DigitalBridge Group, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion should be read in conjunction with our unaudited consolidated financial statements and accompanying notes thereto, which are included in Item 1 of this Quarterly Report, as well as information contained in our Annual Report on Form 10-K for the year ended December 31, 2025, which is accessible on the SEC's website at www.sec.gov. 34 Table of Contents 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. Our Business 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 March 31, 2026, we had $40.8 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 March 31, 2026, we had 311 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% of the Operating Company at March 31, 2026. Proposed Acquisition of DBRG On December 29, 2025, DBRG, the Operating Company and indirect subsidiaries of SoftBank entered into the 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. Warrants to purchase DBRG's common stock will be treated in accordance with the terms of the applicable warrant agreements. Consummation of the Merger required approval by DBRG’s common stockholders, which was received on April 23, 2026, and is subject to certain other closing conditions, including receipt of required consents for the Company’s flagship investment funds and from a specified percentage of fee-paying clients of the Company, and receipt of regulatory approvals, as well as customary closing conditions. The Merger Agreement contains customary termination rights for both parties, including, among others, the right of either party to terminate the Merger Agreement if the 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 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 Merger Agreement in connection with such termination. Subject to conditions set forth in the Merger Agreement, the Merger is expected to be completed in the second half of 2026. Following consummation of the Merger, the Company will become an indirect, wholly-owned subsidiary of SoftBank, but will continue to operate as a separately managed platform. There can be no assurance that the Merger will be consummated. Risks and uncertainties associated with the Merger are discussed in Part I, Item 1A, “Risk Factors — Risks Related to the Merger” in our annual report on Form 10-K. All forward-looking statements herein do not take into account the impact of, or give any effect to, the Merger. Additional information related to the Merger Agreement is included in our Current Report on Form 8-K filed on December 30, 2025. Our Investment Management Platform Our investment management platform is anchored by our value-add funds within the DigitalBridge Partners ("DBP") infrastructure equity series. In providing institutional investors access to investments across different segments of the digital infrastructure ecosystem, our investment offerings have expanded to include core equity, credit and liquid securities. • Our DBP series of commingled funds focus on value-add digital infrastructure, investing in and building businesses across the digital infrastructure sector. 35 Table of Contents • Core Equity invests in stabilized digital infrastructure platforms with long-duration cash flow profiles, primarily in more developed geographies, that offer consistent and predictable current yields, through our Strategic Assets Fund ("SAF"). • DigitalBridge Credit is our credit strategy that delivers credit solutions to corporate borrowers in the digital infrastructure sector globally through credit financing products, ranging from first and second lien term loans, and mezzanine debt to preferred equity. • Our Liquid Strategies are fundamental long-only, long-short and market-neutral public equities strategies with well-defined mandates, leveraging the network and intellectual capital of our platform to build liquid portfolios of high quality, undervalued businesses across digital infrastructure, real estate, and technology, media, and telecom. • InfraBridge is a middle market equity investor, specializing in digital infrastructure, energy and digital adjacent areas of traditional infrastructure (predominantly transportation and logistics) via the Global Infrastructure Fund ("GIF") series of funds). Operating Metrics Fee Earning Equity Under Management 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: (In billions) March 31, 2026 December 31, 2025 Fee Earning Equity Under Management DBP Series $ 17.6 $ 17.8 Co-Investment Vehicles 15.3 15.2 InfraBridge 3.6 3.6 Core, Credit and Liquid Strategies 3.3 3.2 Separately Capitalized Portfolio Companies 1.0 1.2 $ 40.8 $ 41.0 The following table summarizes changes in FEEUM: Three Months Ended March 31, 2026 (In billions) Fee Earning Equity Under Management Balance at January 1 $ 41.0 Inflows (1) 0.2 Outflows (2) (0.7) Market activity (3) 0.3 Balance at March 31 $ 40.8 ________ (1) Inflows include closing on new capital raised where fees are earned on committed capital, deployment of capital where fees are earned on invested capital, new subscriptions where fees are based on NAV, other changes in invested capital such as the effect of recapitalization and syndication, and FEEUM from acquired investment vehicles. (2) Outflows include redemptions and withdrawals in Liquid Strategies, realizations where fees are based on invested capital, other changes in invested capital such as the effect of recapitalization and syndication, change in fee basis from committed to invested capital, permanent write-down in investment values, and expiration of fee paying capital. (3) Market activity includes changes in investment value based on NAV or GAV, and the effect of foreign exchange rates. 36 Table of Contents Fund Performance Metrics Certain performance metrics for our key investment funds from inception through March 31, 2026 are presented in the table below. Excluded are funds with less than one year of performance history as of March 31, 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. ($ in millions) Inception Date (2) Total Commitments Invested Capital (3) Available Capital (4) Investment Value MOIC (8) (10) IRR (9) (10) Fund (1) Unrealized (5) Realized (6) Total (7) Gross Net Gross Net Value-Add DBP I Mar-2018 $ 4,059 $ 4,825 $ 219 $ 4,985 $ 1,763 $ 6,748 1.4x 1.3x 8.6% 7.1% DBP II Nov-2020 8,286 8,158 535 10,450 984 11,434 1.4x 1.3x 9.9% 7.6% Core SAF Nov-2022 1,110 1,045 154 988 138 1,126 1.1x 1.0x 3.0% 1.0% InfraBridge GIF I Mar-2015 1,411 1,514 383 905 1,477 2,382 1.6x 1.4x 8.5% 5.6% GIF II Jun-2018 3,382 3,176 243 2,153 595 2,748 0.9x 0.7x <0% <0% Credit Credit I Dec-2022 697 748 380 413 455 868 1.2x 1.1x 12.0% 8.4% __________ (1) Performance metrics are presented in aggregate for main fund vehicle, its parallel vehicles and alternative investment vehicles. (2) Inception date represents first close date of the fund, except for Credit I which is the first capital call date. The manager/general partner of the InfraBridge funds were acquired in February 2023. (3) Invested capital represents the original cost and subsequent fundings to investments. Invested capital includes financing costs and investment related expenses which are capitalized. With respect to InfraBridge funds, such costs are expensed during the period and excluded from their determination of invested capital. (4) Available capital represents unfunded commitments, including recallable capital. (5) Unrealized value represents total fair value of investments, net of outstanding balance under the fund’s credit facility, if any. (6) Realized value represents proceeds from dispositions that have closed and all earnings from both realized and unrealized investments, including interest, dividend and ticking fees. (7) Total value is the sum of unrealized fair value and realized value of investments. (8) Total gross multiple of invested capital ("MOIC") is calculated as the limited partners' portion of the fair value of unrealized investments, net of 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 distributions gross of general partner carried interest, divided by total 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 net MOIC is calculated as the limited partners' portion of the fund's NAV plus limited partner realized distributions net of carried interest, divided by total 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). MOIC calculations exclude capital not subject to fees and/or carried interest, including general partner and general partner affiliate capital. MOICs are calculated at the fund level and do not reflect MOICs at the individual investor level. (9) Gross internal rate of return ("IRR") represents annualized money-weighted return on invested capital based upon total value of limited partner contributions, that is limited partner realized distributions and limited partner unrealized NAV (based upon fair 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 the first capital call from limited partners (and therefore taking into account the use of any credit facility at the fund level) through the date of limited partner distributions for realized investments. For funds with unrealized investments, gross IRR uses a liquidating distribution equal to the limited partners' portion of the fair 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 total fee-paying limited partner level and based upon the timing and amount of fee-paying third party limited partner 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 affiliate. 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.. (10) 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. 37 Table of Contents Results of Operations Three Months Ended March 31, (In thousands) 2026 2025 Change Revenues Fee revenue $ 87,309 $ 90,139 $ (2,830) Carried interest allocation (reversal) (44,729) (55,464) 10,735 Principal investment income 24,586 5,307 19,279 Other income 5,070 5,465 (395) Total revenues 72,236 45,447 26,789 Expenses Compensation expense—cash and equity-based 49,150 46,110 3,040 Compensation expense—incentive fee and carried interest allocation (reversal) (23,140) (22,304) (836) Administrative and other expenses 19,737 15,946 3,791 Interest expense 3,543 3,898 (355) Transaction-related costs 14,168 4,421 9,747 Depreciation and amortization 5,320 7,226 (1,906) Total expenses 68,778 55,297 13,481 Other income (loss) Other gain (loss), net 4,053 (519) 4,572 Income (Loss) before income taxes 7,511 (10,369) 17,880 Income tax benefit (expense) 8 (301) 309 Income (Loss) from continuing operations 7,519 (10,670) 18,189 Income (Loss) from discontinued operations (5,503) (4,185) (1,318) Net income (loss) 2,016 (14,855) 16,871 Net income (loss) attributable to noncontrolling interests: Redeemable noncontrolling interests 1,126 (748) 1,874 Investment entities (19,213) (27,882) 8,669 Operating Company 138 (7) 145 Net income (loss) attributable to DigitalBridge Group, Inc. 19,965 13,782 6,183 Preferred stock dividends 14,660 14,660 — Net income (loss) attributable to common stockholders $ 5,305 $ (878) 6,183 Revenues In the first quarter, total revenues were $72.2 million in 2026 and $45.4 million in 2025. The changes in total revenues were driven by variability in unrealized carried interest reversals and unrealized principal investment income, both of which are a function of fair value changes in the underlying investments of our funds. The key components of revenue are discussed in more detail below. Fee Revenue Three Months Ended March 31, (In thousands) 2026 2025 Change Management fees $ 85,471 $ 77,875 $ 7,596 Management fees—catch up (1) — 11,985 (11,985) Incentive fees 836 6 830 Other fee revenue 1,002 273 729 $ 87,309 $ 90,139 (2,830) __________ (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 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). 38 Table of Contents 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 Three Months Ended March 31, (In thousands) 2026 2025 Change Carried interest Distributed $ — $ 2,470 $ (2,470) Unrealized (44,729) (57,934) 13,205 $ (44,729) $ (55,464) 10,735 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. See Note 3 to the consolidated financial 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. 2026 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. 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 Three Months Ended March 31, (In thousands) 2026 2025 Change Principal investment income (loss) Realized $ 3,464 $ 35,038 $ (31,574) Unrealized 21,122 (29,731) 50,853 $ 24,586 $ 5,307 19,279 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 gain (loss) from changes in fair value of underlying fund investments. Realized principal investment income in both years included distributions of interest income from our credit funds. 2025 also included $34.0 million of income distribution in connection with a secondary sale of equity by our DataBank portfolio company. Other Income 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). 39 Table of Contents Expenses 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. Changes in the various expense items are discussed below. Compensation Expense Three Months Ended March 31, (In thousands) 2026 2025 Change Cash and equity-based compensation Cash compensation $ 41,753 $ 38,490 $ 3,263 Equity-based compensation 7,397 7,620 (223) $ 49,150 $ 46,110 3,040 Incentive fee and carried interest compensation allocation (reversal) Carried interest distributed $ — $ 1,599 $ (1,599) Carried interest unrealized (26,613) (23,907) (2,706) Incentive fees realized 3,473 4 3,469 $ (23,140) $ (22,304) (836) 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 carried interest compensation in both periods were consistent with the changes in carried interest, as discussed above. Administrative and Other Expenses 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 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 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 Depreciation and amortization expense decreased $1.9 million attributed to management contract intangibles that have a declining amortization rate over time. Other Gain (Loss), Net In the first quarter, 2026 recorded an other gain, net of $4.1 million while 2025 recorded an other loss, net of $0.5 million, reflecting predominantly unrealized fair value changes in financial assets and financial liabilities in both periods, related primarily to our consolidated funds. 40 Table of Contents Income Tax Benefit (Expense) Income tax expense was immaterial in 2026 and $0.3 million in 2025. 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. Income (Loss) from Discontinued Operations 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. Non-GAAP Supplemental Financial Measures We report the following non-GAAP financial measures attributable to the Operating Company: Fee Related Earnings (“FRE”) and Distributable Earnings (“DE”). FRE and DE are common metrics utilized in the investment management sector. We present FRE and DE at the Operating Company level, that is, net of amounts attributed to noncontrolling interests, which include (i) carried interest allocation and equity interests held by current and former employees in general partner entities of the Company's sponsored funds; (ii) participation rights held by a third party investor to a share of carried interest and economics in a sponsored fund; and (iii) limited partners of consolidated funds. We believe the non-GAAP financial measures of FRE and DE supplement and enhance the overall understanding of our underlying financial performance and trends, and facilitate comparison among current, past and future periods and to other companies in similar lines of business. We use FRE and DE in evaluating the Company’s ongoing business performance and in making operating decisions. For the same reasons, we believe FRE and DE are useful financial measures to the Company’s investors and analysts. These non-GAAP financial measures should be considered as a supplement to and not an alternative or in lieu of GAAP net income (loss) as measures of operating performance, or to cash flows from operating activities as indicators of liquidity. Our calculation of these non-GAAP measures may differ from methodologies utilized by other companies for similarly titled performance measures and, as a result, may not be fully comparable to those calculated by our peers. Fee-Related Earnings FRE is used to assess the extent to which direct base compensation and core operating expenses are covered by recurring fee revenues in our investment management business. FRE represents recurring fee revenue, including incentive fees that are not subject to realization events related to underlying fund investments, net of compensation and administrative expenses. Such expenses generally exclude non-cash equity-based compensation, carried interest compensation, and placement fee expense. Also, consistent with DE, FRE excludes non-core items, and presents costs reimbursable by our managed funds on a net basis (as opposed to a gross-up of other income and administrative expenses). Fee revenues earned from consolidated funds are eliminated in consolidation. However, because the fees are funded by and earned from third party investors in these consolidated funds who represent noncontrolling interests, our allocated share of net income from the consolidated funds is increased by the amount of fees that are eliminated. The elimination of these fees, therefore, does not affect net income (loss) attributable to DBRG. Accordingly, FRE is presented without giving effect to the elimination of fee revenue to the extent such fees meet the definition of FRE. FRE does not include distributed carried interest as these are not recurring revenues and are subject to variability given that they are dependent upon realization events related to underlying fund investments. Placement fees are also excluded from FRE as they are inconsistent in amount and frequency depending upon timing of fundraising for our funds. Other items excluded from FRE include realized principal investment income (loss); and interest, dividend and other income, all of which are not core to the investment management fee service business. Unlike DE, which is a post-tax measure, FRE is a pre-tax measure and does not incorporate the effect of income taxes. We believe that FRE is a useful measure to investors as it reflects the Company’s profitability based upon recurring fee streams that are not subject to realization events related to underlying fund investments, and without the effects of income taxes, leverage, non-cash expenses, income (loss) items that are unrealized and other items that may not be indicative of core operating results in an investment management fee service business. This allows for better comparability of the Company's profitability on a recurring and sustainable basis and relative to its peers. 41 Table of Contents Distributable Earnings DE generally represents net realized earnings of the Company and is an indicative measure used by the Company to assess ongoing operating performance and in making decisions related to distributions and reinvestments. Accordingly, we believe DE provides investors and analysts transparency into the measure of performance used by the Company in its decision making. DE is an after-tax measure that reflects the ongoing operating performance of the Company’s core business by including earnings that are realized and generally excluding non-cash expenses, other income (loss) items that are unrealized and items that may not be indicative of core operating results. This allows the Company and its investors and analysts to assess its operating results on a more comparable basis period-over-period. Realized earnings included in DE are generally comprised of fee revenue, including all incentive fees, realized principal investment income (loss), distributed carried interest, interest and dividend income. Income (loss) on principal investments is realized generally when all or a portion of an investment 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. The following items are excluded from DE: transaction-related costs; non-core items; other gain (loss); unrealized principal investment income (loss); non-cash depreciation and amortization expense, non-cash impairment charges (if any); amortization of deferred financing costs, debt premiums and discounts; our share of unrealized carried interest allocation, net of associated expense; non-cash equity-based compensation costs; and preferred stock redemption gain (loss). Transaction-related costs are incurred in connection with acquisitions and costs of unconsummated transactions. Non-core items primarily include acquisition-related compensation and certain severance costs, as well as litigation and settlement-related matters, which are presented within compensation expense—cash and equity-based, administrative and other expenses, and other gain (loss), net on the GAAP income statement. These costs, along with certain other gain (loss) amounts, are excluded from DE as they are related to discrete items, are not considered part of our ongoing operating cost structure, and are not reflective of our core operating performance. Other items excluded from DE are generally non-cash in nature, including income (loss) items that are unrealized, or otherwise do not represent current or future cash obligations. These items are excluded from DE as they do not contribute to the measurement of DE as a net realized earnings measure that is used in decision making related to distributions and reinvestments. Income taxes applied in the determination of DE generally represents GAAP income tax related to continued operations, and includes the benefit of deductions available to the Company on certain expense items excluded from DE (for example, equity-based compensation). As the income tax benefit arising from these excluded expense items do affect actual income tax paid or payable by the Company in any one period, the Company believes their inclusion in DE is appropriate to more accurately reflect amounts available for distribution. 42 Table of Contents Non-GAAP Results Results of our non-GAAP measures attributable to the Operating Company were determined as follows: Three Months Ended March 31, (In thousands) 2026 2025 Change Fee revenue (1) $ 87,476 $ 90,229 $ (2,753) Cash compensation (1) (45,461) (38,096) (7,365) Administrative and other expenses (1) (17,996) (17,183) (813) Fee-Related Earnings—attributable to Operating Company 24,019 34,950 (10,931) Realized principal investment income (loss) 3,077 34,907 (31,830) Distributed carried interest and incentive fees subject to realization events, net of associated expense allocation — 864 (864) Interest expense and preferred dividends (17,767) (18,010) 243 Other income (expense), net (2) 4,053 2,294 1,759 Income tax benefit (expense) 8 (301) 309 Distributable Earnings, after tax—attributable to Operating Company $ 13,390 $ 54,704 (41,314) ________ (1) These amounts are determined based upon the definition of FRE as described above and therefore, differ from those presented on the consolidated statements of operations. (2) Other income (expense), net, includes interest, dividend and other income, placement fee and other expense, and other realized gain (loss). Fee-Related Earnings 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. Distributable Earnings 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. 43 Table of Contents Distributable Earnings and Fee-Related Earnings Reconciliation Three Months Ended March 31, (In thousands) 2026 2025 Net income (loss) attributable to common stockholders $ 5,305 $ (878) Net income (loss) attributable to noncontrolling interests in Operating Company 138 (7) Net income (loss) attributable to Operating Company 5,443 (885) Transaction-related costs and non-core items (1) 14,391 435 Other (gain) loss, net (2) (3,736) 667 Unrealized principal investment income (3) (25,897) 29,847 Unrealized carried interest, net of associated expense (allocation) reversal (4) 1,227 5,816 Equity-based compensation 7,543 7,711 Depreciation and amortization expense 5,320 7,226 Amortization of deferred financing costs, debt premiums and discounts 406 524 Adjustments attributable to noncontrolling interests in investment entities (5) 3,191 (822) OP share of (income) loss from discontinued operations 5,502 4,185 Distributable Earnings, after tax—attributable to Operating Company 13,390 54,704 Realized principal investment (income) loss (3,077) (34,907) Distributed carried interest and incentive fees subject to realization events, net of associated expense allocation (4) — (864) Interest expense and preferred dividends 17,767 18,010 Other (income) expense, net (6) (4,053) (2,294) Income tax (benefit) expense (8) 301 Fee-Related Earnings—attributable to Operating Company $ 24,019 $ 34,950 __________ (1) Non-core items primarily include acquisition-related compensation and certain severance costs, as well as litigation and settlement-related matters, which are presented within compensation expense—cash and equity-based, administrative and other expenses, and other gain (loss), net on the GAAP income statement. (2) Comprises (i) all unrealized gains and losses; and (ii) realized gains and losses associated with consolidated funds or non-core investments. (3) Unrealized principal investment income represents only the Operating Company's share, net of a third party participation interest. (4) Carried interest is presented net of expense allocation or reversal, representing only the Operating Company's share. The expense component is included within compensation expense—incentive fees and carried interest allocation (reversal), and net income (loss) attributable to noncontrolling interests in investment entities on the GAAP income statement. (5) Adjustments attributable to noncontrolling interests in investment entities pertain to other gain (loss) attributed to limited partners of consolidated funds. Allocation of: (i) unrealized carried interest to management and a third party participation interest; and (ii) unrealized principal investment income to a third party participation interest, are netted against "unrealized carried interest, net of expense (allocation) reversal" and "unrealized principal investment income", respectively, for all periods presented. (6) Other income (expense), net, includes interest, dividend and other income, placement fee and other expense, and other realized gain (loss). Liquidity and Capital Resources We regularly evaluate our liquidity position, and anticipated cash needs to fund our business and operations based upon our projected financial performance. Our evaluation of future liquidity requirements is regularly reviewed and updated for changes in internal projections, economic conditions, and other factors as applicable. Liquidity Needs and Sources of Liquidity Our primary liquidity needs, both short term and long term, are to fund: • our operations, including compensation and administrative costs; • our general partner and general partner affiliate commitments to our investment vehicles; • principal and interest payments on our debt; • dividends to our preferred and common stockholders; • our liability for corporate and other taxes; • acquisitions of target investment management businesses; • lease payments on our corporate offices; and • other obligations, including carried interest clawback and contingencies. 44 Table of Contents Our primary sources of liquidity are: • cash on hand; • fees received from our investment management business, including our share of realized net incentive fees and carried interest distributed; • cash flow generated from our investments, both from distributions of income and return of capital, including proceeds from full or partial realization of investments; • availability under our Variable Funding Notes ("VFN"); • issuance of additional term notes under our corporate securitization; and • proceeds from public or private equity and debt offerings. Overview At March 31, 2026, we had $250 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. We believe we have sufficient cash on hand, and anticipated cash generated from operating activities and availability of external financing sources, to meet our short term and long term liquidity and capital requirements. While we have sufficient liquidity to meet our operational needs, we continuously evaluate alternatives to efficiently manage our capital structure and market opportunities to strengthen our liquidity and provide further operational and strategic flexibility. Liquidity Needs and Capital Activities Dividends Common Stock —The payment of common stock dividends and determination of the amount thereof is at the discretion of our Board of Directors. In February 2026, our Board of Directors declared a dividend of $0.01 per share of common stock to be paid in April 2026. Preferred Stock— We have outstanding preferred stock with a redemption value totaling $822 million (at $25 per share), bearing a weighted average dividend rate of 7.135% per annum, with aggregate dividend payments of $14.7 million per quarter. Contractual Obligations, Commitments and Contingencies Debt Obligations As of the date of this filing, our corporate debt is composed of our Class A-2 Notes, with our VFN undrawn. ($ in thousands) Outstanding Principal Interest Rate (Per Annum) Anticipated Repayment Date Years Remaining to Maturity Class A-2 Notes $ 300,000 3.93 % September 2026 0.5 Investment Commitments Fund Commitments —As general partner, we typically have minimum capital commitments to our sponsored funds ranging from 0.02% to 0.72% of the total capital commitments of a fund at final closing, although we may elect to make additional investments in new products. With respect to our flagship value-add DBP fund series, and InfraBridge funds, we have made additional capital commitments as a general partner affiliate, generally ranging from 1.43% to 4.29%, alongside our investors. Our fund capital investments further align our interests to our investors. As of March 31, 2026, we had unfunded equity commitments to our sponsored funds totaling $212 million as general partner and general partner affiliate (including commitments attributed to the ownership by employees and former employees in our general partner entities). Generally, the timing for funding of these commitments is not known and the commitments are callable on demand at any time prior to their respective expirations. Investments or Commitments Transferred The Company may acquire investments on behalf of prospective sponsored investment vehicles or subscribe to commitments in its sponsored funds on behalf of prospective investors. The investments or commitments are transferred to the investment vehicle or prospective investor when sufficient third party capital, including debt, is raised. The Company may be paid a fee by the investment vehicle or investor, akin to an interest charge, typically calculated as a percentage of 45 Table of Contents the acquisition price of the investment or the commitment amount funded, to compensate the Company for its holding cost. The terms of such arrangements may differ for each sponsored investment vehicle and by investment or investor. Carried Interest Clawback Depending on the final realized value of all investments at the end of the life of a fund (and, with respect to certain funds, periodically during the life of the fund), if it is determined that cumulative carried interest distributed has exceeded the final carried interest amount due (or amount due as of the calculation date), the Company is obligated to return the excess carried interest previously received. Therefore, carried interest distributed to the Company may be subject to clawback, up to the amount previously received on an after-tax basis. A liability would be established if a potential clawback obligation arises assuming a hypothetical liquidation of the investments of the fund at their prevailing fair values as of reporting date. However, the actual determination of a clawback, if any, and payment thereof would occur only after final disposition of investments at the end of the life of a fund, except for funds that have interim clawback provisions. The Company, through the OP, has guaranteed the clawback obligation of its subsidiaries that act as general partner or special limited partner of its respective sponsored funds, for the benefit of these funds and their limited partners. If the related carried interest distributions received by the Company are subject to clawback, the previously distributed carried interest to employees and a third party participation interest would be similarly subject to clawback. The Company withholds a portion of the distribution of carried interest to employees to satisfy their potential clawback obligation. At March 31, 2026, $32.6 million of previously distributed carried interest on an after-tax basis would be subject to clawback assuming a hypothetical liquidation of carry paying funds at the March 31, 2026 estimated fair values. Of this amount, $27.4 million and $1.5 million of the clawback obligation would be the responsibility of current/former employees and a third party participation interest, respectively. The Company's share of the clawback obligation would be $3.7 million as of March 31, 2026. In this case, actual clawback obligation, if any, would be determined and become payable at the end of the life of the fund. To satisfy the employees' share of this clawback obligation, $15.2 million of carried interest had been withheld from payment to employees at the time of distribution. Lease Obligations At March 31, 2026, we had operating lease obligations of $30 million for in-place leases on currently occupied corporate offices and commitments on a future office lease of $58 million that is expected to commence in July 2026 with a 10.8 year lease term. With respect to the new lease, the Company intends to sub-lease a portion of the new office space, which will reduce its future lease obligation. We currently sub-lease a portion of certain existing office space over the remaining term of the respective leases and expect to receive fixed sub-lease payments totaling $3 million over the remaining life of the sub-lease contracts. The Company's lease obligations will be funded through corporate operating cash. Lease obligation amounts represent discounted fixed lease payments over contractual lease terms of up to 10 years, excluding any contingent or other variable lease payments, and factor in lease renewal or termination options only if it is reasonably certain that such options would be exercised. Other Contingencies We may be involved in litigation and other proceedings that arise in the ordinary course of business, as discussed in Note 16 to the consolidated financial statements in Item 1 of this Quarterly Report. Sources of Liquidity Debt Funding As of the date of this filing, we have $300 million of outstanding principal on our corporate debt, as discussed above under " —Debt Obligation. " Our securitized financing facility is subject to various covenants, including financial covenants that require the maintenance of minimum thresholds for debt service coverage ratio and maximum loan-to-value ratio, as defined. As of the date of this filing, we are in compliance with all of the financial covenants, and the full $100 million is available to be drawn on our VFN. We are in the process of refinancing our corporate debt and replacing the term notes and VFN prior to their anticipated repayment date in September 2026. 46 Table of Contents The decision to enter into a particular financing arrangement is made after consideration of various factors including future cash needs, current sources of liquidity, demand for the Company’s debt or equity, and prevailing interest rates. Cash From Operations Fee-Related Earnings— We generate FRE from our investment management business, generally encompassing recurring fee revenue net of associated compensation and administrative expenses. Management fee revenue is generally a predictable and stable revenue stream. Our ability to generate new management fee streams through establishing new investment vehicles and raising investor capital depends on general market conditions and availability of attractive investment opportunities as well as availability of debt capital. Incentive Fees— Incentive fees, net of employee allocations, are earned based upon the financial performance of a vehicle above a specified return threshold, which is largely driven by appreciation in value of underlying investments. Incentive fees are recognized as fee revenue when they are no longer probable of significant reversal. As investment fair values and changes thereof could be affected by various factors, including market and economic conditions, incentive fees are by nature less predictable in amount and timing. Carried Interest Distributions— Carried interest is distributed generally upon profitable disposition of an investment if at the time of distribution, cumulative returns of the fund exceed minimum return hurdles. Carried interest distributions are recognized in earnings net of clawback obligations, if any. The amount and timing of carried interest distributions received may vary substantially from period to period depending upon the occurrence and size of investments realized by our sponsored funds. Investments— Our investments in our sponsored funds as general partner and general partner affiliate generate cash largely through capital appreciation of underlying investments that are realized upon a recapitalization, syndication or liquidation event, income distributions from equity investments and interest income from credit investments. Consolidated Cash Flows The following table summarizes the activities from our consolidated statements of cash flows, including discontinued operations. Three Months Ended March 31, (In thousands) 2026 2025 Cash, cash equivalents and restricted cash—beginning of period $ 395,490 $ 306,298 Net cash generated by (used in): Operating activities (39,950) 50,298 Investing activities 101,381 17,474 Financing activities (38,627) (21,875) Effect of exchange rates on cash, cash equivalents and restricted cash (904) 1,911 Cash, cash equivalents and restricted cash—end of period $ 417,390 $ 354,106 Operating Activities Cash inflows from operating activities are generated primarily through fee-related earnings, distributions of our share of net carried interest, and distribution of earnings from our general partner affiliate interests in our sponsored funds. Our operating activities generated net cash outflows of $40.0 million in 2026 and inflows of $50.3 million in 2025. Outside of recurring operating activities, cash inflows in 2025 also included distribution of earnings from the secondary sale of equity in our DataBank portfolio company of $34.0 million and $10.6 million from net insurance recoveries related to litigation costs largely incurred in prior years. Investing Activities Investing activities relate largely to our consolidated liquid funds that invest in marketable equity securities, and our general partner and general partner affiliate investments in sponsored funds, including drawdown of commitments and return of capital from syndications or realized fund investments. Our investing activities generated net cash inflows in 2026 and 2025. • In 2026, net cash inflows of $101.4 million included $80.0 million of proceeds received in January 2026 from syndication of our interests in sponsored funds in December 2025, $15.3 million of distributions, net of fundings, for our general partner and general partner affiliate commitments in our sponsored funds, and $5.1 million of net inflows from the investing activities of our consolidated liquid funds that hold marketable equity securities. 47 Table of Contents • In 2025, net cash inflows were $17.5 million. We received $24.8 million return of capital from the secondary sale of equity in our DataBank portfolio company. Otherwise we funded $7.0 million, net of distributions, for our general partner and general partner affiliate commitments in our sponsored funds, while the investing activities of our consolidated liquid funds which hold marketable equity securities resulted in a net cash outflow of $0.7 million. Financing Activities We incur cash outlays primarily for payments on our corporate debt, and dividends to our preferred and common stockholders. Financing activities generated net cash outflows in 2026 and 2025. • In 2026, net cash outflows of $38.6 million were driven by common and preferred dividend payments of $16.5 million and $11.1 million of capital distributions to limited partners in our consolidated funds. • The net cash outflows of $21.9 million in 2025 included $16.4 million of common and preferred dividend payments and a $2.1 million third party participation interest in net distributions from DBP I. Guarantees and Off-Balance Sheet Arrangements We have no guarantees or off-balance sheet arrangements that we believe are reasonably likely to have a material effect on our financial position. Critical Accounting Policies and Estimates Our financial statements are prepared in accordance with GAAP, which requires the use of estimates and assumptions that involve the exercise of judgment and that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our critical accounting policies and estimates are integral to understanding and evaluating our reported financial results as they require subjective or complex management judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain and unpredictable. There have been no changes to our critical accounting policies since the filing of our Annual Report on Form 10-K for the year ended December 31, 2025. With respect to all critical estimates, we have established policies and control procedures which seek to ensure that estimates and assumptions are appropriately governed and applied consistently from period to period. We believe that all of the decisions and assessments applied were reasonable at the time made, based upon information available to us at that time. Due to the inherently judgmental nature of the various projections and assumptions used, and unpredictability of economic and market conditions, actual results may differ from estimates, and changes in estimates and assumptions could have a material effect on our financial statements in the future. Recent Accounting Updates The effects of accounting standards adopted in 2026 and the potential effects of accounting standards to be adopted in the future are described in Note 2 to our consolidated financial statements in Item 1 of this Quarterly Report.