Good day, and thank you for standing by. Welcome to the Brookfield Asset Management Second Quarter 2025 Conference Call and Webcast. (operator provided instructions). Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jason Fooks, Managing Director of Investor Relations. Please go ahead.

Thank you for joining us today for Brookfield Asset Management's Earnings Call for the Second Quarter of 2025. On the call today, we have Bruce Flatt, our Chief Executive Officer; Connor Teskey, our President; and Hadley Peer Marshall, our Chief Financial Officer. Before we begin, I'd like to remind you that in today's comments, including in responding to questions and in discussing new initiatives and our financial and operating performance, we make forward-looking statements, including forward-looking statements within the meaning of applicable Canadian and U.S. securities law. These statements reflect predictions of future events and trends and do not relate to historic events. They're subject to known and unknown risks, and future events and results may differ materially from such statements. For further information on these risks and their potential impacts on our company, please see our filings with the securities regulators in Canada and the U.S. and the information available on our website. Let me quickly run through the agenda for today's call. Bruce will begin with an overview of the quarter, highlighting the strength of our platform and discuss how we're positioned for long-term growth, particularly around our thematic investment strategies. Connor will discuss our accelerating pace of investment activity and monetizations, both at multiyear highs and the growing opportunity to reach individual investors through retirement and wealth channels. Finally, Hadley will walk through our financial results, balance sheet and some of our recent strategic initiatives. After our formal remarks, we'll open the line for questions. Before I hand things over, I'd like to take a moment to welcome the new analysts who have initiated coverage on Brookfield over the past few months. We're glad to have you with us. To ensure we can hear from as many participants as possible, we're asking everyone to limit themselves to one question. (operator provided instructions). And with that, I'll turn the call over to Bruce.

Thank you, Jason, and everyone joining us on this call. We delivered strong results this quarter with fee-related earnings up 16% to $676 million. Distributable earnings were up 12% to $613 million. We raised $22 billion of capital in the quarter and over the past 12 months, $97 billion, helping drive fee-bearing capital to $563 billion, which was 10% up year-over-year. The broader market environment is very constructive. M&A is gaining traction, and there is significant liquidity with well-functioning capital markets, a much different environment than we saw even a few months ago when investors were waiting for signs of stability. This shift plays directly to our strength. We have always focused on long-term mission-critical investments related to the backbone of global economy and that continues to be our strategy. The businesses we own: critical infrastructure, renewable power, industrial and logistics assets, high-quality real estate and essential service businesses provide stable inflation-linked cash flows, which are sought after in a market where resiliency is valued. This opportunity set is large and compelling and is driven by 3 powerful themes, which we have discussed for years with you: digitalization, decarbonization, and de-globalization. These 3 Ds are more relevant today than ever before. They have expanded and are converging in ways that are accelerating demand for capital at a global scale. First, deglobalization has evolved from a discussion around supply chain resiliency into a broader reordering of global trade. We are seeing increased reshoring and near-shoring across manufacturing and significant investment in alternative and duplicate supply chains. That is driving a surge in demand for logistics hubs, advanced manufacturing facilities and modern industrial infrastructure. Decarbonization originally centered on net zero commitments now also reflects growing concern around energy security and increasingly grid stability. The focus on new energy sources is no longer a long-term policy goal. It is a near-term economic imperative. The lowest cost, fastest-to-market, scalable solution remains renewable power. Most importantly, increased solar penetration is driving soaring demand for the grid-stabilizing benefits of hydro, nuclear and storage. Lastly, digitalization, which initially focused on cloud infrastructure, telecom towers and fiber has entered a new phase. Artificial intelligence is transforming how data is created, processed and consumed. That transformation is driving exponential demand for computing power, data center capacity and sovereign scale AI campuses. In fact, we believe the infrastructure build-out for AI will be one of the largest capital formation cycles of this generation. Connor will speak more about our positioning in AI, but the bottom line is this. We have scale, experience and an integrated approach that few can match and we are viewed as a partner of choice. We are developing next-generation AI infrastructure around the world. Having already built 2,000 megawatts of data center capacity and being one of the largest renewable providers in the world, we can deliver on large complex transactions integrated with energy, land entitlement and development under one roof, and that is exactly what the largest hyperscalers and governments are looking for in a partner. The convergence of these megatrends has created a powerful investment landscape. We are uniquely positioned to lead. We're investing at scale in these high-growth sectors supported by multi-decade structural tailwinds. This year-to-date, we invested $85 billion. We also harvested investments that have benefited from our operating value approach and sold over $55 billion of assets at very good returns. This represents our highest level of activity in years. Connor will discuss monetization more broadly in a little more depth, but these realizations demonstrate the quality of our portfolio and the value creation delivered by our operating teams. The current environment marked by secular tailwinds, improving sentiment and a premium on certainty is suited to our strategy. Our focus remains the same: invest with discipline for value, protect downside, return client capital to clients at excellent returns. By doing so, we will continue to be rewarded with growing fee-bearing capital and the ability to deliver on long-term value to our shareholders. I will now turn the call over to Connor to walk through how we are deploying capital, building strategic partnerships and monetizing assets across our global platform.

Thank you, Bruce, and good morning, everyone. As Bruce highlighted, the market environment is more constructive today and the structural drivers behind our business have been accelerating. With these themes converging to create an unprecedented demand for assets that make up the backbone of the global economy, Brookfield is uniquely positioned to meet that need. This is evident across our platform, where we are deploying capital into long-term trends at greater rates and forming strategic partnerships that reinforce our leadership position. Let's start with partnerships. We recently entered into several large-scale agreements that reflect the depth of our platform and the confidence that the world's largest governments, corporates and institutions placed in Brookfield. The first is a $10 billion public private investment program to support the Swedish Government in building out of next-generation digital infrastructure to power the growth of AI and cloud computing within the country. This framework allows us to integrate our renewable, infrastructure and real estate capabilities to deliver a full suite solution at scale. The second is a renewable energy framework agreement with Google. Under this agreement, we will deliver up to 3,000 megawatts of hydroelectric capacity across the United States, starting with initial contracts valued at more than $3 billion. These facilities provide stable, clean baseload power, a critical input for AI and data operations. These transactions build on other strategic partnerships we've already formed with Microsoft, Barclays and the French Government to deliver high-value infrastructure. This is part of a broader shift: sophisticated counterparties are increasingly turning to us for our ability to not only bring capital at scale, but to bring integrated solutions and most importantly, the experience and capabilities to execute with certainty. Turning now to investment activity. We are seeing transaction volumes increase, particularly around the same secular themes. Nowhere is the impact of the 3 Ds more visible than in our Infrastructure business. This year, we have committed to a number of major infrastructure transactions totaling over $30 billion in enterprise value. These include Colonial Pipeline, the largest refined products pipeline in the United States; Wells Fargo Rail, the second-largest railcar leasing platform in North America; Hotwire Communications, a leading U.S. fiber-to-the-home provider. And even yesterday, Duke Energy Florida, a vertically integrated electric utility serving 2 million customers with 53,000 miles of transmission and distribution lines and over 13 gigawatts of installed generation capacity. Each of these assets is mission-critical, defensively positioned and underpinned by long-duration cash flows. This pace of activity is only possible because of our global footprint and readiness to deploy at scale. We can move decisively, underwrite large and complex assets given our experience, and we will use our operating capabilities to drive value in these businesses under our ownership. Based on our advanced pipeline, this recent pace of activity is not expected to slow down. At the same time, we are seeing robust demand for high-quality assets and businesses we invest in. As evidenced by a significant increase in monetization activity so far this year. Year-to-date, we've announced asset sales valued at over $55 billion, generating $33 billion of equity proceeds. These exits have achieved strong returns and reflect the operating value we've created over time. And we are seeing this across our franchise. In real estate, we've announced $15 billion of sales across senior housing, net lease, student housing and hospitality. We also completed the IPO of Leela Palaces in India at a record value for the sector. In Infrastructure, we've announced the sale of nearly $13 billion of assets, including a partial interest in Patrick Terminals, our final stake in NGPL and stabilized data centers developed through our Data4 platform. We've also been active in renewable power, exiting wind and hydro assets, and in private equity, where we've returned more than $10 billion to clients over the past 2 years. And while we're harvesting value today, equally focused on tomorrow's opportunities, none more important than AI infrastructure. Artificial intelligence is driving exponential demand for compute and requires an unprecedented build-out in infrastructure. Data centers, towers, fiber, liquid cooling and semiconductor capacity are all essential and require trillions in capital investment. This is the next frontier for infrastructure investing and Brookfield is well positioned to lead. We already have strong capabilities in power and data center development globally, and we are scaling these platforms aggressively. But the infrastructure outside the box, land, power and buildings, essentially the racks and shelves is only part of the story. The infrastructure in the box, the compute, chips and cooling systems have largely been funded by corporate balance sheets. We believe that will change. We see an emerging opportunity for long-term private capital to help fund this next wave of AI build-out. We're already seeing demand for GPU Infrastructure-as-a-Service. Long-term compute capacity delivered off balance sheet and funded by third-party private capital. We also see opportunities across the broader AI supply chain, from liquid cooling and power distribution to fiber networks and chip fabrication capacity. Combined with the need for developers that can deliver turnkey AI campuses as we are doing in Sweden and France, we believe this may ultimately support a dedicated strategy of its own. Our integrated platform, spanning equity and credit allows us to deliver these solutions with speed, structure and scale, and our relationships with governments, hyperscalers and industrial leaders are generating proprietary deal flow across the new AI ecosystem. Alongside this transformation in infrastructure, we're also seeing a transformation in our client base. For decades, alternatives have been driven by institutional capital, particularly defined benefit pensions and sovereign wealth funds. That remains our core base, and it continues to grow rapidly. But a new major growth engine is now emerging, the rise of individual access to alternative investments: defined contribution plans, insurance-based savings, and private wealth are quickly becoming the next frontier. In the U.S. alone, 401(k) plans and retail annuities now represent over $10 trillion in assets, on par with institutional pools, and private wealth clients represent another $10 trillion opportunity. A recent executive order from the U.S. administration could accelerate this shift by laying the groundwork for greater access to private strategies through workplace retirement plans. Even a modest reallocation could result in hundreds of billions to trillions of net new flows into alternatives over time. We are well prepared for this evolution. In this evolving landscape, distribution will matter, but it is the quality and durability of the products that will ultimately determine success. Our business is centered around real assets and essential business services that offer income, capital stability and inflation protection that long-term retirement and wealth portfolios require. We've made significant investments across our platform to meet the needs of retail investors through the build-out of our private wealth and retirement platform. Brookfield Wealth, which is on track to raise over $30 billion of capital this year from private wealth and insurance annuity channels. This year, we're launching two new offerings focused on private equity and asset-based finance, and at the same time, we are expanding our dedicated teams for both private wealth and defined contribution channels. At the same time, we manage approximately $100 billion and growing portfolio of annuities on behalf of Brookfield Wealth Solutions, which is designed to generate stable, attractive returns for retirement accounts. And that platform continues to expand globally. Last week, Brookfield entered into an agreement to acquire Just Group, a leading provider of retirement services in the U.K. individual retirement market. While Brookfield Asset Management is not contributing capital to the transaction or taking on insurance liabilities. Upon closing, we could become the investment manager for a significant portion of Just Group's $36 billion portfolio, on terms consistent with our existing arrangement with Brookfield's insurance group, Brookfield Wealth Solutions. This will immediately add stable, incremental fee-related revenue for our business with significant upside as Just Group's origination capabilities support further growth in retirement savings. This transaction demonstrates the significant opportunity for us to service BWS' growing global platform, a feature that remains underappreciated upside for our business. While such transactions are discrete in nature, they continue to be a meaningful and highly accretive source of growth for us as part of Brookfield's ecosystem. In summary, our global scale, real asset focus and track record of delivering income stability and downside protection, make us well suited to serve this new cohort of investors. And as capital flows expand from institutions to individuals, we are well positioned to lead. To close, across our business, we are seeing an acceleration of the most important drivers of our growth. Capital markets are robust, partnerships are expanding and the pipeline of opportunities continues to grow. We are investing behind long-term themes, monetizing into strong demand and leaning into sectors where we have a competitive edge. With a strong balance sheet, global platform and long-term orientation, we are well positioned in today's market and excited about what lies ahead. With that, we'll turn the call over to Hadley.

Thank you, Connor. Today, I'll provide an overview of our second quarter financial results, which demonstrated the advantage of our stable and predictable business model. I'll also discuss our strong fundraising performance and our balance sheet positioning. We delivered strong financial performance in the second quarter. Fee-bearing capital increased to $563 billion up 10% year-over-year. Over the last 12 months, fee-bearing capital inflows totaled $85 billion, of which $60 billion came from fundraising and $25 billion came from deployment of uncalled commitments. We saw contributions from scaling our partner manager platform and growth of our listed affiliates market cap. The strong growth in our capital base continues to drive the strong growth in our earnings. One of the most unique features of our model is that fee-related earnings comprise nearly all of our distributable earnings, making our earnings highly stable and predictable, which is particularly valuable in today's environment. Fee-related earnings were $676 million or $0.42 per share and DE was $613 million or $0.38 per share. That translates into 16% and 12% growth from the same period last year, respectively. With earnings partially offset by higher interest expense paid on our $750 million bond deal issued in the quarter, and lower interest income as we've deployed our cash to acquire partner managers, which will pay off over the long term. Overall, growth has been driven by strong fundraising, $97 billion over the last 12 months and robust deployments. Notably, year-to-date, we've deployed over $85 billion of capital into investment, including over $50 billion of equity value. This has been a huge catalyst for our business, and we will continue to be active on the deployment front, given our robust pipeline. The simplicity and consistency of our earnings anchored almost entirely in recurring fees, gives us a strong foundation to continue to build-out, especially as we grow further our capital base and launch new strategies. Lastly, on financials. Our margin expanded 56%, up 1% from the prior year quarter. Let me spend a minute discussing some of our quarterly fundraising highlights. In total, we raised $22 billion of capital, bringing the 12-month fundraising total to $97 billion. Notably, almost three quarters of our fundraising for the quarter came from complementary strategies, demonstrating the growing diversity and strength of our product suite, which now provide consistent and increasing fundraising regardless of whether our flagships are in the market. Within renewable power and transition, we raised $1.5 billion, including over $800 million for the second vintage of our global transition flagship, bringing total capital raised to over $15 billion. This is already the world's largest energy transition strategy, and we will raise significantly more capital before our final close later this quarter. Infrastructure fundraising totaled $1.7 billion, including over $1 billion raised for our super core infrastructure strategy, the fund's largest quarter in over 3 years, and over $800 million raised for our private wealth infrastructure vehicle, which is the strongest quarter ever. In addition, we raised $1.3 billion across private equity strategies and $1.8 billion across real estate strategies, including $500 million for the fifth vintage of our flagship real estate strategy. The scale and diversity of our fundraising, especially across our complementary funds continues to show strength, and we will have strong fundraising tailwinds in the coming months with two of our flagships currently in the market, expecting final closes shortly. Turning now to private credit, where our platform continues to grow in both scale and capability. During the quarter, we raised $16 billion across our credit strategies. Our partner managers brought in over $10 billion, and we raised more than $4 billion from insurance accounts. We also raised over $800 million for the fourth vintage of our infrastructure mezzanine debt strategy, which will hold its first close shortly, bringing total capital raised to $4 billion. With more than $250 billion of fee-bearing credit capital, we manage one of the largest private credit franchises globally. Importantly, we have meaningful origination capabilities having deployed and committed over $10 billion during the quarter and over $30 billion over the past year. Our platform is highly diversified across credit strategies, including asset-backed finance, opportunistic credit and real asset lending. This diversity is key as it gives us the ability to remain disciplined when certain markets become commoditized or when risk-adjusted returns are less compelling and to focus instead on areas where we see more attractive opportunities. Today, we continue to see strong demand in asset-backed finance and real assets, two areas that align closely with our strength, deploying large-scale capital with specialized underwriting capabilities or in sectors where we have deep domain expertise like infrastructure, power and real estate. These capabilities have also guided our partnership with managers who share our focus that can help expand our platform. In the quarter, we invested approximately $350 million towards buying and growing our partner managers, including an additional 9% stake in Primary Wave, our leading platform for music royalties, participating in a Castlelake-led acquisition of Concora, a specialty consumer credit manager and origination platform and increasing our ownership in Oaktree. Additionally, we expect to finalize our acquisition of a 50% stake in Angel Oak, a leader in nonqualified mortgage origination later this quarter. These are high quality, scalable platforms that enhance our credit capabilities and position us to continue delivering strong risk-adjusted returns. As for our balance sheet, at quarter end, we had $1.5 billion in liquidity. We continue to use our asset-light balance sheet to seed new products, and support strategic partnerships, including the up-and-coming Angel Oak closing, with the goal of generating long-term high-quality revenue streams. We were also picked to be added to the Russell 1000 Index in June, a first step in our broader goal of achieving broader inclusion in the U.S. equity indices. We are prioritizing this initiative, and we believe we are well positioned to continue making progress. And lastly, we declared a quarterly dividend of $0.4375 per share payable to shareholders of record as of August 29. To close, we remain firmly on track with our long-term growth objectives. Our diversified platform, operational depth and global reach continues to give us a competitive edge in today's environment. Our strategy is anchored in the mega trends of digitalization, decarbonization and deglobalization and we're scaling into the areas where these trends intersect, particularly AI infrastructure, energy transition and critical real assets and essential businesses. We look forward to sharing more of these themes at our Investor Day on September 10 here in New York. Thank you for your continued support. Operator, we can open up to questions now.

(operator provided instructions) Our first question will come from Michael Cyprys from Morgan Stanley.

This is Barron Thomas on for Mike. Want to ask about the fundraising backdrop, how you see that progressing into the second half of this year and into 2026? And what you see as some of the key contributors there? Also more broadly, how is the overall environment for raising capital evolving, given industry challenges around DPI?

Thank you for the question. We would characterize the fundraising environment as incredibly robust. To put it simply, we're raising more money in more places across more products than at any point in our history. And that's both by geography and by asset class and product. As an example, year-to-date, we've raised twice as much capital in Europe as we did versus last year. But perhaps even more important and really characterized by this quarter is just the growth in terms of our complementary strategies. This quarter, approximately three quarters of our fundraising came from complementary strategies, showing the increasing diversity of our business and how these products are becoming a very critical and meaningful growth driver for our business. Flagships are going to continue to drive step changes in our growth and our profitability, but the growing number and growing size of our complementary products are providing greater stability and ongoing growth to our business. So where we sit today, we very much expect fundraising this year to be bigger than last year.

Our next question will come from Cherilyn Radbourne from TD Cowen.

Connor, I wanted to pick on the prospect for alternatives to gain access to the broader retirement market. I think there's been a lot of emphasis placed on distribution and shelf space thus far. But in the letter, you commented that ultimately you think the product offering will be the key determinant of success. Can you elaborate on that a bit more and comment on timing as well?

Perfect. Thank you for the question. You are absolutely correct. This is a major and significant growth opportunity for our business. We feel it will grow incrementally over the next several years and decades. But you're right, there's two things of note. One, success in this space is going to be driven by those with the brand, the scale and the track record. And in this regard, we feel we're second to none. And then secondly, we feel the winners are going to be determined by who has the right products to meet the needs of these investors and these new pools of capital. And here, our leadership in the right asset classes, notably real assets across infrastructure, power, real estate in asset classes that have long duration inflation-protected cash flows, which within the alternative space, absolutely make the most sense for retirement products. So at this point, our focus is utilizing our leadership in these key sectors to provide the right products across the right asset classes as this opportunity evolves. And we have every intention to be a leader in the space as the opportunity grows.

Our next question will come from Alex Blostein from Goldman Sachs.

I was hoping we can spend a couple of minutes on insurance. Obviously, an important growth area for the firm. Two-part question there. I guess, number one, we've seen generally increased competition and tighter credit spreads in the U.S. retail channel. How are you guys thinking about both growth in the U.S. retail with respect to kind of that $20-ish billion target you've talked about in the past and the ability to ultimately pivot and rotate more assets into Brookfield strategies? And then secondly, I was hoping you could also hit on the Just acquisition and just kind of thinking what kind of footprint and the ambitions you might have in the U.K. market on the back of that deal?

Thanks, Alex. Maybe taking that all together, in terms of the Just Group transaction, for everyone's benefit, Brookfield Wealth Solutions last week announced an agreement to acquire Just Group, a leader in provider of U.K. retirement products. If this transaction is successful in closing, we could expect to manage a significant portion of Just's $35 billion-plus portfolio under our existing IMA with BWS. And this would add immediate high-quality, stable fee-bearing capital under our platform. Perhaps most important is we feel this transaction again highlights an underappreciated benefit of — and an underappreciated upside for Brookfield Asset Management, which is as BWS continues to scale, we get to partner with them on that growth and scale our asset management activities to support their business, and we get to do so without the need to invest capital or take on insurance liabilities. And while these transactions are somewhat discrete, that is absolutely a growth platform. It grew first in the U.S. Now it's growing in the U.K. and there's the potential that it will grow in other markets around the world. And we certainly will look to benefit and prosper and grow alongside that business. In terms of what we're seeing in the United States and the ability for that business to grow, we very much feel it's consistent with what we've said in the past. Yes, there are other market participants in the space, but the underlying fundamentals are incredibly robust. There is more demand for these types of products today than ever before. There will be more demand next year than there is this year. And by having leading platforms, we are well positioned to capture our portion or more of that long-term growth trend.

And maybe I'll just add to Connor's remarks and talk a little bit about what we're seeing in credit specifically and deploying that capital because obviously, credit is a big area for us. We manage over $300 billion, a major player. And we see significant growth, especially around our core competencies. So that's around asset-backed finance, real assets and opportunistic credit. And these are the markets that we play, and we have a competitive advantage. Where we are less inclined to spend a lot of our time is around the sponsor direct lending. And so that's what that article is referring to because it's more commoditized, a lot of spread compression, and we're seeing better risk-adjusted returns from the core competencies that I laid out. So we are very active in that space. We're growing. We're doing a lot of investments in those areas, and we'll continue given the pipeline of opportunities that I mentioned earlier.

Our next question will come from Bart Dziarski from RBC Capital Markets.

I wanted to follow up on the fundraising commentary. Just specifically diving into the evergreen private equity strategy. So given your position within the retail channel and the strength you called out there, how are you thinking about if we see success on the PE evergreen fund raise, what that could mean for BBU in terms of maybe going into an evergreen structure?

There is no doubt that we view the semi-liquid private evergreen PE strategy as complementary and additive to our product suite within private equity. We were able to leverage our existing positions in order to seed that strategy. We think that will put it in a position to launch with success and grow faster. But the reality is having more products that can meet more different investment types and investor needs will allow us to do more transactions in the space. The other point that we would highlight is our approach to private equity, which is very much focused on high-quality industrial and services business strong cash generation, less focus on growth or significantly leveraged private equity strategies, we feel is incredibly well suited to the current point in the market and also incredibly well suited for the growing number of investors that are looking to get access to private equity exposure, whether that be retail investors or potentially in the future, things like 401(k) accounts.

Our next question will come from Kenneth Worthington from JPMorgan.

I wanted to follow up on Cherilyn's retirement question. You highlighted the 401(k) opportunity, specifically in your shareholder letter and the prepared remarks as part of that retirement opportunity. Is the 401 channel something specifically that Brookfield wants to pursue? And if so, what is your approach to pursuing this? There seems to be a lot of different angles that one could take, whether it's target date funds, adviser managed accounts, record keepers. So how are you thinking about it if, in fact, you are going to go after that channel? And if so, is partnership something that you feel is important to success here?

We'll be clear. We absolutely expect to go after this opportunity. And at this point, we would look to do so across all channels. Piggybacking on the previous question and our comments in the script and on the letter, we believe the most important thing for success here is having the right products. And that is where we are focused. And right now, the environment and the objectives of what people are trying to meet continues to remain fluid. And our view is given our leadership in the right types of alternatives to put into these new accounts as well as the products that we can create given the breadth and depth of our platform, we should be extremely well positioned. There have been some partnerships announced in the space, and that's great. It shows a very constructive direction of travel for more alternatives going into these pools of capital. But we feel that this is going to be an opportunity that is created over an extended period of time, several years and decades. And none of those partnerships, to the best of our knowledge, are exclusive. And we feel if we have the best products in the right leadership position, we'll be well positioned to capture this opportunity in the years to come.

Our next question will come from Crispin Love from Piper Sandler.

Can you share your latest thoughts on real estate? It has been a tougher area in recent years but seems to be getting better. I'm curious what you're seeing regarding investor appetite, deployment, and realization opportunities, and which areas across real estate interest you most today.

Chris, welcome to the call. Maybe just to start with some stats around what we're seeing in our real estate platform. And then when we talk about the strength we're seeing, it's backed by a bit of data. Deployment in real estate year-to-date is up 2x versus last year. Monetizations year-to-date are up 4x versus last year. Across our office portfolio, in recent months, we've signed our highest leases ever, not this year, our highest leases ever in both New York and London. And I think that stat would probably pertain to almost every other major market around the world. And the last thing we would highlight is perhaps the most important that the capital markets that support real estate are now increasingly liquid and very robust. We're seeing some of the financings we've done in certain asset classes come in — the numbers are quite staggering, anywhere between 300 and 450 basis points versus financings that we were doing as recently as 18 to 24 months ago. So in terms of the momentum of our real estate business, we are seeing an incredibly robust recovery. Maybe to put some context around that, when we talk about the monetization activity we're seeing in real estate, the way we would frame it is the ability to exit is expanding very rapidly, but it's still a very discerning market. Investors are willing to pay full value for high-quality platforms that can drive growth in years to come as this market recovers. The read-through to the broader industry is we are still in the early stages of a very robust recovery. But we feel it's perfect for our business model. We can still find some very attractive opportunities to deploy capital. We feel the timing of our most recent flagship fundraise, which is just wrapping up now, is perfect. And we can use our capabilities to buy and step into the tail of opportunities that still exist, while at the same time, monetize more pristine cash flowing assets into an increasingly robust and high-demand market. The recovery is absolutely underway and very robust, but we think it's got a long way to run, and we expect to continue to see strength out of our platform.

Our next question will come from Brian Bedell from Deutsche Bank.

Maybe one for Hadley. Just switch gears a little bit to the expense outlook. Good to see the expense control and margin improving. If you can comment on whether you think this — I think we're about a 10% year-over-year expense growth pace, if that's — if you also see that continuing in the back half of the year? And then how you see the FRE margin expanding into next year? Whether we can get to a 60% level at some point. I know that might be a little bit futuristic. And then also on the acquiring the additional stakes in the partnerships, I think there was about a $250 million FRE upside potential that you outlined in the Investor Day last year. Where are we on that path? And I think Angel Oak is incremental to that $250 million, if you can confirm that.

So these are good questions. On the margin front and on our cost that 10%. It does include a little bit of build. As you know, we've been in building mode around different areas, accessing the retail channel as the example on the fundraising front, our credit platform as we grow our renewable strategy. And so you're seeing that operating leverage that's built into the business pay off on the margin front. So we are up 1%. And so that does make a difference. The margins are also impacted by the mix of our businesses. So as an example, when we acquire more of our partner managers at very attractive levels. But when we do acquire them, they generally come at low margins, and we're also in a cycle where our opportunistic business is in a — is returning on a relative basis, a significant amount of capital while they build into their deployment. So when getting to your question around the rest of the year and just kind of overall long term, we see expenses around that 10% level as we continue to do a little bit of the building, but a steady state kind of as we move forward and meeting our long-term goals from that perspective. So that's critical for the business as we look out over the 5 years. On your second question related to the $250 million attached to FRE that we have options against with our partner managers. You're right, Angel Oak did not exist at that time. So that was not included in that. And we're just really in the early part of that because we bought a small portion of Oaktree, 1.5%. We bought a little bit more Primary Wave that takes us to about 44%. So there's a lot more attached to that, that can generate additional FRE growth, again, at very attractive multiples.

Our next question will come from Dan Fannon from Jefferies.

This is Rick Roy on for Dan Fannon. If I could start with maybe a housekeeping item and fundraising first and then ask a follow-up for the wealth channel. So you noted that you expect to launch your flagship PE and infrastructure fundraises shortly after the AI infrastructure rollout. And I believe last quarter, you mentioned that the upcoming PE flagship was still on track for 2025. Given kind of the new developments and new strategies that have been announced, should we think about a slight pushout of this BCP flagship into 2026? Or are you still, I guess, accounting for a second half story there?

So on both of our next generations of our flagship, PE and Infra. PE, we absolutely expect to launch this year. Infra, either late this year or early part of next year with large meaningful first closes in 2026.

Understood. And then — more on the wealth channel, a lot has been talked about by my peers. But given the recent seeding of the PE vehicle, are you able to size your expectations for demand for that and the asset-backed finance products relative to the $30 billion raise from BWS this year? And then maybe expanding upon the expense and margin discussion from earlier and your previous comments on investing in defined contribution. Where are you in your investment cycle for the wealth channel and thinking about 2023 as an era of spend and depressed margins in that context? How should we think about where you are in that cycle and how that might impact margins a little bit more near term?

So I'll perhaps try and recall that into three points. We have now launched our semi-liquid PE strategy. It's now in the market we expect to have our first closes in the latter part of this year. In terms of total capital raised, if we break the $30 billion out and we focus just on what we generate through retail or Brookfield Oaktree Wealth Solutions. We very much expect to hit our target of $10 billion for the year. We're seeing incredible strength in that channel. And then the last point to tie it all together, when Hadley talks about expense and investing for the future, unequivocally, the place where we are putting the most investment through expense is to target this retail and individual investor channel over the long term.

Our next question will come from Mario Saric from Scotiabank.

I want to come back to the individual allocation, seeing the amortization of alternatives that you put it. How do you see the ramp-up in that demand relative to the ramp-up that you saw with respect to institutional allocations rising to alts over the past 5, 10, 15 years in terms of timing? And then the second part of the question would be how much of this opportunity would you say is already embedded in your 5-year Investor Day forecast as it pertains to the 16% to 17% fee-bearing capital and fee-related revenue CAGR that you laid out last September.

Thanks, Mario. The opportunity for increased allocation to alternatives from what we will call individual investors. Again, we will reiterate — we view it as incredibly significant, perhaps matching and exceeding in size over the long term, what is available from institutional investors, but it will take time. This will grow incrementally over years and decades to come. The actual process of including these still needs to — the regulations to be adjusted, the products need to be formed. It is a very large opportunity, but it is an incremental one in the early years that expands into a very significant one in later years. The other point in context of your question is it's important to recognize that institutional allocations to alternatives are still going up. And we do not see that slowing down anytime soon at any point in kind of our short or medium-term plans. So in terms of comparing the individual to the institutional, it's tough to do those at this point. But only to say we see the retail growing incrementally at first and then scaling very rapidly in the future. And then on the institutional side, we still see increasing demand there.

Our next question will come from Jaeme Gloyn from NBF.

Just wanted to get a sense with the Just acquisition and more broadly what are the requirements and then timelines to be able to shift some of these large fee rate assets that are managed currently in-house by Just or others into the BAM private funds to enhance yields above the standard IMA fee rates?

Thanks, Jaeme, and to you as well, welcome to the call, whenever BWS does a transaction such as Just Group, obviously, the transaction needs to be closed, it needs regulatory approval. And then such shifts need to be agreed and approved by a regulator. And that is no different in the situation of Just as any of the other similar transactions we've done in the past. So we would expect that process to take place at some point in 2026. In terms of the opportunity to then increase allocation to private funds, if that is indeed approved by the regulator as we are seeing in our other insurance portfolios, at that point, it becomes an incremental process over time. We have a little bit of a denominator effect in trying to measure that because the base of assets keeps growing up, the amount that we've been transferring into our private funds continues to be at a low percentage, but we are seeing that increase. And I would say any time we acquire a new portfolio, it's generally a period of somewhere between 2 to 5 years to make that shift.

And our next question will come from Dean Wilkinson from CIBC.

Just a quick question around the base shelf that was filed last night. Given your current financial positioning and liquidity, could we perhaps read into that document that there are acquisition opportunities that may come to the forefront over the next 12 months or so that could be additive to your fee-bearing capital that perhaps we haven't considered at this point?

No. I mean I would say that our focus really is around making sure we can generate the liquidity in order to support the business. So we've got $1.5 billion as of the quarter end. And so we're in a very strong position, but we will continue accessing the bond market in order to support the growth of our business because we still have a lot of opportunities on the partner managers, which we talked about, the $250 million of FRE, and then, of course, seeding additional strategies. We've had such strong success with our complementary strategies, and we see a lot more on the product launch side as well as just newer initiatives that we're looking at. So from that standpoint, that is what you're really seeing in that shelf. In terms of acquisitions, we're always opportunistic, but there's nothing that we need to do. And so it really is just an opportunistic play from that perspective.

And our next question will come from Vikram Gandhi from HSBC.

I've got a two-parter, perhaps starting with the changes incorporated in the Big Beautiful Bill. I wondered if you could share your thoughts on how these changes around tax breaks for renewable projects could possibly maybe back your deployment and exits in that area?

So in terms of our renewable business, there's three points that we would make. One, our renewables strategy, at this point, we are confident that we can safe harbor or secure the legacy tax credit treatment for the entirety of our advanced stage U.S. renewables pipeline. That would be point one. Two, well, the changes in the One Big Beautiful Bill did lead to an accelerated retirement of those tax credits. It does leave a window for those projects that are already either under construction or start construction in the next 12 months to receive the legacy tax treatment. And we feel that opportunity lends itself best to the largest platforms that have access to capital and centralized procurement programs to get those advanced stage projects started, and we're certainly the leader in the space. And then the third thing I would say, beyond our renewables business, we do receive tax credits across a number of investments we have at Brookfield, but some of our advanced manufacturing, nuclear, hydro, batteries, all of that was well protected under the bill. And therefore, we are certainly one of the biggest beneficiaries.

That's very helpful. The other one, if I may, was on a comment made at the Financial Times, Global Insurance Summit by the BWS CEO suggesting the private credit trade was kind of overcrowded. Just curious if you could provide some context around that comment and where do BAM and BWS. Where are the two companies thinking about the asset allocation on incremental AUM, especially once the Just Group deal is concluded?

Yes. So I'll add some clarification around that. When we think again about our core competencies in credit, it is around real assets, asset-backed finance and opportunistic. So these are the markets that we play, and we have a competitive advantage. Where we are less inclined to spend a lot of our time is around the sponsor direct lending. And so that's what that article is referring to because it's more commoditized, a lot of spread compression, and we're seeing better risk-adjusted returns from the core competencies that I laid out. So we are very active in that space. We're growing. We're doing a lot of investments in those areas, and we'll continue given the pipeline of opportunities that I mentioned earlier.

Thank you. And I am showing no further questions from our phone lines. I'd now like to turn the conference back over to Jason Fooks for any further closing remarks.

Okay. Great. Thanks for everyone's participation. If you should have any additional questions on today's release, please feel free to contact me directly. Thank you, everyone, and have a good day.

Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.