Brookfield Asset Management Q2 2026 Earnings: Fee-Related Earnings Rise 20%

Brookfield Asset Management (NYSE/TSX: BAM) reported Q2 2026 revenue of US$1.75 billion, up about 61% from US$1.09 billion, while diluted GAAP EPS rose to US$0.56 from US$0.38. Net income doubled to US$1.17 billion, although a favorable carried-interest swing amplified the increase; fee-related earnings grew 20% to US$808 million. Record fundraising of US$77 billion, led by credit, lifted fee-bearing capital 19% year over year to US$672 billion.

Core earnings data

For the quarter ended June 30, 2026, base management and advisory fees increased 13%, while total fee revenue—which includes incentive fees and fees from equity-method investments—rose about 16%. These measures provide a steadier view of the asset-management business than GAAP revenue, which was materially affected by carried interest.

BAM’s non-GAAP fee-related earnings and distributable earnings both advanced at double-digit rates. The company defines these measures differently from GAAP net income, and they may not be directly comparable with similarly named metrics from other asset managers.

Business and segment performance

BAM raised a record US$77 billion during the quarter and US$98 billion in the first half of 2026. Credit generated most of the quarterly inflows, including US$45 billion from Brookfield Wealth Solutions and the US$40 billion Just Group mandate. The private equity and infrastructure flagship strategies raised US$6.7 billion and US$9.3 billion, respectively.

The company deployed US$21 billion and monetized US$11 billion of investments during the quarter. Credit was the largest source of both fundraising and deployment, while real estate recorded the second-highest deployment total.

Several strategic developments occurred during or shortly after the quarter. BAM completed its acquisition of the remaining interest in Oaktree in July, integrating the credit manager into the broader Brookfield platform. The company also formed an enterprise AI partnership with OpenAI, expanded its Bloom Energy financing framework from US$5 billion to US$25 billion, and increased its French sovereign AI infrastructure framework from €20 billion to €30 billion. These frameworks and plans represent strategic initiatives rather than Q2 revenue.

Carried interest amplified GAAP growth, while fee earnings also advanced

The US$663 million increase in quarterly GAAP revenue was driven primarily by carried interest income, which moved from negative US$63 million to positive US$553 million—a US$616 million swing. That change accounted for about 93% of the overall revenue increase. Base management and advisory fees added US$104 million, incentive fees rose by US$12 million, and other revenue declined by US$69 million.

This distinction matters because carried interest can vary substantially between periods. BAM’s fee-related earnings exclude carried-interest allocations and related compensation, making their 20% increase a more direct indicator of growth in the fee-generating business. That growth was supported by a 19% increase in fee-bearing capital to US$672 billion following US$163 billion of fundraising over the last 12 months.

Profitability and balance sheet

Total expenses increased to US$659 million from US$557 million, a slower rate than GAAP revenue. Compensation and operating expenses rose to US$548 million from US$504 million, while interest expense increased to US$60 million from US$37 million. Income before taxes consequently reached US$1.33 billion, compared with US$659 million a year earlier, though the carried-interest swing was an important contributor.

At June 30, BAM had US$1.50 billion of cash and cash equivalents, compared with US$1.58 billion at the end of 2025. Corporate borrowings increased to US$3.47 billion from US$2.48 billion after the company issued US$1.0 billion of senior notes during the quarter. The issuance consisted of US$550 million of five-year notes carrying a 4.832% coupon and US$450 million of ten-year notes carrying a 5.298% coupon.

Corporate liquidity totaled US$3.1 billion, including cash reserved for the Oaktree acquisition, short-term financial assets and unused revolving-credit capacity. BAM also had US$149 billion of uncalled fund commitments. Of that amount, US$68 billion is expected to generate approximately US$680 million in annual fees once deployed, giving the company a visible source of potential future fee growth while making deployment timing important.

BAM repurchased US$200 million of shares during the quarter. Its board also declared a quarterly dividend of US$0.5025 per share, payable September 29, 2026, to shareholders of record on August 31.

Management perspective

CEO Connor Teskey attributed the quarter’s performance to fundraising across private equity, infrastructure and credit, together with continued capital deployment. Management sees demand for high-quality real assets and essential-service businesses supporting the platform and expects the completed Oaktree transaction to expand BAM’s credit capabilities and product offering.

Teskey also said the broader business had enough momentum for management to expect its “best year ever.” The company’s strategic announcements indicate that AI infrastructure, power generation and retirement-related capital will remain central areas of focus.

Risks investors should monitor

• GAAP earnings remain sensitive to carried interest. The US$616 million year-over-year swing in carried interest produced most of the increase in Q2 revenue. A less favorable contribution in future periods could create volatility even if management fees continue to grow.
• Fundraising was concentrated in credit and one large mandate. Credit accounted for about two-thirds of Q2 fundraising, while the US$40 billion Just Group mandate alone represented more than half of the quarterly total. This raises the comparison base for future fundraising periods.
• Future fee growth depends on deployment. BAM expects US$68 billion of uncalled commitments to generate approximately US$680 million in annual fees once invested, but the timing of those fees depends on capital deployment.
• Borrowings and integration requirements increased. Corporate borrowings rose by nearly US$1.0 billion from year-end, while BAM completed the acquisition of the remainder of Oaktree in July. The financial and operational benefits will depend on effective integration and execution.

Summary

BAM’s Q2 2026 results combined record fundraising and higher fee-bearing capital with 20% growth in fee-related earnings. GAAP revenue and net income increased much faster, largely because carried interest shifted from a loss to substantial income. The main issues to watch are whether BAM can convert its uncalled commitments into fee-paying capital, maintain fundraising momentum after a large credit mandate, and translate the full Oaktree acquisition and AI infrastructure partnerships into sustained fee growth.