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Exchange Rate Risk
−Removed: We and our funds hold investments that are denominated in foreign currencies that may be affected by movements in the rate of exchange between those currencies and the U.S.
+Added: We and our funds hold cash and investments that are denominated in foreign currencies that may be affected by movements in the rate of exchange between those currencies and the U.S.
Movements in the exchange rate between currencies impact the management fees, carried interest and incentive fees earned by funds with fee paying AUM denominated in foreign currencies as well as by funds with fee paying AUM denominated in U.S.
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Additionally, movements in the exchange rate impact operating expenses for our global offices that transact in foreign currencies and the revaluation of assets and liabilities denominated in non-functional currencies, including cash balances and investments.
−Removed: We manage our exposure to exchange rate risks through our regular operating activities, wherein we utilize payments received in foreign currencies to fulfill obligations in foreign currencies, and, when appropriate, through the use of derivative financial instruments to hedge the net foreign currency exposure in:
−Removed: the funds that we advise;
−Removed: the balance sheet exposure for certain direct investments denominated in foreign currencies;
−Removed: and the cash flow exposure for foreign currencies.
+Added: We manage our exposure to exchange rate risks through our regular operating activities, wherein we utilize payments received in foreign currencies to fulfill obligations in foreign currencies, and, when appropriate, through the use of derivative financial instruments to hedge:
+Added: (i) the net foreign currency exposure in the funds that we advise;
+Added: (ii) the balance sheet exposure for certain direct investments denominated in foreign currencies;
+Added: and (iii) the cash flow exposure for foreign currencies.
A portion of our management fees, carried interest, incentive fees and investments are denominated in foreign currencies that may be affected by movements in the rate of exchange between currencies.
−Removed: We estimate that as of December 31, 2023 a hypothetical 10% decline in the rate of exchange of all foreign currencies against the U.S.
−Removed: dollar would not result in a material change to management fees, carried interest, incentive fees or investments for the year ended December 31, 2023, and would be largely offset by the currency conversions of the expenses denominated in foreign currencies.
+Added: We estimate that a hypothetical 10% decline in the rate of exchange of all foreign currencies against the U.S.
+Added: dollar as of December 31, 2024 would not result in a material change to management fees, carried interest, incentive fees or investments for the year ended December 31, 2024, and would be largely offset by the currency conversions of the expenses denominated in foreign currencies.
Interest Rate Risk
−Removed: Our Credit Facility provides a $1.325 billion revolving line of credit with the ability to upsize to $1.65 billion (subject to obtaining commitments for any such additional borrowing capacity) with a maturity date of March 31, 2027.
−Removed: As of December 31, 2023, we had $895.0 million borrowings outstanding under the Credit Facility.
+Added: Our Credit Facility provides a $1.4 billion revolving line of credit , with an accordion feature of $600.0 million (subject to obtaining commitments for any such additional borrowing capacity) , with a maturity date of March 31, 2029.
+Added: As of December 31, 2024, we had no borrowings outstanding under the Credit Facility.
For a further discussion of our Credit Facility, see “Note 6.
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As credit-oriented investors, we are also subject to interest rate risk through the securities we hold in our Consolidated Funds.
−Removed: A 100 basis point increase in interest rates would be expected to negatively affect the fair value of securities that accrue interest income at fixed rates and therefore negatively impact net change in unrealized gains on investments of the Company and the Consolidated Funds.
+Added: A 100 basis point increase in interest rates would be expected to negatively affect the fair value of securities that accrue interest income at fixed rates and therefore negatively impact net change in unrealized gains on our investments and on the investments of the Consolidated Funds.
The actual impact is dependent on the average duration and the amount of such holdings.
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This would positively impact interest and dividend income but have an offsetting decrease in the fair value of the securities and negatively impact the net change in unrealized gains.
−Removed: In the cases where our funds pay management fees based on NAV, we would expect our segment management fees to experience a change in direction and magnitude corresponding to that experienced by the underlying portfolios.
+Added: In the cases where our funds pay management fees based on NAV, we would expect our management fees to experience a change in direction and magnitude corresponding to that experienced by the underlying portfolios.
We are party to agreements providing for various financial services and transactions that contain an element of risk in the event that the counterparties are unable to meet the terms of such agreements.
In such agreements, we depend on the counterparty to make payment or otherwise perform.
−Removed: We generally endeavor to minimize our risk of exposure by limiting to reputable financial institutions the counterparties with which we enter into financial transactions.
+Added: We generally endeavor to minimize our risk of exposure by limiting to reputable financial institutions as the counterparties with which we enter into financial transactions.
In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.