DigitalBridge Group (DBRG) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01Difficult market and political conditions could adversely impact our business, financial condition and results of operations
2. 02Our business depends in large part on our ability to raise capital from investors. If we were unable to raise such capital, we would be unable to collect management fees or deploy such capital into investments, which would materially reduce our revenues and cash flow and adversely affect our financial condition
3. 03The investment management business is intensely competitive
4. 04We depend on investors in the funds we manage for the continued success of our business
5. 05Poor performance of our funds would cause a decline in our revenue, and results of operations, which may obligate us to repay performance fees previously paid to us and could adversely affect our ability to raise capital for future funds
6. 06Many parts of our revenues, earnings and cash flow are highly variable, which may make it difficult for us to achieve steady earnings growth on a quarterly basis, which may cause the price of our shares to be volatile
7. 07indicative of our performance in a future period. It may be difficult for us to achieve steady growth in earnings and cash flow on a quarterly basis, which could in turn lead to large adverse movements in the price of our shares or increased volatility in the price of our shares in general
8. 08Our investments in digital infrastructure may expose us to risks inherent in the ownership and operation of digital infrastructure
9. 09Our investments in infrastructure assets, including through our InfraBridge funds, may expose us to increased risks that are inherent in the ownership of real assets
10. 10Our operations in Europe, Asia, Latin America and other foreign markets expose our business to risks inherent in conducting business in foreign markets
11. 11Rapid growth of our businesses, particularly outside the U.S., may be difficult to sustain and may place significant demands on our administrative, operational and financial resources
12. 12We may not be able to manage our expanding operations effectively or be able to continue to grow, and any failure to do so could adversely affect our ability to generate revenue and control our expenses
13. 13The organization and management of our current and future investment vehicles may create conflicts of interest
14. 14Conflicts of interest may also arise in the allocation of fees and costs among our managed companies that we incur in connection with the management of their assets. This allocation sometimes requires us to exercise discretion and there is no guarantee that we will allocate these fees and costs appropriately
15. 15We may expand into new investment strategies, geographic markets and businesses, each of which may result in additional risks and uncertainties in our businesses
16. 16We do not directly control the operations of our portfolio companies and are therefore dependent on portfolio company management teams to successfully operate their businesses
17. 17We often pursue investment opportunities that involve business, regulatory, legal or other complexities and the failure to successfully manage such risks could have a material adverse effect on our business, results of operations and financial condition
18. 18Our funds may be forced to dispose of investments at a disadvantageous time
19. 19Climate change and regulatory and other efforts to reduce climate change could adversely affect our business
20. 20We are subject to focus by our fund investors, our stockholders, regulators and other stakeholders on environmental, social and governance matters
21. 21within secure environments. Artificial intelligence technologies are susceptible to errors and other malfunctions which

Risks Related to Our Organizational Structure and Business Operations

1. 22We depend on our key personnel, and the loss of their services or the loss of investor confidence in such personnel could have a material adverse effect on our business, results of operations and financial condition
2. 23There may be conflicts of interest between us and our Chief Executive Officer and certain other former senior DBH employees that could result in decisions that are not in the best interests of our stockholders
3. 24be on terms as favorable to us as they would have been if they had been negotiated among unrelated parties. In addition, such transactions may result in future conflicts of interest if the continuing interests of the Former DBH Employees in the transaction (if any) are not aligned with the Company's
4. 25We may not realize the anticipated benefits of our strategic partnerships and joint ventures
5. 26We are subject to substantial litigation risks and may face significant liabilities and damage to our professional reputation as a result of litigation allegations and negative publicity
6. 27Misconduct by our current and former employees, directors, advisers, third party-service providers or others affiliated with us could harm us by impairing our ability to attract and retain investors and by subjecting us to significant legal liability, regulatory scrutiny and reputational harm
7. 28We have been and may continue to be subject to the actions of activist stockholders, which could cause us to incur substantial costs, divert management's attention and resources, and have an adverse effect on our business

Risks Related to Financing

1. 29Increases in interest rates could adversely affect the value of our investments and cause our interest expense to increase, which could result in reduced earnings or losses and negatively affect our profitability as well as the cash available for distribution to our stockholders
2. 30We may not be able to generate sufficient cash flow to meet all of our existing or potential future debt service obligations
3. 31The securitization transaction documents impose certain restrictions on our activities or the activities of our subsidiaries, and the failure to comply with such restrictions could adversely affect our business
4. 32The securitized debt instruments issued by certain of our wholly-owned subsidiaries have restrictive terms, and any failure to comply with such terms could result in default, which could adversely affect our business
5. 33Our use of leverage to finance our businesses exposes us to substantial risks

Risks Related to Ownership of Our Securities

1. 34The market price 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
2. 35We may issue additional equity securities, which may dilute your interest in us
3. 36Our board of directors may modify our authorized shares of stock of any class or series and may create and issue a class or series of common stock or preferred stock without stockholder approval
4. 37An investment in our shares is not an investment in any of the funds we manage, and the assets and revenues of such funds are not directly available to us

Risks Related to Our Incorporation in Maryland

1. 38Certain provisions of Maryland law could inhibit changes in control
2. 39Conflicts of interest may exist or could arise in the future with the OP and its members, which may impede business decisions that could benefit our stockholders

Regulatory Risks

1. 40Extensive regulation in the United States and abroad affects our activities, increases the cost of doing business and creates the potential for significant liabilities that could adversely affect our business and results of operations
2. 41registration under the 1940 Act will limit our ability to make certain investments or change the relevant mix of our investments
3. 42Privacy and data protection regulations are complex and rapidly evolving areas. Any failure or alleged failure to comply with these laws could harm our business, reputation, financial condition, and operating results

Risks Related to Taxation

1. 43Our obligations to pay income taxes increased as a result of no longer qualifying for REIT status, effective January 1, 2022
2. 44We may fail to realize the anticipated benefits of becoming a taxable C Corporation or those benefits may take longer to realize than expected
3. 45Our ability to use capital loss and NOL carryforwards to reduce future tax payments may be limited
4. 46We 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
5. 47We could be subject to increased taxes if the tax authorities in various international jurisdictions were to modify tax rules and regulations on which we have relied in structuring our international investments
6. 48There is a risk of changes in the tax law applicable to an investment in us