholders. The current ratio of 0.65x also relates to this capital-intensive business model, where short-term liquidity is managed within a structure emphasizing long-term investments and fee income rather than traditional balance sheet strength.
Picture this, with exaggerated numbers to make the point clear. Let’s say I start with just $1 and can generate a 100% net annual return. A year later, I’ve turned that into $2. Now imagine others take notice of my impressive returns and decide to invest with me. Collectively, they give me $10 to manage, in exchange for a 10% fee on the profits. That gives me $11 to invest ($10 from others, plus my own $1).
A year later, I’ve doubled that pool to $22. My personal return is now $1 on my own capital, plus another $1 in fees earned on the profits generated for others. By managing third-party money, I’ve effectively doubled my earnings, all while only putting $1 of my own capital at risk.
However, on paper, my balance sheet looks less flattering. Of the $11 in earnings that I generated, $9 technically belongs to others, meaning I owe 82% of my earnings to third parties. By conventional accounting standards, that might not look healthy. But once you understand the economics, it’s actually a brilliant model - leveraging other people’s capital to amplify your own returns without taking on equivalent risk.
In short, Brookfield's business model leads to financial ratios that differ markedly from non-asset-management companies, reflecting the economics of managing alternative assets on a global scale rather than typical corporate balance sheet norms.
I hope this helps.
it does help.
but here's followup questions on your example:
1/
when you got the $10 to manage, what happened in your books?
you've written them as both an asset and a long term liability, right?
if so then debt/ assets would look worse as it moved from 0% to 91%.
2/
when the asset management tells you the $11 portfolio had 100% return ($11) - what happens in your books?
2.1/ assuming you don't return the managed assets to their owner, your assets and liabilities remains constant, right?
2.2/ as for the profit itself: you probably write a revenue of 11 and COGS of 9, right?
if so, the gross profitability would look worse than a year before (from 100% to 18%)
3/ why would any of those explain a bad current ratio?
the timing of the $2 of profit is the same as the payment to 3rd party who gave you assets to manage, no?
if so, and if the managed assets are registered as long term - then no significant short term debt should have been created. current ration should have been close to zero (unless the original $1 asset was purchased with a short term loan that ballooned to $1.3).
or am i missing something?
there's a famous buffet rule that he invests only in companies he fully understands, because only after you understand all aspects of the business do you know what metrics to watch to see how effective management is.
i'm asking questions as i'm trying to follow this advice :)
You mention Buffett's rule about only investing in businesses that you can understand. But how many investors in Berkshire Hathaway really understand that business? It's a super complex conglomerate with an insurance operation on top. If you ever read the excellent annual letters of the fund Semper Augustus written by Chris Bloomstran (an authority on Berkshire Hathaway), you'll start to understand just how complex it is. But it doesn't stop people investing.
In any event, back to your questions about Brookfield.
It operates a hybrid model that makes it look more complicated on paper than it really is. In simple terms, it invests its own money just like any other investor, but it also manages money on behalf of big institutions such as pension funds, sovereign funds, and insurance companies. That second part (managing other people’s money) creates an entirely separate revenue stream. Brookfield earns management and performance fees from these investors, which can be extremely profitable. But when it invests its own capital into the very same projects as its clients, it gets a double benefit: it earns the regular investment return plus a share of the fees from clients’ capital. This is what gives Brookfield such strong long-term compounding power.
The tricky part is that this model can make its accounts look confusing. When Brookfield reports revenue, not all of that income truly “belongs” to Brookfield’s own shareholders. A significant portion of what flows through its financial statements is generated by money that Brookfield manages for others.
This affects the balance sheet. Brookfield’s reported assets are massive because they include the investments it manages on behalf of clients. But those assets are matched by equally large liabilities, since Brookfield owes those returns back to third-party investors when the underlying investments pay out. It’s a bit like a bank that takes deposits: the deposits are technically liabilities - have you ever looked at the debt ratios of a bank? For idiosyncratic businesses like these, it requires a different approach to analysis. The bigger their asset base grows, the more their liabilities appear to balloon too, even when the underlying health of the enterprise is solid and that inflated asset base is being used to generate bigger returns. That’s why Brookfield’s financial statements can resemble those of a bank rather than a typical industrial firm.
Because of this structure, normal valuation metrics such as price-to-earnings, debt-to-equity, or return on assets can be misleading. A quick ratio analysis might make Brookfield look highly leveraged or low-margin, when in reality the balance sheet just reflects the way it handles client assets. Analysts who understand the business instead focus on measures like fee-related earnings (what Brookfield earns from managing assets) and distributable earnings (cash that can actually go to shareholders). Fortunately, Brookfield breaks these numbers out in its financial reports, which makes our job easier. These give a cleaner picture of how much true value the company is generating from its mix of asset management and investing.
I hope this helps.
it does help.
thanks for taking the time breaking it down.
my experience is that complex ownership structures are hiding unpleasant things. not always due to malicious intent, simply because the complex structure allows things to fester. so while i get your point about BAM - i think BN is more risky.
This is why you need to invest in quality management above all else. Trustworthy management with integrity. This brings us back full circle to why people are comfortable investing in Berkshire Hathaway - it was all about Buffett and Munger. But the same is true of Bruce Flat at Brookfield. He is in the same super league of managers. Add to that Howard Marks who is now part of the Brookfield group since it acquired Oaktree Capital (Buffett says that when he sees a memo or note published by Howard Marks, he drops everything else and reads that first - it gives you an idea how great these people are at what they do and how much respect they garner from other highly regarded individuals). If you are not familiar with Marks, see: https://rockandturner.substack.com/p/howard-marks-learn-from-the-best and https://rockandturner.substack.com/p/thinking-like-pabrai-marks-and-buffett
Brookfield partners with U.S. Government - Share price up on the news.
The U.S. government has entered a major strategic partnership with Westinghouse Electric, Cameco Corporation, and Brookfield Asset Management to build at least $80 billion worth of new nuclear reactors across the United States, using Westinghouse’s AP1000 reactor technology. This initiative is explicitly designed to scale up U.S. energy infrastructure, support national security goals, and meet the surging electricity demand driven by artificial intelligence and data centers.
The federal government will arrange financing and expedite regulatory permitting for the reactors, and the deal includes profit-sharing mechanisms, with the government entitled to a share of distributions. Brookfield and Cameco, as co-owners of Westinghouse, will be critical suppliers and investors.
Brookfield stands to benefit massively from this $80 billion U.S. reactor partnership, driving both direct profit growth and broader strategic positioning in infrastructure and energy sectors.
Once $80 billion in orders are cleared, Westinghouse can pocket up to $17.5 billion in distributions from the projects. After this $17.5 billion milestone, the U.S. government receives 20% of any further cash distributions generated by the partnership, but Brookfield remains the majority private beneficiary.
The deal allows Brookfield to double its infrastructure investment in the coming decade, further anchoring it as a dominant player in the U.S. and world energy markets. Brookfield’s annual infrastructure asset base, already valued above half a trillion dollars, will expand sharply with new capital flows and backed orders linked to the nuclear buildout.
The partnership is viewed as central to the Trump administration’s objectives to revitalize American energy sovereignty, build high-paying infrastructure jobs, and win in the global AI competition by securing stable, scalable power.
Alphyn Capital Management stated the following regarding Brookfield Corporation (NYSE:BN) in its third quarter 2025 investor letter:
"The Brookfield machine continues to compound intrinsic value, delivering robust Q2 results across its diversified platform. Distributable earnings (DE) before realizations grew 13% year-over-year, driven by nearly $100 billion in capital inflows over the last twelve months, demonstrating the strength of its ecosystem spanning real assets, insurance, and credit.
At its recent Investor Day, management once again laid out an ambitious plan targeting a 25% annualized growth in DE per share through 2030. This plan anticipates generating $53 billion in free cash flow, leaving $25 billion in excess cash available for opportunistic buybacks and M&A. Management is aggressively scaling the Wealth Solutions platform and investing insurance float, now calling itself an “investment-led insurance organization.” This makes sense as Brookfield’s long-dated, stable life insurance liabilities align well with its expertise in investing in long-duration, essential real assets like infrastructure and renewables. This matching of duration and risk profile enhances capital efficiency and supports the scaling of BAM’s funds without materially altering the overall risk profile.
Management is also leaning heavily into the multi-trillion-dollar capital requirements for AI infrastructure. In an environment where “AI” attracts significant hype and speculative investment, Brookfield’s approach is distinctly de-risked. They are building essential infrastructure such as data centers and the renewable power required to run them, underpinned by long-term commitments from the financially strong hyperscalers, such as a 3,000 MW hydroelectric framework with Google and a 10.5 GW renewable agreement with Microsoft.”
GPU-as-a-Service | An ingenious way to play the AI revolution
While AI providers are hemorrhaging cash simply to stay in the game, with little prospect of generating profits anytime soon, the real beneficiaries of the AI revolution are likely to be those providing the picks and shovels.
Brookfield Corporation ($BN) is playing a smart game and they're doing it in a way that’s entirely on-brand for them. Forget the typical venture capital approach of high-risk bets - Brookfield's strategy is all about treating GPU infrastructure as a long-term, stable asset.
Their plan is straightforward yet brilliant: provide GPU as a service to major clients like hyperscalers, large enterprises and governments. This isn't a simple rental agreement. It’s built on 4-5 year take-or-pay contracts, which are essentially a promise from a creditworthy counterparty to pay for the service whether they use it or not. For Brookfield, this means predictable, durable revenue streams - the same kind they generate from their pipelines and power grids. For their clients, it’s a way to access billions of dollars in AI compute power as an operational expense, freeing up their own balance sheets for other priorities.
But Brookfield isn't stopping at the data center. They understand the real value lies in the entire stack. That’s why they plan to own or co-own the hardware that powers these systems. By controlling the GPUs, along with the critical surrounding infrastructure - think advanced liquid cooling, high-speed interconnects, and the power systems themselves - they can capitalize on the strategic value of these assets. This integrated approach allows them to navigate the long build-out times and complex supply chains that are significant barriers to entry for others.
In essence, Brookfield is applying its core competency in building and managing large-scale, essential infrastructure to the most critical technology of our time. It’s a classic infrastructure play, set to position them as a dominant force in the AI ecosystem.