Company: DBRG
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001679688-25-000100
Chunk: 44

Company: DigitalBridge Group, Inc.
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 1
Chunk 44
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 preferred returns continue to accrue on unreturned capital. Realization of carried interest allocation occurs upon disposition of all underlying investments of the fund, or in part with each disposition. Generally, carried interest allocation is distributed upon profitable disposition of an investment if at the time of distribution, cumulative returns of the fund exceed minimum return hurdles. 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 allocation distributed has exceeded the final carried interest allocation amount earned (or amount earned as of the calculation date), the Company is obligated to return the excess carried interest allocation received. Therefore, carried interest allocation distributed may be subject to clawback if a decline in investment values results in cumulative performance of the fund falling below minimum return hurdles in the interim period. If it is determined that the Company has a clawback obligation, a liability would be established based upon a hypothetical liquidation of the net assets of the fund at the reporting date. The actual determination and required payment of any clawback obligation would generally occur after final disposition of the investments of the fund or otherwise as set forth in the governing documents of the fund.

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Carried interest allocation on the balance sheet date represents unrealized carried interest allocation in connection with sponsored funds that are currently in the early stage of their lifecycle. Carried interest allocation is presented gross of management allocation.Carried Interest DistributedIn 2025, carried interest of $2.5 million was distributed during the first quarter and recognized in carried interest allocations, of which $1.6 million was allocated to current and former employees, recorded as either carried interest compensation or amounts attributable to noncontrolling interests (Note 14). In 2024, there was an immaterial distribution of carried interest in the second quarter.Clawback ObligationThe Company did not have a liability for clawback obligations on carried interest distributed as of September 30, 2025 and December 31, 2024.  With respect to funds that have distributed carried interest, if in the event all of their investments are deemed to have no value, all of the carried interest distributed to date of $164.5 million would be subject to clawback as of September 30, 2025, of which $109.4 million would be the responsibility of the recipients, being employees/former employees and a third party participation interest. For this purpose, a portion of carried interest distributed is generally held back from