Brookfield Oaktree Holdings LLC

03/24/2026 | Press release | Distributed by Public on 03/24/2026 14:47

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the consolidated financial statements of Brookfield Oaktree Holdings, LLCand the related notes included within this annual report. For a discussion and analysis of historical periods ended before January 1, 2024, please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our annual report on Form 10-K for the year ended December 31, 2024. This discussion contains forward-looking statements that are subject to risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity. The factors listed under "Risk Factors" and "Forward-Looking Statements" in this annual report provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations described in any forward-looking statements.
Business Overview
Brookfield Oaktree Holdings, LLC holds Credit, Real Estate and Equity investments managed by leading alternative asset management firms Oaktree Capital Management, L.P. and Brookfield Asset Management Ltd. The Company both directly invests in funds and has indirect exposure through its approximately 74% economic interest in Oaktree Capital I,L.P. ("Oaktree Capital I"),which holds a majority of Oaktree's investments in its funds.
Brookfield Oaktree Holdings, LLC is a Delaware limited liability company that was formed on April 13, 2007 under the name Oaktree Capital Group, LLC. The Company's ownership and operational structure through December 31, 2025 are the result of certain mergers and restructurings. The Company's holdings and operations currently primarily represent (i) limited partner investments in certain of Oaktree's flagship opportunistic credit funds, (ii) an approximately 74% economic interest in Oaktree Capital I, which holds a majority of Oaktree's investments in its funds, and (iii) an indirect ownership interest in Brookfield Real Estate Income Trust Inc. ("Brookfield REIT"). The Company is the issuer of the Series A and Series B preferred units listed on the NYSE.
See Part I, Item I included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 2, 2020 for more information regarding the Mergers and the 2019 Restructuring. See Item 1.01 of the Company's Current Report on Form 8-K filed with the SEC on December 6, 2022 and Part I, Item I included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 21, 2023 for more information about the 2022 Restructuring. See Item 8.01 of the Company's Current Report on Form 8-K filed with the SEC on July 1, 2024 for more information about the 2024 Restructuring.
The results of the Company are largely driven by the performance of certain funds and other investments held directly or indirectly by Oaktree Capital I, which is one of the key operating entities of Oaktree, and managed by Oaktree. The distributions to holders of the Series A and Series B preferred units listed on the NYSE are generally serviced by the distributions from Oaktree Capital I, and payments to the preferred unitholders must be satisfied prior to declaration of any distributions to Class A or Class B unitholders, subject to the terms of the Series A and Series B preferred units and certain limitations and exceptions set forth therein.
OCM provides certain administrative and other services relating to the operations of the Company's business pursuant to the Services Agreement between the Company and OCM.
Business Environment and Developments
The Company and Oaktree are affected by a wide range of factors, including the condition of the global economy and financial markets; the relative attractiveness of Oaktree's investment strategies and investors' demand for them; and regulatory or other governmental policies or actions. Global economic conditions can significantly impact the values of fund investments and the ability to make new investments or sell existing investments for these funds. Historically, however, Oaktree's diversified nature, of both investment strategies and revenue mix, has generally allowed it to benefit from both strong and weak economic environments. Weak economies and the declining financial markets that typically accompany them tend to dampen revenues from asset-based management fees, investment realizations or price appreciation, but their prospect can present opportunities to raise relatively larger amounts of capital for certain strategies, especially opportunistic credit. Additionally, weak financial markets may also present more opportunities for funds to make investments at reduced prices. Conversely, strong financial markets generally increase the value of fund investments, which typically create favorable exit opportunities that enhance the prospect for incentive income and fund-related realized investment income proceeds for Oaktree and enhance the prospect for investment income for us.
The ongoing Russia-Ukraine conflict, including global sanctions imposed on Russia, conflict in the Middle East, controversies regarding Greenland, and changes in trade policies of the United States and other countries, including the imposition of tariffs and retaliatory tariffs, create continued uncertainty and volatility in the global
financial markets and economy and, as a result, may adversely impact Oaktree's businesses and its funds' and their respective portfolio companies' business. As of the date of this filing, we are not aware of any material risk to the stability of our consolidated financial statements caused by the Russia-Ukraine conflict, the conflict in the Middle East or changes in U.S. and global trade policies, or the materiality of any effect such uncertainties may have on our business and operations.
There has been significant recent progress and developments in the area of generative artificial intelligence but the impact to our business of such evolving technology cannot be fully determined at this time.
Understanding Our Results-Consolidation of Oaktree Funds
Generally accepted accounting principles in the United States ("GAAP") requires us to consolidate entities in which we have a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. A limited partnership or similar entity is a variable interest entity ("VIE") if the unaffiliated limited partners do not have substantive kick-out or participating rights. Most of the Oaktree funds are VIEs because they have not granted unaffiliated limited partners substantive kick-out or participating rights. The Company consolidates those VIEs in which we are the primary beneficiary. For entities that are not VIEs, consolidation is evaluated through a majority voting interest model. Please see note 2 to our consolidated financial statements included elsewhere in this annual report for more information.
As a result of the 2024 Restructuring, effected to facilitate the change of the general partner of Oaktree Capital I, the Company no longer indirectly controls Oaktree Capital I. Therefore, Oaktree Capital I was deconsolidated as of July 1, 2024. As such, certain Oaktree funds and CLOs which were consolidated by Oaktree Capital I are no longer consolidated by the Company. The Company continues to consolidate the respective vehicles through which interests are held in Oaktree Opportunities Fund XI, L.P. and Oaktree Opportunities Fund XII, L.P. as the Company remains the primary beneficiary.
Revenues
We earn interest and dividend income which is primarily earned by our consolidated funds from their investment holdings.
Historically, we had the potential to earn incentive income from many of the closed-end funds and certain evergreen funds managed by Oaktree in Oaktree Capital I's capacity as the general partner of those funds. These closed-end funds generally provided that we received incentive income only after we had returned to Oaktree's investors all of their contributed capital plus an annual preferred return, typically 8%. Once this occurred, we generally received as incentive income 80% of all distributions otherwise attributable to Oaktree's investors, and those investors received the remaining 20% until we had received, as incentive income, 20% of all such distributions in excess of the contributed capital from the inception of the fund. Thereafter, all such future distributions attributable to Oaktree's investors were distributed 80% to those investors and 20% to us as incentive income. As a result of the 2022 Restructuring, we were generally only entitled to earn one-third of the incentive income attributable to Oaktree Capital I in respect of Oaktree's closed-end funds established in 2022 or later and in respect of incentive income from Oaktree's evergreen funds earned subsequent to January 1, 2023. We were generally earning 100% of the incentive income attributable to Oaktree Capital I in respect of Oaktree's closed-end funds established prior to 2022. Subsequent to the 2024 Restructuring, the Company no longer earns incentive income as a result of the deconsolidation of Oaktree Capital I. Rather the economics resulting from Oaktree Capital I's right to earn incentive income are reflected in the Company's results through investment income earned from the Company's approximately 74% equity method investment in Oaktree Capital I.
We earn revenue from investment income, which represents our pro-rata share of income or loss from our investments. Historically, investment income was generally from Oaktree Capital I's capacity as general partner in Oaktree funds and as an investor in Oaktree's CLOs and third-party managed funds and companies. Subsequent to the 2024 Restructuring, we no longer earn investment income from the direct fund-related holdings of Oaktree Capital I. Rather the economics resulting from Oaktree Capital I's investments are reflected in the Company's investment income earned from the Company's approximately 74% equity method investment in Oaktree Capital I.
Our consolidated revenues reflect the elimination of all revenues, if any, related to funds that are consolidated by the Company.
Please see "Business-Structure and Operation of Our Business-Structure of Funds" in this annual report for a detailed discussion of the structure of Oaktree funds.
Expenses
Compensation, General and Administrative Expenses
Compensation has historically primarily reflected compensation expense directly related to incentive income, which generally consists of percentage interests (sometimes referred to as "points" or an allocation of shares received upon the completion of a successful SPAC merger) that are granted to Oaktree investment professionals associated with the particular fund or SPAC that generated the incentive income, and secondarily, compensation directly related to investment income. There was no fixed percentage for the incentive income-related portion of this compensation, either by fund, SPAC or strategy. The percentage that consolidated incentive compensation expense represented of the particular period's consolidated incentive income may not have been meaningful because incentive income from consolidated funds or SPACs was eliminated in consolidation, whereas no incentive income compensation expense was eliminated in consolidation.
Subsequent to the 2024 Restructuring, the Company no longer earns incentive income as a result of the deconsolidation of Oaktree Capital I, and therefore will no longer record incentive compensation expense. Compensation and benefits following the 2024 Restructuring primarily reflects compensation to the Company's board of directors.
Subsequent to the 2022 Restructuring, general and administrative expenses generally included costs related to outside auditors, tax professionals, derivative and hedging activity, and other general items related directly to the Company's operations. Subsequent to the 2024 Restructuring and deconsolidation of Oaktree Capital I, the Company no longer directly incurs costs related to derivative and hedging activity.
Consolidated Fund Expenses
Consolidated fund expenses consist primarily of costs, expenses and fees that are incurred by, or arise out of the operation and activities of or otherwise are related to, our consolidated funds, including, without limitation, travel expenses, professional fees, research and software expenses, insurance, and other costs associated with administering and supporting those funds. Inasmuch as most of these fund expenses are borne by third-party investors, they reduce the investors' interests in the consolidated funds and have no impact on net income or loss attributable to the Company.
As a result of the 2024 Restructuring, the Company deconsolidated Oaktree Capital I as of July 1, 2024. As such, certain Oaktree funds and CLOs which were consolidated by Oaktree Capital I are no longer consolidated by the Company. The Company continues to consolidate the respective vehicles through which interests are held in Oaktree Opportunities Fund XI, L.P. and Oaktree Opportunities Fund XII, L.P. as the Company remains the primary beneficiary.
Interest Expense
Interest expense has historically primarily reflected the interest expense of the consolidated funds, as well as the interest expense of Oaktree and its operating subsidiaries. Subsequent to the 2022 Restructuring, our financial statements reflected debt obligations, interest expense or related liabilities associated with our operating subsidiary when Oaktree Capital I directly borrowed under Oaktree's credit agreements, issued private placement notes or entered into another debt arrangement. Subsequent to the 2024 Restructuring, as a result of the deconsolidation of Oaktree Capital I, the Company no longer records interest expense for debt obligations of Oaktree Capital I or funds that were consolidated due to interests held by Oaktree Capital I.
Other Income (Loss)
Net Realized Gain (Loss) on Consolidated Funds' Investments
Net realized gain (loss) on consolidated funds' investments consists of realized gains and losses arising from dispositions of investments held by Oaktree's consolidated funds.
Net Change in Unrealized Appreciation (Depreciation) on Consolidated Funds' Investments
Net change in unrealized appreciation (depreciation) on consolidated funds' investments reflects both unrealized gains and losses on investments held by Oaktree's consolidated funds and the reversal upon disposition of investments of unrealized gains and losses previously recognized for those investments.
Income Taxes
The Company is a publicly traded partnership. Because it satisfies the qualifying income test, it is not required to be treated as a corporation for U.S. federal and state income tax purposes; rather it is taxed as a partnership.
The Company analyzes its tax filing positions for all open tax years in all of the U.S. federal, state and local tax jurisdictions where it is required to file income tax returns. If the Company determines that uncertainties in tax positions exist, a reserve is established. The Company recognizes accrued interest and penalties related to uncertain tax positions within income tax expense in the consolidated statements of operations.
Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties. The Company reviews its tax positions quarterly and adjusts its tax balances as new information becomes available.
The Oaktree funds are generally not subject to U.S. federal and state income taxes and, consequently, no income tax provision has been made in the accompanying consolidated financial statements because individual partners are responsible for their proportionate share of the taxable income.
Net Income Attributable to Non-controlling Interests
Net income attributable to non-controlling interests represents the ownership interests that third parties hold in entities that are consolidated in our financial statements. These interests fall into two categories:
•Net Income Attributable to Non-controlling Interests in Consolidated Funds. This category represents the economic interests of the unaffiliated investors in the consolidated funds. The net income of these interests is primarily driven by the investment performance of the consolidated funds. In comparison to net income, this measure excludes our operating results and other items solely attributable to the Company. Following the 2024 Restructuring, with the deconsolidation of Oaktree Capital I, we no longer reflect the economic interest owned by other investors in the funds consolidated by Oaktree Capital I as noncontrolling interests; and,
•Net Income Attributable to Non-controlling Interests in Consolidated Subsidiaries. This category primarily represents the economic interest in the Oaktree Operating Group owned by OCGH and OEP ("OCGH and other non-controlling interest"), as well as the economic interest in certain consolidated subsidiaries held by third parties. Subsequent to the 2022 Restructuring, this category included only the OCGH and other non-controlling interest in Oaktree Capital I. The OCGH and other non-controlling interest was determined at the Oaktree Operating Group level based on the weighted average proportionate share of Oaktree Operating Group units held by OCGH and other unitholders. Inasmuch as the number of outstanding Oaktree Operating Group units corresponded with the total number of outstanding Class A, OCGH and OEP units, changes in the economic interest held by the OCGH and other unitholders were driven by additional issuances of our Class A units and driven by additional issuances of OCGH, OEP and OEP II units, as well as repurchases and forfeitures of, and exchanges between, Class A, OCGH, OEP and OEP II units. Certain of our expenses, such as income tax and related administrative expenses of Brookfield Oaktree Holdings, LLC and the holding companies through which we hold interests in Oaktree Capital I, were solely attributable to the Class A unitholders. Please see note 11 to our consolidated financial statements included elsewhere in this annual report for additional information on the economic interest in the Oaktree Operating Group owned by OCGH. Subsequent to the 2024 Restructuring, we no longer reflect the economic interest owned by OCGH and OEP as noncontrolling interests.
Net Income Attributable to Preferred Unitholders
This category represents distributions declared, if any, on our preferred units. Please see note 11 to our consolidated financial statements for more information.
GAAP Consolidated Results of Operations
The following table sets forth our audited consolidated statements of operations:
Year Ended December 31,
2025 2024 2023
(in thousands, except per unit data)
Revenues:
Interest and dividend income $ 483,025 $ 490,389 $ 348,801
Incentive income - 117,529 267,325
Investment income
196,521 170,032 72,664
Total revenues 679,546 777,950 688,790
Expenses:
Compensation and benefits (1,077) (1,009) (675)
Incentive income compensation - (22,168) (134,837)
General and administrative (3,168) (3,182) (5,556)
Consolidated fund expenses (84,258) (81,066) (65,768)
Interest expense (88,648) (99,773) (50,272)
Total expenses (177,151) (207,198) (257,108)
Other income (loss):
Net realized gain (loss) on consolidated funds' investments 52,275 65,644 79,420
Net change in unrealized appreciation (depreciation) on consolidated funds' investments
(31,455) 150,666 29,064
Total other income (loss) 20,820 216,310 108,484
Income before income taxes 523,215 787,062 540,166
Income taxes - - -
Net income 523,215 787,062 540,166
Less:
Net income loss attributable to non-controlling interests in consolidated funds
(272,350) (417,901) (245,928)
Net income loss attributable to non-controlling interests in consolidated subsidiaries
(1,627) (61,637) (73,061)
Net income attributable to Brookfield Oaktree Holdings, LLC
249,238 307,524 221,177
Net income attributable to preferred unitholders (27,316) (27,316) (27,316)
Net income attributable to Brookfield Oaktree Holdings, LLC Class A unitholders
$ 221,922 $ 280,208 $ 193,861
Distributions declared per Class A unit $ 2.10 $ 2.84 $ 1.00
Net income per Class A unit (basic and diluted):
Net income per Class A unit
$ 1.88 $ 2.45 $ 1.80
Weighted average number of Class A units outstanding 118,186 114,452 107,590
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Revenues
Interest and Dividend Income
Interest and dividend income decreased $7.4 million, or 1.5%, to $483.0 million for the year ended December 31, 2025, from $490.4 million for the year ended December 31, 2024. The decrease was primarily attributable to the deconsolidation of Oaktree Capital I as a result of the 2024 Restructuring, partially offset by higher income from our investments in Opps XI and Opps XII.
Incentive Income
Subsequent to the 2024 Restructuring, we no longer earn incentive income due to the deconsolidation of Oaktree Capital I.
Investment Income
A summary of investment income is set forth below:
Year Ended December 31,
2025 2024
Income (loss) from investments in funds: (in thousands)
Oaktree funds:
Credit $ 58,801 $ 149,504
Equity
- 4,105
Real Estate
3,132 (15,420)
Non-Oaktree - 9,911
Total investment income - Before equity-method investment in Oaktree Capital I
61,933 148,100
Equity-method investment in Oaktree Capital I
192,973 127,872
Total investment income - Oaktree and operating subsidiaries
254,906 275,972
Eliminations (58,385) (105,940)
Total investment income $ 196,521 $ 170,032
Investment income increased $26.5 million, or 15.6%, to $196.5 million for the year ended December 31, 2025, from $170.0 million for the year ended December 31, 2024 primarily reflecting the performance of Oaktree Capital I and Brookfield REIT.
Expenses
Incentive Income Compensation
Subsequent to the 2024 Restructuring, we no longer incur incentive income compensation expense due to the deconsolidation of Oaktree Capital I.
General and Administrative
General and administrative expense was unchanged at $3.2 million for the year ended December 31, 2025, compared to the year ended December 31, 2024.
Consolidated Fund Expenses
Consolidated fund expenses increased $3.2 million, or 3.9%, to $84.3 million for the year ended December 31, 2025, from $81.1 million for the year ended December 31, 2024. The increase is primarily due to higher general costs incurred by Opps XII, partially offset by the deconsolidation of Oaktree Capital I's consolidated funds following the 2024 Restructuring.
Interest Expense
Interest expense decreased $11.2 million, or 11.2%, to $88.6 million for the year ended December 31, 2025, from $99.8 million for the year ended December 31, 2024. The decrease is primarily driven by the deconsolidation of Oaktree Capital I and its consolidated funds as a result of the 2024 Restructuring.
Other Income (Loss)
Net Realized Gain (Loss) on Consolidated Funds' Investments
Net realized gain on consolidated funds' investments decreased $13.3 million, to $52.3 million for the year ended December 31, 2025, from $65.6 million for the year ended December 31, 2024. The net realized gain during the year ended December 31, 2025reflects our consolidated funds' performance on investments sold and the decline is primarily due to Opps XII.
Net Change in Unrealized Appreciation (Depreciation) on Consolidated Funds' Investments
The net change in unrealized appreciation (depreciation) on consolidated funds' investments decreased $182.2 million, to a depreciation of $31.5 million for the year ended December 31, 2025, from an appreciation of $150.7 million for the year ended December 31, 2024. Excluding the impact of the reversal of net realized gain (loss) on consolidated funds' investments, the net change in unrealized appreciation (depreciation) on consolidated funds' investments decreased $195.5 million to a net gain of $20.8 million for the year ended December 31, 2025, from a net gain of $216.3 million for the year ended December 31, 2024, primarily resulting from our investments in Opps XI.
Net (Income) Loss Attributable to Non-controlling Interests in Consolidated Funds
Net (income) loss attributable to non-controlling interests in consolidated funds decreased $145.5 million, or 34.8% to net income of $272.4 million for the year ended December 31, 2025, from net income of $417.9 million for the year ended December 31, 2024. The decrease reflected our consolidated funds' performance attributable to third-party investors in each period. These effects are described in more detail under "-Other Income (Loss)" above.
Net Income (Loss) Attributable to Brookfield Oaktree Holdings, LLC Class A Unitholders
Net income (loss) attributable to Brookfield Oaktree Holdings, LLC Class A unitholders decreased $58.3 million, or 20.8%, to $221.9 million for the year ended December 31, 2025, from $280.2 million for the year ended December 31, 2024, primarily reflecting lower other income related to our consolidated funds. These effects are described in more detail under "- Other Income (Loss)" above.
GAAP Statement of Financial Condition
We manage our financial condition without the consolidation of Oaktree funds. Since Oaktree's founding, Oaktree and, by extension, we have managed our financial condition in a way that builds our capital base and maintains sufficient liquidity for known and anticipated uses of cash.
The following table presents our GAAP consolidating statement of financial condition:
As of December 31, 2025
Oaktree and Operating Subsidiaries Consolidated Funds Eliminations Consolidated
(in thousands)
Assets:
Cash and cash-equivalents $ 6,766 $ - $ - $ 6,766
Corporate investments 2,225,411 - (794,638) 1,430,773
Receivables and other assets 32,599 - - 32,599
Assets of consolidated funds - 5,330,174 - 5,330,174
Total assets $ 2,264,776 $ 5,330,174 $ (794,638) $ 6,800,312
Liabilities and Capital:
Liabilities:
Accounts payable and accrued expenses $ 554 $ - $ - $ 554
Liabilities of consolidated funds - 1,463,925 - 1,463,925
Total liabilities 554 1,463,925 - 1,464,479
Non-controlling redeemable interests in consolidated funds - - 3,071,611 3,071,611
Capital:
Capital attributable to BOH preferred unitholders
400,584 - - 400,584
Capital attributable to BOH Class A unitholders
1,854,246 588,032 (588,032) 1,854,246
Non-controlling interest in consolidated subsidiaries 9,392 206,606 (206,606) 9,392
Non-controlling interest in consolidated funds - 3,071,611 (3,071,611) -
Total capital 2,264,222 3,866,249 (3,866,249) 2,264,222
Total liabilities and capital $ 2,264,776 $ 5,330,174 $ (794,638) $ 6,800,312
Corporate Investments
As of December 31,
2025 2024
(in thousands)
Oaktree funds:
Credit $ 799,483 $ 852,425
Real Estate
310,956 307,824
Total corporate investments - Before equity-method Investment in Oaktree Capital I 1,110,439 1,160,249
Equity-method Investment in Oaktree Capital I 1,114,972 1,203,005
Total corporate investments - Oaktree and operating subsidiaries 2,225,411 2,363,254
Eliminations
(794,638) (842,994)
Total corporate investments - Consolidated $ 1,430,773 $ 1,520,260
Liquidity and Capital Resources
We manage our liquidity and capital requirements by focusing on our cash flows before the consolidation of Oaktree funds and the effect of normal changes in short-term assets and liabilities. Prior to the 2024 Restructuring, our primary cash flow activities on an unconsolidated basis involved (a) generating cash flow from operations, (b) generating realized income and return of principal from investment activities, including strategic investments in certain third parties, (c) funding capital commitments that we have made to Oaktree funds, (d) funding our growth initiatives, (e) distributing cash flow to our Class A unitholders and to OCGH and OEP, (f) borrowings, interest
payments and repayments under credit agreements, our senior notes and other borrowing arrangements, and (g) issuances of, and distributions made on, our preferred units. Subsequent to the 2024 Restructuring, our primary cash flow activities on an unconsolidated basis involve (a) generating realized income and return of principal from investment activities, (b) funding capital commitments that we have made to Oaktree funds, (c) distributing cash flow to our Class A unitholders, (d) issuances of, and distributions made on, our preferred units, and (e) equity contribution from the investors of the Company to fulfill certain contractual capital commitments to its subsidiaries. As of December 31, 2025, the Company on an unconsolidated basis had $6.8 million of cash and cash equivalents.
Ongoing sources of cash include distributions from our equity method corporate investments. We primarily use distributions from our corporate investments to pay compensation and related expenses, service fees under the Services Agreement with OCM and distributions. Subject to applicable law and certain consent rights contained in our operating agreement, pursuant to a covenant in our operating agreement Oaktree plans to cause its operating group entities to distribute, on a quarterly basis, at least 85% of its adjusted distributable earnings, as defined in our operating agreement, and we plan to distribute amounts we receive in respect of such distributions, less any tax and tax receivable obligations, to holders of our Class A units. Distributions from each Oaktree Operating Group entity may not be proportionate to its share of adjusted distributable earnings.
Distributions on the preferred units are discretionary and non-cumulative. We may redeem, at our option, out of funds legally available, at any time, in whole or in part, the Series A preferred units or the Series B preferred units, at a price of $25.00 per preferred unit plus declared and unpaid distributions to, but excluding, the redemption date, without payment of any undeclared distributions. Holders of the preferred units have no right to require the redemption of the preferred units.
We have subscribed for a limited partner interest in, and made a capital commitment of, $750.0 million to Oaktree Opportunities Fund XI, L.P., a parallel investment vehicle thereof or a feeder fund in respect of one of the foregoing (such limited partner interest, the "Opps XI Investment" and such fund entities collectively, "Opps XI"). In order to fund the Opps XI Investment, our sole Class A unitholder, or one of its affiliates, will contribute cash as a capital contribution (the "Opps XI Investment Cash") as and to the extent required to satisfy our obligations to Opps XI. We will use the Opps XI Investment Cash solely to fund the Opps XI Investment and satisfy our obligations in respect of Opps XI. Distributions from the Opps XI Investment are intended for the benefit of the Class A unitholder, subject to applicable law. Our preferred unitholders should not rely on distributions received by us in respect of the Company's Opps XI Investment for payment of distributions on or redemption of the preferred units. As of December 31, 2025, $637.5 million of the $750.0 million capital commitment was funded. $346.8 million of the investment interest was pledged as collateral for two non-recourse credit facilities of an affiliate. The potential exposure is limited to the pledged interests.
We have subscribed for a limited partner interest in, and made a capital commitment of, $796.2 million to Oaktree Opportunities Fund XII, L.P., a parallel investment vehicle thereof or a feeder fund in respect of one of the foregoing (such limited partner interest, the "Opps XII Investment" and such fund entities collectively, "Opps XII"). In order to fund the Opps XII Investment, our sole Class A unitholder, or one of its affiliates, will contribute cash as a capital contribution (the "Opps XII Investment Cash") as and to the extent required to satisfy our obligations to Opps XII. We will use the Opps XII Investment Cash solely to fund the Opps XII Investment and satisfy our obligations in respect of Opps XII. Distributions from the Opps XII Investment are intended for the benefit of the Class A unitholder, subject to applicable law. Our preferred unitholders should not rely on distributions received by us in respect of the Company's Opps XII Investment for payment of distributions on or redemption of the preferred units. As of December 31, 2025, the Company has funded in the aggregate $218.9 million of the $796.2 million capital commitment. $102.0 million of the investment interest was pledged as collateral for one non-recourse credit facility of an affiliate. The potential exposure is limited to the pledged interests.
On June 27, 2023, the Company entered into a contribution agreement (the "Treasury Contribution Agreement") with Brookfield Corporate Treasury Ltd. ("Treasury"). Treasury holds all of the outstanding Class A units of the Company. Pursuant to the Treasury Contribution Agreement, Treasury agreed to contribute to the Company an amount (the "Contributed Amount") equal to the value of BUSI II GP-C LLC, BUSI II-C L.P., BUSI II SLP-GP LLC and Brookfield REIT OP Special Limited Partner L.P. (collectively, and together with any additional entities that may become direct or indirect subsidiaries of NTR (as defined below) and that beneficially own shares of Brookfield REIT (as defined below), the "REIT Entities"), including their indirect ownership in Brookfield Real Estate Income Trust Inc., a Maryland corporation ("Brookfield REIT"), as of June 30, 2023, and the Company agreed to contribute the Contributed Amount to OCG NTR Holdings, LLC, a wholly owned subsidiary of the Company ("NTR"), in connection with the Company's indirect acquisition (the "Acquisition") of 100% of the interests in the REIT Entities. An amount of $307.0 million in respect of the Contributed Amount was contributed to the Company on June 27, 2023 (the "Purchase Price") and a true-up contribution of $13.9 million was made on July 31, 2023 (the "True-Up Payment"). Also on June 27, 2023, the Company entered into a contribution agreement (the "NTR Contribution Agreement")
with NTR whereby the Company contributed the Purchase Price to NTR and agreed to make a contribution in an amount equal to the True-Up Payment to NTR, and NTR agreed to use the Contributed Amount in connection with the Acquisition. On June 29, 2023, NTR entered into an agreement of purchase and sale (the "Agreement of Purchase and Sale") to effect the Acquisition, whereby NTR acquired 100% of the interests in the REIT Entities from BUSI II NTR Sub LLC in exchange for cash. The Acquisition was completed on June 30, 2023.
As of December 31, 2025, the carrying value of the REIT Entities included in corporate investments was $311.0 million.
In connection with the Acquisition, on June 29, 2023, the Company entered into a letter agreement (the "Restructuring Letter Agreement") with Treasury whereby, among other things, the Company agreed that, notwithstanding any provision of the operating agreement of the Company to the contrary, Treasury will have the right, in its sole and absolute discretion, to make up to $200.0 million of additional capital contributions to the Company to be utilized in connection with the Company's indirect ownership of Brookfield REIT or any other matters with respect to the operations of NTR and the REIT Entities, and no vote, approval or other authorization will be required in connection with such additional capital contributions. Also on June 29, 2023, the Company entered into a letter agreement (the "Indemnification Letter Agreement") with BP US REIT LLC ("BP US") whereby, among other things, BP US agrees to defend, indemnify and hold harmless the Company, its members and the Company's and such members' respective officers, directors, employees, agents, successors, and assigns from any third-party claims brought against any of them related to the ownership, management or ongoing operating of the REIT Entities, and any subsidiaries thereof.
Consolidated Cash Flows
The accompanying consolidated statements of cash flows include our consolidated funds, despite the fact that we typically have only a minority economic interest in those funds. The assets of consolidated funds, on a gross basis, are larger than the assets of our business and, accordingly, have a substantial effect on the cash flows reflected in our consolidated statements of cash flows. The primary cash flow activities of our consolidated funds involve:
•raising capital from third-party investors;
•using the capital provided by us and third-party investors to fund investments and operating expenses;
•financing certain investments with indebtedness;
•generating cash flows through the realization of investments, as well as the collection of interest and dividend income; and
•distributing net cash flows to fund investors and to us.
Because our consolidated funds are either treated as investment companies for accounting purposes or represent CLOs whose primary operations are investing activities, their investing cash flow amounts are included in our cash flows from operations. We believe that we and each of the consolidated funds has sufficient access to cash to fund our and their respective operations in the near term. Subsequent to the 2022 Restructuring, the Company no longer consolidates CLOs whose direct ownership interests are held by OCM Cayman. As a result of the 2024 Restructuring, the Company no longer consolidates Oaktree Capital I, and the cash inflows and outflows related to Oaktree Capital I are now presented under the investing activities of the Company's cash flow.
Significant amounts from our consolidated statements of cash flows for the years ended December 31, 2025, 2024 and 2023 are discussed below.
Operating Activities
Operating activities provided $0.5 billion of cash in 2025 and used $0.5 billion and $0.7 billion of cash in 2024 and 2023, respectively. These amounts principally reflected net income, purchases of securities, net of non-cash adjustments, and net realized and unrealized (gain) loss from consolidated fund investments in each of the respective periods as well as net purchases of securities of the consolidated funds.
Investing Activities
Investing activities provided $66.1 million of cash in 2025 and used $1.1 million and $366.6 million of cash in 2024 and 2023, respectively. No cash was invested in corporate investments in funds and companies in 2025. Corporate investments in funds and companies were $34.9 million and $488.3 million in 2024 and 2023,
respectively. Distributions and proceeds from corporate investments in funds and companies of $66.1 million, $203.8 million and $121.6 million in 2025, 2024 and 2023, respectively.
Financing Activities
Financing activities used $0.8 billion of cash in 2025 and provided $0.8 billion and $1.3 billion of cash in 2024 and 2023, respectively. Financing activities included: (a) net distributions from non-controlling interests in consolidated funds of $0.3 billion and $0.2 billion in 2025 and 2024, respectively, and net contributions of $0.9 billion in 2023; (b) net repayments of credit facilities of the consolidated funds of $0.2 billion and $48.9 million in 2025 and 2023, respectively, and borrowings of $1.3 billion in 2024; (c) distributions to unitholders of $0.5 billion, $0.4 billion and $0.2 billion in 2025, 2024 and 2023, respectively; and (d) net capital contributions of $0.1 billion, $0.1 billion and $0.6 billion in 2025, 2024 and 2023, respectively.
Future Sources and Uses of Liquidity
We expect to continue to make distributions to our preferred unitholders in accordance with their contractual terms and our Class A unitholders pursuant to our distribution policy for our common units as described in our operating agreement. In the future, subject to our operating agreement we may also issue additional units or debt and other equity securities with the objective of increasing our available capital. In addition, we may, from time to time, repurchase our preferred units in open market or privately negotiated purchases or otherwise, redeem our preferred units pursuant to the terms of their respective governing documents, or repurchase OCGH, OEP or OEP II units. The distributions from our corporate investments, including the distributions from the equity investment in Oaktree Capital I, also provide the Company with ongoing cash inflow.
We believe that the sources of liquidity described above will be sufficient to fund our working capital requirements for at least the next twelve months.
Preferred Unit Issuances
On May 17, 2018, we issued 7,200,000 of our 6.625% Series A preferred units representing limited liability company interests with a liquidation preference of $25.00 per unit. The issuance resulted in $173.7 million in net proceeds to us. Distributions on the Series A preferred units, when and if declared by the board of directors of Oaktree, will be paid quarterly on March 15, June 15, September 15 and December 15 of each year. Distributions on the Series A preferred units are non-cumulative.
On August 9, 2018, we issued 9,400,000 of our 6.550% Series B preferred units representing limited liability company interests with a liquidation preference of $25.00 per unit. The issuance resulted in $226.9 million in net proceeds to us. Distributions on the Series B preferred units, when and if declared by the board of directors of Oaktree, will be paid quarterly on March 15, June 15, September 15 and December 15 of each year. Distributions on the Series B preferred units are non-cumulative.
Unless distributions have been declared and paid or declared and set apart for payment on the preferred units for a quarterly distribution period, during the remainder of that distribution period we may not repurchase any common units or any other units that are junior in rank, as to the payment of distributions, to the preferred units and we may not declare or pay or set apart payment for distributions on any common units or junior units for the remainder of that distribution period, other than certain Permitted Distributions (as defined in the unit designation related to the applicable preferred units (each, the "Preferred Unit Designation")).
We may redeem, at our option, out of funds legally available, at any time, in whole or in part, the Series A preferred units or the Series B preferred units, at a price of $25.00 per preferred unit plus declared and unpaid distributions to, but excluding, the redemption date, without payment of any undeclared distributions. Holders of the preferred units have no right to require the redemption of the preferred units.
The preferred units are not convertible into Class A units or any other class or series of our interests or any other security. Holders of the preferred units do not have any of the voting rights given to holders of our Class A units, except that holders of the preferred units are entitled to certain voting rights under certain conditions.
Contractual Obligations, Commitments and Contingencies
In the ordinary course of business, we and our consolidated funds enter into contractual arrangements that may require future cash payments. The following table sets forth information related to anticipated future cash payments as of December 31, 2025:
2026 2027-2028 2029-2030 Thereafter Total
(in thousands)
Oaktree and Operating Subsidiaries:
BOH limited partner commitments to Oaktree funds (1)
689,758 - - - $ 689,758
Subtotal 689,758 - - - 689,758
Consolidated Funds:
Debt obligations payable 1,320,795 - - - 1,320,795
Interest obligations on debt (2)
35,447 - - - 35,447
Total $ 2,046,000 $ - $ - $ - $ 2,046,000
(1) These obligations represent commitments by us to provide limited partner capital funding to our funds. These amounts are generally due on demand and are therefore presented in the 2026 column. Capital commitments are generally expected to be called over a period of several years.
(2) Interest obligations include accrued interest on outstanding indebtedness. Where applicable, current interest rates are applied to estimate future interest obligations on variable-rate debt.
In some of Oaktree's service contracts or management agreements, Oaktree has agreed to indemnify third-party service providers or separate account clients under certain circumstances. The terms of the indemnities vary from contract to contract and the amount of indemnification liability, if any, cannot be determined and has neither been included in the above table nor recorded in our consolidated financial statements as of December 31, 2025.
Off-Balance Sheet Arrangements
Please see note 14 to our consolidated financial statements included elsewhere in this annual report for information on our commitments and contingencies and notes 9 and 15 for information on our joint and several liability as co-obligors on certain debt obligations with affiliates of the Company prior to the 2024 Restructuring.
Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates or judgments, however, are both subjective and subject to change, and actual results may differ from our assumptions and estimates. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. We believe our critical accounting policies could potentially produce materially different results if we were to change underlying assumptions, estimates or judgments. Our most significant assumptions and estimates are related to the valuation of our corporate investments and the investments of our consolidated funds. For a summary of our significant accounting policies and estimates, please see the notes to our consolidated financial statements included elsewhere in this annual report.
Recent Accounting Developments
Please see note 2 to our consolidated financial statements included elsewhere in this annual report for information regarding recent accounting developments.
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