Introduction
Brookfield Corporation (BN), a premier global alternative asset manager and owner-operator of high-quality real assets, announced its Q2 2025 results on August 7, 2025, showcasing the strength of its diversified platform amid a dynamic economic environment. BN’s business model integrates asset management (through its ~61% economic interest in Brookfield Asset Management Ltd., or BAM), wealth solutions (focused on insurance and annuities via Brookfield Wealth Solutions, or BWS), and direct operating businesses across renewables, infrastructure, private equity, real estate, and credit. With over $1 trillion in assets under management (AUM) and a focus on essential, inflation-protected assets, BN is strategically positioned to benefit from secular megatrends including decarbonization, deglobalization, and digitalization. Key highlights from the quarter include a 13% year-over-year (YoY) increase in distributable earnings (DE) before realizations to $1,253 million, record year-to-date monetizations exceeding $55 billion, robust fundraising of $22 billion, and the declaration of a three-for-two stock split effective October 9, 2025.
Financial Performance: Steady Recurring Earnings Growth Offset by Lower Realizations
BN’s Q2 2025 financial results emphasize the resilience of its recurring cash flows, with DE before realizations—a metric that excludes lumpy realization gains to highlight operational stability—rising 13% YoY to $1,253 million, or $0.80 per share. This growth was propelled by higher fee-related earnings in asset management, improved spreads in wealth solutions, and enhanced performance in operating businesses. Total DE, which includes disposition gains and realized carried interest, reached $1,385 million, or $0.88 per share, though this marked a 35% decline from Q2 2024’s $2,127 million ($1.35 per share) due to exceptionally high realizations in the prior year (e.g., significant disposition gains). Over the last twelve months (LTM) ended June 30, 2025, DE before realizations climbed 21% YoY to $5,311 million ($3.36 per share), while total DE increased modestly to $5,865 million ($3.71 per share) from $5,805 million ($3.67 per share) in the prior LTM period, reflecting consistent organic growth tempered by realization variability.
Net income attributable to shareholders surged to $272 million, or $0.15 per diluted share, in Q2 2025, up from $43 million ($0.00 per share) in Q2 2024, reflecting favorable fair value adjustments, operational gains, and lower non-cash impairments. Consolidated net income for the quarter was $1,055 million, a significant turnaround from a $285 million loss in Q2 2024. For the LTM, net income attributable to shareholders was $841 million ($0.43 per share), down 22% from $1,074 million ($0.58 per share) YoY, influenced by non-cash items such as depreciation, amortization, and market-driven fair value changes.
Funds from Operations (FFO), a measure of cash generated from operations, totaled $1,073 million in Q2 2025, down from $2,214 million in Q2 2024 due to lower disposition activity. LTM FFO stood at $5,499 million. Realized carried interest net of direct costs was $129 million for the quarter (up 153% YoY from $51 million) and $487 million LTM (up 14% from $428 million). Accumulated unrealized carried interest reached $11.3 billion gross ($6.7 billion net) as of June 30, 2025, with $1,027 million generated LTM net of costs, signaling substantial future monetization potential. Target carried interest on capital currently invested is $4 billion per annum, with an additional $1 billion on uninvested capital, totaling $5 billion gross annually ($3.6 billion net to BN), valued at $27 billion using a 10x industry multiple.
The following table summarizes key metrics with YoY comparisons:
| Metric | Q2 2025 | Q2 2024 | YoY Change (%) | LTM Q2 2025 | LTM Q2 2024 | LTM YoY Change (%) |
|---|---|---|---|---|---|---|
| Distributable Earnings (DE) | $1,385M | $2,127M | -35% | $5,865M | $5,805M | +1% |
| DE per Share | $0.88 | $1.35 | -35% | $3.71 | $3.67 | +1% |
| DE Before Realizations | $1,253M | $1,113M | +13% | $5,311M | $4,379M | +21% |
| DE Before Realizations per Share | $0.80 | $0.71 | +13% | $3.36 | $2.77 | +21% |
| Net Income Attributable to Shareholders | $272M | $43M | +533% | $841M | $1,074M | -22% |
These figures illustrate BN’s ability to grow core earnings while navigating variability in realizations, with per-share metrics benefiting from ongoing share repurchases (e.g., over $300 million in Class A shares repurchased in Q2 at an average of $49.03, a 52% discount to intrinsic value of $101.52 per share).
Operational Achievements: Record Capital Recycling and Strategic Growth
BN’s operational momentum was evident in its capital activities, with $22 billion raised in new commitments (contributing to $96 billion LTM), primarily in credit ($16 billion) and supported by over $5 billion from retail and wealth channels. Fee-bearing capital expanded 10% YoY to $563 billion, with 87% in long-term or perpetual structures for earnings predictability. Deployments totaled $28 billion in equity across high-conviction opportunities, including $10 billion in infrastructure (e.g., a $10 billion digital infrastructure investment in Sweden for AI and data centers) and $11.8 billion in credit, aligning with megatrends like digitalization and energy transition.
Monetizations were exceptional, reaching over $55 billion year-to-date ($35 billion since Q1 end), diversified across real estate ($12 billion, including Australia’s largest single transaction), infrastructure ($9 billion, e.g., a major U.K. port), renewables ($6 billion, reflecting global demand), and other assets ($9 billion). Nearly all sales were at or above carrying values, generating liquidity, unlocking carried interest ($129 million realized in Q2), and advancing multiple funds toward realization thresholds. Financings raised $94 billion year-to-date ($53 billion in Q2), including investment-grade issuances by subsidiaries like Brookfield Renewable Partners (BEP) and Brookfield Infrastructure Partners (BIP), enhancing capital efficiency.
In wealth solutions, annuity sales exceeded $4 billion, growing insurance assets to $135 billion with a 5.8% portfolio yield and 1.8% net spread above the 4.0% cost of funds. Deployments of $3.5 billion into Brookfield-managed strategies at an 8% average net yield bolstered returns. Uncalled commitments stood at $128 billion ($54 billion yet to earn fees), with total deployable capital at a record $177 billion ($71 billion corporate liquidity + $106 billion third-party). This positions BN for opportunistic, counter-cyclical investments in a constructive market backdrop.
Segment Analysis: Synergistic Performance Across Businesses
BN’s three core segments—Asset Management, Wealth Solutions, and Operating Businesses—delivered balanced contributions, leveraging internal synergies for enhanced returns.
- Asset Management: This segment, primarily through BAM, manages over $1 trillion in AUM and generated DE of $650 million ($0.41 per share) in Q2 2025, up from $636 million ($0.40 per share) in Q2 2024, with LTM DE at $2,722 million ($1.72 per share), a 7% increase from $2,540 million. Fee-related earnings grew 16% YoY to $676 million ($2.7 billion LTM, +18%), driven by a 10% YoY increase in fee-bearing capital to $563 billion and $22 billion in quarterly inflows (including $5 billion from retail/wealth). Base management fees and incentive distributions supported a stable ~64% margin (assuming consolidated margins in line with historical averages). Carried interest was a highlight: Unrealized carried interest net of costs decreased $273 million in Q2 due to temporary real estate valuation dips, offset by gains in infrastructure and renewables; however, LTM generation was $1,027 million net ($1.4 billion before FX/costs), with $940 million realized gross ($487 million net to BN). Accumulated unrealized carried interest stood at $11.3 billion gross ($6.7 billion net), with $5.9 billion expected to realize within three years. Target carried interest is $5 billion annualized gross ($3.6 billion net), valued at $27 billion (10x multiple). Direct investments within this segment totaled $11.9 billion (e.g., $8.7 billion in flagship real estate funds, $5.2 billion in other credit/private equity), generating $96 million FFO in Q2 ($568 million LTM) and $221 million cash distributions quarterly ($906 million LTM), targeting 15%+ blended returns. Value creation stems from scaling fee-bearing capital, achieving superior investment returns (all funds tracking to meet/exceed targets), and cost discipline. BN values this segment as the market price of BAM plus a multiple on target/accumulated carried interest.
- Wealth Solutions: Focused on retirement services, annuities, and insurance via BWS, this segment delivered DE of $391 million ($0.25 per share) in Q2, up 34% YoY, with LTM DE at $1,606 million ($1.02 per share), a 61% surge from $1,000 million. Annualized DE reached $1.7 billion, targeting 15% return on equity. Insurance assets grew to $135 billion, with $4 billion+ in annuity originations and a portfolio yield of 5.8% generating 1.8% net spread over 4.0% cost of funds. Invested assets included ~65% investment-grade private credit and ~65% public credit, with cash/liquids for liquidity management. DE breakdown: Net investment income of $1.6 billion annualized, supported by proactive risk management (e.g., reinsurance, duration matching) and deployments of $3.5 billion into Brookfield strategies at 8% net yield. The pending acquisition of Just Group (~$40 billion in assets) will scale operations, building on U.K. licensing momentum. Invested capital was $11.6 billion IFRS, with group capital ~$16 billion (including $13.4 billion in subsidiaries and $2.5 billion in holdings). Value creation drivers: Acquiring long-duration liabilities at value, minimizing risks via underwriting/reinsurance, and leveraging Brookfield’s investment expertise for excess returns. BN values this segment at 15x annualized distributable operating earnings (~$25.5 billion blended).
- Operating Businesses: With over $40 billion invested across diversified, high-barrier assets, this segment generated DE of $350 million ($0.22 per share) in Q2, with LTM DE at $1,695 million ($1.07 per share), annualized at $1.6 billion. Sub-segments share characteristics like inflation-linked revenues, high margins, and capital recycling potential. Detailed sub-analysis:
- Renewable Power & Transition (BEP): Held via 46% interest in BEP, this sub-segment owns/operates hydro, wind, solar, and transition assets. Operating FFO was $155 million in Q2 ($521 million LTM), with cash distributions of $115 million quarterly ($447 million LTM). Key activity: Landmark Google agreement for up to 3,000 MW hydro capacity, supporting decarbonization. Value creation via inflation-protected cash flows, capacity expansion (record backlog), and recycling. Valued at BEP’s trading price, targeting 12-15% total returns and 5-9% distribution growth.
- Infrastructure (BIP): Via 26% interest in BIP, spans utilities, transport, midstream, data. Operating FFO contributed to segment totals, with $579 million LTM for the business, supporting $346 million LTM distributions. Monetizations (e.g., U.K. port) aided liquidity. Focus on de-risking, operational improvements, and backlog execution. Valued at BIP’s trading price, targeting similar 12-15% returns.
- Private Equity (BBU): Via 68% combined interest (42% direct, 26% via BWS), includes business services and industrials. Resilient amid deglobalization, with Adjusted EBITDA supporting DE. Targets high returns via operational enhancements and recycling.
- Real Estate (BPG): Wholly owned, comprises core ($26.8 billion invested in 35 premier office/retail assets, 94% office/97% retail occupancy, 4M sq ft leased in Q2) and transitional/development ($6.8 billion in 151 assets, 92% leased, plus $1.4 billion development). Core FFO: $66 million Q2 ($333 million LTM, excluding corp/interest); Transitional: $66 million Q2 ($333 million LTM). NOI growth from leasing/development, with sales recycling into higher-growth. Valued using IFRS/blended (quoted for core, market data for land/housing).
This diversification ensures risk mitigation, with operating businesses providing stable cash flows to fuel asset management and wealth solutions growth.
Balance Sheet and Liquidity: Fortified for Opportunistic Deployment
BN’s balance sheet is robust, with total capital at $181 billion blended ($161 billion net) as of June 30, 2025, translating to $101.52 per share. Corporate liquidity was $5.7 billion ($2.4 billion cash/financial assets + $3.4 billion undrawn credit), part of $71 billion overall corporate deployable capital. Capital allocation included $432 million returned to shareholders in Q2 ($1.6 billion LTM) via $124 million dividends ($0.08 per share quarterly) and over $300 million in repurchases. Net business reinvestment was $6.5 billion LTM, offset by $1.1 billion net financings. Low corporate leverage (6% recourse debt, investment-grade ratings) and conservative capitalization (corporate debt to capital low) enhance flexibility for growth.
Executive Commentary and Outlook
President Nick Goodman remarked, “We had strong financial performance in the second quarter supported by the continued positive momentum across our core businesses and a significant increase in monetization activity. To date this year, we had over $55 billion of asset monetizations diversified across asset class and geography, returning substantial capital to our investors at excellent returns.” He added, “With a record $177 billion of deployable capital and an increasingly constructive market backdrop, we are well-positioned to capitalize on investment opportunities, drive strong organic earnings growth, and deliver 15%+ returns on a per share basis to our shareholders over the long term.”
The outlook remains positive, with expectations for accelerated fundraising (e.g., final closes on flagship real estate and transition funds), increased carried interest realizations, and organic DE growth. The stock split aims to improve liquidity and accessibility. Forward-looking guidance assumes continued trend acceleration but cautions on risks like economic downturns and regulatory shifts.
Conclusion
Similar to the Brookfield Asset Management Q2 performance, we praise Brookfield Corporations continued consistency and resilience. The Management team at Brookfield created an amazing compounding machine that is able to deploy capital not only efficient but als secure and local in essential assets (we recommend our article about Brookfields Europe expansion). While we don’t believe that BN will close its discount gap fully, it still presents a lucrative upside potential and gives management the right incentive to repurchase more shares. BN continuous on its path of excellence set in the first quarter, compounding and not being troubled by tariffs.
