BROOKFIELD ASSET MANAGEMENT LTD Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : I was hoping we could start maybe with the commentary around fundraising momentum in the business you're seeing into 2026. A number of pretty robust verticals, but at the same time, it sounds like monetization outlook is also picking up. So maybe help us frame what that could mean for management fee growth as you look out into 2026. So maybe we could start there. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2025 / 2:00PM, BAM.N - Q3 2025 BROOKFIELD ASSET MANAGEMENT LTD Earnings Call

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : Great. Thank you.

Question: Sohrab Movahedi - Bank of Montreal - Analyst : I just wanted to focus just a little bit on the Credit business, if we can. Obviously, an important source of fee-bearing capital growth as part of the five-year plan. This quarter, the fee rate, the blended fee rate, if I look at the fee revenues relative to the private credit, or the total credit, I should say, funds was a bit higher than what we're used to seeing. Can you just talk a little bit about what was the driver of that, if that is a new rate we're looking at, if the fee rate is a little bit higher? Is that consistent? Or is that a one-off? And then there's just -- private credit has been a little bit more in the headlines. Just curious to kind of get a sense of how you think about it relative to your business and the growth aspirations that you have especially coming from credit. Thank you.

Question: Sohrab Movahedi - Bank of Montreal - Analyst : But Hadley, if I can just ask one quick follow-up on that. Given the pleasant surprise, for example, this quarter, as minor as it was, came out of one of the partner managers that you own, like is there a potential for negative surprises, I suppose, to come from the partner managers as well? And can you dimension what sort of risk management, I suppose, is in place to color that?

Question: Sohrab Movahedi - Bank of Montreal - Analyst : Okay. Very helpful. Thank you very much for taking my question.

Question: Craig Siegenthaler - Bofa Merrill Lynch Asset Holdings Inc - Analyst : So our question is on corporate direct lending, both IG and non-IG. From your prepared commentary, it sounds like you're less constructive on the investment opportunity today versus some of what your peers are saying due to intensifying competition. However, when you take a step back, it looks like aggregate LTVs are still pretty low, and the spread to public are still pretty rich. And with the cash yields declining now at Fed rate cuts, the relative attractiveness to retail insurers institutions should still be there. So my question is, what am I missing here besides the gaining share of private credit versus BSL and high yield? Connor Teskey - BROOKFIELD ASSET MANAGEMENT LTD - President of the Manager and Chief Executive Officer - Renewable Power & Transition So Craig, great question. And maybe just to put some context around this, let's come at it from a few different ways. On a more general basis, we believe private credit for various reasons has become and will continue to be a very important component of global finance, and it's going to continue to grow beside bank credit and other liquid sources. And that growth is very robust, and it's not short term in nature. It's going to be enduring for the long term. In terms of today within the market, where are we seeing the most attractive returns on a risk-adjusted basis? Obviously, every investment is specific. But broad-based, we're seeing tremendous -- we're seeing a very strong premium in particular, in credit related to real assets, infrastructure and real estate credit, and certain components of the asset-backed finance market. I think the comments that you are referring to is there have been a significant amount of capital poured into the direct and corporate lending market. And in some places, we are seeing spreads very compressed. And in other places, we're seeing a little bit of covenant degradation due to

Question: Craig Siegenthaler - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Thanks, Connor. I have a follow-up on the Credit business, and I think you covered a little bit earlier, but I was bouncing around between two calls. But management fees in the Credit business went up a lot faster than average fee-bearing AUM. And I know Castlelake went in there. So maybe REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2025 / 2:00PM, BAM.N - Q3 2025 BROOKFIELD ASSET MANAGEMENT LTD Earnings Call that had some lumpiness in there. But we still have the fee rate up 10% on the average fee-bearing AUM base. So were there any lumpy items in the revenue side that we should back out? And also, I don't think you hit this part, but were there any lumpy items in the expense side of the Credit business? Because sometimes a lumpy revenue item might correlate with an expense item. So we just want to make sure we get the P&L run rate correct as we walk into 4Q here. Thanks, Connor. Connor Teskey - BROOKFIELD ASSET MANAGEMENT LTD - President of the Manager and Chief Executive Officer - Renewable Power & Transition Sure. And it's pretty simple. Thank you again for the question. The outsized growth that we had in Credit this quarter, I think the way to think about it is I think that business was up almost 15%. About half of that is just run rate organic growth, the continued momentum we're seeing in that business. And half of that was the full quarter of an acquisition that was made within our Castlelake business. So some of it was M&A related, and some of it was organic growth. Maybe you can think about that as roughly half and half. And then on the fee rate component within Castlelake, which is a business -- a partner manager of ours that's performing very well, they did have some outsized transaction fees in this quarter. The blended broader fee rate is trending up, but it was somewhat enhanced this quarter by onetime transaction fees.

Question: Kenneth Worthington - JPMorgan Chase & Co - Analyst : Great. Maybe for Hadley. You're operating at 58% operating margins right now. You highlighted on the call that Oaktree margins are depressed but getting better. Core margins are rising, but that acquisitions are operating at lower margins. How do we put these pieces together, particularly since we've got some of the transactions just closed or closing? And you mentioned sort of the transaction fees sort of helps in the current quarter. So how do we think about the right level and then the trajectory once everything gets closed?

Question: Kenneth Worthington - JPMorgan Chase & Co - Analyst : Okay. Great, that's helpful. Thank you very much.

Question: Jaeme Gloyn - National Bank Financial Research - Analyst : Good job on the fundraising this quarter this year. One thing that was mentioned at the Investor Day was broadening or deepening the client base -- the institutional client base. So I'm just curious on what the source of fundraising looked like from a breadth of client standpoint?

Question: Jaeme Gloyn - National Bank Financial Research - Analyst : That's very good. Thank you.