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Item 1A. Risk Factors

2026-03-02 compared with 2025-03-17 · 127 added, 114 removed, 679 unchanged (26% of the section changed)

You should carefully consider the following factors in addition to other information set forth in this Annual Report.

If any of the following risks were actually to occur, our business, financial condition and results of operations and the prospects and value of the Class A Shares would likely suffer.

You should carefully consider the following risk factors, in addition to other information set forth in this Annual Report.

If any of the following risks were actually to occur, our business, financial condition and results of operations and the prospects and value of the Class A Shares would likely be materially impacted.

Risks Relating to Our Business

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(x) the depth and liquidity of the market for the Class A Shares;

(xi) dilution from the issuance of additional equity;

(xi) dilution from the issuance of additional

(xii) investor perception of our business, our managed assets and the sectors in which we deploy the funds from our strategies;

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In addition, we disclose certain metrics that do not have standardized meaning, are based on our own methodologies and assumptions and may not properly convey the information they purport to reflect.

Management is responsible for establishing and maintaining adequate internal controls over financial reporting to give our stakeholders assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in conformity with U.S.

However, the process for establishing and maintaining adequate internal controls over financial reporting has inherent limitations, including the possibility of human error.

Management is responsible for establishing and maintaining adequate internal control over financial reporting to give our stakeholders assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in conformity with U.S.

However, the process for establishing and maintaining adequate internal control over financial reporting has inherent limitations, including the possibility of human error.

In addition, we may exclude recently acquired companies from our evaluation of internal controls.

Our internal controls over financial reporting may not prevent or detect misstatements in our financial disclosures on a timely basis, or at all.

Our internal control over financial reporting may not prevent or detect misstatements in our financial disclosures on a timely basis, or at all.

Some of these processes may be new for certain subsidiaries in our structure, and in the case of acquisitions, may take time to be fully implemented.

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Our policies and procedures governing disclosures may not ensure that all material information regarding us is disclosed in a proper and timely fashion, or that we will be successful in preventing the disclosure of material information to a single person or a limited group of people before such information is generally disseminated.

As at December 31, 2024, BAM used the equity method of accounting for its interest in our asset management business, and our asset management business’ results are not consolidated into BAM's financial statements, and therefore the recording of our asset management business’ transactions into its accounts is not part of BAM’s internal control structure.

BAM has provided Asset Management Company stand-alone financial statements in this report.

However, as of December 31, 2024, our asset management business was not independently required to meet Sarbanes-Oxley requirements and BAM did not have the same control and certification processes with respect to the information on our asset management business that it would have if it were a wholly-owned subsidiary of BAM.

If BAM or our auditors were to conclude that our internal controls over financial reporting were not effective in respect of any reporting period, investors could lose confidence in our reported financial information and the price of our Class A Shares could decline.

As at December 31, 2025, the results of our asset management business are consolidated into BAM's financial statements.

However, as a result of the 2025 Arrangement, management has excluded from its evaluation the internal control over financial reporting of our asset management business.

The total assets, net assets, total revenues and net income subject to our asset management business’ internal control over financial reporting of the consolidated financial statement amounts as of and for the year ended December 31, 2025 are disclosed in “Part II—Item 9A.

Controls and Procedures” in this report.

If BAM or our auditors were to conclude that our internal control over financial reporting were not effective in respect of any reporting period, investors could lose confidence in our reported financial information and the price of our Class A Shares could decline.

Our failure to achieve and maintain effective internal controls could have a materially adverse effect on our business, our ability to access capital markets and our reputation.

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Investors may find it difficult or impossible to effect service of process and enforce judgments against us, our directors and our executive officers.

BAM is headquartered in New York, NY, but some of its officers and directors are not residents of the United States, and a portion of the assets of BAM and said persons are located outside the United States.

BAM is headquartered in New York, NY, but some of its officers and directors are not residents of the U.S., and a portion of the assets of BAM and said persons are located outside the U.S..

As a result, it may be difficult for U.S.

investors to:

(i) effect service of process within the United States upon BAM or those directors and officers who are not residents of the United States;

or (ii) realize in the United States upon judgments of courts of the United States predicated upon the civil liability provisions of the United States federal securities laws.

(i) effect service of process within the U.S.

upon BAM or those directors and officers who are not residents of the U.S.;

or (ii) realize in the U.S.

upon judgments of courts of the U.S.

predicated upon the civil liability provisions of the U.S.

federal securities laws.

Investors outside of the U.S.

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The financial services industry has been the subject of heightened scrutiny and enforcement actions.

Regulatory investigations and/or enforcement actions by our regulators could have a material adverse effect on our business and/or reputation.

Regulatory investigations and/or enforcement actions by our regulators could have a material adverse effect on our business and/or

In addition, the introduction of new legislation and increased regulations may result in increased compliance costs and could materially affect the manner in which we conduct our business and adversely affect our profitability.

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Similar to the environment in the U.S., our business and how we market in jurisdictions outside the U.S.

has become subject to further regulation.

have become subject to further regulation.

Governmental agencies around the world have proposed or implemented a number of initiatives and additional rules and regulations that could adversely affect our business and our managed assets, and governmental agencies may propose or implement further rules and regulations in the future.

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Compliance with additional regulatory requirements will impose additional restrictions and expenses for us and could reduce our operating flexibility and fundraising opportunities.

The broker-dealer side of our managed assets is regulated by the SEC, the various Canadian provincial securities commissions, as well as self-regulatory organizations, including the Financial Industry Regulatory Authority in the U.S.

The broker-dealer side of our managed assets is regulated by the SEC, the various Canadian provincial and territorial securities commissions and administrators, as well as self-regulatory organizations, including the Financial Industry Regulatory Authority in the U.S.

These regulatory bodies may conduct administrative or enforcement proceedings that can result in censure, fine, suspension or expulsion of a broker-dealer, its directors, officers or employees.

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If we were required to register as an investment company, we would face severe limitations on the operation of our business.

Among other things, we would be prohibited from engaging in certain business activities (or have conditions placed on our business activities), face

restrictions on engaging in transactions with affiliated entities and issuing certain securities or engaging in certain types of financings, be restricted with respect to the amount and types of borrowings we are permitted to obtain, be required to limit the amount of investments that we make as principal, and face other limitations on our activities.

Among other things, we would be prohibited from engaging in certain business activities (or have conditions placed on our business activities), face restrictions on engaging in transactions with affiliated entities and issuing certain securities or engaging in certain types of financings, be restricted with respect to the amount and types of borrowings we are permitted to obtain, be required to limit the amount of investments that we make as principal, and face other limitations on our activities.

We have and may become subject to additional regulatory and compliance requirements as we expand our product offerings and investment platform which likely will carry additional legal and compliance costs, as well as additional operating requirements that may also increase costs.

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Our insurance may not provide sufficient coverage in the event that a successful claim is made against us.

Most of our funds rely on Rule 506 of Regulation D under the U.S.

Securities Act to raise capital from investors.

Most of our funds rely on Rule 506 of Regulation D under the Securities Act to raise capital from investors.

Rule 506 is not available to issuers deemed to be “bad actors” under Rule 506 if a covered person of the issuer has been the subject to certain criminal, civil or regulatory disqualifying events.

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If we fail to comply with such laws and regulations, we could be exposed to claims for damages, financial penalties, incarceration of our employees, reputational harm, restrictions on our operations and other liabilities, which could negatively affect our operating results and financial condition.

In addition, we may be subject to successor

liability for violations under these laws and regulations or other acts of bribery committed by entities in which we or our managed assets invest.

In addition, we may be subject to successor liability for violations under these laws and regulations or other acts of bribery committed by entities in which we or our managed assets invest.

We are also subject to laws and regulations governing trade and economic sanctions.

The Office of Foreign Assets Control of the U.S.

Department of the Treasury, the U.S.

Department of the Treasury (“OFAC”), the U.S.

Department of Commerce and the U.S.

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Anti-corruption, anti-money laundering, economic sanctions, and trade control laws imposed by non-U.S.

jurisdictions, such as EU and UK sanctions or blocking statutes and the UK Bribery Act, may also impose stricter or more onerous requirements than the FCPA, OFAC, the U.S.

jurisdictions, such as E.U.

sanctions or blocking statutes and the U.K.

Bribery Act, may also impose stricter or more onerous requirements than the FCPA, OFAC, the U.S.

Department of Commerce, the U.S.

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Department of Treasury, and implementing them may disrupt our business or cause us to incur significantly more costs to comply with those laws.

Different laws may also contain conflicting provisions, making compliance with all laws more difficult.” In February 2022, the U.S.

Different laws may also contain conflicting provisions, making compliance with all laws more difficult.

In February 2022, the U.S.

and other countries began imposing meaningful sanctions targeting Russia as a result of actions taken by Russia in Ukraine.

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countries that have laws designed to protect national security or to restrict foreign direct investment.

For example, under the United States Foreign Investment Risk Review Modernization Act, the Committee on Foreign Investment in the United States has the authority to review, block or impose conditions on investments by non-U.S.

For example, under the United States Foreign Investment Risk Review Modernization Act of 2018, the Committee on Foreign Investment in the United States has the authority to review, block or impose conditions on investments by non-U.S.

persons in U.S.

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has adopted an E.U.-wide mechanism to screen foreign investment on national security grounds and most E.U.

member states now have a foreign investment screening mechanism in place or has initiated a consultative or legislative process expected to result in the adoption of a new mechanism or amendments to an existing mechanism, adopted a regulation aimed at regulation of foreign subsidies that could distort the internal E.U.

member states

now have a foreign investment screening mechanism in place or has initiated a consultative or legislative process expected to result in the adoption of a new mechanism or amendments to an existing mechanism, adopted a regulation aimed at regulation of foreign subsidies that could distort the internal E.U.

Under these laws, governments have the authority to impose a variety of actions, including requirements for the advance screening or notification of certain transactions, blocking or imposing conditions on certain transactions, limiting the size of foreign equity investments or control by foreign investors, and restricting the employment of foreigners as key personnel.

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We cannot predict the effect of changing derivatives legislation on our hedging costs, our hedging strategy or its implementation, or the risks that we hedge.

Regulation of derivatives may increase the cost of derivative contracts, reduce the availability of derivatives to protect against operational risk and reduce the liquidity of the derivatives market, all of which may reduce our use of derivatives and result in the increased volatility and decreased predictability of our cash flows.

Regulation of derivatives may increase the cost of derivative contracts, reduce the availability of derivatives to protect against operational risk and reduce the liquidity of the over-the-counter derivatives market, all of which may reduce our use of derivatives and result in the increased volatility and decreased predictability of our cash flows.

Further increases in interest rates could increase our interest costs and adversely affect our financial performance.

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In many jurisdictions in which we operate, a period of sharply increasing interest rates may cause certain market dislocations that could negatively impact our financial performance, increase the cost and impact the availability of debt financing and thereby negatively impact the ability of our managed assets to obtain attractive financing or refinancing and could increase the cost of such financing if obtained.

Many factors may impact us and our managed assets, including interest rate increases, which would impact the amount of revenue generated by our managed assets and may lead to an increase in the amount of cash required to service our obligations.

Many factors may impact us and our managed assets, including interest rate increases, which would impact the

amount of revenue generated by our managed assets and may lead to an increase in the amount of cash required to service our obligations.

Political instability, changes in government policy or unfamiliar cultural factors could adversely impact the value of our investments.

We are subject to geopolitical uncertainties in all jurisdictions in which we operate.

We make investments in businesses that are based outside of the United States and we may pursue investments in unfamiliar markets, which may expose us to additional risks not typically associated with investing in the United States.

We make investments in businesses that are based outside of the U.S.

and we may pursue investments in unfamiliar markets, which may expose us to additional risks not typically associated with investing in the U.S..

We may not properly adjust to the local culture and business practices in such markets, and there is the prospect that we may hire personnel or partner with local persons who might not comply with our culture and ethical business practices;

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and (iv) the ability of us and our managed assets to raise or deploy capital, each of which could adversely impact our financial condition.

In general, a decline in economic conditions, either in the markets or industries in which our strategies invest, or both, will result in downward pressure on our operating margins and asset values as a result of lower demand and increased price competition for the services and products that we provide.

services and products that we provide.

In particular, given the importance of the U.S.

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Our managed assets are impacted by inflationary pressures.

While inflation has eased and central banks began reducing interest rates in the second half of 2024, past price increases continue to affect households and weigh on confidence and spending power.

The potential for increased tariffs and trade barriers, as well as increased geopolitical risks, adds uncertainty to the long term outlook for inflation and interest rates and a reacceleration of inflation could trigger a reversal in recent interest rate decreases.

While inflationary pressures eased in 2025 across many jurisdictions, past price increases continue to affect households and weigh on confidence and spending power.

Increased tariffs, retaliatory actions and trade barriers, as well as increased geopolitical risks, add uncertainty to the long-term outlook for inflation and interest rates and a reacceleration of inflation could trigger a reversal in recent interest rate decreases.

Interest rate increases or other government actions taken to reduce inflation could also result in recessionary pressures in many parts of the world.

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Catastrophic events (or combination of events), such as earthquakes, tornadoes, floods, wildfires, pandemics/epidemics, climate change, military conflict/war or terrorism/sabotage, could adversely impact our financial performance.

Our managed assets could be exposed to effects of catastrophic events, such as severe weather conditions, natural disasters, major accidents, pandemics/epidemics, acts of malicious destruction, climate change, war/military conflict or terrorism, which could materially adversely impact our operations.

Our managed assets could be exposed to the effects of catastrophic events, such as severe weather conditions, natural disasters, major accidents, pandemics/epidemics, acts of malicious destruction, climate change, war/military conflict or terrorism, which could materially adversely impact our operations.

A local, regional, national or international outbreak of a contagious disease, such as COVID-19, which spreads across the globe at a rapid pace impacting global commercial activity and travel, or future public health crises, epidemics or pandemics, could materially and adversely affect our results of operations and financial condition due to disruptions to commerce, reduced economic activity and other unforeseen consequences that are beyond our control.

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Changes in weather patterns or extreme weather (such as floods, wildfires, droughts, hurricanes and other storms) may negatively affect our managed assets’ operations or damage assets that we may own or develop.

Further, rising sea levels could, in the future, affect the value of any low-lying coastal real assets that we may manage.

Further, rising sea levels and/or other types of flooding could, in the future, affect the value of any coastal or other real assets and businesses that we may manage.

Climate change may increase the frequency and severity of severe weather conditions and may change existing weather patterns in ways that are difficult to anticipate.

Responses to these changes could result in higher costs, such as the imposition of new property taxes and increases in insurance rates or additional capital expenditures.

Responses to and impacts from these changes could result in lower revenues and/or higher costs, such as the imposition of new property taxes, limited availability of insurance, increases in insurance rates or additional capital or operating expenditures.

Our managed assets forming part of our commercial office strategy are concentrated in large metropolitan areas, some of which have been or may be perceived to be threatened by terrorist attacks or acts of war.

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Adequate terrorism insurance may not be available at rates we believe to be reasonable in the future.

These risks could be heightened by foreign policy decisions of the U.S.

These risks could be heightened by foreign policy decisions of

(where we have significant operations) and other influential countries or general geopolitical conditions.

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Sustainability considerations include climate change, human capital and labor management, corporate governance, diversity and privacy and data security, among others.

Increasingly, investors and lenders are incorporating sustainability considerations into their investment or lending process, respectively, alongside traditional financial considerations.

Certain investors and lenders are incorporating sustainability considerations into their investment or lending process, respectively, alongside traditional financial considerations.

Investors or potential investors may not invest in all our products given certain industries in which we operate.

If we are unable to successfully integrate sustainability considerations into our practices, we may incur a higher cost of capital, lower interest in our debt securities and/or equity securities or otherwise face a negative impact on our business, operating results and cash flows and result in reputational damage.

Certain of our managed assets may be subject to compliance with laws, regulations, regulatory rules and/or guidance relating to sustainability, and any failure to comply with these laws, regulations, regulatory rules or guidance could expose us to material adverse consequences, including loss, limitations on our ability to undertake licensable business, legal liabilities, financial and non-financial sanctions and penalties, and/or reputational damage.

Certain of our managed assets may be subject to compliance with laws, regulations, regulatory rules and/or guidance relating to sustainability, and any failure to comply with these laws, regulations, regulatory rules and/or guidance could expose us to material adverse consequences, including loss, limitations on our ability to undertake licensable business, legal liabilities, financial and non-financial sanctions and penalties, and/or reputational damage.

Sustainability requirements imposed by jurisdictions in which we do business, such as the E.U.

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The transition to a lower-carbon economy has the potential to be disruptive to traditional business models and investment strategies.

Efforts to limit global warming may give rise to changes in regulations, reporting and consumer sentiment that could have a negative impact on our existing operations by increasing the costs of operating our business or reducing demand for our products and services.

Efforts to limit climate change may give rise to changes in regulations, reporting and consumer sentiment that could have a negative impact on our existing operations by increasing the costs of operating our business or reducing demand for our products and services.

The adverse effects of climate change and related regulation at state, provincial, federal or international levels could have a material adverse effect on our business, financial position, results of operations or cash flows.

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Health, safety and environmental laws and regulations can change rapidly and significantly, and we and/or our managed assets may become subject to more stringent laws and regulations in the future.

The occurrence of any adverse health, safety or environmental event, or any changes, additions to, or more rigorous enforcement of, health, safety and environmental standards, licenses, permits or other approvals could have a significant impact on operations and/or result in material expenditures.

The occurrence of any adverse health, safety or environmental event, or any changes or additions to, or more rigorous enforcement of, health, safety and environmental standards, licenses, permits or other approvals could have a significant impact on operations and/or result in material expenditures.

Owners and operators of real assets may become liable for the costs of removal and remediation of certain hazardous substances released or deposited on or in their properties, or at other locations regardless of whether the owner and operator caused the release or deposit of such hazardous materials.

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Failure to maintain the security of our information and technology systems could have a material adverse effect on us.

We rely on the use of technology and information systems, many of which are controlled by third-party service providers, which may not be able to accommodate our growth or may increase in cost and may become subject to cyber-terrorism or other compromises and shut-downs, and any failures or interruptions of these systems could adversely affect our businesses and results of operations.

We rely on the use of technology and information systems, many of which are controlled by third-party service providers, which may not be able to accommodate our growth or may increase in cost and may become subject to cyber-terrorism or other compromises and shutdowns, and any failures or interruptions of these systems could adversely affect our businesses and results of operations.

We and our managed assets operate in businesses that are dependent on information systems and other technology, such as computer systems used for information storage, processing, administrative and commercial functions as well as the machinery and other equipment used in certain parts of our operations.

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We may in the future be subject to cyber-terrorism or other cybersecurity risks or other breaches of information technology security, noting the increasing frequency, sophistication and severity of these kinds of incidents.

In particular, our information technology systems may be subject to cyber-terrorism intended to obtain unauthorized access to our proprietary information, personally identifiable information or to client or third-party data stored on our systems, destroy or disable our data, and/or that of our business partners, disclose confidential data in breach of data privacy legislation, destroy data or disable, degrade or

sabotage our systems, through the introduction of computer viruses, cyber-attacks and other means.

Such attacks could originate from a wide variety of sources, including internal actors or unknown third parties.

Further, unauthorized parties may also gain physical access to our facilities and infiltrate our information systems or attempt to gain access to information and data.

The sophistication of these threats continue to evolve and grow, including the risk associated with the use of emerging technologies, such as artificial intelligence and quantum computing, for nefarious purposes.

We cannot predict what effects such cyber-attacks or compromises or shut-downs may have on our business and on the privacy of the individuals or entities affected, and the consequences could be material.

The sophistication of these threats continue to evolve and grow, including the risk associated with the use of emerging technologies, such as AI and quantum computing, for nefarious purposes.

We cannot predict what effects such cyber-attacks or compromises or shutdowns may have on our business and on the privacy of the individuals or entities affected, and the consequences could be material.

Cyber incidents may remain undetected for an extended period, which could exacerbate these consequences.

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We are reliant on third party service providers for certain aspects of our business, including for the administration of certain funds we manage, as well as for certain information systems and technology platforms, trustee services, legal services, technology, administration, tax, accounting and compliance matters.

A disaster, disruption or compromise in technology or infrastructure that supports our managed assets, including a disruption involving electronic communications or other services used by us, our vendors or third parties with whom we conduct business, may have an adverse impact on our ability to continue to manage our assets without interruption which could have a material adverse effect on us.

A disaster, disruption or compromise in technology or infrastructure that

supports our managed assets, including a disruption involving electronic communications or other services used by us, our vendors or third parties with whom we conduct business, may have an adverse impact on our ability to continue to manage our assets without interruption which could have a material adverse effect on us.

These risks could increase as vendors increasingly offer cloud-based software services rather than software services that can be operated within our own data centers.

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The GDPR imposes stringent rules and penalties for non-compliance.

Other countries where we operate are enacting or amending data protection, artificial intelligence and other technology laws to empower regulators to impose financial penalties and injunctions on certain data processing activities, which could have an adverse effect on our business.

Other countries where we operate are enacting or amending data protection, AI and other technology laws to empower regulators to impose financial penalties and injunctions on certain data processing activities, which could have an adverse effect on our business.

AI may be used more effectively by our competitors and our employees or third parties may inappropriately use the technology.

Developments in AI, including machine learning technology and generative AI, and their impact on the private investment and financial services sectors are rapidly evolving.

The full extent of the risks associated with AI, as well as the legal and regulatory frameworks within which they will operate across jurisdictions, is impossible to predict.

Given the substantial uncertainty about the extent to which AI will create dramatic changes throughout the world, we may not be able to anticipate or mitigate all of the potential risks.

Our competitors may be more successful than us in the development and implementation of AI and, if we are unable to adequately advance our capabilities in these areas or do so at a slower pace than our competitors, we may be at a competitive disadvantage.

As the use of AI increases, there is a risk that it may be used or relied upon inappropriately by our employees or third parties that we engage in carrying out their responsibilities.

Furthermore, AI technologies may produce inaccurate, incomplete, biased, or non-explainable outputs, or rely on data that is flawed, improperly sourced, restricted, or subject to privacy or confidentiality obligations.

This could adversely impact us and our operations to the extent that we rely on the work product of such AI in such operations.

The misuse or misappropriation of our data through the use of AI could also have an adverse impact on our reputation and could subject us to legal and regulatory investigations and/or actions.

Additionally, increased reliance on third-party AI technologies may also expose us to security vulnerabilities, limitations in our ability to monitor or control model behavior, and uncertainty regarding the ownership or licensing of intellectual property associated with AI-generated outputs.

Finally, any failure to appropriately govern the development, deployment, or use of AI could result in regulatory scrutiny, legal liability, financial loss, or reputational harm.

We and our managed assets may become involved in legal disputes in the U.S.

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We and our managed assets carry various insurance policies in relation to our respective business activities.

These policies contain policy specifications, limits and deductibles that may mean that such policies do not provide coverage or sufficient coverage against all potential material losses.

These policies contain policy specifications, limits and deductibles that may mean that such policies do not provide coverage or sufficient coverage against

all potential material losses.

We or those also part of the group policy may also self-insure a portion of certain of these risks, and therefore we may not be able to recover from a third-party insurer in the event that we, if we had separate insurance coverage from a third party, could make a claim for recovery.

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We may also self-insure a portion of our D&O insurance, and therefore we may not be able to recover from a third-party insurer in the event that we, if we had D&O insurance from a third-party insurer, could make a claim for recovery.

For economic efficiency and other reasons, we may enter into insurance policies as a group (which may include BN) that are intended to provide coverage for the entire group.

For economic efficiency and other reasons, Brookfield may enter into insurance policies as a group that are intended to provide coverage for the entire group.

Where group policies are in place, any payments under such policy could have a negative impact on other entities covered under the policy as they may not be able to access adequate insurance in the event it is needed.

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We may also be required to seek additional debt financing on terms that include more restrictive covenants and/or higher interest rates, change of control restrictions, require repayment on an accelerated schedule or impose other obligations that limit our ability to grow our business, acquire needed assets, exit investments in assets or portfolio companies, or take other actions that we might otherwise consider appropriate or desirable.

The material assets of BAM consist solely of its interest in the common shares of the Asset Management Company.

After giving effect to the 2025 Arrangement, BAM owns 100% of the Asset Management Company.

BAM depends on distributions and other payments from our asset management business to provide it with the funds necessary to meet its financial obligations, as well as pay dividends to shareholders.

BAM intends to pay dividends to shareholders on a quarterly basis equal to approximately 90% of its Distributable Earnings in the preceding quarter and our asset management business intends to pay dividends to BAM on a quarterly basis sufficient to ensure that BAM can pay its intended dividend.

Dividends will be variable and will change in line with the growth of Distributable Earnings.

The declaration and payment of any dividends will be at the discretion of the Board (and the board of the Asset Management Company), and may change at any time, including, without limitation, to reduce such quarterly dividends or to eliminate such dividends entirely.

Our asset management business and our managed assets are legally distinct from BAM and some of them are or may become restricted in their ability to pay dividends and distributions or otherwise make funds available to BAM pursuant to local law, regulatory requirements and their contractual agreements, including agreements governing their financing arrangements.

Our asset management business and our managed assets will generally be required to service their debt and other obligations before making distributions to BAM.

BAM is solely liable for the debts and liabilities of the asset management business.

The Asset Management Company is an unlimited liability company and certain of its subsidiaries are also unlimited liability companies.

As a result, after giving effect to the 2025 Arrangement whereby BAM acquired 100% of the Asset Management Company, it became liable for the payment of the debts and liabilities of the Asset Management Company on a liquidation or dissolution.

If BAM has assets other than its interest in the asset management business, and if the assets of the asset management business are not sufficient to cover its debts and liabilities (including those arising as a result of its obligations towards its unlimited liability company subsidiaries), then BAM would be required to contribute its assets to the Asset Management Company, further reducing the assets of BAM available to its shareholders.

Risks Relating to our Investment Activities

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In addressing these conflicts, we have implemented a variety of policies and procedures;

however, there can be no assurances that these will be effective at mitigating actual, potential or perceived conflicts of interest in all circumstances, or will not reduce the positive synergies that we seek to cultivate.

however, there can be no assurance that these will be effective at mitigating actual, potential or perceived conflicts of interest in all circumstances, or will not reduce the positive synergies that we seek to cultivate.

It is also possible that actual, potential or perceived conflicts of interest, if not properly addressed, could give rise to investor dissatisfaction, litigation, regulatory enforcement actions or other detrimental outcomes.

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In addition to impacting our ability to raise and retain third-party capital and pursue investment opportunities, certain of the risks identified herein that may have a negative impact on our reputation also could, in extreme cases, result in our removal as general partner or an acceleration of the liquidation date of the private funds that we manage.

The governing agreements of our private funds provide that, subject to certain conditions (which may, particularly in the case of our removal as general partner, include final legal adjudications of the merits of the particular issue), third-party investors in these funds will have the right to remove us as general partner or to accelerate the liquidation date of the fund.

The governing agreements of our private funds

provide that, subject to certain conditions (which may, particularly in the case of our removal as general partner, include final legal adjudications of the merits of the particular issue), third-party investors in these funds will have the right to remove us as general partner or to accelerate the liquidation date of the fund.

Additionally, at any time, investors may seek to terminate a fund and accelerate the liquidation date upon the vote of a super-majority of investors in such fund.

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Such an event, were it to occur, would result in a reduction in the fees we would earn from such fund, particularly if we are unable to maximize the value of the fund’s investments during the liquidation process or in the event of the triggering of a “clawback” for fees already paid out to us as general partner.

We face risks specific to our infrastructure strategies.

Our infrastructure managed assets include utilities, transport, midstream and data businesses.

Our infrastructure assets include toll roads, telecommunication towers, electricity transmission systems, terminal operations, electricity and gas distribution companies, residential infrastructure, rail networks, ports and data centers.

The principal risks facing the regulated and unregulated businesses comprising our infrastructure assets relate to government regulation, general economic conditions and other material disruptions, counterparty performance and capital expenditure requirements.

Many of the infrastructure assets we manage are subject to government regulation, including with respect to revenues and environmental sustainability.

If any of the respective regulators in the jurisdictions in which we operate decides to change the tolls or rates we are allowed to charge or the amounts of the provisions we are allowed to collect, we may not be able to earn the rate of return on our investments that we had planned, or we may not be able to recover our initial cost.

With environmental regulation becoming more stringent, our managed assets may become subject to increasing environmental responsibility and liability.

These regulations may result in increased costs to our managed assets that may not be able to be passed onto their customers and may have an adverse impact on prospects for growth of some businesses.

General economic conditions (including those resulting from climate change and severe weather conditions) affect international demand for the commodities handled and services provided by operators in our infrastructure managed assets.

A downturn in the economy generally or specific to any of our infrastructure managed assets, may lead to a reduction in volumes, disruption to business, bankruptcies or liquidations of one or more large customers, which could reduce our revenues, increase our bad debt expense, reduce our ability to make capital expenditures or have other adverse effects on us.

Some of our managed assets have customer contracts as well as concession agreements in place with public and private sector clients.

Our managed assets with customer contracts could be adversely affected by any material change in the assets, financial condition or results of operations of such customers.

Protecting the quality of our revenue streams through the inclusion of take-or-pay or guaranteed minimum volume provisions into our contracts is not always possible or fully effective.

Some of our managed assets may require substantial capital expenditures to maintain their asset base.

Any failure to make necessary expenditures to maintain their operations could impair their ability to serve existing customers or accommodate increased volumes.

In addition, we may not be able to recover investments in capital expenditures based upon the rates our operations are able to charge.

We face risks specific to our renewable power and transition strategies.

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If regulators disagree with the sustainability disclosures that we make, or with the categorization of our financial products, we may face regulatory enforcement action, and our business or reputation could be adversely affected.