Business Context and Reporting Period
Company: Brookfield Oaktree Holdings, LLC (BOH)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter and six months ended June 30, 2026
Business Overview: BOH holds Credit, Equity, and Real Estate investments managed by Oaktree Capital Management, L.P. Its operations primarily consist of limited partner investments in Oaktree's flagship opportunistic funds and an equity method investment in Oaktree Capital I, L.P. On April 20, 2026, the Company distributed its 100% equity interest in OCG NTR Holdings, LLC (NTR), eliminating its indirect ownership in Brookfield REIT.
Key Financial Metrics
| Metric ($ in thousands) | Three Months Ended June 30, 2026 |
Six Months Ended June 30, 2026 |
Six Months Ended June 30, 2025 |
|---|---|---|---|
| Total Revenues | $91,180 | $202,870 | $264,485 |
| Net Income (Consolidated) | $160,909 | $288,262 | $94,948 |
| Net Income Attributable to Class A Unitholders | $49,038 | $81,469 | $2,906 |
| Net Income Per Class A Unit (Basic & Diluted) | $0.41 | $0.69 | $0.02 |
| Total Assets | $7,070,997 | $7,070,997 | $6,800,312 (Dec 31, 2025) |
| Debt Obligations (Consolidated Funds) | $1,500,383 | $1,500,383 | $1,320,795 (Dec 31, 2025) |
| Cash and Cash Equivalents (Unconsolidated) | $11,557 | $11,557 | $6,766 (Dec 31, 2025) |
Material Changes vs. Prior Period
- Revenue Decline: Total revenues decreased 23.3% year-over-year for the six months ended June 30, 2026 ($202.9M vs. $264.5M). Interest and dividend income dropped 38.1% to $161.5M, primarily due to lower income from investments in Oaktree Opportunities Fund XI (Opps XI).
- Investment Income Surge: Investment income increased 989.5% to $41.4M for the six-month period, driven by the performance of Oaktree Capital I and the prior indirect ownership in Brookfield REIT.
- Profitability Improvement: Net income attributable to Class A unitholders increased significantly to $81.5M for the six months ended June 30, 2026, compared to $2.9M in the prior year period. This was primarily driven by a $260.6M swing in net change in unrealized appreciation/depreciation on consolidated funds' investments.
- Expense Reduction: Consolidated fund expenses decreased 20.3% to $39.3M, and interest expense decreased 24.5% to $39.5M, largely due to lower general costs and interest rates at Opps XII.
- Asset Composition: Corporate investments decreased to $1.15B from $1.43B at year-end 2025, reflecting the distribution of the NTR interest and changes in equity-method investments.
Guidance, Outlook, and Risks
Management Commentary: The Company's results are largely driven by the performance of funds held directly or indirectly by Oaktree Capital I. Management notes that while weak economies can dampen fee revenues, they often present opportunities for opportunistic credit strategies. The distribution of NTR in April 2026 removed the indirect ownership of Brookfield REIT from the balance sheet.
Subsequent Events: On July 31, 2026, transactions were consummated under a Transaction Agreement dated April 14, 2026, involving Oaktree, Brookfield Asset Management (BAM), and Brookfield Corporation. Outstanding limited partnership interests and equity awards of OCGH, OEP, and OEP II were acquired or cancelled in exchange for cash and Brookfield securities.
Risks and Contingencies:
- Market Risk: A 10% decline in market values of consolidated fund investments would result in a $551.6M decrease in unrealized appreciation, impacting Class A unitholders by approximately $112.7M.
- Interest Rate Risk: Consolidated funds hold $1.5B in variable-rate debt. A 100-basis point increase in rates would increase annualized interest expense by $15.0M.
- Liquidity: The Company has undrawn capital commitments of $112.5M to Opps XI and $517.5M to Opps XII. The Company believes current liquidity sources are sufficient for the next 12 months.
Investor Verification Checklist
- Subsequent Transaction Impact: Verify the final terms and financial impact of the July 31, 2026, transaction between Oaktree and Brookfield Corporation, including the exchange of OCGH units.
- Unrealized Gains Sustainability: Assess the durability of the $120.3M unrealized appreciation in the first half of 2026, which was a primary driver of net income.
- Capital Commitments: Monitor the funding status of the $112.5M (Opps XI) and $517.5M (Opps XII) undrawn capital commitments.
- Preferred Unit Distributions: Confirm the declaration and payment of quarterly distributions on Series A (6.625%) and Series B (6.550%) preferred units, which must be satisfied before Class A distributions.
- Debt Maturities: Review the weighted average remaining maturity of consolidated fund debt (0.78 years) and the status of the credit facility renewal mentioned in Note 8.