Three months later, the Q1 2026 results are in. The machine is still running. The discount has actually widened.

Let’s update the numbers.

If you want the original articles you can find them here :

1. What Just Happened (Q1 Snapshot)

Brookfield reported $1.55 billion ($0.66/share) in Distributable Earnings for Q1 2026—essentially flat versus Q1 2025’s $1.549 billion. But the headline masks the important detail: DE before realizations grew 7% year-over-year, from $1.301 billion to $1.393 billion. The recurring earnings engine is getting stronger.

For the last twelve months (LTM) ended March 31, 2026:

The drop in total LTM DE is a simple prior-year comp issue: Q1 2025 included ~$1 billion in one-time disposition gains from the sale of a portion of BN’s stake in BAM (used to fund the AEL insurance acquisition). Strip that out and the underlying business is growing cleanly.

2. The Three Engines: Where Things Stand

Engine #1: Asset Management

This remains the crown jewel and it’s accelerating.

Fee-bearing capital hit $614 billion, up 12% year-over-year. Fee-related earnings grew 18% over the LTM to $3.07 billion. Year-to-date fundraising is already $67 billion (including $21 billion in Q1 alone), boosted by a $40 billion insurance mandate from Just Group—which Brookfield just closed the acquisition of. The seventh vintage flagship private equity fund is in its first close, targeting essential services and industrial businesses—what management calls “hard assets” for a cycle where everyone wants exactly that.

The asset management business now generates $1.953 billion in annualized DE at Brookfield’s share. At a 10x multiple on $2.7 billion net target carried interest, the carried interest component alone is worth $27.4 billion. Add to that the market value of BN’s 74% stake in BAM (1,193 million shares × $43.56/share = ~$52 billion at quarter-end), and asset management capital on a blended basis is ~$96.6 billion.

One new detail worth watching: Brookfield is quietly building a technology investment portfolio ($2.3 billion of balance sheet capital) that includes ~$1 billion in SpaceX shares, ~$500 million committed to Figure (humanoid robotics), a joint venture with OpenAI called The Deployment Company, and half ownership of Pinegrove Capital (a venture secondaries platform). These are still small relative to the overall business but reflect the “Watch, Learn, Invest” playbook that Bruce Flatt describes in this quarter’s shareholder letter early bets on secular trends before they become consensus.

Engine #2: Wealth Solutions (Insurance Float)

DE was $430 million for the quarter and $1.671 billion for the LTM growing but still building. The bigger news is what happened after quarter-end: Brookfield completed the acquisition of Just Group, a UK pension risk transfer platform. This added $40 billion to the insurance asset base, bringing total insurance assets to $180 billion.

Annualized cash flow is now $2.028 billion (including Just Group), supporting a $30 billion valuation at management’s 15x multiple. Return on equity is 15%, holding steady.

The gross spread remains intact at 2.24%: earning 5.77% on invested assets, paying 3.53% in cost of funds. Simple math: at $180 billion in assets, that spread generates ~$4 billion gross before operating costs. The Berkshire-playbook-with-real-assets analogy from my previous piece is even more apt now.

One strategic move worth flagging: Brookfield has announced the combination of BN and BNT (the Brookfield Wealth Solutions paired security). Shareholder votes are scheduled for July 16, 2026. The rationale is capital efficiency the combined entity unlocks roughly $145 billion of permanent capital to support the insurance business’s continued scaling. The company is also evaluating similar simplifications for its listed infrastructure and energy vehicles. Simpler structure = lower complexity discount = potential multiple expansion.

Engine #3: Operating Businesses

This is the quietest engine and intentionally so. DE was $360 million for Q1 ($1.536 billion LTM), down from $426 million in Q1 2025 due largely to reduced real estate distributions (BPG went from $215 million to $120 million quarterly). Infrastructure (BIP: +6% YoY) and Energy (BEP: +7% YoY) both grew.

The real estate fundamentals, however, remain solid: super core office occupancy at 96%, core plus at 95%, and net rents on new office leases running 15% above expiring levels. During Q1, Brookfield refinanced Two Manhattan West with a $1.9 billion non-recourse mortgage at 5.53%, repaid the prior $1.5 billion mortgage, and pocketed $400 million in net cash while keeping the building. That’s the asset recycling flywheel at work.

Monetization activity in Q1: $17 billion of asset sales, substantially all at or above carrying values. Accumulated unrealized carried interest stands at $11.8 billion (net $7.9 billion after costs). Management continues to guide toward $6 billion of carried interest realizations over the next three years.

3. The Updated Napkin Math

Management’s blended intrinsic value per share, as of March 31, 2026: $66.37 (down from $68.08 at year-end, primarily due to BAM’s share price declining from $52.39 to $43.56 during a volatile market quarter).

The components:

BN shares were repurchased at an average of $41 year-to-date management’s own characterization is a ~40% discount to intrinsic value. That’s not a marketing claim; it’s backed by the sum-of-the-parts math above. $470 million of BN shares and $575 million of BAM shares were repurchased in Q1 alone, in the open market, during the market volatility.

At $44/share (approximate current price):

• P/E on LTM DE before realizations: $44 / ($5.48B / 2.37B shares) = ~18x

• P/E on total LTM DE: $44 / ($6.01B / 2.37B shares) = ~17x

• Discount to blended intrinsic value: ~38%

• FCF Yield (DE before realizations): $2.32/share ÷ $44 = 5,2%

• FCF Yield (total DE): $2.54/share ÷ $44 =5,7%

The spread over 10-year Treasuries (~4.3%) remains over 100 basis points on a recurring basis, and over 150 basis points including realizations.

4. What Changed Since My Last Piece

The FY 2025 article used $44/share as the price. The stock has since sold off further, to ~$41 and came back to 44 now, ironically making the thesis more compelling since Earnings grew, not less. Let me be precise about what’s new:

What improved: Fee-related earnings growing faster (+18% LTM), insurance assets growing to $180 billion post-Just Group, BN/BNT combination announced (structural simplification = potential discount narrowing), $67 billion raised year-to-date already with a seventh PE fund in the works, management actively buying back shares at what they call a 40% discount.

What’s the same: The complexity discount is still there. Real estate distributions from BPG are softer. The stock hasn’t re-rated toward peers.

What’s slightly weaker: BAM’s share price declined ~16% in Q1 (from $52 to $44), reducing the blended intrinsic value per BN share from $68 to $66. This is mark-to-market noise on a publicly traded holding, not a deterioration in the underlying business.

5. The Structural Catalyst: BN + BNT Combination

This is the one genuinely new development worth examining carefully.

The proposed combination merges BN (the investment firm) with BNT (the Brookfield Wealth Solutions vehicle). The stated rationale: give the insurance business access to ~$145 billion of additional permanent capital sitting in BN’s balance sheet. This is the same logic that makes Berkshire Hathaway’s structure so powerful insurance float invested in a diversified pool of high-quality assets.

If approved at the July 16 shareholder meetings, the combined entity will trade under “BN” on NYSE and TSX. The company will also adopt US GAAP from Q1 2027, making it directly comparable to US-listed peers like Blackstone, KKR, and Apollo. That matters for valuation: if you’re running on different accounting standards, many institutional investors run you through a different (often lower-multiple) lens. Switching to US GAAP removes that friction.

Both changes simplification and US GAAP adoption are catalysts for multiple expansion that didn’t exist six months ago.

6. Risks (Still Real)

Nothing has changed structurally on the risk side, but a few deserve updated color:

Complexity discount: The BN/BNT combination and potential simplification of infrastructure/energy vehicles are explicitly designed to address this. Progress, but not resolved yet.

Real estate drag: BPG distributions were down significantly YoY ($642M LTM vs. $904M prior). Management characterizes this as timing and disposition-related, not fundamental deterioration 96% occupancy and improving lease economics support that view. But it’s worth watching.

Private credit sentiment: The shareholder letter addressed this directly. Market concerns about AI disruption of SaaS businesses have weighed on private credit broadly. Brookfield’s management explicitly states they have no material software exposure in their credit book, with the portfolio focused on real asset credit and opportunistic lending. Oaktree’s track record through cycles is the relevant benchmark here.

Capital deployment: $188 billion to deploy is a lot. Getting it wrong matters. The track record says they don’t $17 billion in Q1 asset sales, substantially all at or above carrying values, is reassuring but it’s a genuine risk at this scale.

7. The Updated Verdict

The Q1 2026 results don’t change the thesis they reinforce it.

The asset management business is growing faster than peers on a fee earnings basis. The insurance business just scaled to $180 billion with the Just Group acquisition. Operating businesses are stable. Management is aggressively repurchasing shares at a 40% discount. And for the first time, there are concrete structural catalysts (BN/BNT combination, US GAAP adoption) that could close some of the discount.

At $44/share, you’re paying:

• ~17x recurring earnings (peers at 22–25x)

• ~38% discount to blended intrinsic value ($66.37)

• 5.2% yield on recurring DE alone

The five-year return math is essentially unchanged from my prior piece: 12–15% DE growth + 0.6% dividend yield + ~2% buyback yield + potential multiple expansion from structural simplification = 15–18% CAGR scenario if things go right.

If you owned it at $47 per my last piece: the thesis is intact, the price is better, and you now have two concrete catalysts you didn’t have before. Add on weakness.

If you’re new: this is one of the more compelling setups in large-cap financials right now. The complexity that keeps most investors away is a feature, not a bug it’s precisely why the discount exists. The business itself is not complicated. It collects fees, earns spreads on insurance float, and owns world-class real assets. It does all three simultaneously, at scale, with a 30-year track record.

The Portfolio Update

Here is a look at my complete portfolio. As an investor, I am extremely concentrated by design.

I’ll be the first to admit it: I have significantly underperformed the S&P 500 since the start of 2026 (lagging 5%). Our two flagship holdings, Kinsale Capital and VusionGroup, have been absolutely torn apart by the market recently.

With this latest update, Brookfield now moves into the #3 spot in the portfolio by value. It sits just behind S&P Global (SPGI) which is my most recently added position and VusionGroup, a line where I continue to accumulate more and more shares with Kinsale and Apollo.

I am staying the course. I know the fundamental power of these companies and their long-term potential. I’d much rather be patient with high-quality businesses I understand than reckless by chasing the latest “trend” stocks trading at 35x earnings.

See the full portfolio

As always i’m updating the PDF, this time with a special offer, the report is a full equity deep-dive on Brookfield Corporation, updated with Q1 2026 results. It covers the investment thesis, a plain-English breakdown of how the Brookfield ecosystem works insurance float, asset management fees, and direct asset ownership and the key financial data: segment earnings, peer valuation comparisons, and scenario analysis from bull to stress case.

Get the Institutional version for 2.99$

American Express posted the highest spend growth in three years and the market shrugged. Kinsale posted a 77.4% combined ratio, a 47% dividend hike, and $62.5M in buybacks at above-market prices, and got dinged for flat premium volume. Two different companies, same story: the headline lied, the filing didn’t.

This week’s breakdown is about learning to read the right number. Let’s go.

AMERICAN EXPRESS

0. THE SCOREBOARD

EPS of $4.28, up 18% year-over-year, beating consensus by roughly 4%. Revenue at $18.9B, up 11%. Guidance reaffirmed at 9-10% revenue growth and $17.30 to $17.90 EPS for the full year. Stock dipped slightly post-earnings on the reinvestment commentary, which was the wrong read.

Gut reaction: Strong quarter that accelerates the thesis. Spend growth at a 3-year high wasn’t in the base case.

1. DID THE STORY CHANGE?

Yes, and for the better.

Billed Business hit $428B, up 10% year-over-year. That’s the highest quarterly spend growth in three years. The premium cardholder base isn’t just holding, it’s reaccelerating. Net write-off rate improved to 2.0% from 2.1% a year ago, which means they’re growing balances and improving credit quality simultaneously. That combination is the thesis in its purest form.

The one thing worth watching is that expenses grew 11%, exactly matching revenue. Squeri made the deliberate call to reinvest the Q1 beat into marketing and technology rather than let it flow to the bottom line. Strategically correct. But operating leverage won’t appear until that investment cycle matures. Watch the margin trajectory in H2.

Provisions ticked up to $1.3B from $1.2B, driven by slightly higher write-offs and a smaller reserve release. Not alarming. But the direction is worth tracking.

Verdict: ⚡ Thesis Strengthening. Spend at a 3-year high, credit quality improving, NFL partnership globally, NBA extension, and an AI commerce developer kit all in the same quarter. Squeri is playing offense.

2. WHAT ACTUALLY MOVED

The number that matters isn’t EPS. It’s Billed Business at $428B, up 10%. Everything else revenue, NII, card fees flows from that line. When spend reaccelerates, the model compounds.

Net investment income also grew quietly alongside spending, as card balances build the float. Full-year EPS guidance midpoint at $17.60 on a 16-17x forward multiple puts fair value around $299. Buybacks continue to shrink the share count, which is doing roughly 2-3 points of the per-share math on its own.

3. THE ONE THING MOST RECAPS MISSED

The Amex Agentic Commerce Experiences developer kit got approximately zero coverage. Here’s why it matters: if AI agents become the transaction layer for daily life, whoever controls the payment authentication and trust layer wins. Amex is embedding their payment capability into AI ecosystems right now, before the platform winners are decided. It’s a 2028 story dressed up as a 2026 product announcement, and the market isn’t pricing it at all.

4. MANAGEMENT CREDIBILITY: 🟢 Delivered

They said spend would accelerate. It did. They said credit would hold. It did. No sandbagging, no pivots. Squeri also made a line worth decoding: when he said they’re increasing investments to “capitalize on long-term growth opportunities,” that’s not hedging language. That’s a CEO who sees the next three years more clearly than the market does and is spending accordingly.

5. MY TAKE

The spend reacceleration removes the biggest lingering doubt. The question was whether premium consumer spending could stay elevated. Q1 answered it definitively.

Bull case got stronger: Spend at a 3-year high, demographics still a tailwind, agentic commerce positioning is a free option the market hasn’t noticed yet.

Bear case is narrower but real: If macro softens, provision creep could accelerate from here. And at 16-17x forward earnings, any EPS guidance cut bites hard.

The one-liner: “The machine is running exactly as expected, and management decided to push it harder. Boring is beautiful, except when it’s actually accelerating.”

KINSALE CAPITAL

Flat GWP. Record underwriting profit. Market panicked at the wrong number.

0. THE SCOREBOARD

Diluted EPS of $4.88, up 27% year-over-year. Net income $112.6M, up 26%. Combined ratio improved to 77.4% from 82.1%. Gross written premiums essentially flat at $482M, down 0.5%. That last number is what spooked people. It shouldn’t have.

Gut reaction: The market read the wrong line. Flat GWP with a 77.4% combined ratio, a 66% dividend hike, and $62.5M in buybacks at above-market prices is not a struggling company. It’s a disciplined one.

1. DID THE STORY CHANGE?

No. And that’s the point.

The Commercial Property division fell 28.3% because standard carriers are flooding into E&S property at softened rates. Kehoe is refusing to write bad business at bad prices. Excluding Property, the rest of the book grew 6%. The flat headline number is management doing exactly what you want management to do.

Meanwhile, the actual business metrics moved in the right direction across the board. Underwriting income up 40.1%. Net investment income up 26.5% to $55.4M, as the $5.3B portfolio keeps rolling old 2-3% bonds into new money at roughly 5%. Operating cash flow at $248.9M. The platform is compounding quietly while the GWP headline creates noise.

The one thing that hasn’t resolved is construction liability adverse development in the 2018 and 2019 accident years. The overall prior-year development was positive at $18.7M net, but those older construction years keep producing adverse surprises. Not thesis-breaking yet. But it’s showing up for the third or fourth consecutive quarter, and bears will keep citing it until it stops.

Verdict: Thesis Strengthening. Kinsale is transitioning from a growth stock to a compounding machine. The flat GWP is the feature, not the bug.

2. WHAT ACTUALLY MOVED

The combined ratio at 77.4% is the headline number that matters. For every dollar in premium, Kinsale keeps 22.6 cents as pure underwriting profit before investment income. That improved from 82.1% a year ago, driven by dramatically lower catastrophe losses ($1.6M versus $22.6M in Q1 2025, which caught the Palisades Fire) and favorable prior-year reserve development.

Net retention ratio improved to 83.7% from 78.8%. Kinsale is ceding less to reinsurers and keeping more of its own risk, because it trusts its own pricing more than the reinsurance market. That confidence is showing up in the numbers.

The capital return picture is worth its own paragraph. $62.5M in buybacks at $378.64 average, which is above where the stock trades today. Quarterly dividend at $0.25, up from $0.17 a year ago. When management buys stock above market, that’s not a scheduled program. That’s a conviction signal.

3. THE ONE THING MOST RECAPS MISSED

Buried in Item 4 of the 10-Q: Kinsale implemented a new general ledger system in Q1 2026. This got zero coverage. Management says controls were effective throughout, and there’s no indication of any problem. But a mid-year general ledger transition is the kind of operational change that can surface accounting irregularities one or two quarters later. File this away and check Item 4 specifically in the Q2 filing. Non-event if nothing appears. Worth knowing it happened regardless.

The bigger picture nobody’s writing: this is the GEICO moment. Standard carriers entering E&S property at irrational prices will eventually take losses and exit. When they do, Kinsale will be standing there with its broker relationships intact, its balance sheet clean, and its technology platform ready to write Property at the rates the market should have been charging all along. The wait is the strategy.

4. MANAGEMENT CREDIBILITY: 🟢 Delivered

The construction liability adverse development was disclosed clearly and contextualized honestly. No surprises buried, no pivots on prior guidance. What Kehoe said last quarter happened this quarter. The discipline on Property pricing has been consistent across multiple earnings cycles, which means it’s culture, not a one-quarter call.

5. MY TAKE

The capital return posture removes doubt. When management buys stock at $378 and the market gives you the same stock at $340-350, they’ve told you something important with their own money.

Bull case got stronger: 77.4% combined ratio with room to improve further, NII compounding at 26.5% growth as the portfolio reprices, and a Property rebound coming when standard carriers eventually retreat.

Bear case is narrower but real: Construction liability adverse development hasn’t resolved after multiple quarters, which raises the question of whether it’s cyclical or something more structural. Property softness could persist longer than expected. And the general ledger transition is a minor risk worth verifying in Q2.

Why Flat Is the New Smart

Here’s the thing about insurance that most people outside the industry don’t fully appreciate: it runs in cycles, and right now we’re in the part of the cycle that separates the disciplined from the desperate.

The soft market is when competition peaks. Rates come down, terms get looser, and carriers start fighting for volume instead of profit. Standard insurers, under pressure from shareholders to show growth, start flooding into markets they’d normally avoid, including E&S lines like commercial property, offering coverage at prices that only make sense if nothing bad happens. The key word there is if.

This is exactly what’s happening right now. Standard carriers are cutting rates in commercial property and stepping into Kinsale’s territory. Kinsale’s response? Let them. The Commercial Property division shrank 28.3% this quarter not because brokers stopped sending submissions, but because Kehoe looked at the rates on offer and said no. Voluntarily. Repeatedly. Across an entire division.

This is where most insurance companies burn themselves. The soft market feels fine while it lasts. Loss ratios look manageable, new business is flowing, everyone’s growing. And then a hurricane makes landfall in the wrong place, or a wildfire season runs longer than the models predicted, or a string of large construction liability claims hits in the same quarter, and suddenly the policies written at 2023 prices are paying out 2026 claims. The carriers who chased volume in the soft market are the ones scrambling to raise capital, pulling back from markets, and posting ugly combined ratios for two or three years straight.

Kinsale has seen this movie before. So has every disciplined E&S underwriter. The hard market that follows a major loss event is where the real money gets made, and the only way to be positioned for it is to not have wrecked your balance sheet in the soft market trying to look busy.

When the next major catastrophe hits, and it will, the carriers who priced irrationally will retreat. Some will exit markets entirely. The brokers who placed business with them will need new homes for that risk, fast, and they’ll call the carriers they trust. Kinsale will pick up the phone with a clean book, a $5.3B investment portfolio, and the ability to write those policies at whatever price the market needs to charge to actually make money. That moment is where years of combined ratio discipline converts into years of premium growth.

The flat GWP isn’t a warning sign. It’s a reservation for a table that’s going to be very full, very soon.

The one-liner: Market panicked at the headline. The filing told a different story. Flat GWP with a 77.4% combined ratio, a 47% dividend hike, and $62.5M in buybacks at above-market prices is not stagnation. It’s a compounding machine choosing quality over quantity.