DigitalBridge Group (DBRG) risk factors, FY2025 10-K

Risks Related to the Merger

1. 01The Merger may not be completed on the terms or timeline currently contemplated or at allNew
2. 02An 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 timeframeNew
3. 03Failure to consummate the proposed Merger could have a material adverse impact on our business, results of operations and financial conditionNew
4. 04Uncertainty 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 employeesNew
5. 05The Merger Agreement contains provisions that could discourage a potential competing acquirerNew
6. 06Our directors and executive officers have interests in the Merger that are different from, or in addition to, those of our other stockholdersNew

Risks Related to Our Business

1. 07Difficult market and political conditions could adversely impact our business, financial condition and results of operations
2. 08Our 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. 09The investment management business is intensely competitive
4. 10We depend on investors in the funds we manage for the continued success of our business
5. 11Poor 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. 12Many 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 volatile67% rewritten
7. 13Our investments in digital infrastructure may expose us to risks inherent in the ownership and operation of digital infrastructure
8. 14Our investments in infrastructure assets, including through our InfraBridge funds, may expose us to increased risks that are inherent in the ownership of real assets
9. 15Our operations in Europe, Asia, Latin America and other foreign markets expose our business to risks inherent in conducting business in foreign markets
10. 16Rapid 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
11. 17We 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 expenses60% rewritten
12. 18periodically engage independent valuation firms to assess and validate our valuation models; however, there can be no assurance that these valuations accurately reflect market conditionsNew
13. 19The organization and management of our current and future investment vehicles may create conflicts of interest
14. 20Conflicts 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. 21We may expand into new investment strategies, geographic markets and businesses, each of which may result in additional risks and uncertainties in our businesses
16. 22We 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. 23We 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. 24Our funds may be forced to dispose of investments at a disadvantageous time
19. 25Climate change and regulatory and other efforts to reduce climate change could adversely affect our business
20. 26We are subject to focus by our fund investors, our stockholders, regulators and other stakeholders on environmental, social and governance matters

Risks Related to Our Organizational Structure and Business Operations

1. 27We 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. 28There 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 stockholders60% rewritten
3. 29We 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 systemsNew
4. 30We may not realize the anticipated benefits of our strategic partnerships and joint ventures
5. 31Risks related to emerging and changing technology, particularly artificial intelligence, could have a material adverse effect on our business, financial condition and results of operationsNew
6. 32We 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
7. 33Misconduct 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
8. 34We 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. 35Increases 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. 36We may not be able to generate sufficient cash flow to meet all of our existing or potential future debt service obligations
3. 37The 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. 38The 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. 39Our use of leverage to finance our businesses exposes us to substantial risks

Risks Related to Ownership of Our Securities

1. 40The 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
2. 41We may issue additional equity securities, which may dilute your interest in us
3. 42Our 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. 43An 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 and Our Structure

1. 44Certain provisions of Maryland law could inhibit changes in control
2. 45Conflicts 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. 46Extensive 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 operations31% rewritten
2. 47Privacy 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. 48We may fail to realize the anticipated benefits of becoming a taxable C Corporation or those benefits may take longer to realize than expected
2. 49Our ability to use capital loss and NOL carryforwards to reduce future tax payments may be limited
3. 50We 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
4. 51There is a risk of changes in the tax law applicable to an investment in us