Brookfield Oaktree's Q3 Net Income Jumps, 9-Month Revenue Dips

TL;DR

**Brookfield Oaktree's Q3 looks good, but the nine-month numbers and asset shrinkage are a red flag; watch the full Brookfield takeover.**

AI Summary

Brookfield Oaktree Holdings, LLC (BOH) reported a net income attributable to Class A unitholders of $59.704 million for the three months ended September 30, 2025, a significant increase from $36.762 million in the same period of 2024. However, for the nine months ended September 30, 2025, net income attributable to Class A unitholders decreased to $62.610 million from $151.522 million in 2024. Total revenues for the three months ended September 30, 2025, rose to $160.356 million from $140.320 million year-over-year, driven by increased interest and dividend income and investment income. Conversely, total revenues for the nine-month period declined to $424.841 million from $550.379 million, primarily due to the absence of incentive income in 2025, which was $117.529 million in 2024. The company's total assets decreased to $6.629 billion as of September 30, 2025, from $7.073 billion at December 31, 2024, largely due to a reduction in corporate investments and consolidated funds' investments. Cash and cash equivalents also saw a substantial drop from $22.303 million to $8.587 million for Oaktree and from $427.548 million to $281.785 million for consolidated funds over the same period. A key strategic outlook mentioned is Brookfield's pending acquisition of the remaining approximately 26% interest in Oaktree it does not already own, subject to regulatory approvals.

Why It Matters

This filing reveals a mixed financial picture for Brookfield Oaktree Holdings, LLC, with strong Q3 net income growth but a notable decline in nine-month revenues and overall assets. For investors, the pending acquisition by Brookfield of the remaining 26% of Oaktree is a critical development, signaling a full integration that could impact future unit valuations and strategic direction. Employees might see changes in corporate structure and compensation as the integration progresses. Customers of Oaktree's investment funds should monitor how this full ownership affects fund strategies and performance. In the broader market, this consolidation within the alternative asset management sector highlights ongoing trends of larger players absorbing specialized firms, potentially reducing competition in certain niches.

Risk Assessment

Risk Level: medium — The company experienced a significant decrease in total assets from $7.073 billion at December 31, 2024, to $6.629 billion at September 30, 2025, and a substantial drop in cash and cash-equivalents from $449.851 million to $290.372 million over the nine months ended September 30, 2025. Additionally, the absence of incentive income in the nine months ended September 30, 2025, compared to $117.529 million in the prior year, indicates a potential volatility in revenue streams.

Analyst Insight

Investors should closely monitor the progress of Brookfield's acquisition of the remaining 26% of Oaktree, as this will likely be a major catalyst. Given the mixed financial results and declining assets, a cautious approach is warranted; consider holding existing positions rather than initiating new ones until the full integration details and their financial implications become clearer.

Financial Highlights

debt To Equity

N/A

revenue

$160,356,000

operating Margin

N/A

total Assets

$6,629,997,000

total Debt

$1,170,611,000

net Income

$59,704,000

eps

$0.50

gross Margin

N/A

cash Position

$290,372,000

revenue Growth

+14.3%

Revenue Breakdown

Key Numbers

• $59.704M — Net income attributable to Class A unitholders (Increased from $36.762M in Q3 2024)
• $62.610M — Net income attributable to Class A unitholders (Decreased from $151.522M for nine months ended Sept 30, 2024)
• $160.356M — Total revenues (Increased from $140.320M in Q3 2024)
• $424.841M — Total revenues (Decreased from $550.379M for nine months ended Sept 30, 2024)
• $117.529M — Incentive income (Present in 2024, absent in 2025 for nine-month period)
• $6.629B — Total assets (Decreased from $7.073B at Dec 31, 2024)
• $290.372M — Cash and cash-equivalents (Decreased from $449.851M at Dec 31, 2024)
• 26% — Interest in Oaktree (Remaining stake Brookfield is acquiring)
• $0.50 — Net income per Class A unit (basic and diluted) (Increased from $0.33 in Q3 2024)
• $0.53 — Net income per Class A unit (basic and diluted) (Decreased from $1.38 for nine months ended Sept 30, 2024)

Key Players & Entities

• Brookfield Oaktree Holdings, LLC (company) — Registrant of the 10-Q filing
• Brookfield (company) — Acquiring the remaining 26% interest in Oaktree
• Oaktree (company) — Investment manager and target of acquisition
• $59.704 million (dollar_amount) — Net income attributable to Class A unitholders for Q3 2025
• $36.762 million (dollar_amount) — Net income attributable to Class A unitholders for Q3 2024
• $62.610 million (dollar_amount) — Net income attributable to Class A unitholders for nine months ended Sept 30, 2025
• $151.522 million (dollar_amount) — Net income attributable to Class A unitholders for nine months ended Sept 30, 2024
• $117.529 million (dollar_amount) — Incentive income for nine months ended Sept 30, 2024
• $6.629 billion (dollar_amount) — Total assets as of September 30, 2025
• $7.073 billion (dollar_amount) — Total assets as of December 31, 2024

FAQ

Risk Factors

• Market Volatility and Investment Performance [high — market]: The company's financial performance is significantly tied to the performance of its investments. Fluctuations in market conditions, interest rates, and asset valuations can negatively impact investment income and the fair value of assets, as seen in the decrease in total revenues for the nine-month period due to the absence of incentive income.
• Dependence on Key Personnel and Investment Strategies [medium — operational]: As an alternative investment manager, the company's success relies on the expertise of its investment professionals and the effectiveness of its investment strategies. Changes in key personnel or shifts in market dynamics that render current strategies less effective could impact revenue generation and profitability.
• Regulatory Approvals for Acquisition [medium — regulatory]: Brookfield's pending acquisition of the remaining 26% interest in Oaktree is subject to regulatory approvals. Delays or failure to obtain these approvals could impact the strategic integration and future operations of the combined entity.
• Reduction in Cash and Investments [medium — financial]: A substantial decrease in cash and cash equivalents for both Oaktree ($8.587M from $22.303M) and consolidated funds ($281.785M from $427.548M), along with a reduction in corporate and consolidated fund investments, indicates a potential shift in liquidity or asset allocation strategy that warrants monitoring.
• Debt Obligations of Consolidated Funds [medium — financial]: The company has significant debt obligations within its consolidated funds, totaling $1,170,611,000 as of September 30, 2025. Changes in interest rates or the ability of these funds to service their debt could pose financial risks.
• Non-controlling Redeemable Interests [medium — market]: The presence of $3,103,747,000 in non-controlling redeemable interests in consolidated funds represents a significant liability. Changes in the redemption patterns or fair value of these interests can impact unitholders' capital.

Industry Context

Brookfield Oaktree Holdings operates in the alternative asset management industry, competing with other global firms managing private equity, credit, real estate, and infrastructure funds. The industry is characterized by its reliance on strong investment performance, fundraising capabilities, and strategic partnerships. Recent trends include increased investor demand for yield-oriented strategies and a focus on ESG (Environmental, Social, and Governance) factors.

Regulatory Implications

The pending acquisition of the remaining Oaktree stake by Brookfield is subject to regulatory review and approval. Compliance with financial regulations, particularly those governing investment funds and asset managers, remains critical. Changes in tax laws or regulations impacting alternative investments could also affect the company's operations and profitability.

What Investors Should Do

1. Monitor the progress and outcome of Brookfield's acquisition of the remaining Oaktree stake.
2. Analyze the drivers of the divergence between quarterly and year-to-date net income.
3. Assess the impact of reduced cash and investment balances.
4. Evaluate the company's ability to generate incentive income in future periods.

Key Dates

• 2025-09-30: End of Third Quarter — Reporting period for the latest financial results, showing increased quarterly net income but decreased year-to-date performance.
• 2025-12-31: End of Fiscal Year 2024 — Prior period balance sheet data for comparison, showing higher total assets and cash positions.
• 2024-09-30: End of Third Quarter 2024 — Prior year comparable period for quarterly results, showing lower net income and revenue.
• 2024-01-01: Start of Fiscal Year 2024 — Beginning of the nine-month period for which year-over-year revenue and net income comparisons are made.

Glossary

Class A unitholders

Holders of Class A units in Brookfield Oaktree Holdings, LLC, who are entitled to a share of the company's net income. (Key metric for profitability attributable to a specific class of owners.)

Incentive income

Income earned by the company based on the performance of its investments, often a share of profits above a certain threshold. (A significant driver of revenue in the prior year, its absence in 2025 impacted year-to-date results.)

Consolidated funds

Investment funds that are controlled by Brookfield Oaktree Holdings, LLC and therefore must be included in the company's consolidated financial statements. (A major component of the company's assets and liabilities, with significant cash and investment holdings.)

Non-controlling redeemable interests

Interests held by third parties in consolidated funds that give those parties the right to redeem their interests for cash or other assets. (Represents a significant financial obligation for the company, impacting its capital structure.)

Paid-in capital

The amount of capital contributed by unitholders in exchange for units, in addition to any par value. (Reflects historical capital contributions from unitholders.)

Retained earnings (accumulated deficit)

The cumulative net income or loss of the company that has not been distributed to unitholders. (Shows the historical profitability of the company; a decrease indicates net losses or distributions exceeding net income.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Brookfield Oaktree Holdings, LLC has experienced a significant decline in total revenues, from $550.379 million to $424.841 million, largely due to the absence of $117.529 million in incentive income in 2025. This revenue drop has contributed to a substantial decrease in net income attributable to Class A unitholders, falling from $151.522 million to $62.610 million. While total assets have decreased from $7.073 billion to $6.629 billion, the company reported a stronger net income and revenue for the third quarter of 2025 compared to the third quarter of 2024, indicating a potential short-term improvement in performance.

Filing Documents

• oak-20250930.htm (10-Q) — 2093KB
• exhibit3113q2025-conformed.htm (EX-31.1) — 11KB
• exhibit3123q2025-conformed.htm (EX-31.2) — 11KB
• exhibit3213q2025-conformed.htm (EX-32.1) — 6KB
• exhibit3223q2025-conformed.htm (EX-32.2) — 5KB
• 0001403528-25-000046.txt ( ) — 11617KB
• oak-20250930.xsd (EX-101.SCH) — 68KB
• oak-20250930_cal.xml (EX-101.CAL) — 76KB
• oak-20250930_def.xml (EX-101.DEF) — 447KB
• oak-20250930_lab.xml (EX-101.LAB) — 712KB
• oak-20250930_pre.xml (EX-101.PRE) — 572KB
• oak-20250930_htm.xml (XML) — 2529KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) 1 Condensed Consolidated Statements of Financial Condition as of September 30, 2025 and December 31, 2024 1 Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 2 Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2025 and 2024 3 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 4 Condensed Consolidated Statements of Changes in Unitholders' Capital for the Three and Nine Months Ended September 30, 2025 and 2024 6 Notes to Condensed Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 45 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 59 Item 4.

Controls and Procedures

Controls and Procedures 60

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 61 Item 1A.

Risk Factors

Risk Factors 61 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 61 Item 3. Defaults Upon Senior Securities 61 Item 4. Mine Safety Disclosures 61 Item 5. Other Information 61 Item 6. Exhibits 62 Signature

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This quarterly report contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), which reflect our current views with respect to, among other things, our future results of operations and financial performance. In some cases, you can identify forward-looking statements by words such as "anticipate," "approximately," "believe," "continue," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "seek," "should," "will" and "would" or the negative version of these words or other comparable or similar words. These statements identify prospective information including, without limitation, statements with respect to the recently announced transaction whereby Brookfield will acquire the approximately 26% interest in Oaktree that it does not already own, subject to regulatory approvals and customary closing conditions. Important factors could cause actual results to differ, possibly materially, from those indicated in these statements. Forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Such forward-looking statements are subject to risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity. In addition to factors previously disclosed in Brookfield Oaktree Holdings, LLC's ("BOH") reports filed with securities regulators in the United States and those identified elsewhere in this quarterly report, the following factors, among others, could cause actual results to differ materially from forward-looking statements and information or historical performance: the ability of BOH to retain and hire key service providers; the conti

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Brookfield Oaktree Holdings, LLC Condensed Consolidated Statements of Financial Condition (Unaudited) ($ in thousands) As of September 30, 2025 December 31, 2024 Assets Cash and cash-equivalents $ 8,587 $ 22,303 Corporate investments (includes $ 306,687 and $ 307,825 measured at fair value as of September 30, 2025 and December 31, 2024, respectively) 1,330,524 1,520,260 Due from affiliates 552 227 Other assets 31,526 16,728 Assets of consolidated funds: Cash and cash-equivalents 281,785 427,548 Investments, at fair value 4,847,399 4,946,862 Dividends and interest receivable 23,076 34,127 Receivable for securities sold 24,094 22,688 Derivative assets, at fair value 44,051 33,349 Other assets, net 38,403 49,340 Total assets $ 6,629,997 $ 7,073,432 Liabilities and Unitholders' Capital Liabilities: Accrued compensation expense $ 232 $ 300 Accounts payable, accrued expenses and other liabilities 358 648 Due to affiliates — 200 Liabilities of consolidated funds: Accounts payable, accrued expenses and other liabilities 24,362 12,981 Payables for securities purchased 78,816 102,607 Derivative liabilities, at fair value 70,865 13,385 Distributions payable 68 68 Debt obligations of the consolidated funds 1,170,611 1,472,795 Total liabilities 1,345,312 1,602,984 Commitments and contingencies (Note 13) Non-controlling redeemable interests in consolidated funds 3,103,747 3,069,084 Unitholders' capital: Series A preferred units, 7,200,000 units issued and outstanding as of September 30, 2025 and December 31, 2024 173,669 173,669 Series B preferred units, 9,400,000 units issued and outstanding as of September 30, 2025 and December 31, 2024 226,915 226,915 Class A units, no par value, unlimited units authorized, 118,832,320 and 116,373,234 units issued and outstanding as of September 30, 2025 and December 31, 2024, respectively — — Class B units, no par value, unlimited units authorized, 41,758,979 and 4

View Full Filing

View this 10-Q filing on SEC EDGAR