Brookfield Oaktree Holdings, LLC

Previous wording

We are subject to a number of material risks inherent in our business. You should carefully consider the risks and uncertainties described below and other information included in this annual report. If any of the events described below occur, our business and financial results could be seriously harmed. The trading price of our preferred units could decline as a result of any of these risks, and you could lose all or part of your investment.

Current wording

We are subject to a number of material risks inherent in our business. You should carefully consider the risks and uncertainties described below and other information included in this annual report. If any of the events described below occur, our business and financial results could be seriously harmed. The trading price of our preferred units could decline as a result of any of these risks, and you could lose all or part of your investment. References to past events are provided by way of example only and are not intended to be a complete listing or representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.

Previous wording

Our business and the businesses in which Oaktree’s funds invest are materially affected by conditions in the global financial markets and economic conditions throughout the world that are outside our control, such as interest rates, the availability and cost of credit, inflation rates, general economic uncertainty, political uncertainty, changes in laws (including laws relating to taxation), trade barriers, commodity prices, currency exchange rates and controls, volatility in financial markets, the impacts of public health issues, such as pandemics and epidemics, and national and international political circumstances (including economic and political events in or affecting the world’s major economies, such as the ongoing war between Russia and Ukraine and conflicts in the Middle East). These and other uncertain conditions in the global financial markets and economy have resulted in, and may continue to result in, adverse consequences for many of Oaktree’s funds, including restricting such funds’ investment activities and impeding such funds’ ability to effectively achieve their investment objectives. Sanctions imposed by the U.S. and other countries in connection with hostilities between Russia and Ukraine and the tensions between China and Taiwan have caused additional financial market volatility and affected the global economy. In addition, concerns over future increases in inflation, economic recession, as well as interest rate volatility and fluctuations in oil and gas prices resulting from global production and demand levels, as well as geopolitical tension, have exacerbated market volatility.

Current wording

Our business and the businesses in which Oaktree’s funds invest are materially affected by conditions in the global financial markets and economic conditions throughout the world that are outside our control, such as interest rates, the availability and cost of credit, inflation rates, general economic uncertainty, political uncertainty, changes in laws (including laws relating to taxation), trade barriers, commodity prices, currency exchange rates and controls, volatility in financial markets, the impacts of public health issues, such as pandemics and epidemics, and national and international political circumstances (including economic and political events in or affecting the world’s major economies, such as the ongoing war between Russia and Ukraine, conflicts in the Middle East and controversies regarding Greenland). These and other uncertain conditions in the global financial markets and economy have resulted in, and may continue to result in, adverse consequences for many of Oaktree’s funds, including restricting such funds’ investment activities and impeding such funds’ ability to effectively achieve their investment objectives. Sanctions imposed by the U.S. and other countries in connection with hostilities between Russia and Ukraine and the tensions between China and Taiwan have caused additional financial market volatility and affected the global economy. In addition, concerns over future increases in inflation, economic recession, as well as interest rate volatility and fluctuations in oil and gas prices resulting from global production and demand levels, as well as geopolitical tension, have exacerbated market volatility.

Previous wording

trade barriers have imposed or expressed an intent to impose similar measures in return. Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs. There continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S. There can be no assurance that future economic conditions in the U.S. or elsewhere around the world will be favorable to our business.

Current wording

Market uncertainty and volatility have also been magnified as a result of ongoing uncertainties regarding actual and potential shifts in U.S. and foreign trade, economic and other policies, including with respect to treaties and tariffs. Starting in 2025, the U.S. has enacted and proposed to enact significant new tariffs or other trade barriers. In that connection, certain countries subject to such trade barriers have imposed or expressed an intent to impose similar measures in return. Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs. There continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S. There can be no assurance that future economic conditions in the U.S. or elsewhere around the world will be favorable to our business.

Previous wording

Certain of Oaktree’s funds and their portfolio companies are in industries that have been impacted by inflation. Recent inflationary pressures have increased the costs of labor, energy and raw materials and have adversely affected consumer spending, economic growth and Oaktree’s funds’ portfolio companies’ operations. While inflation decelerated over 2024, profit margins may be pressured if inflation re-accelerates, particularly for companies that lack pricing power. If such portfolio companies are unable to pass any increases in their costs of operations along to their customers, it could adversely affect their operating results. In addition, any projected future decreases in the operating results of Oaktree’s funds’ portfolio companies due to inflation could adversely impact the fair value of those investments. Any decreases in the fair value of Oaktree’s fund investments could result in future realized or unrealized losses.

Current wording

Certain of Oaktree’s funds and their portfolio companies are in industries that have been impacted by inflation. Inflationary pressures in recent years have increased the costs of labor, energy and raw materials and have adversely affected consumer spending, economic growth and Oaktree’s funds’ portfolio companies’ operations, and profit margins may be pressured if inflation re-accelerates, particularly for companies that lack pricing power. If such portfolio companies are unable to pass any increases in their costs of operations along to their customers, it could adversely affect their operating results. In addition, any projected future decreases in the operating results of Oaktree’s funds’ portfolio companies due to inflation could adversely impact the fair value of those investments. Any decreases in the fair value of Oaktree’s fund investments could result in future realized or unrealized losses.

Previous wording

Oaktree’s funds depend on the diligence, skill, judgment, reputation and business contacts of key personnel of OCM provided to them through investment management agreements with OCM and we depend on key personnel of OCM under the Services Agreement between OCM and us. Our future success will depend upon OCM’s ability to retain these key personnel and to recruit additional qualified personnel. These key personnel possess substantial experience and expertise in investing, are responsible for locating and executing Oaktree’s funds’ investments, have significant relationships with the institutions that are the source of many of Oaktree’s funds’ investment opportunities and in certain cases have strong relationships with Oaktree’s investors. Therefore, if these key personnel join competitors or form competing companies, it could result in the loss of significant investment opportunities and certain existing investors. OCM is not obligated to dedicate any specific personnel exclusively to its funds or to us, nor is OCM or its personnel obligated to dedicate any specific portion of their time to the management of our business. Consequently, we may not receive the level of support and assistance that we otherwise might receive if OCM personnel were employed directly by us and we have no ability to determine the level of support that OCM provides to the Oaktree funds in which we directly and indirectly invest. We are also subject to conflicts of interest arising out of our relationship with OCM, Brookfield and their respective affiliates. For example, Mr. Howard Marks, our Co-Chairman and one of our board members, is also the Co-Chairman of OCM and a board member of Brookfield. As mentioned above (under “Business—Overview”), Brookfield and its affiliates acquired a majority interest in Oaktree upon the completion of the Mergers. Accordingly, Mr. Marks owes duties to OCM and Brookfield, which duties may from time-to-time conflict with the interests of us and our preferred unitholders. Additionally, if our Services Agreement with OCM was significantly altered or terminated, it could result in the loss of significant key personnel of OCM that we depend on to operate as a public reporting company and could have a material adverse effect on our financial condition and results of operation. Also, the services of our Chief Executive Officer, Mr. Nicholas H. Goodman, are made available by Brookfield. If Brookfield ceased to do so, we would have to identify another person to serve as our chief executive officer, which could be disruptive and/or have a material adverse effect on our financial condition and results of operation.

Current wording

OCM personnel were employed directly by us and we have no ability to determine the level of support that OCM provides to the Oaktree funds in which we directly and indirectly invest. We are also subject to conflicts of interest arising out of our relationship with OCM, Brookfield and their respective affiliates. For example, Mr. Howard Marks, our Co-Chairman and one of our board members, is also the Co-Chairman of OCM and a board member of Brookfield. As mentioned above (under “Business—Overview”), Brookfield and its affiliates acquired a majority interest in Oaktree upon the completion of the Mergers. Accordingly, Mr. Marks owes duties to OCM and Brookfield, which duties may from time-to-time conflict with the interests of us and our preferred unitholders. Additionally, if our Services Agreement with OCM was significantly altered or terminated, it could result in the loss of significant key personnel of OCM that we depend on to operate as a public reporting company and could have a material adverse effect on our financial condition and results of operation. Also, the services of our Chief Executive Officer, Mr. Nicholas H. Goodman, are made available by Brookfield. If Brookfield ceased to do so, we would have to identify another person to serve as our chief executive officer, which could be disruptive and/or have a material adverse effect on our financial condition and results of operation.

Previous wording

Our revenues and cash flow are more volatile and limited following the 2019 Restructuring, the 2022 Restructuring and the 2024 Restructuring. As a result of the 2024 Restructuring, the Company no longer consolidates the operations of Oaktree Capital I, but rather accounts for the Company’s approximately 72% interest in Oaktree Capital I under the equity method of accounting. As such, subsequent to the 2024 Restructuring, the Company’s revenue is primarily the investment income earned from (i) limited partner investments in certain of Oaktree’s flagship opportunistic funds, (ii) an equity method investment in Oaktree Capital I, and (iii) an indirect ownership in Brookfield REIT. If we were to experience a significant reduction in investment income, we may not be able to pay future distributions on our preferred units.

Current wording

Our revenues and cash flow are more volatile and limited following the 2019 Restructuring, the 2022 Restructuring and the 2024 Restructuring. As a result of the 2024 Restructuring, the Company no longer consolidates the operations of Oaktree Capital I, but rather accounts for the Company’s approximately 74% interest in Oaktree Capital I under the equity method of accounting. As such, subsequent to the 2024 Restructuring, the Company’s revenue is primarily the investment income earned from (i) limited partner investments in certain of Oaktree’s flagship opportunistic funds, (ii) an equity method investment in Oaktree Capital I, and (iii) an indirect ownership in Brookfield REIT. If we were to experience a significant reduction in investment income, we may not be able to pay future distributions on our preferred units.

Previous wording

Oaktree’s funds, which, among other things, may cause fund investors to indirectly bear interest expense when such investors would prefer to contribute capital and avoid the interest expense; and (iv) the determination of what constitutes fund-related expenses and the allocation of such expenses between Oaktree’s funds and us or Oaktree. Through Oaktree, we maintain internal controls and various policies and procedures, including oversight, codes of ethics and conduct, compliance systems and communication tools, to identify, prevent, mitigate or resolve conflicts of interest that may arise. Notwithstanding these efforts, it is possible that perceived or actual conflicts could give rise to investor dissatisfaction or litigation or regulatory enforcement actions. Appropriately dealing with conflicts of interest is complex and difficult, and any mistake could potentially create liability or damage our reputation. Regulatory scrutiny of, or litigation in connection with, conflicts of interest could have a material adverse effect on our reputation, which in turn could materially adversely affect our business in a number of ways, such as causing investors to redeem their capital (to the degree they have that right), making it harder for Oaktree to raise new funds and discouraging others from doing business with Oaktree.

Current wording

In addition to the potential for conflict among Oaktree’s funds, we and Oaktree face the potential for conflict between us and Oaktree, on the one hand, and Oaktree’s funds or Oaktree’s clients, on the other hand. These conflicts may include: (i) personal trading by Oaktree personnel in the securities of issuers held by one or more of Oaktree’s funds; (ii) the allocation of investment opportunities among funds with different incentive fee structures, or where Oaktree personnel have invested more heavily in one fund than another; (iii) the use of subscription lines by Oaktree’s funds, which, among other things, may cause fund investors to indirectly bear interest expense when such investors would prefer to contribute capital and avoid the interest expense; and (iv) the determination of what constitutes fund-related expenses and the allocation of such expenses between Oaktree’s funds and us or Oaktree. Through Oaktree, we maintain internal controls and various policies and procedures, including oversight, codes of ethics and conduct, compliance systems and communication tools, to identify, prevent, mitigate or resolve conflicts of interest that may arise. Notwithstanding these efforts, it is possible that perceived or actual conflicts could give rise to investor dissatisfaction or litigation or regulatory enforcement actions. Appropriately dealing with conflicts of interest is complex and difficult, and any mistake could potentially create liability or damage our reputation. Regulatory scrutiny of, or litigation in connection with, conflicts of interest could have a material adverse effect on our reputation, which in turn could materially adversely affect our business in a number of ways, such as causing investors to redeem their capital (to the degree they have that right), making it harder for Oaktree to raise new funds and discouraging others from doing business with Oaktree.

Previous wording

Poor performance of Oaktree funds could adversely affect Oaktree’s ability to raise capital for future funds and poor performance of funds in which we are directly or indirectly invested would cause a decline in our revenues, net income and cash flow.

Current wording

Poor performance of Oaktree funds could adversely affect Oaktree’s assets under management and ability to raise capital for future funds and poor performance of funds in which we are directly or indirectly invested would cause a decline in our revenues, net income and cash flow.

Previous wording

When any of Oaktree’s funds performs poorly, either by incurring losses or underperforming benchmarks or Oaktree’s competitors, Oaktree’s investment record suffers. Poor investment performance by Oaktree funds in which we are directly or indirectly invested also adversely affects our investment income and, all else being equal, may lead to a decline in Oaktree’s AUM. In such circumstances, we may experience losses on our investments of our own capital or losses through our equity method investment in Oaktree Capital I. Poor performance of Oaktree’s funds could also make it more difficult for Oaktree to raise new capital for Oaktree. Investors in Oaktree’s closed-end funds may decline to invest in future closed-end funds Oaktree raises, and investors in open-end and evergreen funds may withdraw their investments in the funds (on specified withdrawal dates) as a result of poor performance. Oaktree’s investors and potential investors continually assess Oaktree’s funds’ performance, both on a standalone basis and relative to market benchmarks, Oaktree’s competitors, and other investment products, and Oaktree’s ability to raise capital for Oaktree’s existing and future funds and avoid excessive redemption levels depends on Oaktree’s funds’ performance.

Current wording

When any of Oaktree’s funds performs poorly, either by incurring losses or underperforming benchmarks or Oaktree’s competitors, Oaktree’s investment record suffers. Poor investment performance by Oaktree funds in which we are directly or indirectly invested also adversely affects our investment income and, all else being equal, may lead to a decline in Oaktree’s AUM. In such circumstances, we may experience losses on our investments of our own capital or losses through our equity method investment in Oaktree Capital I. Poor performance of Oaktree’s funds could also make it more difficult for Oaktree to raise new capital for Oaktree. Investors in Oaktree’s closed-end funds may decline to invest in future closed-end funds Oaktree raises, and investors in open-end and evergreen funds may withdraw their investments in the funds (on specified withdrawal dates) as a result of poor performance. During periods of market volatility, investor redemption or repurchase requests for open-end and evergreen funds are likely to be elevated, which may negatively impact the fees we earn from such vehicles. Investor subscriptions to certain of such vehicles have also at times been, and may in the future be, reduced, and investor redemptions or repurchase requests elevated, in the face of negative media or public sentiment with respect to the asset classes of such vehicles. To the extent appropriate and permissible under a vehicle’s constituent documents, we have previously and may in the future limit or prorate redemptions or repurchases in such vehicle for a period of time. This has, and may in the future, make such vehicles less attractive to investors and negatively impact subscriptions to such vehicles for a period of time, which could have a material adverse effect on the revenues we derive from such vehicles. Oaktree’s investors and potential investors continually assess Oaktree’s funds’ performance, both on a standalone basis and relative to market benchmarks, Oaktree’s competitors, and other investment products, and Oaktree’s ability to raise capital for Oaktree’s existing and future funds and avoid excessive redemption levels depends on Oaktree’s funds’ performance.

Previous wording

Regulations related to AI Technologies continue to evolve and may also impose on Oaktree and us certain obligations and costs related to monitoring and compliance. For example, in April 2023, the Federal Trade Commission, U.S. Department of Justice, Consumer Financial Protection Bureau, and U.S. Equal Employment Opportunity Commission released a joint statement on artificial intelligence demonstrating interest in monitoring the development and use of automated systems and enforcement of their respective laws and regulations. In October 2023, the former Presidential Administration signed an executive order (the “October 2023 Executive Order”) that established new standards for AI safety and security. However, in January 2025, the current Presidential Administration signed an executive order that rescinded the October 2023 Executive Order and requires the development of an AI action plan that is consistent with the current Presidential Administration’s policy within 180 days. In the EU, a regulation applicable to certain AI Technologies and the data used to train, test and deploy them (the “EU AI Act”) entered into force in August 2024, with most of its obligations applying in phases from 6 to 36 months thereafter. The EU AI Act imposes significant requirements on both the providers and deployers of AI Technologies, and significant sanctions for breaches. Moreover, claims for damages in respect of AI Technologies may also be possible (and in certain jurisdictions, facilitated by revisions to regulations on liability). The costs of preparing for, monitoring and complying with laws and regulations related to AI Technologies, and any claims or penalties as the result of any use of or reliance on AI Technologies, could, if applicable, adversely affect Oaktree, us and/or third parties connected to Oaktree or us (whether directly or indirectly), which could adversely affect our business and results of operations.

Current wording

Regulations related to AI Technologies continue to evolve and may also impose on Oaktree and us certain obligations and costs related to monitoring and compliance. In October 2023, the former Presidential Administration signed an executive order (the “October 2023 Executive Order”) that established new standards for AI safety and security. However, in January 2025, the current Presidential Administration signed an executive order that rescinded the October 2023 Executive Order and required the development of an AI action plan that is consistent with the current Presidential Administration’s policy; such AI action plan was subsequently released in July 2025. Further, in the absence of a comprehensive federal AI law in the United States, AI-related legislation is emerging as a patchwork of laws and regulations on the federal and state levels. For example, the Colorado AI Act, which goes into effect on June 30, 2026, imposes various obligations on developers and deployers of “high-risk” AI systems. Other states, including California, Texas, and Utah, among others, have passed or are in the process of enacting or considering additional laws and regulations relating to the use and development of AI Technologies. However, the AI regulatory environment in the U.S. is still evolving; for example, on December 11, 2025, the current Presidential Administration signed an executive order aimed at limiting state-level AI legislation and enforcement, but such executive order may be subject to legal challenge. In the EU, a regulation applicable to certain AI Technologies and the data used to train, test and deploy them (the “EU AI Act”) entered into force in August 2024, with most of its obligations applying in phases from 6 to 36 months thereafter. The EU AI Act imposes significant requirements on both the providers and deployers of AI Technologies, and significant sanctions for breaches. Moreover, claims for damages in respect of AI Technologies may also be possible (and in certain jurisdictions, facilitated by revisions to regulations on liability). The EU is also currently considering further targeted amends to the EU AI Act. The costs of preparing for, monitoring and complying with laws and regulations related to AI Technologies, and any claims or penalties as the result of any use of or reliance on AI Technologies, could, if applicable, adversely affect Oaktree, us and/or third parties connected to Oaktree or us (whether directly or indirectly), which could adversely affect our business and results of operations.

Previous wording

Additionally, the General Data Protection Regulation (the “GDPR”) became applicable in all European Union (“EU”) member states on May 25, 2018. This regulation added a broad array of requirements for handling personal data of individuals that are residents of the EU and the processing and transfer of that data from the EU and could impose a fine of up to 4% of global annual revenue or 20 million euros, whichever is higher, for violations. The GDPR has resulted in and will continue to result in significantly greater compliance burdens and costs for companies like Oaktree. Further, due to Brexit (discussed below), Oaktree is required to comply with the GDPR and also the U.K. equivalent (“U.K. GDPR”). The relationship between the UK and the EU in relation to certain aspects of data protection law remains unclear, and any changes will lead to additional costs and increase our overall risk exposure.

Current wording

Additionally, the General Data Protection Regulation (the “GDPR”) became applicable in all European Union (“EU”) member states on May 25, 2018. This regulation added a broad array of requirements for handling personal data of individuals that are residents of the EU and the processing and transfer of that data from the EU and could impose a fine of up to 4% of global annual revenue or 20 million euros, whichever is higher, for violations. The GDPR has resulted in and will continue to result in significantly greater compliance burdens and costs for companies like Oaktree. Further, due to Brexit (discussed below), Oaktree is required to comply with the GDPR and also the U.K. equivalent (“U.K. GDPR”). The relationship between the UK and the EU in relation to certain aspects of data protection law remains unsettled, and any changes may lead to additional costs and increase our overall risk exposure. In particular, both the UK and the EU have in 2025 enacted or proposed changes to their data protection regimes that have introduced or will introduce increasing divergence.

Previous wording

In the U.S., the Gramm-Leach-Bliley Act of 1999 (the “GLBA”) imposes privacy requirements on financial institutions, including obligations to protect and safeguard consumers' nonpublic personal information and records, and limits the ability to share and reuse such information. Under the GLBA, beginning in May 2024, the Federal Trade Commission will require financial institutions to report the unauthorized acquisition of unencrypted customer information involving at least five hundred customers, within thirty days of discovery. In December 2023, an SEC rule went into effect which requires us to report within four days on a Form 8-K any cybersecurity incident determined to be material. Material incidents requiring such disclosure include those involving a third party provider. At the state level, California was the first state to pass a comprehensive privacy law when it enacted the California Consumer Privacy Act of 2018 (the “CCPA”), which went into effect on January 1, 2020. The CCPA imposes sweeping data protection obligations on many companies doing business in California and provides for substantial fines for non-compliance and, in some cases, a private right of action for consumers who are victims of data breaches involving their unencrypted personal information. Further, in November 2020, California voters passed the California Privacy Rights and Enforcement Act of 2020 (“CPRA”), which amended and further expanded the CCPA with additional data privacy compliance requirements that may impact our business, and established a regulatory agency dedicated to enforcing those requirements. In March of 2021, Virginia enacted the Virginia Consumer Data Protection Act, creating the second comprehensive U.S. state privacy law, which took effect on January 1, 2023 (the same day CPRA took effect). Many additional states have since also passed comprehensive state privacy laws with additional obligations and requirements on businesses, with many more states considering passing their own similar laws. In 2023, Delaware, Indiana, Iowa, Florida, Montana, Oregon, Tennessee and Texas adopted laws regulating the permitted use and security of certain personal information, and New Jersey became the first state in 2024 to adopt such a law. Further, the U.S. Congress is considering passing a comprehensive privacy law on the federal level. Many regulators, including the Federal Trade Commission, have indicated an intention to take more aggressive enforcement actions regarding data security and data matters, and related private litigation is increasing and resulting in progressively larger judgments and settlements.

Current wording

In the U.S., the Gramm-Leach-Bliley Act of 1999 (the “GLBA”) imposes privacy requirements on financial institutions, including obligations to protect and safeguard consumers' nonpublic personal information and records, and limits the ability to share and reuse such information. Under the GLBA, beginning in May 2024, the Federal Trade Commission will require financial institutions to report the unauthorized acquisition of unencrypted customer information involving at least five hundred customers, within thirty days of discovery. Additionally, the SEC has adopted amendments to Regulation S-P, an underlying regulation of GLBA, that took effect December 3, 2025. These amendments impose operationally challenging notification requirements and obligations to implement written policies and procedures to govern oversight of service providers that will likely increase associated compliance costs. In December 2023, an SEC rule went into effect which requires us to report within four days on a Form 8-K any cybersecurity incident determined to be material. Material incidents requiring such disclosure include those involving a third party provider. At the state level, California was the first state to pass a comprehensive privacy law when it enacted the California Consumer Privacy Act of 2018, which initially went into effect on January 1, 2020, and was subsequently amended by the California Privacy Rights Act of 2020 (“CPRA”) and all implementing regulations thereto (collectively, the “CCPA”). The CCPA imposes sweeping data protection obligations on many companies doing business in California and provides for substantial fines for non-compliance and, in some cases, a private right of action for consumers who are victims of data breaches involving their unencrypted personal information. The CCPA is enforceable by the California Attorney General and the California Privacy Protection Agency. In March of 2021, Virginia enacted the Virginia Consumer Data Protection Act, creating the second comprehensive U.S. state privacy law, which took effect on January 1, 2023 (the same day CPRA took effect). Many additional states have since also passed comprehensive state privacy laws with additional obligations and requirements on businesses, with many more states considering passing their own similar laws. In addition to the state of Virginia, Colorado, Utah and Connecticut enacted data privacy laws that went into effect in 2023; Montana, Oregon and Texas enacted data privacy laws that went into effect in 2024; Delaware, Iowa, Maryland, Minnesota, Nebraska, New Hampshire, New Jersey, and Tennessee enacted data privacy laws that went into effect in 2025; and Indiana, Kentucky, and Rhode Island enacted data privacy laws that went into effect on January 1, 2026. Many regulators, including the Federal Trade Commission, have indicated an intention to take more aggressive enforcement actions regarding data privacy and security matters, and related private litigation is increasing…

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Previous wording

It remains unclear how various provisions of these newer laws will be interpreted and enforced. These and other data privacy laws and regulations and their interpretations continue to develop and may be inconsistent from jurisdiction to jurisdiction. The effects of the GDPR and U.K. GDPR, CCPA, and other U.S. state, U.S. federal, and international data privacy laws and regulations are significant and may require Oaktree to modify its data processing practices and policies and to incur substantial costs and potential liability in an effort to comply with such laws and regulations.

Current wording

It remains unclear how various provisions of these newer laws will be interpreted and enforced. These and other data privacy, security and use laws and regulations and their interpretations continue to develop and may be inconsistent from jurisdiction to jurisdiction. The effects of the GDPR and U.K. GDPR, CCPA, and other U.S. state, U.S. federal, and international data privacy, security and use laws and regulations are significant and may require Oaktree to modify its data processing practices and policies and to incur substantial costs and potential liability in an effort to comply with such laws and regulations. Any inability, or perceived inability, by us or Oaktree funds’ portfolio companies to adequately address data protection or privacy concerns, or comply with applicable laws, regulations, policies, industry standards and guidance, contractual obligations, or other legal obligations, even if unfounded, could result in significant legal, regulatory and third-party liability, increased costs, disruption of our and Oaktree funds’ portfolio companies’ business and operations, and a loss of client (including investor) confidence and other reputational damage. Many regulators have indicated an intention to take more aggressive enforcement actions regarding data privacy matters, and private litigation resulting from such matters is increasing and resulting in progressively larger judgments and settlements. For example, the SEC’s stated 2026 examination priorities included an intended focus on advisers’ policies and procedures related to information security and operational risks in the safeguarding of customer records and information. Furthermore, as new data protection and privacy-related laws and regulations are implemented, the time and resources needed for Oaktree and Oaktree funds’ portfolio companies to comply with such laws and regulations continues to increase and become a significant compliance workstream.

Previous wording

Any determination that Oaktree personnel have violated the Foreign Corrupt Practices Act (the “FCPA”), UK anti-bribery laws or other applicable anti-corruption laws could subject Oaktree to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, any one of which could adversely affect our reputation, business, financial condition or results of operations. Although the current U.S. Presidential administration has signed an executive order to pause, subject to certain exceptions, the initiation of new investigations and enforcement actions under the FCPA, such laws have attracted significant regulatory focus in recent years, including outside of the U.S. For example, the SEC will be responsible for examining investment advisers’ compliance with a U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) rule currently scheduled to go into effect January 2026, that requires registered investment adviser and exempt reporting advisers to, among other measures, adopt an anti-money laundering and countering the financing of terrorism (“AML/CFT”) program, file certain reports with FinCEN and to maintain records related to such activities. The application of these rules would impose significant compliance costs on us. The EU and the U.K. are similarly revising their respective anti-money laundering regimes. The EU’s revised anti-money laundering regime is expected to come into effect as early as June 2026 and the U.K. has also significantly expanded the reach of its anti-bribery laws. While Oaktree has policies and procedures designed to ensure compliance by its personnel with the FCPA, such policies and procedures may not be effective in all instances to prevent violations. In addition, in light of the executive order to pause initiation of new FCPA investigations and enforcement actions in the U.S., other asset managers, particularly those who, unlike Oaktree, are not subject to the anti-corruption laws of a jurisdiction outside of the United States, may implement changes to their FCPA or anti-money laundering policies that would provide such managers access to investment opportunities that may not be available to Oaktree because of its current policies and procedures.

Current wording

Any determination that Oaktree personnel have violated the Foreign Corrupt Practices Act (the “FCPA”), UK anti-bribery laws or other applicable anti-corruption laws could subject Oaktree to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, any one of which could adversely affect our reputation, business, financial condition or results of operations. Although the current U.S. Presidential administration has signed an executive order to pause, subject to certain exceptions, the initiation of new investigations and enforcement actions under the FCPA, such laws have attracted significant regulatory focus in recent years, including outside of the United States. For example, the SEC will be responsible for examining investment advisers’ compliance with a U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) rule currently scheduled to go into effect January 2026, that requires registered investment adviser and exempt reporting advisers to, among other measures, adopt an anti-money laundering and countering the financing of terrorism (“AML/CFT”) program, file certain reports with FinCEN and to maintain records related to such activities. The application of these rules would impose significant compliance costs on us. The EU and the U.K. are similarly revising their respective anti-money laundering regimes. The EU’s revised anti-money laundering regime is expected to come into effect as early as June 2026 and the U.K. has also significantly expanded the reach of its anti-bribery laws. While Oaktree has policies and procedures designed to ensure compliance by its personnel with the FCPA, such policies and procedures may not be effective in all instances to prevent violations. In addition, in light of the executive order to pause initiation of new FCPA investigations and enforcement actions in the U.S., other asset managers, particularly those who, unlike Oaktree, are not subject to the anti-corruption laws of a jurisdiction outside of the United States, may implement changes to their FCPA or anti-money laundering policies that would provide such managers access to investment opportunities that may not be available to Oaktree because of its current policies and procedures.

Previous wording

The future internal rate of return for any current or future fund may vary considerably from the historical internal rate of return generated by any particular fund, or for Oaktree’s funds as a whole. In addition, future returns will be affected by the applicable risks described elsewhere in this annual report, including risks of the industries and businesses in which a particular fund invests. Moreover, the Company’s investment income earned from Brookfield’s equity method investment in Oaktree Capital I generally reflects only 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.

Current wording

The future internal rate of return for any current or future fund may vary considerably from the historical internal rate of return generated by any particular fund, or for Oaktree’s funds as a whole. In addition, future returns will be affected by the applicable risks described elsewhere in this annual report, including risks of the industries and businesses in which a particular fund invests. Moreover, the Company’s investment income earned from the Company’s equity method investment in Oaktree Capital I generally reflects only 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.

Previous wording

Following the 2022 Restructuring, the only entity within the Oaktree Operating Group in which we have an indirect economic interest is Oaktree Capital I. As a result of the 2024 Restructuring, the Company no longer consolidates the operations of Oaktree Capital I, but rather accounts for the Company’s approximately 72% interest in Oaktree Capital I under the equity method of accounting. As such, subsequent to the 2024 Restructuring, the Company’s revenue is primarily the investment income earned from (i) limited partner investments in certain of Oaktree’s flagship opportunistic funds, (ii) an equity method investment in Oaktree Capital I, and (iii) an indirect ownership in Brookfield REIT. Please see “Item 1. Business—Structure and Operation of our Business.”

Current wording

Following the 2022 Restructuring, the only entity within the Oaktree Operating Group in which we have an indirect economic interest is Oaktree Capital I. As a result of the 2024 Restructuring, the Company no longer consolidates the operations of Oaktree Capital I, but rather accounts for the Company’s approximately 74% interest in Oaktree Capital I under the equity method of accounting. As such, subsequent to the 2024 Restructuring, the Company’s revenue is primarily the investment income earned from (i) limited partner investments in certain of Oaktree’s flagship opportunistic funds, (ii) an equity method investment in Oaktree Capital I, and (iii) an indirect ownership in Brookfield REIT. Please see “Item 1. Business—Structure and Operation of our Business.”

Previous wording

In addition, we hold a limited partner interest in, and made a capital commitment of, $750.0 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, contributes 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 our Opps XII Investment for payment of distributions on or redemption of the preferred units. As of December 31, 2024, the Company has funded in the aggregate $53.3 million of the $750.0 million capital commitment.

Current wording

In addition, we hold a limited partner interest in, and made a capital commitment of, $750.0 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”). Subsequently, the Company made an additional commitment of $46.2 million. In order to fund the Opps XII Investment, our sole Class A unitholder, or one of its affiliates, contributes 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 our 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.

Previous wording

We are a limited liability holding company and have no independent means of generating revenues. In connection with the issuance of our preferred units, Oaktree Capital I issued ”mirror” preferred units to a holding company in which we indirectly own an interest to correspond with each series of our preferred units. The terms of the mirror preferred units state that, subject to certain exceptions, no distributions may be declared or paid with respect to the common units of Oaktree Capital I until distributions have been declared and paid or declared and set aside with respect to each series of mirror preferred units and the series of our preferred units to which they correspond. Accordingly, our ability to receive distributions from Oaktree Capital I may be impaired to the extent Oaktree Capital I has not declared and paid or declared and set aside distributions on each series of mirror preferred units.

Current wording

We are a limited liability holding company and have no independent means of generating revenues. In connection with the issuance of our preferred units, Oaktree Capital I issued ”mirror” preferred units to a holding company in which we indirectly own an interest to correspond with each series of our preferred units. The terms of the mirror preferred units state that, subject to certain exceptions, no distributions may be declared or paid with respect to the common units of Oaktree Capital I until distributions have been declared and paid or declared and set aside with respect to each series of mirror preferred units and the series of our preferred units to which they correspond. Accordingly, our ability to receive distributions from Oaktree Capital I may be impaired to the extent