Brookfield Asset Management Ltd. 2026 Q2 Earnings Call

Please go ahead. Thank you for joining us today for Brookfield Asset Management's second quarter 2026 earnings call.

On the call today, we have Connor Teskey, our Chief Executive Officer, Hadley Peer Marshall, our Chief Financial Officer, and joining us this quarter, Sikander Rashid, our Global Head of AI Infrastructure and Head of Europe. Before we begin, I'd like to remind you that in today's comments, including in responding to questions and in discussing new initiatives and our financial and operating performance, we may make forward-looking statements, including forward-looking statements in the meaning of applicable U.S. and Canadian securities law. These statements reflect predictions of future events and trends and do not relate to historic events. They're subject to known and unknown risks. Future events and results may differ materially from such statements.

For further information on these risks and their potential impacts on our company, please see our filings with the securities regulators in the U.S. and Canada, and the information available on our website. Connor will begin with an overview of the quarter, including our record fundraising and strategic partnerships that continue to strengthen our platform. Sikander will discuss our AI infrastructure strategy in greater detail, including the differentiated position we've built, our growing momentum, and the opportunity ahead. Hadley will review our financial and operating results and our balance sheet. After our formal remarks, we'll open the line for questions. To ensure we hear from as many participants as possible, we ask that you please limit yourself to one question. If you have a follow-up, please rejoin the queue, and we'll take additional questions as time permits. With that, I'll turn the call over to Connor.

Thank you, Jason. Good morning, everyone. Similar to last quarter, we expect 2026 will be a record year for Brookfield, and not by a small margin. Reinforcing this, the second quarter was exceptional by almost any measure: record fundraising, with both earnings and fee-bearing capital growing well ahead of our long-term targets. It sets us up well for what we expect to be a record year across the board. Fee-related earnings for the quarter were $808 million, up 20% from the prior year. Distributable earnings were $707 million, up 15%. Fee-bearing capital reached $672 billion, up 19% over the last 12 months. Perhaps most importantly, the quarter delivered $77 billion of fundraising, our strongest fundraising quarter ever, and was led by two of our flagship strategies and the $40 billion Just Group mandate.

This mandate increases the insurance capital we manage by more than a third and further extends our reach into retirement. It also reinforces our differentiated insurance model. Brookfield Wealth Solutions holds the assets and liabilities on its balance sheet, while we manage the capital for a recurring fee. For BAM, that means recurring fee revenue at scale on an asset-light basis without assuming any insurance liabilities. Even if we set the Just Group mandate aside, the second quarter would still have set a record for organic fundraising. Driven by momentum across our two flagships, both of which are on track to be the largest vintages of their kind, alongside a broad set of complementary strategies. This brings year-to-date fundraising to $98 billion, and fundraising over the last 12 months to $163 billion.

These results reflect the strength and diversity of our franchise, the depth of our client relationships, and the growing importance of the assets and businesses we own. Both our earnings and our fee-bearing capital are compounding above the long-term targets we set out, and they are doing so across essentially every part of the platform. That breadth is especially valuable in the current environment. Last quarter, we discussed that we have limited exposure to the areas under the greatest pressure, like software and sponsor-led direct lending. At the same time, we have outsized exposure to the areas where there is high demand. The developments of the past quarter have reinforced both sides of that equation. Our non-traded BDC sits within a broadly diversified suite of products, representing less than 1% of our fee-bearing capital.

The team has been prudent in raising and deploying capital over the past several years, delivering strong performance and allowing the fund to enter this period under-levered and with ample capital resources. This quarter, redemptions requests fell below 5%, which the fund met in full. At the same time, we continued to see robust inflows into our other wealth strategies, particularly infrastructure. More important than the strong downside protection is how we are positioned for the greatest growth opportunities in the market today. Three areas stand out. The first is real assets. In today's environment, marked by pockets of uncertainty and volatility, investors gravitate towards high-quality, cash-generative assets and essential services businesses. Real assets tend to outperform in periods like this because they offer precisely what investors are seeking: capital preservation, inflation protection, and both cash generation and value appreciation.

This is exactly where we have leading strategies, that strength is showing up across fundraising, deployment, and monetizations. The second area is credit. Last week, we completed the acquisition of Oaktree, fully combining the two businesses. Together, our credit platform has leading scale and depth of capability across asset-backed finance, real asset finance, and opportunistic credit, and is well-positioned to perform across market cycles. Full integration lets us source and underwrite more effectively and deliver the full breadth of our combined capabilities on behalf of all our investors. The third area is AI. Our leadership across the entire AI infrastructure value chain, data centers, power generation, and compute, gives us a rare and differentiated set of capabilities. Notably, the ability to raise capital at scale, to source proprietary opportunities, and to build relationships with the hyperscalers, sovereign governments, and other key players across the AI ecosystem.

Our ability to bring these skills together to meet one of the largest investment opportunities globally is why this has become one of the fastest-growing parts of our business. We're pleased that Sikander is joining us today to walk you through the momentum in our AI infrastructure fund. That leadership is now translating into partnerships that are scaling rapidly. We have expanded our framework with Bloom Energy to finance quick-to-deploy power solutions for AI infrastructure fivefold, from $5 billion-$25 billion in just nine months, a measure of the sheer scale of what lies ahead. Through our Sovereign AI Infrastructure initiative, we've increased our development framework with France from EUR 20 billion-EUR 30 billion. We've partnered with Naver and Nvidia to accelerate the expansion of South Korea's sovereign AI infrastructure.

Nvidia, who joined our AI infrastructure fund as an investor and a founding partner, is also both a cornerstone investor and our technology partner in the compute platform at the center of that build-out. Through Westinghouse, we are continuing to support the U.S. government's effort to accelerate nuclear deployment. Most recently, the Department of Energy issued a $17.5 billion financing commitment to support the development of up to 10 Westinghouse AP1000 reactors. Sico will discuss our recently announced deal to build a large AI factory in Kentucky. We are also forming new relationships that broaden the opportunity set. We partnered with OpenAI to launch a company focused on accelerating commercial AI adoption, including within our own portfolio of industrial and manufacturing businesses. The same partner of choice dynamic extends beyond AI.

We partnered with AllianceBernstein to bring private market real assets into their target date funds, an example of our growing involvement in the 401 market, a segment that we feel is well suited to our real asset focus and one of the largest long-term growth opportunities we see anywhere. Taken together, these partnerships demonstrate the strategic value of our platform. Few firms can bring together capital, operating capabilities, energy, digital infrastructure, and strategic relationships at this scale. To conclude, we are entering the second half of the year with record results, exceptional strategic momentum, limited exposure to the areas causing the most concern, and meaningful exposure to where capital should continue to flow. We are positioned not simply to navigate this environment, but to outperform through it.

With that, we will hand the call over to Sikander to give you more color on the strong momentum in our AI infrastructure strategy.

Thanks, Conor. AI is not only shaping our AI infrastructure strategy, it is becoming an increasingly important theme across all of Brookfield. It is influencing capital deployment in our infrastructure, energy, and credit businesses, and business plans within every portfolio company, including efficiency and revenue growth in 600 businesses and assets in our portfolio. A brief word on the underlying thesis. We estimate $10 trillion in annual economic productivity potential for AI requiring $10 trillion of CapEx across the AI value chain, including energy, data centers, compute, and strategic adjacencies. For investors, the important point is that this is a physical infrastructure, the critical backbone of economies that are becoming more digital, not a technology bet on which model, chip, or application ultimately wins. This opportunity led us to launch our dedicated AI infrastructure strategy, which is off to a great start.