Company: DBRG
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0001679688-25-000017
Chunk: 197

Company: DigitalBridge Group, Inc.
Filing Date: 2025-02-21
Form: 10-K
Item: Item 8
Chunk 197
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 million of net assets attributed to the limited partners of the funds that had represented noncontrolling interests in investment entities. Subsequent to deconsolidation of the funds, the Company's co-investment in Vantage SDC is reflected as a principal investment under the equity method with the election of fair value option. Prior to December 31, 2023, equity investments of consolidated funds included equity interests in pooling entities that hold a portfolio of loans, invested alongside other parallel funds within the same credit fund complex. Fair value of the fund's equity interests in the pooling entities was based upon its share of expected cash flows from the loan assets held by the pooling entities, classified as level 3. In estimating fair value of the underlying loans, the pooling entities considered the prevailing market yields at which a third party might expect to receive on equivalent loans with similar credit risk. Based upon a comparison to market yields, it was determined that the transacted price or par value of the loans held by the pooling entities approximated their fair value. In December 2023, following a reorganization of the Company's ownership interest within the fund structure, the credit fund was deconsolidated and the Company's interest in the credit fund was reflected as a principal investment under the equity method.

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Fair Value OptionEquity Method InvestmentsThe Company has elected to account for certain equity method investments under the fair value option. Fair value was determined using a discounted cash flow model based upon projected earnings, with discount rates ranging between 11.0% and 21.0% (weighted average discount rate based upon relative fair value of 11.0%) at December 31, 2024, and using a discount rate of 18.3%, and also taking into consideration a comparison to market values of similar public companies at December 31, 2023. The fair value is classified as Level 3 of the fair value hierarchy and changes in fair value are recorded in principal investment income. DBRG Stock WarrantsAs discussed in Note 9, the Company had previously issued five warrants to Wafra in July 2020. Each warrant entitled Wafra to purchase up to 1,338,000 shares of the Company's class A common stock at staggered strike prices between $9.72 and $24.00 each, exercisable through July 17, 2026.Effective May 2022, the five warrants were carried at fair value with changes in fair value recorded in other gain (loss) on the consolidated statements of