Brookfield tightens its grip on private credit with full $3bn buyout of Oaktree Capital Management

Brookfield Asset Management Ltd. (NYSE: BAM, TSX: BAM) and its parent Brookfield Corporation (NYSE: BN, TSX: BN) have jointly announced their decision to acquire the remaining 26% stake in Oaktree Capital Management that they do not already own. The all-equity deal, valued at approximately $3 billion, will result in Brookfield gaining 100% ownership of Oaktree, one of the world’s most respected credit investment platforms.

This acquisition marks a significant step forward in Brookfield’s long-term strategy to dominate the global alternative asset management landscape—particularly in private credit, where demand from institutional investors continues to rise amid high interest rates and constrained bank lending. Since their initial partnership in 2019, Brookfield and Oaktree have worked in tandem to scale their credit offerings, expand wealth management solutions, and develop joint investment strategies that have contributed to a 75% surge in Oaktree’s assets under management.

Bruce Flatt, Chief Executive Officer of Brookfield, called the six-year partnership a value-creating success, stating that the deal will broaden Brookfield’s credit franchise and enable deeper collaboration across its business lines. Oaktree Co-Chairman Howard Marks emphasized that becoming part of Brookfield in full was a “natural evolution” and that the deal reinforces Oaktree’s continued importance within Brookfield’s credit ecosystem.

What are the key financial terms of the Brookfield–Oaktree transaction and how is shareholder dilution being addressed?

The structure of the proposed acquisition is designed to maintain alignment and reduce dilution risks for existing Brookfield shareholders. Oaktree’s common equity holders can elect to receive their consideration in either cash, shares of Brookfield Asset Management, or, within certain restrictions, shares of Brookfield Corporation. The transaction will be funded approximately 53% by BAM ($1.6 billion) and 47% by BN ($1.4 billion), reflecting their proportional ownership of Oaktree prior to the deal.

To counterbalance any new share issuance, both Brookfield entities have committed to acquiring a number of their own shares equal to those issued in the transaction. In BAM’s case, buybacks will either be conducted on the open market or sourced directly from BN, subject to regulatory approval. This ensures that the transaction remains accretive and avoids any meaningful dilution to current shareholders.

The shares issued will also be subject to long-term lock-up periods—two years for BAM stock and five years for BN stock. This lock-in mechanism not only strengthens investor alignment but also signals management’s confidence in the long-term value creation potential of the combined entity.

How does the deal impact Brookfield’s fee-related earnings and presence in the U.S. asset management market?

Brookfield Asset Management reported $2.8 billion in fee-related earnings over the past 12 months, a figure that already reflects the contribution from Oaktree based on its previously held majority interest. By acquiring full ownership, Brookfield now secures all future fee-related earnings, net carried interest, and balance sheet investment returns from Oaktree, offering an immediate earnings uplift across both BAM and BN.

The acquisition also expands Brookfield’s footprint in the U.S., its largest and most strategically important market. Post-transaction, Brookfield will manage over $550 billion in U.S.-based assets, employ more than half of its global workforce domestically, and generate close to 50% of its total revenues from U.S. operations. This deeper presence is likely to drive stronger relationships with U.S. institutional investors, improve Brookfield’s positioning within domestic stock indices, and boost its ability to compete head-to-head with other major U.S.-based alternative managers like Blackstone and Apollo Global Management.

For Brookfield Corporation, the deal bolsters distributable earnings through increased exposure to Oaktree’s balance sheet investments and performance-based carried interest, while maintaining the asset-light nature of BAM’s fee-based model.

What leadership and governance changes are expected as Brookfield integrates Oaktree fully?

Leadership continuity appears central to Brookfield’s integration strategy for Oaktree. Co-Chairmen Howard Marks and Bruce Karsh will remain actively involved. Marks will continue to serve on the Brookfield Corporation board, while Karsh is expected to join the board of Brookfield Asset Management prior to or at the closing of the deal.

Operationally, Oaktree Co-CEOs Robert O’Leary and Armen Panossian will take on expanded roles as Co-CEOs of Brookfield’s entire credit business, effectively bridging the management structures of both entities. This dual leadership is intended to preserve Oaktree’s identity and institutional relationships while enabling broader synergies across Brookfield’s rapidly growing credit platform.

The deal also transfers Brookfield’s incremental 26% share in Oaktree’s carried interest, fee-related earnings, and associated investments—excluding the portion of carried interest where BN retains a 33% royalty. Brookfield Corporation will acquire Oaktree’s remaining balance sheet investments and legacy carried interest positions, further embedding the integration within its earnings model.

How are analysts and institutional investors viewing Brookfield’s $3 billion Oaktree acquisition in terms of valuation, earnings impact, and credit strategy expansion?

Institutional reaction to the proposed acquisition has been broadly positive, with analysts suggesting that Brookfield’s move is well-timed and strategically coherent. Given that private credit has emerged as one of the fastest-growing segments in alternative investing—driven by shrinking bank lending and a rising yield environment—owning a fully integrated credit platform is expected to materially enhance Brookfield’s competitive edge.

Analysts also highlight that the deal removes any residual uncertainty about Oaktree’s long-term positioning within Brookfield’s organizational structure. By consolidating ownership, Brookfield avoids potential governance conflicts and unlocks the full economic upside from one of its most strategically important subsidiaries.

Importantly, Brookfield’s capital discipline is seen as a key positive. The pre-commitment to share repurchases signals that management is proactively protecting shareholder interests. The long lock-up periods attached to the consideration shares also provide a measure of supply control, reducing volatility and reinforcing market confidence in the deal’s long-term value.

For both BAM and BN investors, the move is likely to be seen as earnings-accretive with minimal balance sheet strain, a rare combination in today’s cautious capital markets environment.

How does Brookfield’s full takeover of Oaktree reflect broader consolidation trends in private credit and alternative asset management in 2025?

Brookfield’s full acquisition of Oaktree reflects a growing industry-wide trend among alternative asset managers to consolidate operating entities under a unified brand. As the sector matures and regulatory scrutiny intensifies, integration offers cost efficiencies, improved governance, and stronger investor alignment—particularly when it comes to fundraising, product innovation, and cross-selling opportunities.

Private credit, in particular, has been undergoing a wave of consolidation. Managers are racing to build scale, diversify capital sources, and differentiate themselves with end-to-end investment platforms. Oaktree’s global reputation in distressed and opportunistic credit provides Brookfield with a powerful brand and established deal pipeline in markets where credit dislocation is becoming more common.

This transaction also sends a broader signal to the market: Brookfield is doubling down on credit as a strategic priority. With more institutional clients seeking customized fixed income-like returns with equity-like upside, the demand for actively managed credit strategies is expected to remain robust. Brookfield’s expanded capabilities now position it to capitalize more fully on this secular trend.