Introduction
In August, we analyzed Brookfield’s Q2 letter in our article „Brookfield Corporation’s Bold Q2 2025 Vision: Navigating Markets with AI at the Forefront.“ At that time, CEO Bruce Flatt unveiled a roadmap for a $200 billion investment into „AI Factories“—a new asset class combining gigawatt-scale power generation with advanced data center infrastructure. It was a vision of grand scale, promising to position Brookfield as the backbone of the digital economy.
Six months later, with the release of the Q4 and Full Year 2025 results on, that vision has transitioned into rapid execution.
Brookfield Corporation (BN) delivered a record-breaking performance to close the year, characterized by the successful integration of major strategic acquisitions (Neoen, Just Group) and a substantial acceleration in capital recycling. The „Compounding Machine“ is firing on all cylinders, leveraging its three-pillar strategy: Asset Management, Wealth Solutions, and Operating Businesses.
Key highlights from the quarter include:
- Record Distributable Earnings (DE) before realizations of **$5.4 billion** for the full year ($2.27 per share), up 11% per share.
- A Monetization Super-Cycle: The firm generated $91 billion in proceeds from asset sales in 2025, validating the carrying value of its portfolio.
- Wealth Solutions Scale: The segment now generates $1.7 billion in annualized earnings, driven by the closed acquisition of Just Group.
- Dividend Hike: A 17% increase in the quarterly dividend, reflecting confidence in recurring cash flows.
Financial Performance: Resilience and Growth
BN’s financial results for Q4 2025 underscore the resilience of its diversified model. While the macro environment in 2025 was volatile, Brookfield’s exposure to inflation-linked assets and essential services provided a robust hedge.
Distributable Earnings (DE)—the primary metric for assessing cash flow available to shareholders—reached $1.45 billion in the fourth quarter. More importantly, DE before realizations (excluding lumpy disposition gains) grew 14% year-over-year to $1.38 billion. This metric is crucial as it represents the steady, recurring cash flow generated by fees, insurance spreads, and utility-like dividends.
Net Income attributable to shareholders surged to $3.2 billion for the full year (up from $1.1 billion in 2024). This figure includes non-cash fair value changes, which turned highly positive in Q4 as interest rates stabilized and the appraisal values of the company’s premier real estate assets began to tick upward.
The following table summarizes the key metrics (per share amounts reflect the 3-for-2 stock split effective Oct 9, 2025):
| Metric (USD Millions, except per share) | Q4 2025 | Q4 2024 | YoY Change | FY 2025 | FY 2024 | YoY Change |
| DE Before Realizations | $1,380 | $1,210 | +14% | $5,400 | $4,821 | +12% |
| Realized Carried Interest (Net) | $210 | $145 | +45% | $620 | $510 | +22% |
| Total Distributable Earnings | $1,590 | $1,355 | +17% | $6,020 | $5,331 | +13% |
| DE Before Realizations Per Share | $0.58 | $0.51 | +14% | $2.27 | $2.03 | +11% |
| Total DE Per Share | $0.67 | $0.57 | +17% | $2.54 | $2.25 | +13% |
| Net Income | $950 | $320 | +196% | $3,200 | $1,100 | +190% |
Strategic Deep Dive: The AI Vision in Action
In our Q2 review, we noted Brookfield’s plan to deploy $200 billion over five years into „AI Factories.“ The Q4 update provides the first concrete evidence of this deployment.
1. The Convergence of Power and Compute
Management revealed that 40% of the $19 billion deployed in Q4 went directly into digital and energy transition assets. The integration of Neoen, the French renewables developer mentioned in the Q2 letter, is complete. This has added a massive pipeline of solar and wind projects in Europe and Australia, which are now being „paired“ with data center developments.
2. Physical Infrastructure Progress
The specific projects highlighted in the Q2 „Bold Vision“ are moving forward rapidly:
- Sweden (Strängnäs): The SEK 95 billion digital park is now under construction. Brookfield announced a landmark power purchase agreement (PPA) with a „leading global technology company“ (likely Microsoft or Meta) for the entire initial phase.
- United States: Two major „AI Campuses“ in the U.S. (part of the $75B pipeline) have broken ground.
- The „Backbone“ Thesis: CEO Bruce Flatt reiterated that the constraint on AI is no longer chips, but power. By owning the hydro dams, the wind farms, the grid connections, and the data center shells, Brookfield has become a critical utility provider to the Magnificent Seven.
Wealth Solutions: The „Investment-Led“ Engine
The transformation of Brookfield into an „investment-led insurance organization“ is perhaps the most significant structural change of 2025.
Just Group Integration
The $3.2 billion acquisition of Just Group, which was pending in Q2, closed successfully in Q3. Its impact on the Q4 numbers was immediate and accretive.
- Insurance Assets grew to $145 billion, bolstered by record annuity sales of $20 billion in 2025.
- The „Float“ Advantage: By bringing Just Group’s U.K. pension assets onto the platform, Brookfield has increased its permanent capital base. This float is „sticky“ and long-duration (10-15 years).
- Spread Expansion: The segment is earning a 1.8% net spread. The average investment portfolio yield is now 5.6%, while the cost of funds (crediting rate) sits at 3.8%. As Brookfield rotates the Just Group’s conservative bond portfolio into its own high-grade private credit and infrastructure debt, we expect this spread to widen further, potentially reaching 2.0% in 2026.
Segment Analysis
Brookfield’s ecosystem operates through synergy. The „Operating Businesses“ generate cash and assets; „Asset Management“ earns fees on those assets; and „Wealth Solutions“ provides the capital to buy them.
1. Asset Management (BAM)
- Fee-Bearing Capital: Grew 12% to $610 billion.
- Fundraising: Raised $112 billion in 2025. The flagship infrastructure fund and the new „Energy Transition Fund II“ saw strong institutional demand.
- Carried Interest: The „bank“ of accumulated unrealized carried interest now stands at $10.5 billion. As vintage funds from 2019-2021 begin to monetize assets, we expect the realization of this carry to accelerate in 2026/2027.
2. Operating Businesses
- Renewable Power & Transition: FFO increased 9% YoY. The development pipeline is now 150 GW, the largest in the world.
- Real Estate: Contrary to the „office is dead“ narrative, Brookfield’s core portfolio is performing well. Core office occupancy ended the year at 96%, with 27 million square feet of leasing signed in 2025. The firm sold $15 billion of real estate in Q2, and that momentum continued in Q4 with another $8 billion of disposals, including the exit of stabilized logistics assets at sub-5% cap rates.
- Infrastructure: FFO grew 11%, driven by inflation-indexed rate hikes in the utilities and transport businesses.
Balance Sheet and Capital Allocation
Brookfield maintains a fortress balance sheet designed to be counter-cyclical.
- Liquidity: Corporate liquidity stands at $6.2 billion, with total deployable capital across the ecosystem reaching a record $188 billion.
- Leverage: Corporate debt-to-market capitalization remains conservative at 11%.
- Share Buybacks: In 2025, BN returned $3.5 billion to shareholders. The company repurchased $1.1 billion of shares at an average price of ~$36 (split-adjusted), which management emphasizes was a „deep discount“ to their internal intrinsic value estimate of $62 per share.
Executive Commentary
In his letter, Bruce Flatt connected the Q2 vision to the Q4 results:
„Six months ago, we outlined our conviction that AI would require a physical overhaul of the global energy and digital infrastructure. Today, that conviction is being validated by the market. We are seeing unprecedented demand for power-backed data centers. Our ability to deliver 6 GW of capacity is not just a plan; it is currently under construction.“
President Nick Goodman added on the financial outlook:
„With interest rates stabilizing, transaction velocity is returning. We expect 2026 to be a year of significant realization activity, which will unlock substantial carried interest and allow us to aggressively recycle capital into our 20% ROE targets.“
Conclusion
Brookfield Corporation’s Q4 2025 report serves as a confirmation of the thesis we explored in August. The „Bold Vision“ regarding AI and the „Investment-Led“ insurance strategy are no longer theoretical—they are generating cash.
The market often struggles to value Brookfield due to its complexity. However, the Sum-of-the-Parts (SOTP) analysis is becoming clearer:
- Asset Management: A capital-light fee machine.
- Wealth Solutions: A massive, low-cost float engine.
- Operating Businesses: A portfolio of essential assets that provide inflation protection.
We believe the current share price does not reflect the embedded value of the Wealth Solutions business or the impending wave of carried interest. The continued growth, combined with the strategic positioning in AI infrastructure and world class management team, makes Brookfield Corp a compelling long-term compounder.
