AlTi Global (ALTI) risk factors, FY2025 10-K

Risks Related to Macroeconomic Conditions

1. 01Difficult market and political conditions may reduce the value or hamper the performance of the investments made by our investment products and services or impair the ability of our investment products and services to raise or deploy capital
2. 02Inflation may adversely affect the business, results of operations and financial condition of our investment products and services
3. 03Higher interest rates could have a material adverse effect on our business and that of our investment products and services’ portfolio companies
4. 04Changes in market and economic conditions could lower the value of assets on which we earn revenue and could decrease the demand for our investment solutions and services
5. 05The results of events or concerns that involve one or more of these factors could include a variety of material and adverse impacts on our current and projected business operations, our financial condition, and results of operations

Risks Related to our Business and Industry

1. 06specifically impact the capital available for expansion and/or business initiative efforts to grow or scale the businessNew
2. 07We are a holding company and our only material asset is our interest in our subsidiaries, and we are accordingly dependent upon distributions made by our subsidiaries to pay taxes, make payments under the Tax Receivable Agreement and pay dividends
3. 08The success of our business depends on the identification and availability of suitable investment opportunities for our clients
4. 09The historical returns attributable to our investment products and services should not be considered as indicative of the future results of our investment products and services or of our future results or of any returns expected on an investment in our Class A Common Stock
5. 10Valuation methodologies for certain assets of our investment products and services can be open to subjectivity
6. 11The due diligence process that we undertake in connection with investments and M&A may not reveal all facts that may be relevant in connection with an investment or acquisition
7. 12Dependence on leverage by certain funds, underlying investment funds and portfolio companies subjects us to volatility and contractions in the debt financing markets and could adversely affect the ability of our funds to achieve attractive rates of return on their investments
8. 13Defaults by third-party investors could adversely affect that fund’s operations and performance
9. 14Our failure to comply with investment guidelines of our clients could result in damage awards against us or a reduction in AUM, either of which would cause our earnings to decline and adversely affect our business
10. 15Investments by most of our funds, as well as by the External Strategic Managers in which we have made strategic investments, will include debt instruments and equity securities of companies that we do not control
11. 16The investment products, services, and investment strategies we currently pursue may expose us to specific market, tax, regulatory and other risks
12. 17Investments made on behalf of our clients may in many cases rank junior to investments made by other investors
13. 18Certain of our investments utilize special situation and distressed debt investment strategies that involve significant risks
14. 19Our investment advisory contracts may be terminated or may not be renewed by investors or fund boards on favorable terms and the liquidation of certain funds may be accelerated at the option of investors
15. 20We may sell our strategic investments in the External Strategic Managers or they may sell their businesses or exercise their rights to purchase our interests
16. 21We may establish fund vehicles in the future to own the existing strategic investments in our External Strategic Managers or to make strategic investments in new External Strategic Managers
17. 22If we are unable to compete effectively, our business and financial condition could be adversely affected
18. 23The anticipated benefits of future acquisitions that we may pursue may not be realized or may take longer than expected to realize
19. 24The administration/insolvency of our International Real Estate Businesses could negatively impact our business, and liabilities arising from intercompany balances could adversely affect our financial resultsNew
20. 25The Administrators have broad powers, including with respect to the realization of assets, including intercompany balances owed to the International Real Estate Businesses, and adjudication of claimsNew
21. 26The potential insolvency of other subsidiaries or affiliated entities could materially adversely affect usNew
22. 27Potential conflicts of interest may arise in the allocation of investment opportunities among funds
23. 28Conflicts of interest may arise in our allocation of costs and expenses, and we are subject to increased regulatory scrutiny and uncertainty with regard to those allocations
24. 29Additional and unpredictable conflicts of interests may rise in the future
25. 30We have implemented procedures to mitigate potential conflicts of interest and address certain regulatory requirements that prevent us from fully realizing potential synergies across our various businesses
26. 31Failure to properly disclose conflicts of interest could harm our reputation, results of operations, financial condition or business
27. 32Additionally, we permit employees, former employees and other parties associated with the firm to invest in or alongside our funds on a no-fee, no-carry basis. These arrangements may create a conflict in connection with investments we make on behalf of our clients
28. 33We pay carried interest and performance-based fees to our investment professionals and other personnel in order to attract and retain them, which may result in a reduction of our revenues and a decrease in our profit margins

Risks Related to Geographical Environment

1. 34Our international operations subject us to numerous risks
2. 35Our operations in Hong Kong may be adversely affected by political and trade tensions between the U.S. and China

Risks Related to Our Regulatory Environment

1. 36We are exposed to litigation risk and subject to regulatory examinations and investigations
2. 37We are subject to extensive government regulation, and our failure or inability to comply with these regulations or regulatory action against us could adversely affect our results of operations, financial condition or business
3. 38We are subject to U.S. foreign investment regulations, which may impose conditions on or limit certain investors’ ability to purchase or maintain our Class A Common Stock41% rewritten
4. 39review any of our past or proposed transactions, including the Business Combination, involving new or existing foreign investors, even if a filing with CFIUS is or was not required at the time of such transactionNew
5. 40Changes in tax law or policy could increase our effective tax rate and tax liability or the taxes payable by investors in our funds or holders of shares of our Common Stock, each of which could have a material adverse effect on our business, financial condition and results of operations
6. 41We may be subject to the excise tax included in the Inflation Reduction Act of 2022 in connection with redemptions of our Class A Common Stock
7. 42Federal, state and foreign anti-corruption, export control and sanctions laws create the potential for significant liabilities and penalties and reputational harm
8. 43Failure to comply with “pay to play” regulations implemented by the SEC and certain states, and changes to the “pay to play” regulatory regimes, could adversely affect our business
9. 44Failure to comply with regulations regarding the prevention of money laundering or terrorism or national security could adversely affect our business38% rewritten
10. 45Financial regulations and changes thereto in the United States could adversely affect our business and the possibility of increased regulatory focus could result in additional burdens and expenses on our business34% rewritten
11. 46disposition of these proposals. At this time, it is unclear whether these proposed rules will be adopted in their current form, modified, or withdrawn altogetherNew
12. 47We are exposed to data and cybersecurity risks that could result in data breaches, service interruptions, harm to our reputation, protracted and costly litigation or significant liability21% rewritten
13. 48If we are not able to satisfy data protection, security, privacy and other government- and industry-specific requirements or regulations, our results of operations, financial condition or business could be harmed56% rewritten
14. 49Confidentiality agreements with employees, consultants, and others may not adequately prevent disclosure of trade secrets and other proprietary information
15. 50We may face damage to our professional reputation and legal liability if our services are not regarded as satisfactory or for other reasons
16. 51Our inability to obtain adequate insurance could subject us to additional risk of loss or additional expenses
17. 52Our controls and procedures may fail or be circumvented, our risk management policies and procedures may be inadequate and operational risks could adversely affect our reputation and financial condition
18. 53If Umbrella were treated as a corporation for U.S. federal, state or local tax purposes, then the amount available for distribution by it could be substantially reduced and our financial condition and results of operations could be adversely affected
19. 54In certain cases, payments under the Tax Receivable Agreement may be accelerated or exceed the actual tax benefits realized by the Company88% rewritten

Risks Related to Personnel

1. 55We rely on our management team to grow our business, and the loss of key management members, or an inability to hire key personnel, could harm our business
2. 56Employee misconduct could harm us by impairing our ability to attract and retain fund investors and subjecting us to significant legal liability, regulatory scrutiny and reputational harm
3. 57Our future growth depends on our ability to attract, retain and develop human capital in a highly competitive talent market

Risks Related to Being a Public Company

1. 58Our management team has limited experience managing a public company
2. 59Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation57% rewritten
3. 60If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our shares or if our results of operations do not meet their expectations, our share price and trading volume could decline
4. 61As a public company, we are subject to laws, regulations and stock exchange listing standards, which will impose additional costs on us and may strain our resources and divert our management’s attention
5. 62If we are deemed an “investment company” subject to regulation under the Investment Company Act, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business71% rewritten
6. 63investment companies with an obligation to register as such pursuant to Section 3(a)(1)(A) of the Investment Company ActNew
7. 64Our quarterly operating results and other operating metrics may fluctuate from quarter to quarter, which makes these metrics difficult to predict
8. 65Any one of the factors above or the cumulative effect of some of the factors above may result in significant fluctuations in our operating results
9. 66Our ability to raise capital in the future may be limited
10. 67The forecasts of market growth and other projections included in this Annual Report may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, we cannot assure you that our business will grow at a similar rate, if at all41% rewritten
11. 68our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholdersNew

Risks Related to Our Strategic Alternatives Review Process

1. 69Our Review of Preliminary Indications of Interest and Potential Strategic Alternatives May Not Result in Any Transaction, and the Announcement or Conduct of Such a Process May Adversely Affect Our BusinessNew
2. 70We may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition and our share price, which could cause you to lose some or all of your investment
3. 71The certificate of incorporation contains certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable
4. 72Our business and operations could be negatively affected if we become subject to any securities litigation or stockholder activism, which could cause us to incur significant expense, hinder execution of business and growth strategy and impact our stock price
5. 73Future resales of shares may cause the market price of our securities to drop significantly, even if our business is doing well