DBRG 10-K & 10-Q changes, risk factors and insider trading
DigitalBridge Group, Inc. (also DBRG-PH, DBRG-PI, DBRG-PJ) · NYSE · Investment Advice · CIK 1679688 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Risks Related to the Merger”
New heading “The Merger may not be completed on the terms or timeline currently contemplated or at all.”
New heading “An adverse judgment in one or more lawsuits challenging the Merger, should they occur, may prevent the transaction from becoming effective or from becoming effective within the expected timeframe.”
New heading “Failure to consummate the proposed Merger could have a material adverse impact on our business, results of operations and financial condition.”
New heading “Uncertainty regarding the completion of the Merger may adversely impact our ability to maintain relationships with investors and business partners and may adversely affect our ability to attract and retain key employees.”
New heading “The Merger Agreement contains provisions that could discourage a potential competing acquirer.”
New heading “Our directors and executive officers have interests in the Merger that are different from, or in addition to, those of our other stockholders.”
New heading “Risks related to emerging and changing technology, particularly artificial intelligence, could have a material adverse effect on our business, financial condition and results of operations.”
Removed heading “Our use of artificial intelligence could expose us to various risks.”
Removed heading “Our obligations to pay income taxes increased as a result of no longer qualifying for REIT status, effective January 1, 2022.”
Removed heading “We may incur adverse tax consequences if we failed to qualify as a REIT for U.S. federal income tax purposes for the period during which we elected to be taxed as a REIT.”
Largest changes
“The legal requirements relating to AI continue to evolve and remain uncertain, and such legal developments could impact our business and ability to enforce our proprietary rights or protect against infringement of those rights. Regulations related to AI also may impose certain obligations and costs related to monitoring and compliance as certain existing and proposed legal regimes, including those related to data privacy, regulate certain aspects of AI technology. …”see in full comparison
“An adverse judgment in one or more lawsuits challenging the Merger, should they occur, may prevent the transaction from becoming effective or from becoming effective within the expected timeframe.”see in full comparison
“Risks related to emerging and changing technology, particularly artificial intelligence, could have a material adverse effect on our business, financial condition and results of operations.”see in full comparison
“Stockholders may file lawsuits challenging the Merger or the other transactions contemplated by the Merger Agreement, which may name the Company, members of the board of directors or others as defendants. No assurance can be made as to the outcome of such lawsuits, should they occur, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims. …”see in full comparison
“The consummation of the Merger is subject to certain closing conditions, including among other things: (a) the approval of the Company’s stockholders; (b) expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and the receipt of certain non-U.S. antitrust approvals; (c) the receipt of certain required consents or approvals, including, among others, from (i) the Committee on Foreign Investment in the United States and the applicable regulators in certain non-U.S. …”see in full comparison
“Although AI tools may facilitate optimization and operational efficiencies, they also have the potential for inaccuracy, error, bias, infringement, or misappropriation of intellectual property, as well as risks related to data privacy and cybersecurity. The use of AI tools may introduce errors or inadequacies that are not easily detectable, including deficiencies, inaccuracies, or biases in the data used for AI training, or in the content, analyses, or recommendations generated by AI applications. …”see in full comparison
Full comparison: every changed paragraph (56)
Risks Related to the Merger
The Merger may not be completed on the terms or timeline currently contemplated or at all.
The consummation of the Merger is subject to certain closing conditions, including among other things: (a) the approval of the Company’s stockholders; (b) expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and the receipt of certain non-U.S. antitrust approvals; (c) the receipt of certain required consents or approvals, including, among others, from (i) the Committee on Foreign Investment in the United States and the applicable regulators in certain non-U.S. jurisdictions under foreign investment laws, (ii) the Federal Energy Regulatory Commission, (iii) the Federal Communications Commission, (iv) the Monetary Authority of Singapore, (v) the UK Financial Conduct Authority, and (vi) the European Union under the EU Foreign Subsidies Regulation 2022/2560; (d) the absence of legal restraints prohibiting the Merger; (e) the absence of certain materially adverse conditions or remedies imposed in connection with the foregoing regulatory approvals; and (f) the receipt of required consents for the Company’s flagship investment funds and from fee-paying clients of the Company and its subsidiaries representing, in the aggregate, at least 85% of the base date revenue run rate of the fee-paying clients of the Company and its subsidiaries, as well as other customary closing conditions. There can be no assurance that such conditions will be satisfied in a timely manner or at all, or that an effect, event, development or change will not transpire that could delay or prevent these conditions from being satisfied. Governmental agencies may not approve the Merger or the related transactions necessary to complete the Merger or may impose conditions to the approval of such transactions or require changes to the terms of such transactions. Any such conditions or changes could have the effect of delaying completion of the Merger or imposing costs on or limiting the operation of the Company's business following the Merger, and such conditions or changes could lead to the termination of the Merger Agreement. Further, competing offers or acquisition proposals for the Company may be made, resulting in delay of the Merger or termination of the Merger Agreement.
An adverse judgment in one or more lawsuits challenging the Merger, should they occur, may prevent the transaction from becoming effective or from becoming effective within the expected timeframe.
Stockholders may file lawsuits challenging the Merger or the other transactions contemplated by the Merger Agreement, which may name the Company, members of the board of directors or others as defendants. No assurance can be made as to the outcome of such lawsuits, should they occur, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims. If plaintiffs are successful in obtaining an injunction prohibiting the parties from completing the Merger on the agreed-upon terms, such an injunction may delay the completion of the transaction in the expected timeframe, or may prevent the transaction from being completed altogether. Whether or not any plaintiff’s claim is successful, this type of litigation may result in significant costs and diverts management’s attention and resources, which could adversely affect the operation of our business.
Failure to consummate the proposed Merger could have a material adverse impact on our business, results of operations and financial condition.
In the event the Merger is not completed, we will be subject to a number of risks without realizing any of the benefits of having completed the Merger, including the following:
•We may be required to pay a termination fee of $93 million if the Merger is terminated under qualifying circumstances, as described in the Merger Agreement;
•We have incurred and will continue to incur substantial costs relating to the Merger, such as financial advisor, legal, and accounting fees, regardless of whether the Merger is completed;
•Time and resources committed by management to matters relating to the Merger (including integration planning) could otherwise have been devoted to pursuing other beneficial opportunities; and
•The market price of our common stock could decline to the extent that the current market price reflects a market assumption that the Merger will be completed.
If the Merger is not completed, the Company cannot assure its stockholders that the risks described above will not materialize and will not materially affect the Company’s business and financial results or the market price of our securities.
Uncertainty regarding the completion of the Merger may adversely impact our ability to maintain relationships with investors and business partners and may adversely affect our ability to attract and retain key employees.
The Merger will be consummated only if stated conditions are met, many of which are beyond our control, and may not be completed on the terms or timeline currently contemplated or at all. As a result, there may be uncertainty regarding the completion of the Merger. This uncertainty may cause some of our investors and business partners to delay or defer decisions or to end their relationships with us, which could negatively affect our revenues, earnings and cash flows, regardless of whether the Merger is completed.
Uncertainty regarding the completion of the Merger may also foster uncertainty among employees about their future roles. This may adversely affect our ability to attract and retain key personnel, which could have an adverse effect on our ability to generate revenue at anticipated levels prior to the completion of the Merger.
The Merger Agreement contains provisions that could discourage a potential competing acquirer.
The Merger Agreement contains “no shop” provisions that, subject to limited exceptions, restrict our ability to initiate, solicit, knowingly encourage or knowingly facilitate any acquisition proposals, or provide non-public information to or engage in negotiations or substantive discussions with third parties in connection therewith. In some circumstances, upon termination of the Merger Agreement, we will be required to pay a termination fee of $96 million. These provisions could discourage a potential third-party acquirer that might have an interest in acquiring all or a significant portion of us from considering or proposing that acquisition, even if it were prepared to pay consideration with a higher per share cash or market value than the market value proposed to be received or realized in the Merger, or might otherwise result in a potential third-party acquirer proposing to pay a lower price to our stockholders than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances.
Our directors and executive officers have interests in the Merger that are different from, or in addition to, those of our other stockholders.
Our directors and executive officers have interests in the Merger that are different from, or in addition to, other stockholders of the Company. Some of these interests include:
•our executive officers are entitled to severance protections and benefits under their employment agreements in connection with a change in control;
•specified awards held by our executive officers and members of our board of directors may be cancelled and cashed out based on the merger consideration;
•pursuant to the Merger Agreement, deferred stock unit awards and awards of a partnership interest in the Operating Company that have been designated as an “LTIP Unit” held by our executive officers and members of our board of directors will fully vest (to the extent not already vested) and be cancelled and cashed out based on the merger consideration;
•certain executive officers may enter into employment arrangements with the surviving company or affiliates of SoftBank following the effective time of the Merger or other agreements addressing such executive officer's post-closing employment and equity compensation and holdings, on terms to be mutually agreed by the surviving company or such affiliate(s) and such executive officer; and
•the provision of indemnification, the advancement of expenses, exculpation and insurance arrangements pursuant to the Merger Agreement and our charter and bylaws, and performance under any indemnification agreements between the Company and our executive officers and members of our Board.
Our business is materially affected by general economic and political conditions and events throughout the world, such as changes in interest rates, fiscal and monetary stimulus and withdrawal of stimulus, availability of credit, inflation rates, economic uncertainty, changes in laws (including laws relating to taxation), trade barriers, and tariffs, commodity prices, currency exchange rates and controls, national and international political circumstances (including wars, terrorist acts or security operations) and responses to widespread health events, and our ability to manage our exposure to these conditions may be very limited. These conditions and/or events can adversely affect our business in many ways, including by reducing the ability of our funds to raise or deploy capital, reducing the value or performance of our investments and the investments made by our funds and making it more difficult for us and our managed vehicles to realize value from existing investments. Adverse changes in market and economic conditions in the United States or the countries or regions in which we or our funds invest would likely have a negative impact on the value of our assets and spending and demand for infrastructure and technology and, accordingly, our and our funds' financial performance, the market prices of our securities, and our ability to pay dividends.
When any of our funds perform poorly, either by incurring losses or underperforming benchmarks, as compared to our competitors or otherwise, our investment record suffers which could make it more difficult for us to raise new capital, and investors in our funds may decline to invest in future funds we raise. As a result, our performance fees may be adversely affected and, all else being equal, the value of our assets under managementFEEUM could decrease, which may, in turn, reduce our management fees. Moreover, we may experience losses on investments of our own capital as a result of poor investment performance and may not receive performance fees with regard to such fund. Furthermore, if, as a result of poor performance or otherwise, a fund does not achieve total investment returns that exceed a specified investment return threshold over the life of the fund or other measurement period, we may be obligated to repay the amount by which performance fees that were previously distributed or paid to us exceed amounts to which we were entitled. We also guarantee such clawback obligations of our employees and may be required to repay a portion of performance fees distributed to an employee to the extent such employee fails to fulfill their repayment obligation and the amount held back by the Company from prior distributions to the employee is insufficient to satisfy the obligation.
Infrastructure investments often involve an ongoing commitment to a municipal, state, federal or foreign government or regulatory agencies. The nature of these obligations exposes us to a higher level of regulatory control than typically imposed on other businesses and may require us to rely on complex government licenses, concessions, leases or contracts, which may be difficult to obtain or maintain. Infrastructure investments may require external operators to manage such investments under contractual relationships and such operators’ failure to comply with laws, including prohibitions against bribing of government officials, may adversely affect the value of such investments and cause us serious reputational and legal harm. Revenues for such investments may rely on contractual agreements for the provision of services with a limited number of counterparties and are consequently subject to counterparty default risk or poor operational performance. The operations and cash flow of infrastructure investments are also more sensitive to inflation and, in certain cases, commodity price risk and price controls. Furthermore, services provided by infrastructure investments may be subject to rate regulations by government entities that determine or limit prices that may be charged. Similarly, users of applicable services or government entities in response to such users may react negatively to any adjustments in rates and thus reduce the profitability of such infrastructure investments.
Similarly, users of applicable services or government entities in response to such users may react negatively to any adjustments in rates and thus reduce the profitability of such infrastructure investments.
Our assetsFEEUM under management havehas grown significantly in the past, and we are pursuing further growth in the near future, both organic and through acquisitions. Our rapid growth has placed, and planned growth, if successful, will continue to place, significant demands on our legal, accounting, compliance and operational infrastructure and has increased expenses. The complexity of these demands, and the expense required to address them, is a function not simply of the amount by which our assets under managementFEEUM has grown, but of the growth in the variety and complexity of, as well as the differences in strategy between, our different funds. In addition, we are required to continuously develop our systems and infrastructure in response to the increasing sophistication of the investment management market and legal, accounting, regulatory and tax developments. Our future growth will depend in part on our ability to maintain an operating platform and management system sufficient to address our growth and will require us to incur significant additional expenses and to commit additional senior management and operational resources. As a result, we face significant challenges in:
We intend, to the extent that market conditions warrant, to seek to grow our businesses by increasing AUMFEEUM in existing businesses, pursuing new investment strategies, developing new types of investment structures and products (such as separately managed accounts and structured products), expanding into new geographic markets and businesses and marketing products to new categories of investors. Introducing new types of investment structures and products or the types of investors we provide services to could increase the complexities involved in managing such investments, including ensuring compliance with regulatory requirements.
The success of our organic growth strategy will depend on, among other things, our ability to correctly identify and create products that appeal to the limited partners of our funds and vehicles. While we have made significant expenditures to develop these new strategies and products, there is no assurance that they will achieve a satisfactory level of scale and profitability. To raise new funds and pursue new strategies, we have and expect to continue to use our balance sheet to warehousehold seed investments, which may decrease the liquidity available for other parts of our business. If a new strategy or fund does not develop as anticipated and such investments are not ultimately transferred to a fund, we may not be able to dispose of such investments at an advantageous time and may be forced to realize losses on these retained investments.
Our use of artificial intelligence could expose us to various risks.
Employees of the Company have access to enterprise-grade artificial intelligence tools that are designed to operate within secure environments. Artificial intelligence technologies are susceptible to errors and other malfunctions which could lead to operational challenges and reputational risks. In addition, we may be subject to increasing regulations related to our use of these technologies, including regulations related to privacy, data security, and intellectual property rights, which could expose us to legal risks.
As a result of their personal investments in DataBank and Vantage Data Centers (the prior owner of the assets from which the assets of Vantage SDC were spun out) prior to the Company’s acquisition of DBH and prior to the Company's investment in Vantage SDC, additional investments made by the Company in DataBank and Vantage SDC subsequent to their initial acquisitions have already and may in the future trigger future carried interest payments to the Former DBH Employees upon the occurrence of future realization events. Such investments made by the Company include ongoing payments for the buildout of expansion capacity, including lease-up of the expanded capacity and existing inventory, in Vantage SDC. In such transactions, the Company takes a series of steps to mitigate the conflicts in the transactions, including, among others, obtaining approval from an independent committee of the board of directors for any related party transactions. In addition, at the time of the Company's investment in Vantage SDC, MessrsMessrs. Ganzi and Jenkins agreed to roll their entitlements to future carried interest in Vantage SDC into equity in Vantage SDC to further align their interests with the Company. Additional information regarding payments to Messrs. Ganzi and Jenkins relating to DataBank and Vantage SDC acquisitions is included in Note 1615 to the consolidated financial statements in Item 8 of this Annual Report.
As an asset manager, our business is highly dependent on information technology networks and systems, including systems provided by third parties over which we have no control. We may also have limited opportunity to verify the security, effectiveness and resiliency of systems provided by third parties or to cause third parties to implement necessary or desirable improvements for such systems. In the normal course of business, we and our service providers process proprietary, confidential, and personal information provided by our customers, employees, and vendors. In addition to our information technology networks and systems, our funds’ portfolio companies maintain their own information technology networks and systems to access, store, transmit, and manage or support a variety of business processes and proprietary, confidential, and personal information. The risk of a cybersecurity incident or system or network disruption to networks and systems, including through cyber-attacks or cyber intrusions, including by computer hackers, nation-state affiliated actors, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. A cybersecurity incident or a significant and extended disruption to our or our funds’ portfolio companies’ systems or systems provided by third parties caused by a third-party or by employee error, negligence or fraud, or a failure to report such an incident or significant and extended disruption in the timeframe required by law, may result in compromise or corruption of, or unauthorized access to or acquisition of, proprietary, confidential, or personal information collected in the course of conducting our business, misappropriation of assets, disruption of our operations, material harm to our financial condition, cash flows, and the market price of our common shares, significant remediation expenses, and increased cybersecurity protection and insurance costs. A cybersecurity incident or disruption could also interfere with our ability to comply with financial reporting requirements or result in loss of competitive position, regulatory actions or increased regulatory scrutiny, litigation, breach of contracts, reputational harm, damage to our stakeholder relationships, or legal liability. While we may be entitled to damages if our third-party service providers fail to satisfy their cybersecurity-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award. Additionally, future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Furthermore, we may identify securitycybersecurity issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
These risks require continuous and likely increasing attention and resources from us to, among other actions, identify and quantify these risks; upgrade and expand our technologies, systems, and processes to adequately address them; and provide periodic training for our employees to assist them in detecting phishing, malware, and other schemes. This diverts time and resources from other activities. In addition, the cost and operational consequences of responding to a cybersecurity incident or deficiency in our cybersecurity could be significant. Although we make efforts to maintain the security and integrity of our networks and systems, and the proprietary, confidential and personal information that resides on or is transmitted through them, and we have implemented various cybersecurity policies, procedures and capabilities to manage the risk of a cybersecurity incident or disruption, there can be no assurance that our cybersecurity efforts and measures will be effective or that attempted cybersecurity incidents or disruptions would not be successful or damaging. Due to the complexity and interconnectedness of our information technology networks and systems, and those upon which we rely, the process of upgrading or patching our protective measures could itself create a risk of cybersecurity issues or system disruptions for the Company, as well as for clients who rely upon, or have exposure to, such information technology networks and systems. Further, adoption of artificial intelligence (“AI”) tools by us or by third parties may pose new cybersecurity challenges. Threat actors may use AI tools to automate and enhance cybersecurity attacks against us.
We use software and platforms designed to detect such cybersecurity threats, including AI-based tools, but these threats could become more sophisticated and harder to detect and counteract, which may pose significant risks to our data security and systems.
Risks related to emerging and changing technology, particularly artificial intelligence, could have a material adverse effect on our business, financial condition and results of operations.
We may use AI tools in our operations, including machine learning technology and generative and agentic AI technologies. The current and potential future applications of these AI tools are rapidly evolving, as are the legal and regulatory frameworks that govern them. AI could significantly disrupt the markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costs, which could have a material adverse effect on our business, financial condition and results of operations.
Although AI tools may facilitate optimization and operational efficiencies, they also have the potential for inaccuracy, error, bias, infringement, or misappropriation of intellectual property, as well as risks related to data privacy and cybersecurity. The use of AI tools may introduce errors or inadequacies that are not easily detectable, including deficiencies, inaccuracies, or biases in the data used for AI training, or in the content, analyses, or recommendations generated by AI applications. This could reduce the effectiveness of AI tools and adversely impact us and our operations to the extent we rely on the work product of such technology in our operations. There is also a risk that AI tools may be misused or misappropriated by our employees and/or third parties engaged by us or with whom we partner, resulting in the unauthorized use or disclosure of confidential information, including material non-public information or personal information. Further, we may not be able to control how third-party AI technologies that we use are developed or maintained, or how data we input is used or disclosed, even where we have sought contractual protections with respect to these matters. As a result, we may be subject to regulatory actions or increased regulatory scrutiny, litigation, reputational harm, or legal liability. Additionally, the effort to gain technological expertise and develop new technologies in our business may be costly. Investments in technology systems and data analytics capabilities, including AI tools, may not deliver the benefits or perform as expected or may be replaced or become obsolete more quickly than expected, and we may not implement or use new technologies in the most effective way, which could result in operational difficulties or additional costs.
Some of our competitors may have instituted, or may institute, low-cost, high-speed applications and services based on AI, and new competitors may enter our industry using new platforms based on AI. We also face competitive risks related to the adoption and application of new technologies by established market participants or new entrants. If our peers use AI tools to optimize operations and we fail to leverage AI tools in a comparable manner, we may be competitively disadvantaged. Advances in technology, including through AI capabilities, automation, and other tools may require us to adapt our strategy, business and operations to address these trends and pressures. We may not be successful in anticipating or responding to these developments on a timely and cost-effective basis and as a result our competitive position may weaken and we could experience a material adverse effect on our operating results, customer relationships and growth opportunities.
The legal requirements relating to AI continue to evolve and remain uncertain, and such legal developments could impact our business and ability to enforce our proprietary rights or protect against infringement of those rights. Regulations related to AI also may impose certain obligations and costs related to monitoring and compliance as certain existing and proposed legal regimes, including those related to data privacy, regulate certain aspects of AI technology. We also may need to expend additional resources to modify and maintain our use of AI tools to comply with applicable law, the nature of which continues to evolve. The enforcement or interpretation of these laws may prevent or limit our ability to use AI in our business, lead to regulatory fines or penalties, or require us to change our business practices. We may also choose not to leverage AI or similar technologies in order to reduce potential risks and liabilities, which could harm our financial performance or increase expenses.
Additionally, our tenants, vendors investors, analysts and other of our stakeholders may use AI tools, which may present similar risks to those described above. Our vendors may use AI tools their products or services without our knowledge, and the providers of these tools may not meet the evolving regulatory or industry standards for privacy and data protection. Consequently, this may inhibit our or our vendors' ability to uphold an appropriate level of service and data privacy.
We require capital to fund acquisitions and originations of our target investments, to fund our operations, including overhead costs, to fund dividends to our stockholders and to repay principal and interest on our borrowings. We expect to meet our capital requirements using cash on hand and cash flow generated from our operations and investments. However, we may also have to rely on third-party sources of capital, including public and private offerings of securities and debt financings. Third-party financing may not be available to us when needed, on favorable terms, or at all. If we are unable to obtain adequate financing to fund or grow our business, it could have a material adverse effect on our ability to acquire additional assets and make our debt service payments, and our financial condition, results of operations and the ability to fund our distributions to our stockholders would be materially adversely affected. Due to the fact that, as of this filing, we are no longer a “well-known seasoned issuer,” as such term is used in the SEC’s regulations, which otherwise would allow us to, among other things, file automatically effective Form S-3 registration statements, our capital-raising ability may be impaired. During any period when we are not eligible to use Form S-3 or qualify as a “well known seasoned issuer,” we would be required to conduct offerings on an exempt basis or use a registration statement on Form S-1 to register securities with the SEC, which could hinder our ability to act quickly in raising capital to take advantage of market conditions and may increase our cost of raising capital. Further, the expenses associated with raising capital using Form S-1 are generally greater than those associated with using Form S-3.
The market price and trading volume of our class A common stock has been and may continue to be volatile and holders of our class A common stock could lose all or a significant portion of their investment due to drops in the market price of our class A common stock.
Risks Related to Our Incorporation in Maryland and Our Structure
The SEC’s oversight, inspections and examinations of global investment firms, including our firm, have focused on transparency, investor disclosure practices, fees and expenses, valuation and conflicts of interest and whether firms have adequate policies and procedures to ensure compliance with federal securities laws in connection with these and other areas of focus. While we believe we have procedures in place reasonably designed to monitor and make appropriate and timely disclosures regarding the engagement and compensation of our affiliated services providers and other matters of current regulatory focus, the SEC’s inspections of our firm have raised concerns about these and other areas of our operations. In September 2024, Colony Capital Investment Advisors, LLC (“CCIA”), the investment adviser to certain legacy funds and vehicles holding legacy assets, entered into a settlement agreement with the SEC that resolved the previously disclosed SEC examination into certain alleged deficiencies identified in the examination relating to CCIA’s compliance with its fiduciary duty, duty of care and disclosure of affiliate transactions involving certain legacy businesses and operations. Although we believe that CCIA acted in accordance with applicable legal requirements and always conducted its business in the best interests of its clients, we took a number of steps to improve our investor disclosures and compliance processes in response to the CCIA examination. In connection with the settlement agreement, the SEC issued a cease-and-desist order (the “Order”) against CCIA. Under the terms of the Order, pursuant to which CCIA neither admitted nor denied any of the findings contained therein, CCIA agreed to cease and desist from committing or causing any violations and any future violations of Section 206(2) and 206(4) of the Investment Advisers Act and Rules 206(4)-7 and 206(4)-8 promulgated thereunder, (ii) be censured, and (iii) pay a civil monetary penalty in the amount of $350,000 to the SEC.
In recent years, the SEC has proposed substantial new regulations and, more recently in 2025, rescinded certain rule proposals or extended the effectiveness of other proposals. Nevertheless, any changes or potential changes in the regulatory framework applicable to our business may impose additional expenses or capital requirements on us, limit our fundraising activities, have on adverse effect on our results of operations, financial condition, reputation or prospects, impair employee retention or recruitment, increase the need for broader insurance coverage and require substantial additional attention by our senior management. Adoption of new rules and amendments to existing rules could significantly impact us and our operations, including by increasing compliance burdens and associated regulatory costs and complexity. In addition, new or changed rules enhance the risk of regulatory action, which could adversely impact our reputation and our fundraising efforts, including as a result of public regulatory sanctions and increased regulatory enforcement activity in the financial services industry.
The SEC recently adopted amendments to Form PF that enhance reporting obligations for private fund advisors and to Regulation S-P, which requires, among other things, that private fund advisors adopt written policies and procedures for an incident response program to address unauthorized access to customer information. The SEC has also proposed, and can be expected to propose, additional rules and rule amendments under the Investment Advisers Act including in respect of custody requirements, cybersecurity risk governance, disclosures regarding how ESG factors are taken into consideration in investment strategies, the use of predictive data analytics or similar technologies and the outsourcing of certain functions to service providers (the “Proposed Rules”).
The Proposed Rules, to the extent adopted, are expected to significantly increase compliance burdens and associated costs and complexity. This regulatory complexity, in turn, may increase the need for broader insurance coverage by fund managers and increase such costs and expenses. The amendments and Proposed Rules may also increase the cost of entering into and maintaining relationships with service providers to the Company and its managed funds and could expose us to additional regulatory scrutiny, litigation, censure and penalties for noncompliance or perceived noncompliance, which could adversely affect our reputation and business.
In addition to regulatory and legal developments in the U.S. legislation described above,U.S., other jurisdictions, including many European jurisdictions, have proposed modernizing financial regulations that have called for, among other things, increased regulation of and disclosure with respect to, and possibly registration of, hedge funds, private investment funds and their managers such as through the AIFM Directive discussed below. Regulatory agencies in the United States, Europe, Asia or elsewhere may adopt burdensome laws (including tax laws) or regulations, or changes in law or regulation, or in the interpretation or enforcement thereof, which are specifically targeted at the private investment fund industry, or other changes that could adversely affect private investment firms and the funds they sponsor.
Our obligations to pay income taxes increased as a result of no longer qualifying for REIT status, effective January 1, 2022.
We became a taxable C Corporation effective for the taxable year ended December 31, 2022. As a REIT, we generally were permitted to deduct any dividends paid on our stock from our REIT taxable income. We reinstated the dividend on our common stock in September of 2022 and we also currently pay dividends on our approximately $821.9 million of outstanding preferred stock. As a result of no longer qualifying for REIT status, we are no longer allowed a deduction for dividends paid to our stockholders (including the preferred dividends we currently pay) in computing our taxable income and are subject to U.S. federal and state income tax on our taxable income at corporate tax rates. This could impair our ability to satisfy our financial obligations and negatively impact the price of our securities. This treatment could also reduce our net earnings available for investment or distribution to our stockholders because of the additional tax liability to us. Further, federal and state income tax rates could increase in the future, exacerbating these risks. We are also disqualified from electing REIT status under the Internal Revenue Code of 1986, as amended, or the Code, through December 31, 2026.
We may incur adverse tax consequences if we failed to qualify as a REIT for U.S. federal income tax purposes for the period during which we elected to be taxed as a REIT.
We elected to be taxed as a REIT under the U.S. federal income tax laws commencing with our taxable year ended December 31, 2017 and ending with our taxable year ended December 31, 2021. Our qualification as a REIT for such period depends on our having satisfied, and in some cases other REITs we have merged with having satisfied, certain gross asset, gross income, organizational, distribution, stockholder ownership and other requirements. If the IRS challenged our characterization, valuation, and treatment of investments (including our direct or indirect interests in subsidiary REITs, each of which must satisfy the same requirements for REIT qualification) for purposes of the REIT asset and income tests for any open tax year, and if such a challenge were sustained, we could fail to qualify as a REIT for such tax year, unless we could avail ourselves of relief provisions for the applicable tax period.
If we failed to qualify as a REIT in any taxable year for which our REIT election was effective, we would be subject to U.S. federal corporate income tax on our taxable income for such year at the regular corporate rate, and dividends paid to our stockholders would not be deductible by us in computing our taxable income for such year. Additionally, if any subsidiary REIT in which we own an interest fails to qualify as a REIT in any taxable year for which its REIT election is or was effective, it (i) would be subject to regular U.S. federal corporate income tax and (ii) would cease to be a qualifying asset for the REIT asset tests, which could have an adverse effect on our REIT qualification for any open tax year in which our REIT election was effective. Any resulting corporate tax liability could be substantial and would reduce the amount of cash available for distribution to our stockholders, which in turn could have an adverse impact on the value of our class A common stock.
Management's Discussion & Analysis (MD&A)
New heading “Proposed Acquisition of DBRG”
New heading “Realization of Investment”
New heading “Investments or Commitments Transferred”
Removed heading “Return of Capital”
Removed heading “Assets Under Management and Fee Earning Equity Under Management”
Removed heading “Warehoused Investments”
Removed heading “Public Offerings”
Removed heading “Allocation of Purchase Consideration”
Largest changes
“Assets Under Management and Fee Earning Equity Under Management”see in full comparison
“Administrative and other expenses was $50.7 million lower at $64.2 million. The decrease can be attributed mainly to (i) $22.2 million of insurance recoveries in 2025 related to litigation costs largely incurred in prior years, and additionally, litigation costs was $6.9 million lower in 2025, (ii) lower third party professional service costs, including reimbursable costs incurred on behalf of our managed investment vehicles, (iii) lower loss accrual related to an employment arbitration ($6.7 million), and (iv) lower placement fees related to DBP III ($5.1 million). …”see in full comparison
“In a business combination, the Company measures the assets acquired, liabilities assumed and any noncontrolling interests of the acquiree at their acquisition date fair values, with the excess of purchase consideration over the fair value of net assets acquired and the fair value of any previously held interest in the acquiree, recognized as goodwill. In an asset acquisition, the Company allocates the purchase consideration to the assets acquired and liabilities assumed based upon their relative fair values, which does not give rise to goodwill.”see in full comparison
Full comparison: every changed paragraph (155)
The following discussion should be read in conjunction with our consolidated financial statements and accompanying notes thereto, which are included in Item 8. " Financial Statements and Supplementary Data " of this Annual Report.
The following summarizes significant developments that affected our business and results of operations in 2024 and through the date of this filing.2025.
Proposed Acquisition of DBRG
•On December 29, 2025, DBRG entered into a definitive agreement to be acquired indirectly by SoftBank for $16.00 in cash per common share and OP common units that are not held by DBRG and the Operating Company (unless otherwise agreed by a holder of OP units and SoftBank through its indirect subsidiary). The transaction is expected to close in the second half of 2026, subject to approval by DBRG's common stockholders and other customary closing conditions. The preferred stock of DBRG and the Operating Company will remain outstanding. Warrants to purchase DBRG's common stock will be treated in accordance with the terms of the applicable warrant agreements.
•In 2025, we raised $5.6 billion of capital, primarily for DigitalBridge Partners III ("DBP III"), our third flagship digital infrastructure fund which had its final closing on October 31, 2025, and various co-investment vehicles.
DBP III fund commitments totaled $7.2 billion, inclusive of $150 million of our commitments as general partner and general partner affiliate.
Realization of Investment
•In 2024, we raised $9.0 billion of capital, primarily for various co-investment vehicles and the third series in our flagship value-add strategy.
Financing
•In 2024, we further reduced our leverage with the full exchange/redemption of our remaining $78 million of 5.75% senior notes, which resulted in annual interest savings of approximately $4.5 million. $73 million of note principal was exchanged for 8.2 million shares of the Company's class A common stock and $5 million of note principal was redeemed for cash.
Return of Capital
•We completed the monetization of marketable equity securities that form non-core investments for total net proceeds of $43 million.
•In February 2025, we received proceeds of approximately $59 million in connection with our participation in a secondary sale of equity by our DataBank portfolio company andin February 2025, we received proceeds of approximately $1$59.7 million, representing $34.0 million realized principal investment income, $24.8 million return of netcapital and our share of carried interest.interest of $0.9 million.
We present below our FEEUM, which is a key operating metric in the alternative investment management industry. Our calculation of FEEUM may differ from other investment managers, and as a result, may not be directly comparable to similar measures presented by other investment managers.
FEEUM represents the total capital managed by the Company and its affiliates which earns fee income. FEEUM is generally based upon committed capital, invested capital, NAV or gross asset value ("GAV"), pursuant to the terms of each underlying investment management agreement.
Presented below is total FEEUM by product:
(3) Market activity includes changes in investment value based on NAV or GAV, and the effect of foreign exchange rates.
FEEUM increased $5.5 billion or 15% to $41.0 billion at December 31, 2025, driven by capital raise for our third flagship fund and new co-investment vehicles, as well as deployment of previously raised capital. This was partially offset by the effects of investor redemption and investment recapitalizations.
(5) Unrealized value represents total fair value of investments, net of outstanding balance under the fund’s credit facility, if any.
(78) Total investment gross multiple of invested capital ("MOIC") is calculated as totalthe limited partners' portion of the fair value of unrealized investments, thatnet isof outstanding balance funded through the fund's credit facility, if any, plus any accrued but unpaid interest and coupon payments received, and limited partner realized proceedsdistributions andgross unrealizedof fairgeneral value,partner carried interest, divided by investedtotal capital,limited partner contributions, without giving effect to the allocation of management fee expense, other fund expenses and general partner carried interest (both distributed and unrealized).
Total investment net MOIC is calculated as totalthe valuelimited partners' portion of investments,the thatfund's isNAV plus limited partner realized proceedsdistributions andnet unrealizedof faircarried value,interest, divided by investedtotal capital,limited partner contributions, after giving effect to the allocation of management fee expense, other fund expenses and general partner carried interest (both distributed and unrealized).
(89) Gross internal rate of return ("IRR") represents annualized time-weightedmoney-weighted return on invested capital based upon total value of investments,limited partner contributions, that is limited partner realized proceedsdistributions and limited partner unrealized NAV (based upon fair value,value of unrealized investments), without giving effect to the allocation of management fee expense, other fund expenses and general partner carried interest (both distributed and unrealized). Gross IRR is calculated from the date of investmentthe fundingsfirst capital call from limited partners (and therefore taking into account the benefituse of any credit facility at the fund level) tothrough the date of investmentlimited distributions.partner distributions for realized investments. For funds with unrealized investments, gross IRR assumesuses a liquidating distribution equal to the investmentlimited partners' portion of the fair value,value of unrealized investments, net of outstanding amounts funded through the fund's credit facility, if any. Gross IRR is calculated at the fund level and does not reflect gross IRR of any individual investor due to timing of investor level inflows and outflows, among other factors.
Net IRR is gross IRR after giving effect to the allocation of management fee expense, other fund expenses and general partner carried interest (both distributed and unrealized). Net IRR is calculated at the individualtotal investorfee-paying limited partner level and based upon the timing and amount of fee-paying third party investorlimited levelpartner inflows and outflows, and excludes capital not subject to fees and/or carried interest, including the portion of capital attributable to the general partner and general partner affiliateaffiliate. capital.As fees may vary by individual investor, net IRR does not represent the return of any individual investor.
With respect to funds that have utilized borrowings from a credit facility to fund portfolio investments, organization expenses, partnership expenses, management fees, or other amounts in lieu of calling capital from limited partners for such purposes, gross and net IRR of the fund differs from what the IRR would have been if such borrowings or financings had not been utilized. Because IRR is calculated based on the actual dates of capital contributions from, and distributions to, limited partners (rather than based on the timing of when investments were made, for example), the use of such borrowings and financings in lieu or in advance of calling capital delays capital contributions from limited partners, generally resulting in higher IRRs than if such borrowings or financings had not been utilized and capital was called earlier from limited partners..
If an investment is later syndicated to third-party investor(s), the IRRs will include cash flows associated with such syndication. This treatment with respect to syndications was implemented in fiscal year 2024 and applied on a life-to-date basis for all funds presented.
(910) Our funds generally permit us to recycle certain capital distributed to limited partners during certain time periods. The exclusion of recycled capital generally causes invested and realized amounts to be lower and MOICs to be higher than had recycled capital been included. In addition, for funds that utilize a subscription line credit facility in advance of receiving capital contributions from investors, reported IRRs may be higher or lower than if such facility had not been utilized.
Total revenues were $94.0 million in 2025 and $607.0 million in 2024. The large swings in total revenues were driven by significant variability in unrealized carried interest, specifically large net reversals in 2025 and net positive allocations in 2024. This was partially offset by increases to fee revenue in 2025, driven by capital formation in our third flagship fund.
Total revenues were $607.0 million in 2024 and $821.4 million in 2023. The decrease of $214.4 million was driven by significant variability in unrealized carried interest and principal investment income, notwithstanding a $65.6 million increase in fee revenue.
(1) Catch-up fees are management fees charged in any given period that pertain to prior periods. With respect to subsequent closing of commitments during the fundraising period, management fees based upon commitments are charged retroactively to the fee activation date at initial closing of the fund through the subsequent close date.
Fee revenue was $44.8 million or 14% higher, totaling $374.4 million in 2025.
FeeYear revenueover year, FEEUM had increased $65.6 million or 25% as our FEEUM increased $2.7$5.5 billion or 8% year-over-year15% to $35.5$41.0 billion at December 31, 2024.2025.
ManagementThe fees were $52.9 million higherincrease in 2024.fee Thisrevenue was driven by (i) additional capital raised for our third flagship fundfund, thatwhich heldcontributed itsincremental firstmanagement closefees inof November 2023, contributing $60.3$41.9 million (of additionalwhich fees in 2024 (including $19.5$19.0 million ofwas incremental catch-up fees), and (ii) deployment of capital deploymentsand innew othercapital funds.raised Thesefor increasesco-investment werevehicles, partially offset by (iii) lower management fees from DBPInfraBridge IIfunds, followingin particular the effect of a change in fee basis from committed to invested capital andeffective syndicationlate ofDecember an investment in 2024, as well as recapitalization of a portfolio company in a co-invest vehicle2024 (aggregatedecreased decrease of $21.8$17.6 million).
2024Incentive alsofees includedattributed higher incentive fee income fromto our liquid securities strategy,strategy was $3.4 million lower in 2025, along with incentive fee compensation (as discussed below), which netted to a $3.3$0.8 million increase.decrease.
Carried Interest Allocation
Carried interest allocation represents gross carried interest from our general partner interests in sponsored investment vehicles prior to allocations to management and a third party investor.participation interest. Unrealized carried interest is subject to adjustments each period, including reversals, based upon the extent to which cumulative performance of the funds, which are driven by underlying investments of these vehicles that are measured at fair value, untilexceed suchtheir timeminimum asreturn hurdles. See Note 3 to the carriedconsolidated interestfinancial is distributed.statements.
In 2025, distributed carried interest arose from a secondary sale of equity by our DataBank portfolio company in February 2025, of which our share net of management allocation was $0.9 million.
When the fair value of fund investments fall below return hurdles or remain constant and preferred returns on unreturned capital accumulate, this may result in a reversal of unrealized carried interest previously recognized. The resulting effects are further exacerbated given the early lifecycle of our funds.
2025 also included an obligation to clawback carried interest of $25.0 million assuming a hypothetical liquidation of carry paying funds at their December 31, 2025 estimated fair values. Of this amount, $22.1 million would be recoverable from current and former employees and a third party participation interest, resulting in a liability to the Company of $2.9 million.
Distributed carried interest in 2023 arose from a recapitalization of DataBank.
The decrease in unrealized carried interest in 2024 was driven by a reversal of carried interest in DataBank funds and lower carried interest in DBP I, partially offset by an increase in carried interest in DBP II. The carried interest reversal for DataBank funds is a function of continuing accrual of preferred returns over time at a higher rate than the fair value increase on DataBank for certain limited partners.
Principal investment income represents the Company's proportionate share of net income (loss) from investments in its sponsored investment vehicles,vehicles. whichChanges iseach period are driven predominantly by unrealized gain (loss) from changes in fair value of underlying fund investments.
Realized principal investment income in both years included gains from sale or syndication of investments and distributions of interest income from our credit funds. In particular, the year-to-date period in 2025 included $34.0 million of income distribution in connection with our participation in a secondary sale of equity by our DataBank portfolio company in February 2025, offset by a $40.3 million loss from a portfolio company of an InfraBridge fund recognized in the second quarter of 2025. This loss pertained to capital funded in prior years and realization of the loss did not affect cash flows in 2025. These realizations were accompanied by a reversal of unrealized principal investment income (loss) in the periods the realizations were recognized. In 2024, realized principal investment income also included $4.2 million of previously escrowed proceeds received from the partial sale of our interest in DataBank in prior years.
Realized principal investment income in 2024 arose largely from gains related to syndication of investments in DBP funds and distribution of interest income from our credit fund. Additionally, 2024 included $4.2 million of previously escrowed proceeds received from a partial sale of our interest in DataBank in prior years.
In comparison, the large unrealized principal investment income in 2023 was driven by significant fair value increase in our DataBank investment and to a lesser extent, DBP I.
Other income decreased $6.5 million to $22.6 million. This was driven by lower cost reimbursements from managed investment vehicles that are presented gross as income and expense ($2.6 million) and lower dividend income from equity securities of consolidated funds ($1.8 million).
Total expenses were $185.5 million in 2025 and $496.9 million in 2024. The significant decrease is attributed to unrealized carried interest compensation which was a large net reversal in 2025 compared to a large net expense in 2024. Additionally, 2025 had lower administrative costs, driven by insurance recoveries in 2025 related to litigation costs largely incurred in prior years.
Other income was $29.1 million in 2024 compared to $48.7 million in 2023. 2023 had included higher interest income from money market deposits and our subordinated notes in a collateralized loan obligation ("CLO"), as well as dividend income from our credit fund that was deconsolidated in the fourth quarter of 2023.
Total expenses were $496.9 million in 2024 and $551.9 million in 2023, with the decrease attributable to lower compensation expense, primarily unrealized carried interest compensation, partially offset by higher administrative costs.
Cash and equity-based compensation—The increase in cash compensation was driven by higher accrual of annual performance based incentive compensation.
Cash and equity-based compensation—Cash compensation was $5.2 million lower in 2024 as a result of lower bonus, severance and retention costs (decreased $13.6 million), partially offset by the effects of a higher headcount in 2024.
Equity-based compensation was $19.9 million lower in 2024 as 2023 included a higher expense associated with performance-based awards that met their targets.
Incentive fee and carried interest compensation allocation—The changenet reversal of compensation in compensation2025 and net expense forin both2024 periods iswere consistent with the changechanges in carried interest, partially offset by an increase in incentive fees, as discussed above.
Administrative and other expenses was $50.7 million lower at $64.2 million. The decrease can be attributed mainly to (i) $22.2 million of insurance recoveries in 2025 related to litigation costs largely incurred in prior years, and additionally, litigation costs was $6.9 million lower in 2025, (ii) lower third party professional service costs, including reimbursable costs incurred on behalf of our managed investment vehicles, (iii) lower loss accrual related to an employment arbitration ($6.7 million), and (iv) lower placement fees related to DBP III ($5.1 million). The decrease was partially offset by organizational and diligence costs incurred for potential new products in 2025 ($5.3 million).
Administrative and other expenses increased $28.0 million to $115.0 million, driven by higher legal fees and loss accrual related to an employment arbitration, professional service costs and placement fees.
Interest expense was $1.2 million higher at $17.6 million. The increase reflects $1.9 million of interest expense in 2025 on a fund-level debt prior to its deconsolidation in the fourth quarter of 2025, partially offset by the full exchange/redemption of the remaining 5.75% exchangeable senior notes in April 2024 ($0.4 million) and lower unused fees following a reduction in the VFN borrowing capacity in June 2025 ($0.4 million).
Interest expense decreased $8.1 million to $16.4 million as a result of a full exchange/redemption of the remaining 5.75% exchangeable senior notes in 2024 ($4.6 million decrease), and full repayment of the $200 million 5.00% convertible notes upon maturity in April 2023 ($3.1 million decrease).
Transaction-related costs werewas $5.3$15.5 million inhigher 2024at compared$20.8 to $10.8 million in 2023. The decrease ismillion, attributed to InfraBridgethe proposed acquisition costsof in 2023DBRG ($7.9$10.1 million), partially offset byand higher expense associated with unconsummated dealsdeal in 2024 ($2.0 million).costs.
Depreciation and amortization expense decreased $2.9$4.3 million in 2024, primarily due to management contract intangibleintangibles assets whichthat have a declining amortization rate over timetime. basedThe upondecrease projectedwas cashpartially flowsoffset toby beaccelerated generateddepreciation fromof thesefixed contracts.assets disposed in connection with the assignment of an office lease in the second quarter of 2025.
Other gain, net was $74.5 million in 2025 and $58.7 million in 2024, reflecting predominantly unrealized fair value changes in financial assets and financial liabilities.
The net gain in 2025 was driven by (i) realized gain of $6.8 million from partial disposition of an investment by a consolidated fund and a write-up in value of the remaining investment totaling $43.8 million, and (ii) fair value increase in marketable equity securities held by consolidated funds ($9.6 million).
What changed in the latest 10-Q
Risk Factors
New heading “Risks Related to the SoftBank Merger and the ArcLight Acquisition”
New heading “The SoftBank Merger and/or the ArcLight Acquisition may not be completed on the terms or timelines currently contemplated or at all.”
New heading “An adverse judgment in one or more lawsuits challenging the SoftBank Merger and/or the ArcLight Acquisition, should they occur, may prevent such transactions from becoming effective or from becoming effective within the expected timeframes, and may result in significant costs and divert management’s attention and resources.”
New heading “Failure to consummate the proposed SoftBank Merger and/or the ArcLight Acquisition could have a material adverse impact on our business, results of operations and financial condition.”
New heading “Uncertainty regarding the completion of the SoftBank Merger and/or the ArcLight Acquisition may adversely impact our ability to maintain relationships with investors and business partners and may adversely affect our ability to attract and retain key employees.”
Largest changes
“An adverse judgment in one or more lawsuits challenging the SoftBank Merger and/or the ArcLight Acquisition, should they occur, may prevent such transactions from becoming effective or from becoming effective within the expected timeframes, and may result in significant costs and divert management’s attention and resources.”see in full comparison
“Stockholders may file lawsuits challenging the SoftBank Merger, the ArcLight Acquisition or the other transactions contemplated by the SoftBank Merger Agreement or the ArcLight Agreement, as applicable, which may name the Company, members of the board of directors or others as defendants. No assurance can be made as to the outcome of such lawsuits, should they occur, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims. …”see in full comparison
“The consummation of the SoftBank Merger and the ArcLight Acquisition are each subject to certain closing conditions, including among other things: (a) expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and the receipt of certain non-U.S. antitrust approvals; (b) the receipt of certain required consents or approvals, including, among others, from (i) the Committee on Foreign Investment in the United States and the applicable regulators in certain non-U.S. …”see in full comparison
“Uncertainty regarding the completion of the SoftBank Merger and/or the ArcLight Acquisition may adversely impact our ability to maintain relationships with investors and business partners and may adversely affect our ability to attract and retain key employees.”see in full comparison
“Failure to consummate the proposed SoftBank Merger and/or the ArcLight Acquisition could have a material adverse impact on our business, results of operations and financial condition.”see in full comparison
“The SoftBank Merger and/or the ArcLight Acquisition may not be completed on the terms or timelines currently contemplated or at all.”see in full comparison
Full comparison: every changed paragraph (15)
ThereExcept as set forth below, there have been no material changes from the risk factors previously disclosed in response to "Part I—Item 1A. Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2025, which is available on the SEC’sSEC's website at www.sec.gov. In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Risks Related to the SoftBank Merger and the ArcLight Acquisition
The SoftBank Merger and/or the ArcLight Acquisition may not be completed on the terms or timelines currently contemplated or at all.
The consummation of the SoftBank Merger and the ArcLight Acquisition are each subject to certain closing conditions, including among other things: (a) expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and the receipt of certain non-U.S. antitrust approvals; (b) the receipt of certain required consents or approvals, including, among others, from (i) the Committee on Foreign Investment in the United States and the applicable regulators in certain non-U.S. jurisdictions under foreign investment laws, (ii) the Federal Energy Regulatory Commission, (iii) the Federal Communications Commission, (iv) the Monetary Authority of Singapore, (v) the UK Financial Conduct Authority, and (vi) the European Union under the EU Foreign Subsidies Regulation 2022/2560; (c) the absence of legal restraints prohibiting the SoftBank Merger and/or the ArcLight Acquisition, as applicable; (d) the absence of certain materially adverse conditions or remedies imposed in connection with the foregoing regulatory approvals; and (e) the receipt of required consents for investment funds and clients, as applicable, as well as other customary closing conditions. There can be no assurance that such conditions will be satisfied in a timely manner or at all, or that an effect, event, development or change will not transpire that could delay or prevent these conditions from being satisfied. While many of the required governmental approvals for the SoftBank Merger and the ArcLight Acquisition have been obtained, certain governmental agencies may not approve the SoftBank Merger, the ArcLight Acquisition and/or the related transactions necessary to complete the SoftBank Merger and/or the ArcLight Acquisition, or may impose conditions to the approval of such transactions or require changes to the terms of such transactions. Any such conditions or changes could have the effect of delaying completion of the SoftBank Merger and/or the ArcLight Acquisition, or imposing costs on or limiting the operation of the Company's business following the SoftBank Merger and/or the ArcLight Acquisition, and such conditions or changes could lead to the termination of the SoftBank Merger Agreement and/or the ArcLight Agreement.
An adverse judgment in one or more lawsuits challenging the SoftBank Merger and/or the ArcLight Acquisition, should they occur, may prevent such transactions from becoming effective or from becoming effective within the expected timeframes, and may result in significant costs and divert management’s attention and resources.
Stockholders may file lawsuits challenging the SoftBank Merger, the ArcLight Acquisition or the other transactions contemplated by the SoftBank Merger Agreement or the ArcLight Agreement, as applicable, which may name the Company, members of the board of directors or others as defendants. No assurance can be made as to the outcome of such lawsuits, should they occur, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims. If plaintiffs are successful in obtaining an injunction prohibiting the parties from completing the SoftBank Merger or the ArcLight Agreement on the applicable agreed-upon terms, such an injunction may delay the completion of the SoftBank Merger and/or the ArcLight Acquisition, in the expected timeframe, or may prevent such transactions from being completed altogether. Whether or not any plaintiff’s claim is successful, this type of litigation may result in significant costs and diverts management’s attention and resources, which could adversely affect the operation of our business.
Failure to consummate the proposed SoftBank Merger and/or the ArcLight Acquisition could have a material adverse impact on our business, results of operations and financial condition.
In the event the SoftBank Merger and/or the ArcLight Acquisition are not completed, we will be subject to a number of risks without realizing any of the benefits of having completed such transactions, including the following:
•Because consummation of the ArcLight Acquisition is conditioned upon prior completion of the SoftBank Merger, if the SoftBank Merger is not completed, the ArcLight Acquisition likewise will not be consummated and we will not realize any of its anticipated benefits;
•We may be required to pay a termination fee of $96 million if the SoftBank Merger is terminated under qualifying circumstances and/or a termination fee of $30 million if the ArcLight Agreement is terminated under qualifying circumstances, in each case as described in the SoftBank Merger Agreement or ArcLight Agreement, as applicable;
•We have incurred and will continue to incur substantial costs relating to the SoftBank Merger and the ArcLight Acquisition, such as financial advisor, legal, accounting, and, with respect to the ArcLight Acquisition, debt financing costs and fees, regardless of whether the SoftBank Merger and the ArcLight Acquisition are completed;
•Time and resources committed by management to matters relating to the SoftBank Merger and the ArcLight Acquisition (including integration planning) could otherwise have been devoted to pursuing other beneficial opportunities; and
•The market price of our common stock could decline to the extent that the current market price reflects a market assumption that the SoftBank Merger will be completed. If the SoftBank Merger and/or the ArcLight Acquisition are not completed, the Company cannot assure its stockholders that the risks described above will not materialize and will not materially affect the Company’s business and financial results or the market price of our securities.
Uncertainty regarding the completion of the SoftBank Merger and/or the ArcLight Acquisition may adversely impact our ability to maintain relationships with investors and business partners and may adversely affect our ability to attract and retain key employees.
The SoftBank Merger and the ArcLight Acquisition will each be consummated only if stated conditions are met, many of which are beyond our control, and may not be completed on the terms or timeline currently contemplated or at all. As a result, there may be uncertainty regarding the completion of the SoftBank Merger and/or the ArcLight Acquisition. This uncertainty may cause some of our investors and business partners to delay or defer decisions or to end their relationships with us, which could negatively affect our revenues, earnings and cash flows, regardless of whether the SoftBank Merger and/or the ArcLight Acquisition are completed. Uncertainty regarding the completion of the SoftBank Merger and/or the ArcLight Acquisition may also foster uncertainty among employees about their future roles. This may adversely affect our ability to attract and retain key personnel, which could have an adverse effect on our ability to generate revenue at anticipated levels prior to the completion of the SoftBank Merger and/or the ArcLight Acquisition.
Management's Discussion & Analysis (MD&A)
New heading “DBRG's Proposed Acquisition of ArcLight”
Largest changes
“Administrative and other expenses in the first quarter was $3.8 million higher at $19.7 million in 2026 compared to $15.9 million in 2025. The expense in 2025 had been netted down by $10.6 million of insurance recoveries related to litigation costs incurred in prior years, but that was partially offset by a loss accrual related to an employment arbitration ($5.3 million) and fund placement fees ($0.6 million) in 2025. …”see in full comparison
“Administrative and other expenses were $10.3 million higher at $21.8 million in the quarter-to-date comparison and $14.1 million higher at $41.5 million in the year-to-date comparison. In 2025, expenses were netted down by insurance recoveries related to litigation costs incurred in prior years ($7.6 million quarter-to-date and $18.8 million year-to-date), and also included estimated loss related to an employment arbitration (net reduction of $3.1 million quarter-to-date and net accrual of $2.2 million year-to-date). …”see in full comparison
“Discontinued operations had net loss of $0.4 million and $5.9 million in the three and six months ended June 30, 2026, respectively, and net gain of $1.6 million and net loss of $2.5 million in the three and six months ended June 30, 2025. 2026 included a litigation related contingent loss, while 2025 included primarily an accrued loss for a state tax audit that was partially reversed in 2026 upon settlement.”see in full comparison
“The effect of discontinued operations was a net loss of $5.5 million in 2026 and $4.2 million in 2025 in the first quarter. 2025 included primarily an accrual for a state tax audit, which was partially reversed in 2026 upon settlement, while 2026 included a litigation related contingent loss.”see in full comparison
“Interest expense was $5.5 million and $9.0 million in the three and six months ended June 30, 2026, an increase of $0.9 million and $0.6 million, respectively, due to higher interest rate on our replacement senior notes issued in May 2026.”see in full comparison
Full comparison: every changed paragraph (83)
In this Quarterly Report, unless specifically stated otherwise or the context indicates otherwise, the terms " the "Company," "DBRG," "we," "our" and "us" refer to DigitalBridge Group, Inc. and its consolidated subsidiaries. References to the “Operating Company” and the “OP” refer to DigitalBridge Operating Company, LLC, a Delaware limited liability company and the operating company of the Company, and its consolidated subsidiaries.
We are a leading global investment manager in digital infrastructure, deploying and managing capital across the digital ecosystem, including data centers, cell towers, and fiber networks. Our diverse global investor base includes public and private pensions, sovereign wealth funds, other asset managers, insurance companies, and endowments. At MarchJune 31,30, 2026, we had $40.8$40.2 billion of fee earning equity under management ("FEEUM").
Our head office is in Boca Raton, Florida, with key offices in New York, London, Luxembourg and Singapore. At MarchJune 31,30, 2026, we had 311303 employees.
We operate as a taxable C Corporation and conduct substantially all of our activities and hold substantially all of our assets and liabilities through our Operating Company. As sole managing member, we own 97%98% of the Operating Company at MarchJune 31,30, 2026.
SoftBank's Proposed Acquisition of DBRG
On December 29, 2025, DBRG, the Operating Company and indirect subsidiaries of SoftBank entered into the SoftBank Merger Agreement pursuant to which, among other things, DBRG and the Operating Company would be acquired by such indirect subsidiaries through a series of mergers.
SoftBank, through its indirect subsidiaries, will acquire all of (i) DBRG's issued and outstanding common stock and (ii) the OP common units that are not held by DBRG and the Operating Company (unless otherwise agreed by a holder of OP units and SoftBank through its indirect subsidiary), for $16.00 per share or per unit in cash. The preferred stock of DBRG and the Operating Company will remain outstanding. WarrantsAll warrants to purchase DBRG's common stock willhave beeither treatedbeen exercised or otherwise expired in accordanceJuly with the terms of the applicable warrant agreements.2026.
Consummation of the MergerThe required approval byor DBRG’s common stockholders, which was received on April 23, 2026, and is subject to certain other closing conditions, including receipt of required consentsconsent for the Company’sSoftBank Merger has been received from DBRG's common stockholders and from the Company's flagship investment funds and from a specified percentage of fee-paying clientsclients. As of the Company,date andof this filing, consummation of the SoftBank Merger is still subject to receipt of regulatory approvals,approvals asand wellsatisfaction asof customary closing conditions.
The SoftBank Merger Agreement contains customary termination rights for both parties, including, among others, the right of either party to terminate the SoftBank Merger Agreement if the SoftBank Merger is not consummated on or before March 29, 2027, which may be extended by either party by up to 90 days if the closing conditions related to required regulatory approvals or absence of legal restraints prohibiting the SoftBank Merger have not been satisfied or waived but all other conditions (other than those that by their nature are to be satisfied by actions taken at the closing) have been satisfied or waived. Under certain limited circumstances, the Company or SoftBank (through its indirect subsidiary) may be required to pay a termination fee of $96 million and $154 million, respectively, pursuant to the SoftBank Merger Agreement in connection with such termination.
Subject to conditions set forth in the SoftBank Merger Agreement, the SoftBank Merger is expected to be completed in the second half of 2026. Following consummation of the SoftBank Merger, the Company will become an indirect, wholly-ownedindirect subsidiary of SoftBank, but will continue to operate as a separately managed platform.
There can be no assurance that the SoftBank Merger will be consummated. Risks and uncertainties associated with the SoftBank Merger are discussed in Part I,II, Item 1A, “Risk Factors—Risks Related to the SoftBank Merger and the ArcLight Acquisition” in ourthis annualquarterly report on Form 10-K.10-Q. All forward-looking statements herein do not take into account the impact of, or give any effect to, the SoftBank Merger.
Additional information related to the SoftBank Merger Agreement is included in our Current Report on Form 8-K filed on December 30, 2025.2025 and our Current Report on Form 8-K filed on April 23, 2026.
DBRG's Proposed Acquisition of ArcLight
On May 23, 2026, DBRG and its subsidiaries entered into a definitive agreement to acquire ArcLight, a leading specialist investor in power and electric infrastructure, for a total purchase price of up to $1.05 billion. The consideration is composed of a base purchase price of $650 million plus a contingent consideration of up to $400 million payable based upon annual ArcLight earnings for each fiscal year from 2027 through 2029.
The ArcLight Acquisition will be funded through a combination of cash on hand and debt financing. In connection therewith, the Company has obtained a commitment for a secured bridge loan facility of up to $500 million. The Company expects that any amounts drawn therefrom will be refinanced through issuance of additional senior notes under its securitization facility.
The ArcLight Acquisition is conditioned upon closing of the SoftBank Merger, and is subject to customary closing conditions, including regulatory approvals and consents from limited partners of ArcLight funds.
The ArcLight Acquisition is subject to customary termination rights, including, among others, (a) the right of either party to terminate (i) if the ArcLight Acquisition is not consummated on or before the later of March 31, 2027 and six months after consummation of the SoftBank Merger (subject to extension in certain circumstances) or (ii) if the SoftBank Merger is validly terminated in accordance with its terms; and (b) the right of ArcLight to terminate (i) if the SoftBank Merger is not consummated on or before March 31, 2027 or (ii) if the ArcLight Acquisition is not consummated on or before March 31, 2027 (subject to extension in certain circumstances, and at such time all other conditions to closing are satisfied or capable of being satisfied, including consummation of the SoftBank Merger, except for receipt of certain regulatory approvals related to the ArcLight Acquisition). With respect to a termination under certain limited circumstances, the Company may be subject to a termination fee of $30 million.
There can be no assurance that the ArcLight Acquisition will be consummated. Risks and uncertainties associated with the ArcLight Acquisition are discussed in Part II, Item 1A, “Risk Factors—Risks Related to the SoftBank Merger and the ArcLight Acquisition” in this quarterly report on Form 10-Q. All forward-looking statements herein do not take into account the impact of, or give any effect to, the ArcLight Acquisition.
Additional information related to the ArcLight Acquisition is included in our Current Report on Form 8-K filed on May 27, 2026.
Certain performance metrics for our key investment funds from inception through MarchJune 31,30, 2026 are presented in the table below. Excluded are funds with less than one year of performance history as of MarchJune 31,30, 2026, funds and separately managed accounts in the liquid strategy, co-investment vehicles and separately capitalized portfolio companies. The historical performance of our funds is not indicative of their future performance nor indicative of the performance of our other existing funds or of any of our future funds. An investment in DBRG is not an investment in any of our funds and these fund performance metrics are not indicative of the performance of DBRG.
(2) Inception date represents first close date of the fund, except for Credit Ifunds which is the first capital call date. The manager/general partner of the InfraBridge funds were acquired in February 2023.
InTotal revenues were $508.7 million and $580.9 million in the firstthree quarter,and six months ended June 30, 2026, respectively. In 2025, total revenues were $72.2negative $3.2 million in 2026the three months ended June 30, 2025, and $45.4positive $42.2 million in the six months ended June 30, 2025. The changes in total revenues were driven by variability in unrealized carried interest reversals(which could be subject to reversal) and unrealized principal investment income, both of which are a function of fair value changes in the underlying investments of our funds.
Fee revenue was $2.6 million or 3% higher at $87.8 million in the quarter-to-date comparison, but largely consistent at $175.1 million in the year-to-date comparison.
The higher fees in the second quarter of 2026 can be attributed mainly to deal transaction fees. While capital raises and deployments since July 2025 contributed additional fees, this was partially offset by the absence of catch-up fees in 2026 from our third flagship fund (which had its final closing in October 2025) and the effect of investment realizations.
Fee revenue in the first quarter was $2.8 million or 3% lower, at $87.3 million in 2026.
Year over year, FEEUM increased $3.5 billion or 9% to $40.8 billion at March 31, 2026 (from $37.3 billion at March 31, 2025).
The lower fee revenue can be attributed to the absence of catch-up fees in 2026 from our third flagship fund, which was partially offset by higher recurring fees from capital raised during 2025 prior to the final closing of the fund in October 2025. There was also additional capital deployment in other funds and new capital raised for co-investment vehicles that contributed incremental fees in 2026.
Carried interest allocation represents gross carried interest from our general partner interests in sponsored investment vehicles prior to allocations to management and a third party participation interest. Unrealized carried interest is subject to adjustments each period, including reversals, based upon the extent to which cumulative performance of the funds, which are driven by underlying investments that are measured at fair value, exceed their minimum return hurdles. SeeWhen investment fair values fall below fund return hurdles or remain constant and preferred returns on unreturned capital accumulate, this may result in a reversal of unrealized carried interest previously recognized. The resulting effects may be further exacerbated given the early lifecycle of our funds. This is described further in Note 3 to the consolidated financial statements.
In 2025, distributedDistributed carried interest arosewas from$9.4 amillion secondaryin salethe second quarter of equity2026 by(of which our DataBankshare portfolionet companyof management allocation was $3.8 million) and $2.5 million in Februarythe 2025,first quarter of 2025 (of which our share net of management allocation was $0.9 million.million), with the higher amount in 2026 contributed by our credit fund.
Unrealized carried interest saw a large positive swing in 2026 driven by fair value increases in data center investments held primarily by our co-investment vehicles.
When the fair value of fund investments fall below return hurdles or remain constant and preferred returns on unreturned capital accumulate, this may result in a reversal of unrealized carried interest previously recognized. The resulting effects are further exacerbated given the early lifecycle of our funds.
Unrealized carried interest in the 2026 year-to-date period also included an incremental obligation to clawback carried interest of $7.7 million assuming a hypothetical liquidation of a carry paying fund at its March 31, 2026 estimated fair value.fund. Of this amount, $6.8 million would be recoverable from current and former employees and a third party participation interest, resulting in an incremental liability to the Company of $0.9 million in the first quarter of 2026.
Principal investment income represents the Company's proportionate share of net income (loss) from investments in its sponsored investment vehicles. Changes each period are driven predominantly by unrealized gainIncome (loss) fromon changesprincipal ininvestments fairis valuerealized generally when all or a portion of underlyingan fundinvestment investments.is disposed, redeemed or repaid or if the Company no longer retains control, or when the Company receives income such as dividends, interest or other distributions of earnings.
Realized principal investment incomeloss in boththe yearssecond included distributionsquarter of interest2025 was driven by a $40.3 million loss from a portfolio company in an InfraBridge fund that pertained to invested capital funded in prior years. In the 2025 year-to-date period, this loss was more than offset by realized income from ourother creditinvestments, funds. 2025 also includedprimarily $34.0 million of income distribution in connection with a secondary sale of equity by our DataBank portfolio company.
In 2026, the large unrealized principal investment income can be attributed to fair value increases in data center investments in the second quarter, held primarily by our co-investment vehicles.
Other income saw marginal increases of $0.8 million to $7.0 million in the quarter-to-date comparison and $0.4 million to $12.1 million in the year-to-date comparison. The increases resulted from higher interest income from corporate cash and from consolidated liquid funds in both periods under comparison, while cost reimbursements from managed investment vehicles were higher in the quarter-to-date comparison ($0.5 million) but lower in the year-to-date comparison ($0.6 million).
Total expenses were $274.9 million and $32.4 million in the three months ended June 30, 2026 and 2025, respectively, and $343.7 million and $87.7 million in the six months ended June 30, 2026 and 2025, respectively. The significant increase in both periods is driven by higher unrealized carried interest compensation, which is a function of changes in unrealized fair value of underlying fund investments.
Other income decreased $0.4 million to $5.1 million. This was driven by lower cost reimbursements from managed investment vehicles that are presented gross as income and expense ($1.1 million), partially offset by a net increase in other income (interest and dividends) from our consolidated liquid funds ($0.4 million).
Total expenses were $68.8 million in 2026 and $55.3 million in 2025. The increase can be attributed to higher compensation and transaction costs in 2026 while 2025 administrative cost was net of insurance recoveries.
The increase in cash compensation for both periods under comparison is driven by higher accruals of performance based incentive compensation, as well as severance and retention costs. Additionally, cash compensation and incentive fee compensation increased in the year-to-date comparison due to an incentive arrangement tied to income earned in prior periods.
Equity-based compensation was lower in both periods under comparison, driven by timing of annual equity award grants which occurred in June this year compared to March in prior years and a reduction in accelerated vesting.
The higher cash and incentive fee compensation in 2026 can be attributed primarily to an incentive arrangement tied to income earned in prior periods.
The net reversal of carriedCarried interest compensation in bothall periods were consistent with thecarried changesinterest allocation (reversal) recognized in carriedthe interest,corresponding period, as discussed in the revenue section above.
Administrative and other expenses were $10.3 million higher at $21.8 million in the quarter-to-date comparison and $14.1 million higher at $41.5 million in the year-to-date comparison. In 2025, expenses were netted down by insurance recoveries related to litigation costs incurred in prior years ($7.6 million quarter-to-date and $18.8 million year-to-date), and also included estimated loss related to an employment arbitration (net reduction of $3.1 million quarter-to-date and net accrual of $2.2 million year-to-date). Excluding these discrete items in 2025, expenses were largely consistent in both periods under comparison.
Administrative and other expenses in the first quarter was $3.8 million higher at $19.7 million in 2026 compared to $15.9 million in 2025. The expense in 2025 had been netted down by $10.6 million of insurance recoveries related to litigation costs incurred in prior years, but that was partially offset by a loss accrual related to an employment arbitration ($5.3 million) and fund placement fees ($0.6 million) in 2025. The increase in 2026 can also be attributed to higher third party professional service costs, including reimbursable costs incurred on behalf of our managed investment vehicles, partially offset by lower litigation costs ($1.1 million) and lower fund organizational and diligence costs in 2026 ($1.3 million).
Interest expense was $5.5 million and $9.0 million in the three and six months ended June 30, 2026, an increase of $0.9 million and $0.6 million, respectively, due to higher interest rate on our replacement senior notes issued in May 2026.
Interest expense was $0.4 million lower at $3.5 million due to lower unused fees following a reduction in the VFN borrowing capacity in June 2025.
Transaction-related costs were $6.2 million and $20.4 million in the three and six months ended June 30, 2026, an increase of $2.0 million and $11.7 million, respectively, reflecting costs incurred related to the Company's two pending acquisition transactions, separately as acquiree and acquirer.
Transaction-related costs was $9.7 million higher at $14.2 million, which includes cost attributed to the proposed acquisition of DBRG.
Depreciation and amortization expense decreasedwas $1.9$5.5 million and $10.8 million in the three and six months ended June 30, 2026, a decrease of $3.1 million and $5.0 million, respectively, attributed to (i) management contract intangibles that have a declining amortization rate over time.time, and (ii) accelerated depreciation of fixed assets disposed in connection with the assignment of an office lease in the second quarter of 2025.
In the first quarter, 2026 recorded an otherOther gain, net ofwas $4.1$4.5 million whileand 2025$8.5 recordedmillion anin otherthe loss,three netand ofsix $0.5months million,ended June 30, 2026, respectively, and $9.1 million and $8.5 million in the three and six months ended June 30, 2025, respectively, reflecting predominantly unrealized fair value changes in financial assets and financial liabilities in both periods,liabilities, related primarilylargely to our consolidated funds.
Income tax expense was immaterial in 2026all andperiods $0.3under million in 2025.comparison. The Company has operating losses and capital loss carryforwards that can be applied against current income tax expense for its domestic entities, and the deferred tax assets of these entities are currently subject to a full valuation allowance, resulting in an immaterial income tax impact for its domestic entities. With respect to the Company's foreign subsidiaries, the resulting foreign income tax impact remains immaterial, driven largely by its U.K. subsidiaries.
Discontinued operations had net loss of $0.4 million and $5.9 million in the three and six months ended June 30, 2026, respectively, and net gain of $1.6 million and net loss of $2.5 million in the three and six months ended June 30, 2025. 2026 included a litigation related contingent loss, while 2025 included primarily an accrued loss for a state tax audit that was partially reversed in 2026 upon settlement.
The effect of discontinued operations was a net loss of $5.5 million in 2026 and $4.2 million in 2025 in the first quarter. 2025 included primarily an accrual for a state tax audit, which was partially reversed in 2026 upon settlement, while 2026 included a litigation related contingent loss.
FRE was $26.6 million for the second quarter of 2026, compared to $32.0 million for the second quarter of 2025, a decrease of $5.4 million. The decrease was driven by an $8.0 million increase in operating costs, principally compensation expense, partially offset by a $2.7 million increase in fee revenue largely attributable to investment origination fees earned in 2026. While 2026 had higher recurring fees from capital raises and deployments that occurred since the third quarter of 2025, this was partially offset by the absence of catch-up fees in 2026 and the effect of investment realizations over time.
In the first quarter, FRE was $24.0 million in 2026, $10.9 million lower than in 2025.
Fee revenue decreased $2.8 million, attributed to the absence of catch-up fees in 2026 from our third flagship fund that had its final closing in October 2025. This was partially offset by higher recurring fees from additional capital raises and deployments. Additionally, operating cost was $8.2 million higher, driven by compensation cost.
DE was $17.8 million for the second quarter of 2026, compared to negative $18.6 million for the second quarter of 2025. The 2025 result reflected a $40.3 million realized principal investment loss from an InfraBridge fund portfolio company, relating to capital funded in prior periods. Excluding that loss, DE for the second quarter of 2025 would have been $21.7 million, and the year-over-year decrease would have been $3.9 million. This decrease was driven by the $5.4 million decline in FRE and lower realized principal investment income, partially offset by $3.8 million of net realized carried interest from our credit fund in 2026.
In the first quarter, DE was $13.4 million in 2026 compared to $54.7 million in 2025. In comparison, 2025 had benefitted from $35 million of realized principal investment income and carried interest received from a secondary sale of equity by our DataBank portfolio company. 2026 also recorded a lower FRE as discussed above.
At MarchJune 31,30, 2026, we had $250$294 million of available corporate cash. This generally represents cash at our OP entity after allocating cash for certain compensatory liabilities, and excludes cash held at subsidiaries of the OP, including cash maintained to satisfy regulatory capital requirements in applicable foreign jurisdictions and cash held by consolidated funds. We also have the full $100 million available to be drawn under our VFN facility.
DBRG insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-30 | Teh Tracey |
Disposition to issuer | 85,503 | $16.00 | $1.4M |
| 2026-09-30 | Goldschein Geoffrey |
Disposition to issuer | 155,001 | $16.00 | $2.5M |
| 2026-09-30 | Curtin Nancy Ann |
Disposition to issuer | 5,515 | $16.00 | $88.2K |
| 2026-09-30 | Wintrob Jay S |
Disposition to issuer | 19,265 | $16.00 | $308.2K |
| 2026-09-30 | Mayrhofer Thomas B |
Disposition to issuer | 283,532 | $16.00 | $4.5M |
| 2026-09-30 | Mccray Gregory James |
Disposition to issuer | 68,751 | $16.00 | $1.1M |
| 2026-09-30 | Tolley David |
Disposition to issuer | 58,997 | $16.00 | $944.0K |
| 2026-09-30 | Jenkins Benjamin J. |
Disposition to issuer | 271,289 | $16.00 | $4.3M |
| 2026-09-30 | Ganzi Marc C |
Disposition to issuer | 2,779,201 | $16.00 | $44.5M |
| 2026-09-30 | Stewart Liam |
Disposition to issuer | 309,373 | $16.00 | $4.9M |
| 2026-09-30 | Reiss Dale Anne |
Disposition to issuer | 92,826 | $16.00 | $1.5M |
| 2026-09-30 | Diefenderfer Jeannie |
Disposition to issuer | 86,074 | $16.00 | $1.4M |
| 2026-06-01 | Teh Tracey |
Grant/award | 25,494 | — | — |
| 2026-06-01 | Tolley David |
Grant/award | 11,190 | — | — |
| 2026-06-01 | Mayrhofer Thomas B |
Grant/award | 127,470 | — | — |
| 2026-06-01 | Ganzi Marc C |
Grant/award | 229,764 | — | — |
| 2026-06-01 | Reiss Dale Anne |
Grant/award | 11,190 | — | — |
| 2026-06-01 | Jenkins Benjamin J. |
Grant/award | 101,976 | — | — |
| 2026-06-01 | Stewart Liam |
Grant/award | 101,976 | — | — |
| 2026-06-01 | Diefenderfer Jeannie |
Grant/award | 11,190 | — | — |
| 2026-06-01 | Goldschein Geoffrey |
Grant/award | 60,548 | — | — |
| 2026-06-01 | Wintrob Jay S |
Grant/award | 11,190 | — | — |
| 2026-06-01 | Mccray Gregory James |
Grant/award | 11,190 | — | — |
| 2026-05-28 | Ganzi Marc C |
Conversion | 2,358,601 | — | — |
Well-known investors holding DBRG (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Soros Fund Management | 2026-06-30 | 4,118,793 | $65.0M | 0.85% | New position |
| Millennium Management (Israel Englander) | 2026-06-30 | 1,290,664 | $20.4M | 0.01% | Reduced 74% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 225,916 | $3.6M | 0.0% | Reduced 15% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 102,854 | $1.6M | 0.0% | Reduced 76% |
| Two Sigma Investments | 2026-06-30 | 45,269 | $714.3K | 0.0% | New position |
| Renaissance Technologies | 2026-06-30 | 34,176 | $539.3K | 0.0% | Reduced 93% |
| D. E. Shaw & Co. | 2026-06-30 | 18,317 | $289.0K | 0.0% | Reduced 28% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 13,096 | $201.9K | — | Sold out |