BRDG Bridge Investment Group Holdings Inc. - 10-K

Item 1A. Risk Factors

Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this annual report on Form 10-K, including our consolidated financial statements and the related notes, before deciding to invest in our Class A common stock. The occurrence of any of the events described below could harm our business, operating results and financial condition. In such an event, the market price of our Class A common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business. See “Cautionary Note Regarding Forward—Looking Statements.”

Risks Related to the Proposed Mergers

The Mergers may not be completed within the expected timeframe, or at all, and significant delay or the failure to complete the Mergers could adversely affect our business and the market price of our common stock.

On February 23, 2025, we entered into the Merger Agreement, pursuant to which, and on the terms and subject to the conditions thereof, Merger Sub Inc. will be merged with and into us, and we will survive such merger as a wholly owned subsidiary of Apollo, and Merger Sub LLC will be merged with and into the Operating Company with the Operating Company surviving such merger as the surviving limited liability company and a wholly-owned subsidiary of Apollo. The consummation of the Mergers is subject to certain closing conditions customary for a transaction of this type, as set forth in the Merger Agreement, including, among other things, (i) approval by the affirmative vote of the holders representing at least a majority of the aggregate voting power of the outstanding shares of Class A common stock and Class B common stock entitled to vote in accordance with the DGCL, voting together, (ii) the expiration or termination of the applicable waiting period under the HSR Act, (iii) the accuracy of each party’s representations and warranties (subject to customary materiality qualifiers), (iv) each party’s compliance with its covenants and agreements contained in the Merger Agreement in all material respects, (v) the revenue run-rate for all of our clients (other than non-consenting clients) being at least 85% of the revenue run-rate for all of our clients as of December 31, 2024, (vi) certain pre-closing restructuring activities having been completed, (vii) the effectiveness of the registration statement to be filed by Apollo with the SEC pursuant to the Merger Agreement, (viii) the approval for listing on the New York Stock Exchange of the shares of the Apollo common stock to be issued as merger consideration in connection with the Mergers, subject to official notice of issuance, (ix) the Second A&R TRA remaining in full force and effect, and (x) other customary conditions specified in the Merger Agreement.

Many of the conditions to consummation of the Mergers are not within our control or the control of Apollo or the Merger Subs, and we cannot predict when or if these conditions will be satisfied. There can be no assurance that our business, our relationships or our financial condition will not be adversely affected, as compared to the condition prior to the announcement of the Mergers, if the Mergers are not consummated within the expected timeframe, or at all. Failure to complete the Mergers within the expected timeframe, or at all, could adversely affect our business and the market price of our common stock in a number of ways, including the following:

• if the Mergers are not completed within the expected timeframe, or at all, the share price of our common stock may change to the extent that the current market price of our stock reflects assumptions regarding the completion of the Mergers;

• we have incurred, and will continue to incur, significant costs, expenses and fees for professional services and other costs in connection with the Mergers, for which we may receive little or no benefit if the Mergers are not completed. Many of these fees and costs will be payable by us even if the Mergers are not completed and may relate to activities that we would not have undertaken other than to complete the Mergers;

• failure to complete the Mergers within the expected timeframe, or at all, may result in negative publicity and a negative impression of us in the investment community and may lead to subsequent offers to acquire our company at a lower price or otherwise on less favorable terms to us and our stockholders than contemplated by the Mergers;

• the impairment of our ability to attract and retain employees as well as fund investors;

• upon termination of the Merger Agreement by us or Apollo under specified circumstances, we would be required to pay a termination fee of approximately $45 million; and

• we could be subject to litigation related to any failure to complete the Mergers.

The announcement and pendency of our acquisition by Apollo could adversely affect our business, prospects, financial condition, and results of operations.

The announcement and pendency of the Mergers could cause disruptions in and create uncertainty surrounding our business, which could have an adverse effect on our business, prospects, financial condition, and results of operations, regardless of whether the Mergers are completed. These risks to our business include the following, all of which could be exacerbated by a delay in the completion of the Mergers:

• the diversion of significant management time and resources towards the completion of the Mergers;

• the impairment of our ability to attract and retain employees as well as fund investors;

• the inability to pursue alternative business opportunities or make appropriate changes to our business because of requirements in the Merger Agreement that we conduct our business in the ordinary course and not engage in certain kinds of transactions or business activities prior to the completion of the Mergers; and

• litigation relating to the Mergers and the costs and distractions related thereto.

The Merger Agreement contains provisions that could discourage a potential competing acquirer of our company or could result in any competing proposal being at a lower price than it might otherwise be.

We are subject to certain restrictions on our ability to solicit alternative acquisition proposals from third parties, to provide information to third parties and to enter into or continue discussions or negotiations with third parties regarding alternative acquisition proposals, subject to customary exceptions. In addition, we may be required to pay Apollo a termination fee of approximately $45 million in specified circumstances, including if the Merger Agreement is terminated in specified circumstances following our receipt of a Superior Proposal (as defined in the Merger Agreement). These provisions could discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of our company from considering or proposing such an acquisition, including, if the Merger Agreement is terminated prior to the consummation of the Mergers, after such termination of the Merger Agreement, even if it were prepared to pay a purchase price per share higher than the purchase price per share proposed to be paid in the Mergers, or might result in a potential competing acquirer proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in specified circumstances under the Merger Agreement, including, in certain circumstances, after a valid termination of the Merger Agreement in accordance with the terms thereof.

While the Merger Agreement is in effect, we are subject to restrictions on our business activities.

The Merger Agreement includes restrictions on the conduct of our business prior to the completion of the Mergers, generally requiring us to (and to cause the Operating Company and specified subsidiaries to) conduct our business in the ordinary course and use reasonable best efforts to preserve intact our business organizations, relationships and assets. In addition, we are subject to a variety of specified restrictions. Unless we obtain Apollo’s prior written consent (which consent may not be unreasonably withheld, conditioned or delayed), except as specifically required by the Merger Agreement or required by applicable law, we may not (and may not cause the Operating Company nor specified subsidiaries to), among other things and subject to certain exceptions, limitations and qualifications, incur additional indebtedness, issue or repurchase equity, pay certain dividends, acquire or dispose of certain assets or securities, enter into, modify or terminate material contracts or make certain capital expenditures. We may find that these and other contractual restrictions in the Merger Agreement delay or prevent us from responding, or limit our ability to respond, effectively to competitive pressures, industry developments and future business opportunities that may arise during such period, even if our management believes they may be advisable. If any of these effects were to occur, it could materially and adversely impact our operating results, financial position, cash flows or the price of our common stock.

If the Corporate Merger does not qualify as a “reorganization” under Section 368(a) of the Code, holders of our Class A common stock may be subject to additional U.S. federal income tax in connection with their receipt of Apollo common stock in the Corporate Merger.

The Corporate Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code for U.S. federal income tax purposes. However, neither we nor Apollo intends to request any ruling from the IRS regarding any matters relating to the integrated mergers, and, consequently, there can be no assurance that the IRS will not assert, or that a court would not sustain, a position to the contrary to any of the positions set forth in this proxy statement/prospectus. If the IRS were to challenge the “reorganization” status of the integrated mergers successfully or the form or structure of the integrated mergers was changed in a manner such that it did not qualify as a “reorganization,” the holders of our Class A common stock could be subject to additional U.S. federal income tax in connection with their receipt of Apollo common stock in the Corporate Merger.

Risks Related to Our Business

The historical performance of our fund investments may not be indicative of the future results of our fund investments or our operations or any returns expected on an investment in our Class A common stock.

Past performance of our funds and fund investments is not necessarily indicative of future results or of the performance of our Class A common stock. An investment in our Class A common stock is not an investment in any of our funds or other investments. In addition, the historical and potential future returns of funds or other investments that we manage are not directly linked to returns on our Class A common stock. Therefore, you should not conclude that continued positive performance of our funds or other investments will necessarily result in positive returns on an investment in our Class A common stock. However, poor performance of our funds or other investments could cause a decline in our revenue and could therefore have a negative effect on our performance and on returns on an investment in our Class A common stock.

The historical performance of our funds and other investments should not be considered indicative of the future performance of these funds or of any future funds we may raise, in part because:

• market conditions and investment opportunities during previous periods may have been significantly more favorable for generating positive performance than those we may experience in the future;

• our historical returns derive largely from the performance of our earlier funds, whereas future fund returns will depend increasingly on the performance of our newer funds or funds not yet formed;

• our newly established funds may generate lower returns during the period that they initially deploy their capital;

• in recent years, we have at times witnessed increased competition for investment opportunities resulting from the increased amount of capital invested in private markets alternatives and high liquidity in debt markets, and the increased competition for investments may reduce our returns in the future; and

• the performance of particular funds or other investments also will be affected by risks of the underlying assets or markets in which they invest.

Difficult economic, market and political conditions may adversely affect our businesses, including by reducing the value or hampering the performance of the investments made by our funds or reducing the ability of our funds to raise or deploy capital, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.

Our investments are materially affected by conditions in the global financial markets and economic and political conditions throughout the world, such as increases in interest rates, the availability and cost of credit, inflation rates, economic uncertainty, changes in laws or regulations (including laws relating to our taxation, taxation of our fund investors and the possibility of changes to regulations applicable to alternative asset managers), trade policies, commodity prices, tariffs, currency exchange rates and controls and national and international political circumstances (including wars and other forms of conflict, terrorist acts, and security operations) and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, other adverse weather and climate conditions and pandemics. These factors are outside of our control and may affect the level and volatility of securities prices and the liquidity and value of investments, and we may not be able to or may choose not to manage our exposure to these conditions.

Global financial markets have experienced heightened volatility in recent periods, including as a result of economic and political events in or affecting the world’s major economies. For example, concerns over inflation, the rapid increase and maintenance of high interest rates and resulting impacts on availability of debt financings, and fluctuations in oil and gas prices resulting from global production and demand levels, together with hostilities in the Middle East region, including the conflict between Israel and Hamas, the conflict between Russia and Ukraine and tensions between China and Taiwan, have precipitated market volatility.

In addition, numerous structural dynamics and persistent market trends have exacerbated volatility generally. Concerns over significant declines in the commodities markets, sluggish economic expansion in non-U.S. economies, including continued concerns regarding growth prospects in China and emerging markets, and growing debt loads for certain countries all highlight the fact that economic conditions remain unpredictable and volatile. In recent periods, trade tensions between the United States and China, and other geopolitical tensions have escalated. Further escalation of such tensions and the related imposition of sanctions or other trade barriers may negatively impact the rate of global growth. Moreover, there is a risk of both sector-specific and broad-based corrections and/or downturns in the equity and credit markets. Any of the foregoing could have a significant impact on the markets in which we operate and a material adverse impact on our business prospects and financial condition.

These and other conditions in the global financial markets and the global economy may result in adverse consequences for us and many of our funds, each of which could adversely affect the investments of such funds, restrict such funds’ investment activities, impede such funds’ ability to effectively achieve their investment objectives and result in lower returns than we anticipated at the time certain of our investments were made. More specifically, these economic conditions could adversely affect our operating results by causing: decreases in the market value of securities, debt instruments or investments held by some of our funds; decreased availability and increased cost of financing caused by elevated interest rates, impacting returns and contributing to illiquidity in the market, which could adversely affect transaction volumes and the pace of realization of our funds’ investments or otherwise restrict the ability of our funds to realize value from their investments, thereby adversely affecting our ability to generate performance fees or other income; reduced absorption or lease rates in the market related to one or more of our asset classes, including office, thereby reducing returns from such investments or realizing losses related thereto; our assets under management to decrease, thereby lowering a portion of our management fees payable by our funds to the extent they are based on market values; and increases in costs or reduced availability of financial instruments that finance our funds. During periods of difficult market conditions or slowdowns, negative financial results may reduce the net asset value of our funds and the investment returns for our funds, which could have a material adverse effect on our operating results and cash flow. As many of our funds have a finite term, they may be adversely affected by being forced to dispose of investments when there are reduced opportunities to exit and realize lower-than-expected returns on investments made prior to the deterioration of the credit markets. Our funds may also be negatively impacted by our inability to find suitable investments for the funds to effectively deploy capital, which could adversely affect our expected returns and our ability to raise new funds and thus adversely impact our prospects for future growth.

Our profitability may also be adversely affected by our fixed costs and the possibility that we would be unable to scale back other costs within a time frame sufficient to match any decreases in revenue relating to changes in market and economic conditions. If our revenue declines without a commensurate reduction in our expenses, our net income will be reduced. Accordingly, difficult market conditions could materially and adversely affect our business, financial condition and results of operations.

Valuation methodologies for certain assets held by our funds and other vehicles can be subject to significant subjectivity, and the values of assets may not be the same when realized.

The investments of our funds are generally illiquid and thus have no readily ascertainable market prices. We value these investments based on our estimate, or an independent third-party’s estimate, of their fair value as of the date of determination, which often involves significant subjectivity. There is no single standard for determining fair value in good faith and in many cases fair value is best expressed as a range of fair values from which a single estimate may be derived. We estimate the fair value of our investments based on third-party models, or models developed by us, which include discounted cash flow analyses and other techniques and may be based, at least in part, on independently sourced market parameters. The material estimates and assumptions used in these models include the timing and expected amount of cash flows, the appropriateness of discount rates used, and, in some cases, the ability to execute, the timing of and the estimated proceeds from expected financings, some or all of which factors may be ascribed more or less weight in light of the particular circumstances. The actual results related to any particular investment often vary materially as a result of the inaccuracy of these estimates and assumptions.

We include the fair value of illiquid assets in the calculations of net asset values, returns of our funds and our assets under management. Furthermore, we recognize performance fees from affiliates based in part on these estimated fair values. Because these valuations are inherently uncertain, they may fluctuate greatly from period to period. Also, they may vary greatly from the prices that would be obtained if the assets were to be liquidated on the date of the valuation and often do vary greatly from the prices we eventually realize; as a result, there can be no assurance that such unrealized valuations will be fully or timely realized.

If we realize value on an investment that is significantly lower than the value at which it was reflected in prior valuations, we could suffer losses in the applicable fund. This could in turn lead to a decline in asset management fees for certain vehicles and a loss equal to the portion of the performance fees from affiliates reported in prior periods that was not realized upon disposition. These effects could become applicable to a large number of our investments if our estimates and assumptions used in estimating their fair values differ from future valuations due to market developments. If asset values turn out to be materially different than values reflected in fund net asset values, fund investors could lose confidence which could, in turn, result in difficulties in raising additional capital.

If the investments we make on behalf of our funds perform poorly, we may suffer a decline in our investment management revenue and earnings.

Our revenue is derived from fees earned for our management and operation of our funds and incentive fees or carried interest, among other sources. In the event that our funds or individual investments perform poorly, our revenues and earnings derived from incentive fees will decline and make it more difficult for us to raise capital for new funds or gain new fund investors in the future. We may be unable to collect unrealized or future management fees from fund investors on products or strategies that perform poorly. If such products do not return to profitability, we may be required to write off all accrued and unpaid management fees. For example, as the result of ongoing headwinds in the commercial office sector, which represented 3% of our AUM as of December 31, 2024, we are no longer collecting fund management fees or fund administration fees on Bridge Office Fund LP (“BOF I”), which previously contributed $2.0 million to revenue on a quarterly basis. During the third quarter of 2024, we began reserving for fund management fees and fund administration fees for Bridge Office Fund II LP (“BOF II”). As of December 31, 2024, we have a $15.0 million outstanding unsecured loan to a subsidiary of BOF I, as well as a $15.8 million outstanding unsecured loan to BOF II, both of which we have determined to be recoverable, but which may be lost in whole or in part. Further, if economic or market conditions related to any asset class that we manage result in any of our funds filing for bankruptcy, we may lose all future management or incentive fees in connection with such fund. For certain products or strategies, failure to integrate and apply acceptable sustainability and responsibility investment principles, including carbon neutrality or climate change strategies, can be considered in determining, or result in, poor performance, and result in decreased capital commitments and increased redemptions, and failure to earn performance fees, carried interest and/or other fees. In addition, if carried interest that was previously distributed to us exceeds the amounts to which we are ultimately entitled, we may be required to repay that amount under a “clawback” obligation pursuant to the governing documents of our funds. These clawback obligations may require us to use cash or other reserves to satisfy such obligations instead of using the cash for another purpose. If we are unable to raise or are required to repay capital, our business, financial condition and results of operations would be materially and adversely affected.

Additionally, certain of our strategies are designed to permit fund investors to be eligible to obtain certain tax benefits through their investment in the funds within these strategies. For example, our Opportunity Zone funds are organized to be “qualified opportunity funds” as defined in Section 1400Z-2(d) of the Code. Although our Opportunity Zone funds do not guarantee eligibility for tax benefits available to investors in qualified opportunity funds, if these fund investors lose or otherwise become ineligible for some or all of the tax benefits available to investors in a qualified opportunity fund, or if such tax benefits are not extended by legislative action beyond their scheduled expiration in 2026, that could negatively impact our ability to attract new capital for our opportunity zone and other funds, which could have a negative impact on our management fees.

Our business depends in large part on our ability to raise capital from third-party investors. A failure to raise capital from third-party investors on attractive fee terms or at all, would impact our ability to collect management fees or deploy such capital into investments, which would materially reduce our revenue and cash flow and adversely affect our financial condition.

Our ability to raise capital from third-party investors depends on a number of factors, including certain factors that are outside our control. Certain factors, such as economic and market conditions (including the level of interest rates and stock market performance) and the asset allocation rules or investment policies to which such third-party investors are subject, could inhibit or restrict the ability of third-party investors to make investments in our investment funds or the asset classes in which our investment funds invest.

In addition, volatility in the valuations of investments, has in the past and may in the future affect our ability to raise capital from third-party investors. To the extent periods of volatility are coupled with a lack of realizations from investors’ existing portfolios, such investors may be left with disproportionately outsized remaining commitments to a number of investment funds, which significantly limits such investors’ ability to make new commitments to third-party managed investment funds such as those managed by us. Further, during periods of market volatility, investor subscription requests may be reduced.

Our ability to raise new funds could similarly be hampered if the general appeal of alternative investments or real estate as an asset class were to decline. An investment in a limited partner interest in an alternative investment fund is generally more illiquid and the returns on such investment may be more volatile than an investment in securities for which there is a more active and transparent market. In periods of positive markets and low volatility, for example, investors may favor passive investment strategies over our actively managed investment vehicles.

If economic conditions were to deteriorate or if we are unable to find new investors, we might raise less than our desired amount for a given fund. Further, as we seek to expand into other asset classes, we may be unable to raise a sufficient amount of capital to adequately support such businesses. A failure to successfully raise capital could materially reduce our revenue and cash flow and adversely affect our financial condition.

In connection with raising new funds or making further investments in existing funds, we negotiate terms for such funds and investments with existing and potential investors. The outcome of such negotiations could result in our agreement to terms that are materially less favorable to us than for prior funds we have managed or funds managed by our competitors, including with respect to management fees, incentive fees and/or carried interest, which could have an adverse impact on our revenues. Such terms could also restrict our ability to raise investment funds with investment objectives or strategies that compete with existing funds, add additional expenses and obligations for us in managing the fund or increase our potential liabilities, all of which could ultimately reduce our revenues. In addition, certain institutional investors, including sovereign wealth funds and public pension funds, have demonstrated an increased preference for alternatives to the traditional investment fund structure, such as managed accounts, smaller funds and co-investment vehicles. There can be no assurance that such alternatives will be as profitable for us as the traditional investment fund structure, or as to the impact such a trend could have on the cost of our operations or profitability if we were to implement these alternative investment structures.

We may not be able to maintain our desired fee structure as a result of industry pressure from private markets investors to reduce fees, which could have a material adverse effect on our profit margins and results of operations.

We may not be able to maintain our current funds’ fee structures as a result of industry pressure from private markets investors to reduce fees. In order to maintain our desired fee structure in a competitive environment, we must be able to continue to provide fund investors with investment returns and service that incentivize our fund investors to pay our desired fee rates. We cannot assure you that we will succeed in providing investment returns and service that will allow us to maintain our desired fee structure. Fee reductions on existing or future new business could have a material adverse effect on our profit margins and results of operations.

Fund investors may be unwilling to commit new capital to our funds or advisory accounts as a result of our decision to become a public company, which could materially and adversely affect our business, financial condition and results of operations.

As a publicly traded company, some of our fund investors may believe that we may strive to generate near-term profit for the public company rather than returns for our fund investors over time, or that we might grow our AUM for the purpose of generating additional management fees without regard to whether we believe there are sufficient investment opportunities to effectively deploy the additional capital. Some of our current and potential fund investors may determine not to invest in our funds based on the performance of our stock price. There can be no assurance that we will be successful in our efforts to address such concerns or to convince current or future fund investors that becoming a publicly traded company has not or will not negatively affect our longstanding priorities or the way we conduct our business. A decision by a significant number of our current fund investors or prospective future fund investors not to commit additional capital to our funds or to cease doing business with us altogether could inhibit our ability to achieve our investment objectives and may materially and adversely affect our business, financial condition and results of operations.

A significant portion of our revenues are subject to the risks inherent in the ownership and operation of real estate and the construction, development and financing of real estate, including, among other risks, environmental liabilities.

Real property investments are subject to varying degrees of risk. These risks include changes in general or local economic conditions, interest rates, availability of mortgage and operating funds, real estate taxes and other operating expenses, environmental changes, availability of insurance, and acts of God (which may result in uninsured losses).

Our funds are subject to risks arising from the ownership and operation of real estate and real estate-related businesses and assets. In addition to the general risks described above, these risks include the following: general and local economic conditions; reduced availability and increased cost of financing; changes in supply of and demand for competing properties in an area (as a result, for example, of overbuilding); changes in building, environmental and other laws (including regulations related to climate change); diminished financial resources of tenants; energy and supply shortages; uninsured or uninsurable risks; liability for “slip-and-fall” and other accidents on properties held by our funds; natural disasters; changes in government regulations (such as rent control and tax laws or laws imposing penalties on real estate fund operators for holding certain classes of real estate); changes in real property tax and transfer tax rates; changes in interest rates; the reduced availability of mortgage funds which may render the sale or refinancing of properties difficult or impracticable; negative developments in the economy that depress travel activity; environmental liabilities, including under environmental laws that impose, regardless of fault, joint and several liability for the cost of remediating contamination and compensation for damages; contingent liabilities on disposition of assets; unexpected cost overruns in connection with development projects; terrorist attacks, war (including current hostilities between Russia and Ukraine and Israel and Hamas) and other factors that are beyond our control; and dependence on operating partners. Even in cases where we are indemnified against liabilities, we cannot assure you as to the financial viability of the indemnifying party to satisfy such indemnities or our ability to achieve enforcement of such indemnities.

For example, our commercial real estate funds, our capital commitments therein, and management and incentive fees we receive therefrom are exposed to the general downturn in leasing and occupancy rates and available financing following the COVID-19 pandemic and resulting remote work initiatives and office employment levels in our core markets. Average occupancy in future periods may be lower, perhaps significantly, if potential changes in customer behavior, such as the continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements, result in reduced future demand for office space over the long-term. Lower rental revenues that result from lower average occupancy or lower rental rates with respect to our same property portfolio may adversely affect the value of our capital commitments in and management and incentive fees collectible from our funds’ office portfolios. These impacts have been and are expected to continue to be compounded by the lack of available financing for commercial real estate assets to fund tenant improvements and ongoing operations to maintain rental and occupancy rates necessary to maintain ownership of our funds’ office portfolios and to facilitate the disposition of the assets in our office portfolios at attractive values. In addition, prolonged market uncertainty and sustained economic downturns increase the likelihood that we will have to recognize a depreciation in the fair value of our funds’ office properties and halt collection of fees in relation to some or all of our office properties, all of which would adversely impact our financial condition and results of operations.

In addition, we may incur contingent liabilities in relation to the real estate assets our funds own and operate that may be enforced against us in the future. For example, from time to time we and certain of our funds have entered into guaranties with financial institutions in relation to indebtedness incurred by our funds or their assets for the acquisition, development or operation of fund assets. These guaranties include non-recourse carve-out guaranties for fraud, willful misconduct and other customary wrongful acts, environmental indemnities, mechanics liens, completion guaranties and other customary performance guaranties. To the extent that such guaranties are enforced against us it could have a material adverse effect on our business, financial condition and results of operation.

If our funds or fund investors acquire direct or indirect interests in undeveloped land or underdeveloped real property, which may often be non-income producing, they will be subject to the risks normally associated with such assets and development activities, including risks relating to the availability and timely receipt of zoning and other regulatory or environmental approvals, the cost and timely completion of construction (including risks beyond the control of our fund, such as weather or labor conditions or material shortages) and the availability of both construction and permanent financing on favorable terms. Additionally, such investments may be managed by a third-party, which makes them dependent upon such third parties. Any of these factors may cause the value of real estate investments to decline, which may have a material adverse effect on our funds or our business, financial condition and results of operations.

Dependence on leverage by certain funds and investments subjects us to volatility, high interest rates and contractions in the debt financing markets could adversely affect the ability of our funds to deploy capital or achieve attractive rates of return on those investments.

A number of factors have had and may continue to have an adverse impact on credit markets in particular. After several rate increases to the federal funds rate during 2022 and 2023 and the corresponding deceleration of inflationary growth, the Federal Reserve paused increases in the fourth quarter of 2023. During 2024, inflation continued to decelerate and moderated at approximately 2.5%, which led to the Federal Reserve making its first rate cut in four years during its September 2024 meeting. It is expected that the Federal Reserve will make additional rate cuts in coming quarters. However, uncertainty surrounding interest rates have had and may continue to have a material effect on our business, including downward pressure on the market value of the assets that we manage and associated incentive fees we can accrue and realize therefrom, as well as the cost and availability of financing for acquisition and disposition transactions. An extended period of high interest rates would continue to present a challenge for the valuations of such assets, as well as for fundraising in our real estate strategies. The absence of available sources of sufficient debt financing for extended periods of time or an increase in either the general levels of interest rates or in the risk spread demanded by sources of indebtedness would make it more expensive to finance those investments, which has reduced and may continue to reduce transaction volumes in the real estate assets in which we operate. Reduced transaction volumes have restricted and may continue to restrict liquidity in the real estate market, which would require our funds to delay realization of gains and incentive fees or sell assets at a discount as facilities reach maturity.

Certain investments may also be financed through fund-level debt facilities, which may or may not be available for refinancing at the end of their respective terms. In the current environment, banks and other lenders may restrict or impose moratoria on lending into troubled asset classes, which would reduce our or our funds’ ability to return assets to performance and may result in the total loss of our and our investor equity and additional management or incentive fees relating to such assets or funds. In addition, the interest payments on the indebtedness used to finance our funds’ investments are generally deductible expenses for income tax purposes, subject to limitations under applicable tax law and policy. Any change in such tax law or policy to eliminate or limit these income tax deductions, as has been discussed from time to time in various jurisdictions, would reduce the after-tax rates of return on the affected investments.

Further, in 2023 the U.S. banking system experienced volatility resulting in large part from the closure of certain U.S. banks. Similar events at U.S. or international banks in the future could increase our costs, negatively impact our or our funds’ ability to execute on pending transactions, including with respect to the ability to draw down amounts under credit facilities, and divert the Company’s time, attention and resources. Any such closures could result in significant financial distress in the markets, which could exacerbate the normal risks we face. Furthermore, such closures could lead to financial system and participant regulatory reform, and such increased regulatory oversight could impose additional administrative burdens on us or our funds. In the event of a bank failure, we may lose access to funds held at that bank. While the Federal Deposit Insurance Corporation (“FDIC”) insures deposits at FDIC-insured banks, there are limits to the amount of coverage provided. Any deposits or interest earned on deposits that exceed FDIC insurance limits may not be recovered. The foregoing could materially adversely impact our operations and our ability to realize our objectives in a timely manner.

We may need to raise additional capital in the future and such capital may not be available on acceptable terms, if at all.

As of December 31, 2024, our principal sources of liquidity consisted of cash and cash equivalents of $90.6 million, fund management fees and property management and leasing fees, which are collected monthly or quarterly, transaction fee income, and borrowings under our Credit Facility (as defined herein). We believe that our current sources of liquidity, which include cash generated by our operating activities and cash and funds available under our credit sources, will be sufficient to meet our projected operating and debt service requirements for at least the next 12 months. To the extent that our current liquidity is insufficient to fund future activities, we may need to raise additional capital. We may raise additional capital through the sale of equity securities or through debt financing arrangements, and depending on our capital requirements, such funds may not be available on favorable terms, if at all. The incurrence of additional debt financing would result in debt service obligations, and any future instruments governing such debt could provide for operating and financial covenants that could restrict our operations. In addition, rules and regulations of the SEC may restrict our ability to conduct certain types of financing activities or may affect the timing of and the amounts we can raise by undertaking such activities. See “Risks Related to Ownership of Our Class A Common Stock — Future sales, or the expectation of future sales, by us or our existing stockholders in the public market could cause the market price for our Class A common stock to decline.” If we cannot raise funds on acceptable terms, we may not be able to repay debt or other liabilities, execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated liquidity requirements. Any of these events could adversely affect our ability to achieve our development and commercialization goals and have a significant adverse effect on our business, financial condition and results of operations.

Investors in our open-end funds may redeem their investments in these funds on short notice, which could lead to a decrease in our investment management revenue and earnings.

Investors in our open-end funds may redeem their investments following the expiration of a specified period of time, subject to the applicable fund’s specific redemption provisions. Redemptions from these open-end funds would decrease the management fee payable to us from these investors. In a declining market, these open-end funds may experience declines in value and the pace of redemptions and consequent reduction in management fees payable to us could accelerate. To the extent permissible under our fund’s governing documents, we may suspend redemptions during a redemption period, which could adversely impact our reputation.

The success of our business depends on the identification and availability of suitable investment opportunities for our funds.

Our success largely depends on the identification and availability of suitable investment opportunities for our funds. The availability of investment opportunities will be subject to market conditions and other factors outside of our control. The historical investment returns of our funds have benefited from investment opportunities and general market conditions that may not continue or reoccur, including favorable borrowing conditions in the debt markets, and we cannot assure you that our funds will be able to avail themselves of comparable opportunities and conditions. In addition, our funds are subject to investment guidelines regarding investment allocation and strategy in addition to further restrictions required by investors in connection with their investments. Our failure to comply with these guidelines, restrictions and other limitations could result in clients terminating investment management agreements with us or investors seeking to withdraw from our funds or such failure could expose us to claims for breach of contract and recovery of damages. Any of these events could cause our earnings to decline and materially and adversely affect our business, financial condition and results of operations.

We have obligations to investors in our funds and may have obligations to other third parties that may conflict with your interests.

Our subsidiaries that serve as the general partners of or advisors to our funds have fiduciary and contractual obligations to the investors in those funds and accounts, and some of our subsidiaries may have contractual duties to other third parties. As a result, we may take actions with respect to the allocation of investments among our funds (including funds and accounts that have different fee structures), the purchase or sale of investments in our funds, the structuring of investment transactions for those funds, the advice we provide or other actions in order to comply with these fiduciary and contractual obligations, and such actions may conflict with your interests.

Our ability to retain our senior leadership team and attract additional qualified investment professionals is critical to our success.

Our success depends on our ability to retain our senior leadership team and to recruit additional qualified investment and other professionals. However, we may not be successful in our efforts to retain our senior leadership team, as the market for investment professionals is extremely competitive. The individuals that comprise our senior leadership team possess substantial experience and expertise and, in many cases, have significant relationships. Accordingly, the loss of any one of our senior leadership team could adversely affect certain relationships or limit our ability to successfully execute our investment strategies. If any of our senior professionals or other key personnel join competitors or form competing companies, it could result in the loss of significant investment opportunities, limit our ability to raise capital from certain existing investors or result in the loss of certain existing investors, which could have a material adverse effect on our business, financial condition and results of operations. There is no guarantee that the non-competition and non-solicitation agreements to which certain of our senior professionals and other key personnel are subject, together with our other arrangements with them, will prevent them from leaving, joining our competitors or otherwise competing with us. Such agreements also expire after a certain period of time, at which point such senior personnel would be free to compete against us and solicit our clients and employees. In addition, there is no assurance that such agreements will be enforceable in all cases, particularly as U.S. states and/or federal agencies enact legislation or adopt rules aimed at effectively prohibiting non-competition agreements.

Effective succession planning is also important to our long-term success. Failure to ensure effective transfer of knowledge and smooth transitions involving executives and other key employees could hinder our strategic planning, execution and future performance. Further, changes in our management team may be disruptive to our business, and any failure to successfully integrate key new hires or promoted employees could adversely affect our business, financial condition and results of operations.

We intend to expand our business and may enter into new investment asset classes, new lines of business and/or new markets and offer new investment products, which may result in additional risks and uncertainties in our business.

In connection with the continued growth of our business we face numerous risks and uncertainties. We have also pursued and may continue to, from time to time, pursue opportunities to grow our business via acquisitions, partnerships, investments or other strategic transactions. For example, in the first quarter of 2023, we acquired substantially all of the assets of Newbury. There can be no assurance that we will successfully identify, negotiate or complete any such transactions, or that any completed transactions will produce favorable financial results.

We have also increasingly undertaken business initiatives to increase the number and type of products offered to investors, especially individual (non-institutional) investors (including investors often described as high net worth individuals, family offices and mass affluent individuals), in the United States and other jurisdictions around the world. Accessing individual investors and selling products directed at such investors exposes us to new and greater levels of risk, including heightened litigation and regulatory enforcement risks. To the extent we distribute products through new channels we may not be able to effectively monitor or control the manner of their distribution, including by Company employees involved in the distribution of our investment products who do not follow our compliance and supervisory procedures, which could result in allegations of improper conduct, litigation or regulatory action against us by state and federal regulators in the United States and regulators in jurisdictions outside of the United States, including with respect to, among other things, claims that investment products distributed through such channels are distributed to customers for whom they are unsuitable, that they are distributed in an otherwise inappropriate manner with regard to investor classification, compliance with securities laws, conflicts of interest and the adequacy of disclosure to customers to whom our products are distributed through those channels, any of which may expose us to the risks of reputational damage and legal liability to the extent such third parties improperly sell our products to investors. In addition, our initiatives to expand our individual investor base, including outside of the United States, requires the investment of significant time, effort and resources, including the potential hiring of additional personnel, the implementation of new operational, compliance and other systems and processes and the development or implementation of new technology. There is no assurance that such efforts will be successful. Furthermore, we may expend significant time and resources to acquire, develop and launch new investment products, which often must be in the marketplace for a period of time and undergo a certain amount of asset portfolio construction in order to generate a track record sufficient to attract significant inflows and enable platform placement at key distributors and intermediaries, which may not be realized within the timeframe or in the form expected, or at all.

Entry into certain lines of business and strategic transactions may subject us to new laws and regulations with which we are not familiar, or from which we are currently exempt, and may lead to increased litigation and regulatory risk. In addition, certain aspects of our cost structure, such as costs for compensation, office space and communication and information technology services will be largely fixed, and we may not be able to timely adjust these costs to match fluctuations in revenue related to growing our business or entering into new lines of business or strategic transactions. If a new business, strategic transaction or investment product generates insufficient revenue or if we are unable to efficiently manage our expanded operations, our business, financial condition and results of operations could be materially and adversely affected.

The substantial growth of our business in recent years may be difficult to sustain, as it may place significant demands on our resources and employees and may increase our expenses in the future.

The substantial growth of our business has placed, and if it continues, will continue to place, significant demands on our infrastructure, our investment team and other employees, and will increase our expenses. In addition, we are required to develop continuously our infrastructure in response to the increasingly complex investment management industry and increasing sophistication of investors. Legal and regulatory developments also contribute to the level of our expenses. The future growth of our business will depend, among other things, on our ability to maintain the appropriate infrastructure and staffing levels to sufficiently address our growth and may require us to incur significant additional expenses and commit additional senior management and operational resources. We may face significant challenges in maintaining adequate financial and operational controls as well as implementing new or updated information and financial systems and procedures. Training, managing and appropriately sizing our work force and other components of our business on a timely and cost-effective basis may also pose challenges. In addition, our efforts to retain or attract qualified investment professionals may result in significant additional expenses. There can be no assurance that we will be able to manage our growing business effectively or that we will be able to continue to grow, and any failure to do so could adversely affect our ability to generate revenue and control our expenses.

Defaults by investors in our funds could adversely affect such funds’ operations and performance.

Our business is exposed to the risk that fund investors may not fulfill their investment commitments. If our fund investors default on their obligations to us, we may experience adverse consequences on the investment process and we could incur losses. We depend on fund investors fulfilling and honoring their commitments when we call capital from them for those funds to consummate investments and otherwise pay their obligations when due. Any fund investor that does not fund a capital call would be subject to several possible penalties, however, those penalties may not be adequate to make us and the applicable fund whole. A failure of fund investors to honor a significant amount of capital calls for any particular fund or funds could have a material adverse effect on the operation and performance of those funds.

Cybersecurity risks and data security breaches could result in the loss of data, interruptions in our business and damage to our reputation, and subject us to regulatory actions, increased costs and financial losses.

Our operations are highly dependent on our information systems and technology, and (as noted above) we rely heavily on our financial, accounting, communications and other data processing systems. Our or our information technology (“IT”) vendors’ systems may fail to operate properly or become disabled as a result of tampering or a breach of our network security systems. In addition, our systems face ongoing cybersecurity threats and attacks. Breaches in security, whether malicious in nature or through inadvertent transmittal or other loss of data, could potentially jeopardize our, our employees’ or our fund investors’ or counterparties’ confidential, proprietary and other information processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in our, our employees’, our fund investors’, our counterparties’ or third parties’ business and operations, which could result in significant financial losses, increased costs, liability to our fund investors and other counterparties, regulatory intervention and reputational damage.

Attacks on our systems could involve, and in some instances have in the past involved, attempts intended to obtain unauthorized access to our proprietary information, destroy data or disable, degrade or sabotage our systems, or divert or otherwise steal funds, including through the introduction of computer viruses, “phishing” attempts and other forms of social engineering.

Cyberattacks and other security threats could originate from a wide variety of external sources, including cyber criminals, nation state hackers, hacktivists and other outside parties. Cyberattacks and other security threats could also originate from the malicious or accidental acts of insiders, such as employees. There can be no assurance that measures we take to ensure the integrity of our systems will provide protection, especially because cyberattack techniques used change frequently or are not recognized until successful. If our systems are compromised, do not operate properly or are disabled, or we fail to provide the appropriate regulatory or other notifications in a timely manner, we could suffer financial loss, a disruption of our businesses, liability to our investment funds and fund investors, regulatory intervention or reputational damage. The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means.

Cybersecurity has become a top priority for regulators. Many jurisdictions in which we operate have laws and regulations relating to data privacy, cybersecurity and protection of personal information, including, as examples the General Data Protection Regulation (“GDPR”) in the EU, the California Consumer Privacy Act (“CCPA”) and other similar data privacy regulations. Some jurisdictions have also enacted laws requiring companies to notify individuals and government agencies of data security breaches involving certain types of personal data.

While we and our service providers have established enhanced data-security measures, business continuity plans and IT systems designed to prevent cyber-attacks from reoccurring in the future, there are inherent limitations in such plans and systems including the possibility that certain risks have not been identified. There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information. Similar types of cyber security risks are also present for service providers and other third parties with which we do business. These service providers and other third parties may hold our information or fund investor information and not have the same level of protection as we maintain for their information or may nevertheless be subject to risk of breach even with enhanced data security measures, any of which could result in material adverse consequences for us.

Finally, we rely on third-party service providers for certain aspects of our business, including for certain information systems and technology and management of assets held in our funds. Any interruption or deterioration in the performance of these third parties or failures of their information systems and technology could impair the quality of the funds’ operations and could affect our reputation and hence adversely affect our business, financial condition and results of operations.

Technological developments in artificial intelligence could disrupt the markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costs.

Technological developments in artificial intelligence, including machine learning technology and generative artificial intelligence (collectively, “AI Technologies”) and their current and potential future applications, including in the private investment and financial sectors, as well as the legal and regulatory frameworks within which they operate, are rapidly evolving. The full extent of current or future risks related thereto is difficult to predict. AI Technologies could significantly disrupt the markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costs, which could have a material adverse effect on our business, financial condition and results of operations. We intend to avail ourselves of the potential benefits, insights and efficiencies that are available through the use of AI Technologies, which presents a number of potential risks that cannot be fully mitigated. Data in models that AI Technologies utilize are likely to contain a degree of inaccuracy and error, which could result in flawed algorithms. This could reduce the effectiveness of AI Technologies and adversely impact us and our operations to the extent we rely on the work product of such AI Technologies in such operations. There is also a risk that AI Technologies may be misused or misappropriated by our employees and/or third parties engaged by us. For example, a user may input confidential information, including material non-public information or personal identifiable information, into AI Technology applications, resulting in such information becoming part of a dataset that is accessible by third-party AI Technology applications and users, including our competitors. Such actions could subject us to legal and regulatory investigations and/or actions. Further, we may not be able to control how third-party AI Technologies that we choose to use are developed or maintained, or how data we input is used or disclosed, even where we have sought contractual protections with respect to these matters. The misuse or misappropriation of our data could have an adverse impact on our reputation and could subject us to legal and regulatory investigations and/or actions. Regulations related to AI Technologies may also impose on us certain obligations and costs related to monitoring and compliance.

A public health crisis or global outbreak of disease may affect our operations and financial performance and the investment returns of our funds, and may disrupt industries in which we and our funds operate and could potentially negatively impact us or our funds and our results of operations, financial condition and cash flows.

A public health crisis, including a pandemic similar in nature to the COVID-19 pandemic, could impact the geographic regions where our funds operate. The global, regional and local spread of a public health crisis could result in, and in the past has resulted in, significant global mitigation measures, including government-directed quarantines, social distancing and shelter-in-place mandates, travel restrictions, healthcare mandates, restrictions on large gatherings and restricted access to certain facilities. Business disruptions and market volatility resulting from a public health crisis could have a substantial negative impact on our results of operations, financial condition and cash flows. The adverse impact of a pandemic could include, and in the past has included without limitation, a slowdown in the pace of their fundraising activity, investment activity and capital deployment, which could also adversely affect the timing of raising capital for new or successor funds and could also impact the management fees we earn on funds that generate fees based on invested (and not committed) capital. While the increased volatility in the financial markets caused by a public health crisis may present attractive investment opportunities for certain investment strategies, we or our funds may not be able to complete those investments due to, among other factors, increased competition or operational challenges, such as our ability to raise capital within each strategy, obtain attractive financing, to overcome internal lender policies restricting lending to particular asset classes, to conduct due diligence and to consummate the acquisition and disposition of investments for our funds. Additionally, a public health crisis could adversely impact, and in the past has adversely impacted, our business and operations since an extended period of remote working by our employees could strain our technology resources and introduce operational risks, including heightened cybersecurity risk. While we have taken steps to secure our networks and systems, remote working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts that seek to exploit the public health crisis. Any such risks may materialize during the public health crisis or be triggered by intermediate causes resulting from such public health crises or government action related thereto.

Our funds may face risks relating to undiversified investments.

We cannot give assurance as to the degree of diversification that will be achieved in any of our funds. Difficult market conditions or slowdowns affecting a particular asset class, geographic region or other category of investment could have a significant adverse impact on a given fund if its investments are concentrated in that area, which would result in lower investment returns up to a total loss of fund equity in the investments. Accordingly, a lack of diversification on the part of a fund could adversely affect its investment performance and, as a result, our business, financial condition and results of operations.

Our risk management strategies and procedures may leave us exposed to unidentified or unanticipated risks.

Risk management applies to our investment management operations as well as to the investments we make for our funds. We have developed and continue to update strategies and procedures specific to our business for managing risks, which include market risk, liquidity risk, operational risk and reputational risk. Management of these risks can be very complex. These strategies and procedures may fail under some circumstances, particularly if we are confronted with risks that we have underestimated or not identified. In addition, some of our methods for managing the risks related to our funds’ investments are based upon our analysis of historical private markets behavior. Statistical techniques are applied to these observations in order to arrive at quantifications of some of our risk exposures. Historical analysis of private markets returns requires reliance on valuations performed by Fund Managers, which may not be reliable measures of current valuations. These statistical methods may not accurately quantify our risk exposure if circumstances arise that were not observed in our historical data. In particular, as we enter new lines of business, our historical data may be incomplete. Failure of our risk management techniques could materially and adversely affect our business, financial condition and results of operations, including our right to receive incentive fees.

The due diligence process that we undertake in connection with investments may not reveal all facts that may be relevant in connection with an investment.

Before making or recommending investments for our fund investors, we conduct due diligence that we deem reasonable and appropriate based on the facts and circumstances applicable to each investment. When conducting due diligence, we may be required to evaluate important and complex business, financial, tax, accounting, environmental and legal issues. Outside consultants, legal advisors and accountants may be involved in the due diligence process in varying degrees depending on the type of investment and the parties involved. Nevertheless, when conducting due diligence and making an assessment regarding an investment, we rely on the resources available to us, including information provided by the target of the investment and, in some circumstances, third-party investigations. The due diligence investigation that we will carry out with respect to any investment opportunity may not reveal or highlight all relevant facts that are necessary or helpful in evaluating such investment opportunity. Moreover, such an investigation will not necessarily result in the investment ultimately being successful. Poor investment performance could result in negative reputational effects, which could materially and adversely affect our business, financial condition and results of operations.

Operational risks may disrupt our business, result in losses or limit our growth.

We rely heavily on our financial, accounting, compliance, monitoring, reporting and other data processing systems. Any failure or interruption of these systems, including the loss of data, whether caused by fire, other natural disaster, power or telecommunications failure, computer viruses, act of terrorism or war or otherwise, could result in a disruption of our business, liability to our funds, regulatory intervention or reputational damage, and thus materially and adversely affect our business. Although we have back-up systems in place, including back-up data storage, our back-up procedures and capabilities in the event of a failure or interruption may not be adequate. In recent years, we have substantially upgraded and expanded the capabilities of our data processing systems and other operating technology, and we expect that we will need to continue to upgrade and expand these capabilities in the future to avoid disruption of, or constraints on, our operations. We may incur significant costs to further upgrade our data processing systems and other operating technology in the future. In addition, we are dependent on the effectiveness of our information security policies, procedures and capabilities to protect our computer and telecommunications systems and the data such systems contain or transmit. As described in the following risk factor, breaches in security may also disrupt our business, result in losses or limit our growth.

Changes in, or any failure to comply with, data privacy laws, regulations, and standards may adversely affect our business.

Data privacy and data security have become significant issues in the United States, Europe, and in many other jurisdictions. The regulatory framework for data privacy and security issues worldwide is rapidly evolving and is likely to remain uncertain and continue evolving for the foreseeable future. Federal, state, or foreign government bodies or agencies have in the past adopted, and may in the future adopt, additional laws and regulations affecting data privacy.

Within the United States, there are a number of federal laws that impose limits on or requirements regarding the collection, distribution, use, security and storage of personal data of individuals, including the Federal Trade Commission (the “FTC”). Additionally, state legislatures have begun to adopt comprehensive privacy laws, including the CCPA and CPRA in California and similar comprehensive data privacy statutes in other states. Similar laws also have been proposed at the federal level. Internationally, many jurisdictions in which we operate have established or enhanced their own data security and privacy legal framework with which we and our customers must comply, including but not limited to, the EU’s GDPR. The effects of recently proposed or enacted legislation are potentially far-reaching and may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply. We cannot be sure how these regulations will be interpreted, enforced or applied to our operations.

In many jurisdictions, enforcement actions and consequences for noncompliance are also rising. In addition to government regulation, privacy advocates and industry groups may propose new and different self-regulatory standards that either legally or contractually apply to the Company. The changing legal and regulatory landscape could in the future further limit our ability to use and share personal information and require changes to our operating model. Furthermore, any inability or perceived inability, even if unfounded, to comply with the relevant laws and regulations could result in regulatory investigations and penalties, negative publicity and reputational harm.

Employee misconduct could harm us by subjecting us to significant legal liability and reputational harm and impairing our ability to attract and retain fund investors.

We have a large employee headcount relative to many of our peers due to our vertically integrated business model. There is a risk that our employees, property managers at our assets or our service providers could engage in or be alleged to engage in misconduct, including financial fraud or other deceptive practices or failure to comply with anti-bribery, trade sanctions, anti-harassment, anti-discrimination or other legal and regulatory requirements, which could subject us to, among other things, civil and criminal penalties or material fines, profit disgorgement, injunctions on future conduct and securities litigation, and could also cause significant reputational and business harm to us. Even allegations of such misconduct, regardless of their merit, could harm our reputation and affect our ability to attract and retain clients, require us to compensate claimants or pay fines, divert the attention of management and require us to incur significant legal expenses in defending against such claims, litigation or regulatory investigations into these matters. Such misconduct may undermine our due diligence efforts with respect to investments and could negatively affect the valuations of such investments. Losses to our funds and us could also result from misconduct or other actions by service providers, such as administrators, consultants or other advisors, if such service providers improperly use or disclose confidential information, misappropriate funds, or violate legal or regulatory obligations.

Further, we are subject to a number of obligations and standards arising from our advisory and investment management businesses and our discretionary authority over the assets we manage. The violation of these obligations and standards by any of our employees would adversely affect our funds and us. Our business often requires that we deal with confidential matters. If our employees were to improperly use or disclose confidential information, we could be subject to legal or regulatory action and suffer serious harm to our reputation, financial position and current and future business relationships. It is not always possible to detect or deter employee misconduct, and the extensive precautions we take to detect and prevent this activity may not be effective in all cases. Such misconduct may harm our reputation, which may impact our ability to attract and retain investors in our funds.

Employee misconduct may include binding us to unauthorized transactions or present unacceptable risks. Losses could also result from actions by third-party service providers, including the misappropriation of assets. We may also be adversely affected if there is misconduct by management or employees of companies involved in real estate projects in which we invest, and we may be unable to control or mitigate such misconduct. Further, although we have adopted measures reasonably designed to prevent and detect employee misconduct and to select reliable third-party service providers, such measures may not be effective in all cases. If one of our employees were to engage in misconduct or were to be accused of such misconduct, our business and our reputation could be materially and adversely affected.

We are subject to substantial risk of litigation and regulatory proceedings and may face significant liabilities and damage to our professional reputation as a result of litigation allegations and negative publicity.

From time to time we, our funds and our funds’ investments have been and may be subject to litigation. In recent years, the volume of claims and amount of damages claimed in litigation and regulatory proceedings against the financial services industry in general have been increasing, as have claims against owner operators of real estate assets. The investment decisions we make in our asset management business and the activities of our investment professionals (including in connection with investment and investment advisory activities) may subject us, our funds and our funds’ investments to the risk of third-party litigation or regulatory proceedings arising from investor dissatisfaction with the performance of those investment funds, alleged conflicts of interest, the suitability or manner of distribution of our products, including to retail investors and a variety of other claims.

In addition, to the extent investors in our investment funds suffer losses resulting from fraud, gross negligence, willful misconduct or other similar misconduct, investors may have remedies against us, our investment funds, our senior managing directors or our affiliates under the federal securities law and/or state law. While the general partners and investment advisers to our investment funds, including their directors, officers, other employees and affiliates, are generally indemnified to the fullest extent permitted by law with respect to their conduct in connection with the management of the business and affairs of our investment funds, such indemnity generally does not extend to actions determined to have involved fraud, gross negligence, willful misconduct or other similar misconduct.

Further, we operate in a highly regulated environment where we are subject to numerous securities, tax, corporate, real estate, antitrust and other regulations under U.S. and foreign law and our business practices could be subject to scrutiny under such regulations. Regulatory claims, including securities, antitrust, tax or other claims could have a significant impact on our business, financial condition and results of operations or cause significant reputational harm to us. If our business practices were found to be in violation of these laws, we could be subject to substantial penalties, including fines, injunctions, and forced divestitures. These outcomes could disrupt our operations and materially adversely affect our business. Even if we were to prevail in against such regulatory claims, the litigation could be costly and time-consuming and could divert the attention of our management and key personnel from our business operations. We continually monitor our compliance with all applicable laws and regulations, but there can be no assurance that we will effectively mitigate this risk.

Furthermore, we depend to a large extent on our business relationships and our reputation for integrity and high-caliber professional services to attract and retain investors and to pursue investment opportunities for our funds. As a result, allegations of improper conduct by private litigants, regulators, or employees, whether the ultimate outcome is favorable or unfavorable to us, as well as negative publicity and press speculation about us, our investment activities, our lines of business or distribution channels, our workplace environment, or the asset management industry in general, whether or not valid, may harm our reputation, which may be more damaging to our business than to other types of businesses. The pervasiveness of social media and the internet, the recent rise in activity by activist and other organized groups with respect to investments made by private funds, coupled with increased public focus on the externalities of business activities, could also lead to faster and wider dissemination of any adverse publicity or inaccurate information about us, making effective remediation more difficult and further magnifying the reputational risks associated with negative publicity.

We may face damage to our professional reputation and legal liability if our services are not regarded as satisfactory or for other reasons.

As an investment manager, we depend to a large extent on our relationships with our fund investors and our reputation for integrity and high-caliber professional services to attract and retain fund investors. As a result, if a fund investor is not satisfied with our services, such dissatisfaction may be more damaging to our business than to other types of businesses.

In recent years, the volume of claims and amount of damages claimed in litigation and regulatory proceedings against financial advisors has been increasing. Our asset management and advisory activities may subject us to the risk of significant legal liabilities to our funds and third parties, including our fund investors or beneficiaries, under securities or other laws and regulations for materially false or misleading statements made in connection with securities and other transactions. In our investment management business, we make investment decisions on behalf of our fund investors that could result in substantial losses. Any such losses also may subject us to the risk of legal and regulatory liabilities or actions alleging negligent misconduct, breach of fiduciary duty or breach of contract. These risks often may be difficult to assess or quantify and their existence and magnitude often remain unknown for substantial periods of time. We may incur significant legal expenses in defending litigation. In addition, litigation or regulatory action against us may tarnish our reputation and harm our ability to attract and retain fund investors. Substantial legal or regulatory liability could materially and adversely affect our business, financial condition or results of operations or cause significant reputational harm to us, which could seriously harm our business.

Our failure to appropriately manage conflicts of interest could damage our reputation and adversely affect our business.

Actual, potential or perceived conflicts can give rise to fund investor dissatisfaction, litigation or regulatory enforcement actions. Appropriately managing conflicts of interest is complex and difficult and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with one or more potential or actual conflicts of interest. As we expand the scope of our business, we increasingly confront potential conflicts of interest relating to our and our funds’ investment activities. These conflicts include but are not limited to:

• Certain of our funds may have overlapping investment objectives, including funds that have different fee structures, and potential conflicts may arise with respect to our decisions regarding how to allocate investment opportunities.

• Our affiliates may be service providers or counterparties to our funds or fund assets and receive fees or other compensation for services that are not shared with our fund investors. In such instances, we may be incentivized to cause our funds or fund assets to purchase such services from our affiliates rather than an unaffiliated service provider despite the fact that a third-party service provider could potentially provide higher quality services or better value.

Enforcement action or litigation asserting improper management of conflicts of interest, even if unproven, could harm our reputation and our business in a number of ways, including affecting our ability to raise additional funds causing existing fund investors to reduce investments or terminate business with us.

A change of control of our company could result in an assignment of our investment management agreements.

Under the Advisers Act, each of the investment management agreements for the funds and other accounts we manage must provide that it may not be assigned without the consent of the particular fund or other account. An assignment may occur under the Advisers Act if, among other things, we or the Operating Company undergoes a change of control, including in connection with the proposed Mergers. Pursuant to the Merger Agreement, both we and the Operating Company will undergo changes of control upon consummation of the Mergers. If a change of control transaction occurs, including with respect to the Mergers, we cannot be certain that our relevant SEC-registered investment adviser subsidiaries will be able to obtain the necessary consents from our funds and other accounts, which could cause us to lose the management fees and performance fees we earn from such funds and other accounts.

In certain circumstances, investors in our funds have the right to remove us as the general partner of the relevant fund and to terminate the investment period or terminate our investment management under certain circumstances, leading to a decrease in our revenues, which could be substantial.

The governing agreements of our funds provide that, subject to certain conditions, investors in those funds have the right to remove us as the general partner of the relevant fund or terminate the fund. Any such removal or dissolution could result in a cessation in management fees we would earn from such funds or a significant reduction in the expected amounts of carried interest or incentive fees from those funds.

Risks Related to Our Industry

The investment management business is intensely competitive.

The investment management business is intensely competitive, with competition based on a variety of factors, including investment performance, the quality of service provided to fund investors, brand recognition and business reputation. Our investment management business competes with a variety of traditional and alternative asset managers, commercial banks, investment banks and other financial institutions. A number of factors serve to increase our competitive risks:

• some of our competitors have more relevant experience, greater financial and other resources and more personnel than we do;

• there are relatively few barriers to entry impeding new asset management firms, including a relatively low cost of entering these lines of business, and the successful efforts of new entrants into our various lines of business have resulted in increased competition;

• if, as we expect, allocation of assets to alternative investment strategies increases, there may be increased competition for alternative investments and access to fund general partners and managers; and

• other industry participants will from time to time seek to recruit our investment professionals and other employees away from us.

This competitive pressure could adversely affect our ability to make successful investments and restrict our ability to raise future funds, either of which would materially and adversely impact our business, financial condition and results of operations.

Extensive government regulation, compliance failures and changes in law or regulation could adversely affect us and the operation of our funds.

In response to volatility in the financial markets, financial institution failures and financial frauds, governmental authorities have called for or implemented regulatory reform, such as additional regulation of the managers and activities of investment funds, including compliance, risk management and anti-money laundering procedures; restrictions on specific types of investments and the provision and use of leverage; implementation of capital requirements; limitations on compensation paid to managers; and books and records, reporting and disclosure requirements. We cannot predict with certainty the impact of such reforms on us, our funds, or on investment markets generally. Any of these regulatory reform measures could have an adverse effect on our funds’ investment strategies or our business model. We may incur significant expense in complying with such reform measures, which may divert management’s attention and resources. Our advisory and investment management businesses are subject to regulation in the United States, including by the SEC, the Commodity Futures Trading Commission (the “CFTC”), the Internal Revenue Service (the “IRS”) and other regulatory agencies, pursuant to, among other laws, the Advisers Act, the Securities Act, the Exchange Act and the Internal Revenue Code of 1986, as amended (the “Code”). Regulators are also increasing scrutiny and considering regulation of the use of artificial intelligence technologies. We cannot predict with certainty what, if any, actions may be taken. Any change in regulatory oversight or any failure to comply with applicable laws or regulations could result in fines, suspensions of personnel or other sanctions, including revocation of our registration as an investment adviser, as well as reputational risk, which could cause us to lose existing fund investors or fail to gain new fund investors.

Federal, state and foreign anti-corruption and sanctions laws create the potential for significant liabilities and penalties and reputational harm.

We are also subject to a number of laws and regulations governing payments and contributions to political persons or other third parties, including restrictions imposed by the Foreign Corrupt Practices Act (the “FCPA”), as well as trade sanctions and export control laws administered by the Office of Foreign Assets Control (“OFAC”), the United States Department of Commerce and the U.S. Department of State. The FCPA is intended to prohibit bribery of foreign governments and their officials and political parties, and requires public companies in the U.S. to keep books and records that accurately and fairly reflect those companies’ transactions. OFAC, the U.S. Department of Commerce and the U.S. Department of State administer and enforce various export control laws and regulations, including economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign states, organizations and individuals. These laws and regulations relate to a number of aspects of our business, including servicing existing fund investors and finding new fund investors.

Similar laws in non-U.S. jurisdictions, such as EU sanctions or the UK Bribery Act, as well as other applicable anti-bribery, anti-corruption, anti-money laundering, or sanction or other export control laws in the U.S. and abroad, may also impose stricter or more onerous requirements than the FCPA, OFAC, the United States Department of Commerce and the U.S. Department of State, and implementing them may disrupt our business or cause us to incur significantly more costs to comply with those laws. Different laws may also contain conflicting provisions, making compliance with all laws more difficult. If we fail to comply with these laws and regulations, we could be exposed to claims for damages, civil or criminal financial penalties, reputational harm, incarceration of our employees, restrictions on our operations and other liabilities, which could negatively affect our business, operating results and financial condition. In addition, we may be subject to successor liability for FCPA violations or other acts of bribery, or violations of applicable sanctions or other export control laws committed by companies in which we invest or which we acquire. While we have developed and implemented policies and procedures designed to ensure strict compliance by us and our personnel with the FCPA and other anti-corruption, sanctions and export control laws in jurisdictions in which we operate, such policies and procedures may not be effective in all instances to prevent violations. Any determination that we have violated the FCPA or other applicable anti-corruption, sanctions or export control laws could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business prospects, financial condition, results of operations or the market value of our Class A common stock.

Regulation of investment advisors outside the United States could adversely affect our ability to operate our business.

We provide investment advisory and other services and raise funds in a number of countries and jurisdictions outside the United States. In many of these countries and jurisdictions, which include the EU, the EEA, the individual member states of each of the EU and EEA, South Korea, the Cayman Islands and Canada, we and our operations, and in some cases our personnel, are subject to regulatory oversight and requirements. In general, these requirements relate to registration, licenses, periodic inspections, the provision and filing of periodic reports, and obtaining certifications and other approvals. Across the EU, we are subject to the AIFMD under which we are subject to regulatory requirements regarding, among other things, registration for marketing activities, the structure of remuneration for certain of our personnel and reporting obligations. Individual member states of the EU have imposed additional requirements that may include internal arrangements with respect to risk management, liquidity risks, asset valuations, and the establishment and security of depository and custodial requirements. Because some EEA countries have not yet incorporated the AIFMD into their agreement with the EU, we may undertake marketing activities and provide services in those EEA countries only in compliance with applicable local laws. Outside the EEA, the regulations to which we are subject primarily relate to registration and reporting obligations.

It is expected that additional laws and regulations will come into force in the EEA, the EU, and other countries in which we operate over the coming years. These laws and regulations may affect our costs and manner of conducting business in one or more markets, the risks of doing business, the assets that we manage or advise, and our ability to raise capital from fund investors. Any failure by us to comply with either existing or new laws or regulations could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Our Organizational Structure

Because our principal asset is our interest in the Operating Company, we depend on distributions from the Operating Company to pay our taxes and expenses, including payments under the Tax Receivable Agreement (“TRA”) and to pay dividends to holders of our Class A common stock. The Operating Company’s ability to make such distributions may be subject to various limitations and restrictions.

We are a holding company that has no material assets other than our ownership of Class A Units in the Operating Company. As such, we have no independent means of generating revenue or cash flow, and our ability to pay our taxes and operating expenses (including payments under the TRA) or declare and pay dividends in the future, if any, is dependent upon the financial results and cash flows of the Operating Company and its subsidiaries and distributions we receive from the Operating Company. There can be no assurance that the Operating Company and its subsidiaries will generate sufficient cash flow to distribute funds to us or that applicable state law and contractual restrictions, including negative covenants in our debt instruments, will permit such distributions. The Merger Agreement, subject to certain exceptions, places restrictions on our and the Operating Company’s ability to pay any dividends or other distributions, other than tax distributions required to be made pursuant to the operating agreement of the Operating Company and which are consistent with past practice, during the interim period between the execution of the Merger Agreement and the Effective Time (or the date on which the Merger Agreement is terminated).

The Operating Company is treated as a partnership for U.S. federal income tax purposes and, as such, generally is not subject to any entity-level U.S. federal income tax. Instead, any taxable income of the Operating Company is allocated to holders of Class A Units, including us. Accordingly, we incur income taxes on our allocable share of any net taxable income of the Operating Company. Under the terms of the Operating Company Agreement, the Operating Company is obligated, subject to various limitations and restrictions, including with respect to our debt agreements, to make tax distributions to holders of Class A Units, including us. In addition to tax expenses, we also incur expenses related to our operations, including payments under the TRA, which we expect could be significant. We intend, as its managing member, to cause the Operating Company to make cash distributions to the holders of Class A Units in an amount sufficient to (1) fund all or part of their tax obligations in respect of taxable income allocated to them and (2) cover our operating expenses, including payments under the TRA. However, the Operating Company’s ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would either violate any contract or agreement to which the Operating Company is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering the Operating Company insolvent. If we do not have sufficient funds to pay tax or other liabilities, or to fund our operations (including, if applicable, as a result of an acceleration of our obligations under the TRA), we may have to borrow funds, which could materially and adversely affect our liquidity and financial condition, and subject us to various restrictions imposed by any lenders of such funds. To the extent we are unable to make timely payments under the TRA for any reason, such payments generally will be deferred and will accrue interest until paid; provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under the TRA resulting in the acceleration of payments due under the TRA. In addition, if the Operating Company does not have sufficient funds to make distributions, our ability to declare and pay cash dividends will also be restricted or impaired. Under the Operating Company Agreement, we intend to cause the Operating Company, from time to time, to make distributions in cash to its equityholders (including us) in amounts sufficient to cover the taxes imposed on their allocable share of taxable income of the Operating Company. As a result of (1) potential differences in the amount of net taxable income allocable to us and to the Operating Company’s other equityholders, (2) the lower tax rate applicable to corporations as opposed to individuals, and (3) certain tax benefits that we anticipate from (a) future purchases or redemptions of Class A Units from the Continuing Equity Owners, (b) payments under the TRA and (c) any acquisition of interests in the Operating Company from other equityholders in connection with the consummation of the Transactions, these tax distributions may be in amounts that exceed our tax liabilities. Our board of directors determines the appropriate uses for any excess cash so accumulated, which may include, among other uses, the payment of obligations under the TRA and the payment of other expenses. We have no obligation to distribute such cash (or other available cash) to our stockholders. No adjustments to the exchange ratio for Class A Units and corresponding shares of Class A common stock will be made as a result of any cash distribution by us or any retention of cash by us. To the extent we do not distribute such excess cash as dividends on our Class A common stock we may take other actions with respect to such excess cash, for example, holding such excess cash, or lending it (or a portion thereof) to the Operating Company, which may result in shares of our Class A common stock increasing in value relative to the value of Class A Units. The holders of Class A Units may benefit from any value attributable to such cash balances if they acquire shares of Class A common stock in exchange for their Class A Units, notwithstanding that such holders may have participated previously as holders of Class A Units in distributions that resulted in such excess cash balances.

The TRA with the Continuing Equity Owners requires us to make cash payments to them in respect of certain tax benefits to which we may become entitled, and we expect that such payments will be substantial.

We entered into a TRA with the Operating Company and each of the Continuing Equity Owners. Under the TRA, we are required to make cash payments to the Continuing Equity Owners equal to 85% of the tax benefits, if any, that we actually realize, or in certain circumstances are deemed to realize, as a result of (1) the increases in our allocable share of the tax basis of the Operating Company’s assets resulting from any future redemptions or exchanges of Class A Units from the Continuing Equity Owners, and certain distributions (or deemed distributions) by the Operating Company; (2) our allocable share of the existing tax basis of the Operating Company’s assets at the time of any redemption or exchange of Class A Units, which tax basis is allocated to the Class A Units being redeemed or exchanged and acquired by us; and (3) certain other tax benefits arising from payments under the TRA. We expect that the amount of the cash payments we will be required to make under the TRA will be substantial.

Any payments made by us to the Continuing Equity Owners under the TRA will not be available for reinvestment in our business and will generally reduce the amount of overall cash flow that might have otherwise been available to us. To the extent that we are unable to make timely payments under the TRA for any reason, the unpaid amounts will be deferred and will accrue interest until paid by us. Payments under the TRA are not conditioned upon one or more of the Continuing Equity Owners maintaining a continued ownership interest in the Operating Company. Furthermore, our future obligation to make payments under the TRA could make us a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax benefits that are the subject of the TRA. The actual existing tax basis the actual increase in tax basis, and the actual utilization of any resulting tax benefits, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors including the timing of redemptions by the Continuing Equity Owners; the price of shares of our Class A common stock at the time of the exchange; the extent to which such exchanges are taxable; the amount of gain recognized by such Continuing Equity Owners; the amount and timing of the taxable income allocated to us or otherwise generated by us in the future; the portion of our payments under the TRA constituting imputed interest; and the federal and state tax rates then applicable.

The Continuing Equity Owners are entitled to certain benefits to which holders of our Class A common stock are not entitled or are not entitled to the same extent.

Our organizational structure, including the TRA, confers certain benefits upon the Continuing Equity Owners that does not benefit the holders of our Class A common stock to the same extent that it benefits the Continuing Equity Owners. We entered into the TRA with the Operating Company and the Continuing Equity Owners, which provides for the payment by us to the Continuing Equity Owners of 85% of the amount of tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of (1) the increases in our allocable share of the tax basis of the Operating Company’s assets resulting from any future redemptions or exchanges of Class A Units from the Continuing Equity Owners and certain distributions (or deemed distributions) by the Operating Company; (2) our allocable share of the existing tax basis of the Operating Company’s assets at the time of any redemption or exchange of Class A Units, which tax basis is allocated to the Class A Units being redeemed or exchanged and acquired by us, and (3) certain other tax benefits arising from payments under the TRA. Although we will retain 15% of the amount of such tax benefits, this and other aspects of our organizational structure may adversely impact the future trading market for the Class A common stock.

In certain cases, payments under the TRA may be accelerated or significantly exceed any actual benefits we realize in respect of the tax attributes subject to the TRA, and we will not be reimbursed for any payments made under the TRA in the event that any tax benefits are disallowed.

The TRA provides that if (1) we materially breach our material obligations under the TRA, (2) certain mergers, asset sales, or other changes of control were to occur, or (3) we terminate the TRA early, then our obligations, or our successor’s obligations, under the TRA would be based on certain assumptions, including an assumption that we would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the TRA. As a result, we would be required to make an immediate cash payment equal to the present value of the anticipated future tax benefits that are the subject of the TRA, based on certain assumptions, which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits. However, if the Mergers are consummated, the Second A&R TRA will become effective, which provides, among other things, that, the Continuing Equity Owners will forego the acceleration of certain payments that would otherwise have been payable under the TRA to the Continuing Equity Owners by the Company as a result of the Mergers.

We could also be required to make cash payments to the Continuing Equity Owners that are greater than the specified percentage of any actual benefits we ultimately realize in respect of the tax benefits that are subject to the TRA. In these situations, our obligations under the TRA could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, or other changes of control. There can be no assurance that we will be able to fund or finance our obligations under the TRA. We may need to incur debt to finance payments under the TRA to the extent our cash resources are insufficient to meet our obligations under the TRA as a result of timing discrepancies or otherwise.

Additionally, the IRS or another tax authority, may challenge all or part of the tax basis increases or other tax benefits we claim, as well as other related tax positions we take, and a court could sustain such challenge, related to such payments under the TRA. We will not be reimbursed for any cash payments previously made under the TRA to the extent that any tax benefits initially claimed by us and for which payment has been made to a Continuing Equity Owner are ultimately disallowed. Instead, any excess cash payments made by us to a Continuing Equity Owner will be netted against any future cash payments we might otherwise be required to make to such Continuing Equity Owner. However, we might not determine that we have made an excess cash payment for several years following the initial time of such payment and we are not permitted to reduce any future cash payments under the TRA until any challenge of our tax positions is finally settled or determined. Moreover, the excess cash payments we made previously under the TRA could be greater than the amount of future cash payments against which we would otherwise be permitted to net such excess. The applicable U.S. federal income tax rules for determining applicable tax benefits we may claim are complex and fact-specific in nature, and there can be no assurance that the IRS or a court will not disagree with our tax reporting positions. As a result, payments could be made under the TRA significantly in excess of any actual cash tax savings that we realize in respect of the tax attributes with respect to any Continuing Equity Owner that are the subject of the TRA.

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results of operations and financial condition.

We are subject to taxes by U.S. federal, state, local and foreign tax authorities. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including: allocation of expenses to and among different jurisdictions; changes in the valuation of our deferred tax assets and liabilities; expected timing and amount of the release of any tax valuation allowances; tax effects of share-based compensation; costs related to intercompany restructurings; changes in tax laws, tax treaties, regulations or interpretations thereof; or lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates. In addition, we may be subject to audits of our income, sales and other taxes by U.S. federal, state, and local and foreign taxing authorities. Outcomes from these audits could have an adverse effect on our operating results and financial condition.

If we were deemed to be an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), including as a result of our ownership of the Operating Company, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.

Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” for purposes of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities, or (2) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we are an “investment company,” as such term is defined in either of those sections of the 1940 Act. We and the Operating Company intend to conduct our operations so that we will not be deemed an investment company. Because we will control and operate the Operating Company, we believe that our interest in the Operating Company is not an “investment security” as that term is used in the 1940 Act. However, if we were to cease participation in the management of the Operating Company, or if the Operating Company itself becomes an investment company, our interest in the Operating Company could be deemed an “investment security” for purposes of the 1940 Act. If it were established that we were an unregistered investment company, we could be subject to monetary penalties and injunctive relief in an action brought by the SEC, we could be unable to enforce contracts with third parties and third parties could seek to obtain rescission of transactions undertaken during the period it was established that we were an unregistered investment company. If we were required to register as an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.

Risks Related to Ownership of Our Class A Common Stock

The Continuing Equity Owners have significant influence over us, including control over decisions that require the approval of stockholders.

The Continuing Equity Owners control, in the aggregate, over 95% of the voting power represented by all our outstanding classes of stock. As a result, the Continuing Equity Owners exercise significant influence over all matters requiring stockholder approval, including the election and removal of directors and the size of our board of directors, any amendment of our amended and restated certificate of incorporation or bylaws and any approval of significant corporate transactions (including a sale of all or substantially all of our assets), and have significant control over our business, affairs and policies, including the appointment of our management. The directors that Continuing Equity Owners elect have the authority to vote to authorize the Company to incur additional debt, issue or repurchase stock, declare dividends and make other decisions that could be detrimental to stockholders.

The members of our board of directors are, and likely will continue to be, appointed by and/or affiliated with the Continuing Equity Owners who have the ability to appoint the majority of directors. The Continuing Equity Owners can take actions that have the effect of delaying or preventing a change of control of us or discouraging others from making tender offers for our shares, which could prevent stockholders from receiving a premium for their shares. These actions may be taken even if other stockholders oppose them. The concentration of voting power with the Continuing Equity Owners may have an adverse effect on the price of our Class A common stock. The Continuing Equity Owners may have interests that are different from yours and may vote in a way with which you disagree and that may be adverse to your interests.

Our dual class structure may increase volatility in the market price of our Class A common stock.

Our dual class structure may result in a lower or more volatile market price of our Class A common stock, in adverse publicity, or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indices. Under policies announced by major indices in recent years, the dual class structure of our stock would make us ineligible for inclusion in certain indices and, as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to track those indices would not invest in our Class A common stock. These policies are relatively new and it is unclear what effect, if any, they will have on the valuations of publicly traded companies excluded from such indices, but it is possible they may depress valuations, compared to similar companies that are included. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock could be adversely affected.

We are a “controlled company” within the meaning of the NYSE rules and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements. You may not have the same protections afforded to stockholders of companies that are subject to such corporate governance requirements.

The parties to the Stockholders Agreement have more than 50% of the voting power for the election of directors, and, as a result, we are considered a “controlled company” within the meaning of the or NYSE rules. As such, we qualify for, and rely on, exemptions from certain corporate governance requirements, including the requirements to have a majority of independent directors on our board of directors, an entirely independent nominating and corporate governance committee, an entirely independent compensation committee or to perform annual performance evaluations of the nominating and corporate governance and compensation committees.

The corporate governance requirements and, specifically, the independence standards are intended to ensure directors who are considered independent are free of any conflicting interest that could influence their actions as directors. We utilize certain exemptions afforded to a “controlled company.” As a result, we are not subject to certain corporate governance requirements, including that a majority of our board of directors consists of “independent directors,” as defined under the NYSE rules. Therefore, we do not have a majority of independent directors on our board of directors or a nominating and corporate governance committee or compensation committee (or perform annual performance evaluations of nominating and corporate governance and compensation committees, if any) and may not unless and until such time as we are required to do so.

Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE rules. Our status as a controlled company could make our Class A common stock less attractive to some investors or otherwise harm our stock price.

The JOBS Act will allow us to postpone the date by which we must comply with certain laws and regulations intended to protect investors and to reduce the amount of information we provide in our reports filed with the SEC. We cannot be certain if this reduced disclosure will make our Class A common stock less attractive to investors.

The Jumpstart Our Business Startups Act (“JOBS Act”), is intended to reduce the regulatory burden on “emerging growth companies.” As defined in the JOBS Act, we are an “emerging growth company” and could remain an “emerging growth company” until as late as the fifth anniversary of the completion of the IPO. For so long as we are an “emerging growth company,” we will, among other things:

• only be required to have three years of audited financial statements and two years of related management’s discussion and analysis of financial condition and results of operations disclosure;

• not be required to engage an auditor to report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

• not be required to comply with the requirement of the PCAOB, regarding the communication of critical audit matters in the auditor’s report on the financial statements;

• not be required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay,” “say-on-frequency” and “say-on-golden parachutes”; and

• not be required to comply with certain disclosure requirements related to executive compensation, such as the requirement to present a comparison of our Chief Executive Officer’s compensation to our median employee compensation.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This permits an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period and, as a result, our consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to other public companies.

We cannot predict whether investors will find our Class A common stock less attractive as a result of our decision to take advantage of some or all of the reduced disclosure requirements above. If some investors find our Class common stock less attractive as a result, there may be a less active trading market for our Class A common stock and our stock price may be more volatile.

We may pay dividends to our stockholders, but our ability to do so is subject to the terms of the Merger Agreement and the discretion of our board of directors, and may be limited by our holding company structure and applicable provisions of Delaware law.

In the past we have made efforts to pay holders of Class A common stock a quarterly dividend representing substantially all of Bridge Investment Group Holdings Inc.’s share of Distributable Earnings, subject to adjustment by amounts determined by our board of directors to be necessary or appropriate to provide for the conduct of our business, to make appropriate investments in our business and funds, to comply with applicable law, any of our debt instruments or other agreements, or to provide for future cash requirements such as tax-related payments and clawback obligations. All of the foregoing is subject to the qualification that (1) the Merger Agreement, subject to certain exceptions, places restrictions on our ability to pay any dividends or other distribution, other than tax distributions required to be made by the Operating Company pursuant to the operating agreement of the Operating Company and which are consistent with past practice (reduced by our estimated obligations (including estimated U.S. federal, state and local income taxes and obligations under the TRA)), during the interim period between the execution of the Merger Agreement and the Effective Time (or the date on which the Merger Agreement is earlier terminated) and (2) the declaration and payment of any dividends are at the sole discretion of our board of directors and our board of directors may change our dividend policy at any time, including, without limitation, to reduce such quarterly dividends or even to eliminate dividends entirely. Any decision to declare and pay dividends in the future is made at the discretion of our board of directors (and, during the interim period between the execution of the Merger Agreement and the Effective Time (or the date on which the Merger Agreement is earlier terminated), other than tax distributions required to be made by the Operating Company pursuant to the operating agreement of the Operating Company and which are consistent with past practice (reduced by our estimated obligations (including estimated U.S. federal, state and local income taxes and obligations under the TRA)), will require the consent of Apollo) and will depend on, among other things, general and economic conditions, our results of operations and financial condition, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, and such other factors that our board of directors may deem relevant. In addition, our ability to pay dividends is, and may be, limited by covenants of existing and any future outstanding indebtedness we or our subsidiaries incur, including under our credit facilities. Therefore, any return on investment in our Class A common stock is dependent upon the appreciation of the price of our Class A common stock on the open market, which may not occur.

In addition, as a holding company, we will be dependent upon the ability of the Operating Company to generate earnings and cash flows and distribute them to us so that we may pay our obligations and expenses (including our taxes and payments under the TRA) and pay dividends to our stockholders. Our ability to declare and pay dividends to our stockholders is also subject to Delaware law (which may limit the amount of funds available for dividends). If, as a consequence of these various limitations and restrictions, we are unable to generate sufficient distributions from our business, we may not be able to make, or may be required to reduce or eliminate, the payment of dividends on our Class A common stock.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for certain stockholder litigation matters and the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

Our amended and restated certificate of incorporation provides (A) (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws (as either may be amended or restated) or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (iv) any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware; and (B) the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Notwithstanding the foregoing, the exclusive forum provision shall not apply to claims seeking to enforce any liability or duty created by the Exchange Act as the Exchange Act provides that federal courts are the sole forum for claims under the Exchange Act. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation.

Our amended and restated certificate of incorporation provides that the doctrine of “corporate opportunity” will not apply with respect to any director or stockholder who is not employed by us or our subsidiaries.

The doctrine of corporate opportunity generally provides that a corporate fiduciary may not develop an opportunity using corporate resources, acquire an interest adverse to that of the corporation or acquire property that is reasonably incident to the present or prospective business of the corporation or in which the corporation has a present or expectancy interest, unless that opportunity is first presented to the corporation and the corporation chooses not to pursue that opportunity. The doctrine of corporate opportunity is intended to preclude officers or directors or other fiduciaries from personally benefiting from opportunities that belong to the corporation. Our amended and restated certificate of incorporation provides that the doctrine of corporate opportunity will not apply with respect to any director or stockholder who is not employed by us or our subsidiaries. Any director or stockholder who is not employed by us or our subsidiaries will, therefore, have no duty to communicate or present corporate opportunities to us, and will have the right to either hold any corporate opportunity for their (and their affiliates’) own account and benefit or to recommend, assign or otherwise transfer such corporate opportunity to persons other than us, including to any director or stockholder who is not employed by us or our subsidiaries. As a result, certain of our stockholders, directors and their respective affiliates are not prohibited from operating or investing in competing businesses. We, therefore, may find ourselves in competition with certain of our stockholders, directors or their respective affiliates, and we may not have knowledge of, or be able to pursue, transactions that could potentially be beneficial to us. Accordingly, we may lose a corporate opportunity or suffer competitive harm, which could negatively impact our business, operating results and financial condition.

Future sales, or the expectation of future sales, by us or our existing stockholders in the public market could cause the market price for our Class A common stock to decline.

The sale of shares of our Class A common stock in the public market, or the expectation that such sales may occur, could harm the market price of our Class A common stock. These sales, or the possibility of future sales, also might make it more difficult for us to sell equity securities at a time and at a price that we deem appropriate.

In addition, any Class A common stock that we issue under the 2021 Incentive Award Plan or other equity incentive plans that we may adopt in the future would dilute the percentage ownership held by the investors who purchase our Class A common stock. The number of shares available for future grant under the 2021 Incentive Plan also provides for an “evergreen” increase on an annual basis unless our board of directors determines otherwise. If our board of directors does not elect to reduce the annual increases in the number of shares available for future grant under the 2021 Incentive Plan, our stockholders may experience additional dilution, which could cause the market price of our securities to fall.

We may also issue securities in connection with investments, acquisitions or capital raising activities. In particular, the number of shares of our Class A common stock issued in connection with an investment or acquisition, or to raise additional equity capital, could constitute a material portion of our then-outstanding shares of our Class A common stock. Any such issuance of additional securities in the future may result in additional dilution to you, or may adversely impact the price of our Class A common stock. Furthermore, if we issue additional equity or debt securities to raise additional funds, the new equity or debt securities may have rights, preferences and privileges senior to our Class A common stock.

General Risk Factors

We incur significant costs as a result of operating as a public company.

As a publicly traded company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the NYSE and other applicable securities laws and regulations. The expenses we incur as a public company for reporting and corporate governance purposes have been increasing and may continue to increase. These rules and regulations have and will continue to increase our legal and financial compliance costs and make some activities more difficult, time-consuming and costly. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our Class A common stock, fines, sanctions and other regulatory action and potentially civil litigation. These factors may, therefore, strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

As a public reporting company, we are subject to the NYSE rules and the rules and regulations established from time to time by the SEC regarding our internal control over financial reporting. If we fail to maintain effective internal control over financial reporting and disclosure controls and procedures, we may not be able to accurately report our financial results or report them in a timely manner.

The NYSE rules and the rules and regulations established from time to time by the SEC require, among other things, that we establish and periodically evaluate our procedures with respect to our internal control over financial reporting. Reporting obligations as a public company place a considerable strain on our financial and management systems, processes and controls, as well as on our personnel.

In addition, we are required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal control over financial reporting by the time our second annual report is filed with the SEC and thereafter, which requires us to document and make significant changes to our internal control over financial reporting. Likewise, our independent registered public accounting firm will be required to provide an attestation report on the effectiveness of our internal control over financial reporting at such time as we cease to be an “emerging growth company,” as defined in the JOBS Act, and we become an accelerated or large accelerated filer. As described above, we could potentially qualify as an “emerging growth company” until as late as the fifth anniversary of the IPO.

We have and expect to continue to incur costs related to implementing an internal audit and compliance function to further improve our internal control environment. If we identify future deficiencies in our internal control over financial reporting or if we are otherwise unable to comply with the demands placed upon us as a public company, including the requirements of Section 404 of the Sarbanes-Oxley Act, in a timely manner, we may be unable to accurately report our financial results, or report them within the timeframes required by the SEC. We also could become subject to sanctions or investigations by the SEC or other regulatory authorities. In addition, if we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, when required, investors may lose confidence in the accuracy and completeness of our financial reports, we may face restricted access to the capital markets and our stock price may be adversely affected.

If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, or if there is any fluctuation in our credit rating, our stock price and trading volume could decline.

The trading market for our Class A common stock relies in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. If one or more of the analysts who do cover us stops covering us or fails to publish reports on us regularly, we could lose visibility in the market, which, in turn, could cause our stock price or trading volume to decline. Furthermore, if one or more of the analysts who do cover us downgrades our stock or our industry, or the stock of any of our competitors, or publishes inaccurate or unfavorable research about our business, the price of our stock could decline.

Additionally, any fluctuation in the credit rating of us or our subsidiaries may impact our ability to access debt markets in the future or increase our cost of future debt, which could have a material adverse effect on our operations and financial condition, which in return may adversely affect the trading price of shares of our Class A common stock.

Certain provisions of Delaware law and antitakeover provisions in our organizational documents could delay or prevent a change of control.

Certain provisions of Delaware law and our amended and restated certificate of incorporation and amended and restated bylaws may have an antitakeover effect and may delay, defer, or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders. These provisions provide for, among other things:

• a classified board of directors with staggered three-year terms;

• the ability of our board of directors to issue one or more series of preferred stock;

• advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings;

• certain limitations on convening special stockholder meetings;

• no cumulative voting in the election of directors;

• any action required or permitted to be taken by the stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing in lieu of a meeting of such stockholders;

• our amended and restated bylaws may be altered only by the affirmative vote of a majority of the whole board of directors or the holders of at least a majority of the voting power represented by our then-outstanding voting stock, voting together as a single class;

• subject to the rights of the holders of any preferred stock and the terms of the Stockholders Agreement, the number of directors will be determined exclusively by a majority of the whole board of directors; and

• the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2/3% of the voting power represented by our then-outstanding common stock (other than directors appointed pursuant to the Stockholders Agreement, who may be removed with or without cause in accordance with the terms of the Stockholders Agreement).

In addition, we have opted out of Section 203 of the DGCL, but our amended and restated certificate of incorporation provides that engaging in any of a broad range of business combinations with any “interested” stockholder (any stockholder with 15% or more of our voting stock) for a period of three years following the time at which the stockholder became an “interested” stockholder is prohibited, provided, however, that, under our amended and restated certificate of incorporation, the Operating Company, Robert Morse and any of their respective affiliates will not be deemed to be interested stockholders regardless of the percentage of our outstanding voting stock owned by them, and accordingly will not be subject to such restrictions.

Climate change may adversely impact the properties owned by our funds and may lead to additional compliance obligations and costs as well as additional taxes and fees.

We face physical climate change risks, such as increasing temperatures, rising sea levels, changing weather patterns and more frequent or intense droughts, floods and storms, and transition climate change risks, such as new or changing land use policies, carbon emissions regulations, water conservation regulations, technology standards and market trends. We cannot predict the extent, rate, or impact of climate change or the measures that may be implemented to address climate change. We may also become subject to new or changing laws or regulations related to climate change. The governments in locations where we operate have enacted or proposed climate change laws and regulations. These laws and regulations could result in substantial increased costs, including compliance costs, retrofit and construction costs, litigation costs, monitoring and reporting costs and other costs for the properties owned by our funds. The potential impacts of climate change on our operations are uncertain and will vary across the geographies in which we operate. Such impacts may result in increased costs and liabilities, stranded assets and volatile demand at certain of our properties. Climate change may also have indirect effects on our business by, among other things, impacting the cost and availability of insurance, disrupting supply chains, and driving population migration to or away from certain properties. Although we strive to manage climate change risks and opportunities, there can be no assurance that climate change will not have an adverse effect on the value of the properties owned by our funds and our financial performance. Furthermore, our reputation could be negatively affected if we violate climate change laws or regulations or our stated sustainability and responsibility investment principles. We cannot predict how future laws and regulations, or future interpretations of current laws and regulations, related to climate change will affect our funds, our business, results of operations and financial condition.

We are subject to increasing scrutiny with respect to climate change and the environmental, social and governance impact of our operations investments made by our funds, which may constrain investment opportunities for our funds, adversely affect our ability to raise capital, or result in other adverse impacts.

In recent years, there has been increased scrutiny by various stakeholders and policymakers regarding companies’ management of climate change, human capital, and other “ESG” matters. For example, some investors have placed increasing emphasis on the negative impacts of investments made by the private equity and other funds to which they commit capital, including with respect to sustainability and responsibility matters. Investors may demonstrate increased activism with respect to existing investments, including by urging asset managers to take certain actions that could adversely impact the value of an investment, or refrain from taking certain actions that could improve the value of an investment. In some cases, investors have conditioned future capital commitments on the taking or refraining from taking of such actions. Increased focus and activism related to sustainability and responsibility and similar matters may constrain our ability to call committed capital and our capital deployment opportunities and the demands of certain investors may further limit the types of investments that are available to our funds.While we engage in various initiatives to manage ESG matters and respond to stakeholder expectations, these efforts can be costly and may not have the desired effect. For example, many such initiatives rely on methodologies, data, or standards that continue to evolve; our approach to such matters also evolves, and we cannot guarantee that our approach will align with the expectations or preferences of any particular stakeholder engagement. In addition, sustainability and responsibility matters have been the subject of increased focus by certain governmental authorities and regulators, including in the United States and in the EU, which may require that we provide additional disclosure to investors in our funds with respect to sustainability and responsibility matters or, in some cases, take or refrain from taking certain actions regarding ESG matters. These regulations are not uniform, which may increase the cost and complexity of compliance and any associated risks. For example, so-called “anti-ESG” policies and legislation have also been enacted or proposed in several U.S. states. If investors subject to such legislation viewed our funds, policies or practices as being in contradiction to such policies, legislation or legal opinions, such investors may not invest in our funds, our ability to maintain the size of our funds could be impaired. Navigating various stakeholder expectations and regulatory requirements entails costs, and if we fail to successfully navigate such expectations it may also result in regulatory or other stakeholder engagement, loss of potential investors, reputational damage, changes in the desirability or price of our stock, or other adverse impacts to our business, financial condition or results of operations.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This section presents management’s perspective on our financial condition and results of operations. The following discussion and analysis is intended to highlight and supplement data and information presented elsewhere in this annual report on Form 10-K, including the consolidated financial statements and related notes, and should be read in conjunction with the accompanying tables. To the extent that this discussion describes prior performance, the descriptions relate only to the periods listed, which may not be indicative of our future financial outcomes. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.” We assume no obligation to update any of these forward-looking statements. In addition, amounts and percentages in the tables below may reflect rounding adjustments and consequently totals may not appear to sum.

Overview

We are a leading alternative investment manager, diversified across specialized asset classes, with approximately $49.8 billion of AUM as of December 31, 2024. Bridge combines its nationwide operating platform with dedicated teams of investment professionals focused on various specialized and synergistic investment platforms, including real estate, credit, renewable energy and secondaries strategies. Our broad range of products and vertically integrated structure allow us to capture new market opportunities and serve investors with various investment objectives. Our ability to scale our specialized and operationally driven investment approach across multiple attractive sectors within real estate equity and debt, in a way that creates sustainable and thriving communities, is the ethos of who we are and the growth engine of our success. We have enjoyed significant growth since our establishment as an institutional fund manager in 2009, driven by strong investment returns, and our successful efforts to organically develop and strategically acquire an array of investment platforms focused on sectors of the U.S. real estate market and other alternative investments that we believe are the most attractive. We have extensive multi-channel distribution capabilities and currently manage capital on behalf of global institutions and individual investors across our investment strategies.

Business Segment

We operate as one business, a fully integrated alternative investment manager. The Company’s chief operating decision maker, which is the executive chairman, utilizes a consolidated approach to assess financial performance and allocate resources. As such, the Company operates as one business segment.

Recent Events

On February 23, 2025, we entered into the Merger Agreement, pursuant to which, and on the terms and subject to the conditions thereof, Merger Sub Inc. will be merged with and into us, and we will survive such merger as a wholly owned subsidiary of Apollo (the “Corporate Merger”), and Merger Sub LLC will be merged with and into the Operating Company with the Operating Company surviving such merger as the surviving limited liability company and a wholly-owned subsidiary of Apollo (the “LLC Merger” and, together with the Corporate Merger, the “Mergers”). Under the terms of the Merger Agreement, Apollo, through the Merger Subs, will acquire all of our outstanding stock (other than cancelled stock) and all of the Operating Company’s outstanding units (other than cancelled units) in an all-stock transaction with the total equity value of the transaction estimated to be approximately $1.5 billion. The Mergers are expected to close in the third quarter of 2025, subject to the satisfaction or waiver of all of the conditions to the Mergers.

For additional information related to the Merger Agreement, please refer to our Current Report on Form 8-K filed with the SEC on February 24, 2025 and Note 23, “Subsequent Events” to our consolidated financial statements included in this annual report on Form 10-K. For additional information regarding risks and uncertainties associated with the Mergers, see Part I, Item 1A – “Risk Factors” included in this annual report on Form 10-K. There is no guarantee that the Mergers will be consummated.

Trends Affecting Our Business

Our business is affected by a variety of factors, including conditions in the financial markets and economic and political conditions. Changes in global economic conditions and regulatory or other governmental policies or actions can materially affect the values of our holdings and the ability to source attractive investments and completely deploy the capital that we have raised. However, we believe our disciplined investment philosophy across our diversified investment strategies has historically contributed to the stability of our performance throughout market cycles.

In addition to these macroeconomic trends and market factors, our future performance is heavily dependent on our ability to attract new capital, generate strong, stable returns, source investments with attractive risk-adjusted returns and provide attractive investment products to a growing investor base. We believe our future performance will be influenced by the following factors:

• The extent to which fund investors favor private markets investments . Our ability to attract new capital is partially dependent on fund investors’ views of alternative investments relative to traditional asset classes. We believe our fundraising efforts will continue to be subject to certain fundamental asset management trends, including (1) the increasing importance and market share of alternative investment strategies to fund investors of all types as fund investors focus on lower correlated and absolute levels of return, (2) the increasing demand for private markets from private wealth fund investors, (3) shifting asset allocation policies of institutional fund investors, (4) de-leveraging of the global banking system, bank consolidation and increased regulatory requirements and (5) increasing barriers to entry and growth.

• Our ability to generate strong, stable returns and retain investor capital throughout the market cycle. Our ability to raise and retain capital is significantly dependent on our track record and the investment returns we are able to generate for our fund investors. The capital we raise drives growth in our AUM, management fees and performance fees. Although our AUM and fees generated have grown significantly since our inception and particularly in recent years, a significant deterioration in the returns we generate for our fund investors, adverse market conditions or an outflow of capital in the alternative asset management industry in general, or in the real estate space in which we specialize, could negatively affect our future growth rate. Ongoing economic headwinds continue to put downward pressure on occupancy rates, valuations, transaction volumes and the availability of financing in the commercial real estate sector, which represented 3% of our AUM as of December 31, 2024. We are no longer collecting fund management fees or fund administration fees on Bridge Office Fund LP (“BOF I”), which previously contributed $2.0 million to revenue on a quarterly basis. During the year ended December 31, 2024, we recognized a credit loss of $1.5 million related to BOF I, and certain joint venture management fees, which was attributed to fund management fees recognized during the first quarter of 2024, as well as $0.6 million credit loss for fund administration fees beginning in the third quarter of 2024. During the third quarter of 2024, we also began reserving fund management fees and fund administration fees for Bridge Office Fund II LP (“BOF II”) totaling $1.4 million. We also have a $15.0 million outstanding unsecured loan to a subsidiary of BOF I, as well as a $15.8 million outstanding unsecured loan to BOF II, both of which we have determined to be recoverable as of December 31, 2024. In addition, market dislocations, contractions or volatility could adversely affect our returns in the future, which could in turn affect our fundraising abilities. Our ability to retain and attract fund investors also depends on our ability to build and maintain strong relationships with both existing and new fund investors, many of whom place significant emphasis on an asset manager’s track record of strong fund performance and distributions. While we believe that our reputation for generating attractive risk-adjusted returns is favorable to our ability to continue to attract investors, we may face greater challenges in raising capital for new investment strategies as we continue to expand our market presence and asset classes.

• Our ability to source investments with attractive risk-adjusted returns . Our ability to continue to grow our revenue is dependent on our continued ability to source and finance attractive investments and efficiently deploy the capital that we have raised. Capital deployed may vary significantly from period to period with the fluctuating availability of attractive opportunities, which are dependent on a number of factors, including debt financing, the general macroeconomic environment, market positioning, valuation, size, the liquidity of such investment opportunities, and the long-term nature of our investment strategies. Each of these factors impacts our ability to efficiently and effectively invest our pool of fund capital and maintain revenue growth over time. Increases in prevailing interest rates could affect not only our returns on debt and mortgage-backed securities, but also our ability to deploy capital for Bridge-sponsored funds due to the increased cost of, and ability to secure, borrowings. Moreover, with respect to our Debt Strategies and Agency MBS Funds, macro-economic trends or adverse credit and interest rate environments affecting the quality or quantity of new issuance debt and mortgage-backed securities or a substantial increase in defaults could adversely affect our ability to source investments with attractive risk-adjusted returns.

• The attractiveness of our product offerings to a broad and evolving investor base . Investors in our industry may have changing investment priorities and preferences over time, including with respect to risk appetite, portfolio allocation, desired returns and other considerations. We continue to expand and diversify our product offerings to increase investment options for our fund investors, while balancing this expansion with our goal of continuing to deliver the consistent, attractive returns that have cultivated our reputation. We believe that achieving that balance is crucial to both our fund investors’ success and satisfaction, as well as our ability to maintain our competitive position and grow our revenue.

• Our ability to maintain our data advantage relative to competitors . Our proprietary data and technology platforms, analytical tools and deep industry knowledge allow us to provide our fund investors with customized investment solutions, including specialized asset management services, tailored reporting packages, customized performance benchmarks as well as experienced and responsive compliance, administration, and tax capabilities. Our ability to maintain our data advantage is dependent on a number of factors, including our continued access to a broad set of private market information and our ability to grow our relationships with sophisticated partners and wealth management platforms.

See “Item 1A. Risk Factors” included in this annual report on Form 10-K for a discussion of the risks applicable to our business.

Business Environment

Global markets have shifted dramatically over the last several years, experiencing significant volatility driven by increasing concerns over persistent inflation, high interest rates, slowing economic growth and geopolitical uncertainty. In 2022, inflation reached multi-decade highs in many major economies around the world, prompting central banks to pursue monetary policy tightening actions that created, and are likely to continue to create, headwinds to economic growth. However, in the latter part of 2023 the U.S. economy began to show signs of growth, with a strong labor market and deceleration of inflation. In response to these trends, the Federal Reserve paused interest rate increases in the fourth quarter of 2023. During 2024, inflation continued to decelerate and moderated at approximately 2.5%, which led to the Federal Reserve making its first rate cut in four years during its September 2024 meeting. It is expected that the Federal Reserve will make additional rate cuts in 2025.

Our future results may be adversely affected by challenges in fundraising activity, the pace of capital deployment and our ability to collect rental income when due. See “Risk Factors—Risks Related to Our Business—Difficult economic, market and political conditions may adversely affect our businesses, including by reducing the value or hampering the performance of the investments made by our funds or reducing the ability of our funds to raise or deploy capital, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition” in “Part I. Item 1A. Risk Factors” of this annual report on Form 10-K.

Key Financial Measures

We manage our business using financial measures and key operating metrics that we believe reflect the productivity of our core investment activities. We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Additional information regarding our significant accounting policies can be found in Note 2, “Significant Accounting Policies,” to our consolidated financial statements included in this annual report on Form 10-K. Our key financial and operating measures are discussed below.

Revenues

Fund Management Fees . Our fund management fees are generally based on a defined percentage of total commitments, invested capital, or net asset value (“NAV”) of the investment portfolios that we manage. Generally, with respect to fund management fees charged on committed capital, fund management fees are earned at the management fee rate on committed capital and, beginning at the expiration of the investment period, on invested capital. The majority of our fee-earning AUM pays fees on committed capital during the respective funds’ investment periods, which generally produces more management fee revenue than fees paid on invested capital. The fees are generally based on a quarterly measurement period and paid in advance. We typically share a portion of the fees we earn on capital raised through wirehouse and distribution channels. Fund management fees are recognized as revenue in the period in which advisory services are rendered, subject to our assessment of collectability. As of December 31, 2024, our weighted-average management fee varies by fund and is based upon the size of the commitment; however, the low average for a single fund is 0.50% and the high average for a single fund is 1.99% of committed or invested capital for our closed-end funds. Fund management fees also includes management fees for joint ventures and separately managed assets. Management fees for those types of assets are usually less than 1% and typically charged on invested capital or invested equity. For our sponsored closed-end funds, our capital raising period is traditionally 18 to 24 months. After the initial closing of a closed-end fund, we charge catch-up management fees to investors who subscribe in subsequent closings in amounts equal to the fees they would have paid if they had subscribed in the initial closing plus interest. Catch-up management fees are recognized in the period in which the investor subscribes to the fund. Fund management fees are presented net of placement agent fees, where we are acting as an agent in the arrangement.

Property Management and Leasing Fees . We have vertically integrated platforms where we manage a significant percentage of the real estate properties owned by our funds. As of December 31, 2024, we managed approximately 100% of the multifamily, single-family rental, workforce and affordable housing and net lease properties, 69% of the office properties, and 56% of the seniors housing properties owned by our funds. We also provide property management services for a limited number of third-party owned assets. These fees are based upon cash collections at the managed properties and traditionally range from 2.5% to 3.0% for multifamily properties, 2% to 5% for workforce and affordable housing properties, 9.5% for single-family rental properties, 2% to 3% for office properties and 4% to 5% for seniors housing properties. Additionally, we receive leasing fees upon the execution of a leasing agreement for our office assets. We determined that certain third-party asset management costs, for which we are deemed to be the primary obligor, are recorded as gross revenue with a corresponding expense. The gross presentation has no impact on our net income to the extent the expense incurred, and corresponding cost reimbursement income are recognized. The offset is recorded in third-party operating expenses on the consolidated statements of operations.

Construction Management Fees and Development Fees . The majority of our equity funds have a value-add component, where we seek to make improvements or reposition the properties, or have a development strategy. Similar to property management fees, we perform the construction management and development management for certain managed properties and receive fees for these services. These fees are earned as the work is completed. The rates charged are based upon market rates and are updated on an annual basis. For small projects, we occasionally charge an immaterial flat fee. For significant projects, the range is generally 0.5% to 5.0% of construction costs.

Transaction Fees . We earn transaction fees associated with the due diligence related to the acquisition of assets and origination of debt financing for assets. The fee is recognized upon the acquisition of the asset or origination of the mortgage or other debt. The fee range for acquisition fees is generally 0.5% to 1.2% of the gross acquisition cost of the investment or, in the case of development projects, the total development budget, and the fee range for debt origination is generally 0.3% to 0.9%.

Fund Administration Fees. The Company earns fees for providing fund administration services to its funds. Fund administration fees include a fixed annual amount plus a percentage of invested or deployed capital. Fund administration fees also include investor services fees, which are based on an annual fee per investor. Fees are earned as services are provided, and are recognized on a straight-line basis.

Insurance Premiums . BIGRM is our subsidiary that provides certain insurance products for multifamily and commercial properties owned by the funds. BIGRM insures direct risks including lease security deposit fulfillment, tenant legal liability, workers compensation deductible, property deductible and general liability deductible reimbursements. Tenant legal liability premiums are earned monthly. Deposit eliminator premiums are earned in the month that they are written. Workers’ compensation and property deductible premiums are earned over the terms of the policy period.

Other Asset Management and Property Income . Other asset management and property income includes, among other things, interest on catch-up management fees, fees related to in-house legal and tax professional services, which are generally billed on an hourly rate to various Bridge funds and properties, and other miscellaneous fees.

Performance Fees . We earn two types of performance fee revenues: incentive fees and performance allocations, as described below. Incentive fees comprise fees earned from certain fund investor investment mandates for which we do not have a general partner interest in a fund. Performance allocations include the allocation of performance-based fees, commonly referred to as carried interest, from limited partners in the funds to us. As of December 31, 2024, we had approximately $18.3 billion of carry-eligible fee-earning AUM across approximately 57 funds and other vehicles, of which 22 were in accrued carried interest positions.

Incentive fees are generally calculated as a percentage of the profits earned with respect to certain accounts for which we are the investment manager, subject to the achievement of minimum return levels or performance benchmarks. Incentive fees are a form of variable consideration and represent contractual fee arrangements in our contracts with investors in our funds. Incentive fees are typically subject to reversal until the end of a defined performance period, as these fees are affected by changes in the fair value of the assets under management or advisement over such performance period. Moreover, incentive fees that are received prior to the end of the defined performance period are typically subject to clawback, net of tax. We recognize incentive fee revenue only when these amounts are realized and no longer subject to significant reversal, which is typically at the end of a defined performance period and/or upon expiration of the associated clawback period (i.e., crystallization). However, clawback terms for incentive fees received prior to crystallization only require the return of amounts on a net of tax basis. Accordingly, the tax basis portion of incentive fees received in advance of crystallization is not subject to clawback and is therefore recognized as revenue immediately upon receipt. Incentive fees received in advance of crystallization that remain subject to clawback are recorded as deferred incentive fee revenue and are included in accrued performance allocations compensation in the consolidated balance sheets.

Performance allocations include the allocation of performance-based fees to us from limited partners in the funds in which we hold an equity interest. We are entitled to a performance allocation (typically 15% to 20%) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized. These performance allocations are subject to the achievement of minimum return levels (typically 6% to 8%), in accordance with the terms set forth in the respective fund’s governing documents. Performance-based fees earned by our general partners from open-end funds are generally based on the investment returns, subject to preferred returns and/or high-watermarks, for the applicable measurement period of the open-end fund. Performance-based fees are measured and eligible to be received on a recurring basis and are not dependent on realization events from the underlying investments.

We account for our investment balances in the funds, including performance allocations, under the equity method of accounting because we are presumed to have significant influence as the general partner or managing member. Accordingly, performance allocations are not deemed to be within the scope of Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”), Revenue from Contracts with Customers . We recognize income attributable to performance allocations from a fund based on the amount that would be due to us pursuant to the fund’s governing documents, assuming the fund was liquidated based on the current fair value of its underlying investments as of that date. Accordingly, the amount recognized as performance allocation income reflects our share of the gains and losses of the associated fund’s underlying investments measured at their then-fair values, relative to the fair values as of the end of the prior period, or in the case of our managed perpetual REITs, the current period NAV. We record the amount of carried interest allocated to us as of each period end as accrued performance allocations in the consolidated balance sheets. Performance allocations are realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the specific hurdle rates, as defined in the applicable governing documents. Performance allocations are subject to reversal to the extent that the amount received to date exceeds the amount due to us based on cumulative results. As such, a liability is accrued for the potential clawback obligations if amounts previously distributed to us would require repayment to a fund if such fund were to be liquidated based on the current fair value of their underlying investments as of the reporting date. Actual repayment obligations generally do not become realized until the end of a fund’s life.

Earnings (Losses) from Investments in Real Estate. The Company’s share of the investee’s income and expenses for the Company’s equity method investments (exclusive of carried interest) is included in investment income as earnings (losses) from investments in real estate.

Expenses

Employee Compensation and Benefits . Compensation includes salaries, bonuses (including discretionary awards), related benefits, share-based compensation, compensatory awards, and the cost of processing payroll. Bonuses are accrued over the employment period to which they relate.

Share-Based Compensation . To further align the interests of our employees with our shareholders and to cultivate a strong sense of ownership and commitment to our Company, certain employees are eligible to receive Class A restricted common stock (“Restricted Stock”), Restricted Stock Units (“RSUs”), and profits interests awards. Equity-classified awards granted to employees that have a service condition only are measured at fair value at date of grant and remeasured at fair value only upon a modification of the award. The fair value of the Restricted Stock and RSUs awards are based upon our stock price on the grant date. The fair value for profits interests awards classified as equity is determined using a Monte Carlo valuation on the grant date or date of modification. We recognize compensation expense on a straight-line basis over the requisite service period of the awards, with the amount of compensation expense recognized at the end of a reporting period at least equal to the fair value of the portion of the award that has vested through that date. Compensation expense is adjusted for actual forfeitures upon occurrence. Refer to Note 20, “Share-Based Compensation and Profits Interests,” to our consolidated financial statements included in this annual report on Form 10-K for additional information about equity awards.

Performance Allocations Compensation . Performance fee-related compensation deemed to be compensatory awards represents the portion of performance allocation revenue and incentive fees that have been awarded to employees as a form of long-term incentive compensation. Performance fee-related compensation is generally tied to the investment performance of the funds. Up to 60% of performance allocation revenue is awarded to employees as part of our long-term incentive compensation plan, fostering alignment of interest with our fund investors and investors, and retaining key investment professionals. Performance allocations related compensation is accounted for as compensation expense in conjunction with the related performance allocation revenue and, until paid, is recorded as a component of accrued performance allocations compensation in the consolidated balance sheets. Amounts presented as realized indicate the amounts paid or payable to employees based on the receipt of performance allocation revenue from realized investment activity. Performance allocations related compensation expense may be subject to reversal to the extent that the related performance allocation revenue is reversed. Performance allocations related compensation paid to employees may be subject to clawback on an after-tax basis under certain scenarios. Incentive fee-related compensation is accrued as compensation expense when it is probable and estimable that payment will be made.

Loss and Loss Adjustment Expenses . Loss and loss adjustment expenses includes the estimated liability (based upon actuarial reports) of both losses which have been reported to us, but have not been processed and paid, and losses relating to insured events which have occurred but have not been reported to us.

Third-Party Operating Expenses . Third-party operating expenses represent transactions, largely operation and leasing of assets, with third-party operators of real estate owned by the funds where we were determined to be the principal rather than the agent in the transaction.

General and Administrative Expenses . General and administrative expenses include costs primarily related to professional services, occupancy, travel, communication and information services, transaction costs, and other general operating items.

Depreciation and Amortization . Deprecation or amortization of tenant improvements, furniture and equipment and intangible assets is expensed on a straight-line basis over the useful life of the asset.

Other Income (Expense)

Realized and Unrealized Gains (Losses) . Realized and unrealized gains (losses) occur when the Company redeems all or a portion of its investment or when the Company receives cash income, such as dividends or distributions. Unrealized gains (losses) result from changes in the fair value of the underlying investment as well as from the reversal of previously recognized unrealized gains (losses) at the time an investment is realized. Realized and unrealized gains (losses) are presented together as net realized and unrealized gains (losses) in the consolidated statements of operations. Finally, realized and unrealized gain (loss) associated with the financial instruments that we elect the fair value option is also included in net realized and unrealized gains (losses).

Interest Income . Interest (other than interest on catch-up management fees), dividends and other investment income are included in interest income. Interest income is recognized on an accrual basis to the extent that such amounts are expected to be collected using the effective interest method. Dividends and other investment income are recorded when the right to receive payment is established.

Other Income (Expense) . Other income (expense) relates to non-operating and non-investment related expenses, which at times can include changes in our TRA liability.

Interest Expense . Interest expense includes interest related to our privately offered notes, or the Private Placement Notes, which have a weighted-average fixed coupon rate of 5.03%. The Credit Facility incurs interest based on a pricing grid, as determined by the Company’s leverage ratio, over Term Secured Overnight Financing Rate (“Term SOFR”) and an unused commitment fee of up to 0.25%, which is based on the daily unused portion of the Credit Facility. As of December 31, 2024, the interest rate on our Credit Facility was approximately 6.48%.

Income Tax Expense . Income tax expense consists of taxes paid or payable by us and our operating subsidiaries. We are taxed as a corporation for U.S. federal and state income tax purposes and, as a result, are subject to U.S. federal and state income taxes, in addition to local and foreign income taxes, with respect to our allocable share of any taxable income generated by the Operating Company that will flow through to its members. The Operating Company has historically been treated as a partnership for U.S. federal and state income tax purposes. As such, income generated by the Operating Company flows through to its members and is generally not subject to U.S. federal or state income tax at the Operating Company level. Our non-U.S. subsidiaries operate as corporate entities in non-U.S. jurisdictions. Accordingly, in some cases, these entities are subject to local or non-U.S. income taxes. In addition, certain subsidiaries are subject to local jurisdiction taxes at the entity level, with the related tax provision reflected in the consolidated statements of operations.

Net Income (Loss) Attributable to Non-Controlling Interests in Bridge Investment Group Holdings LLC. Net income (loss) attributable to non-controlling interests in Bridge Investment Group Holdings LLC represent the economic interests held by management and third parties in the consolidated subsidiaries of the Operating Company, fund manager entities, and employees in those entities. These non-controlling interests are allocated a share of income or loss in the respective consolidated subsidiary in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss.

Net Income (Loss) Attributable to Non-Controlling Interests in Bridge Investment Group Holdings Inc. Net income (loss) attributable to non-controlling interests in Bridge Investment Group Holdings Inc. represents the economic interests in the Operating Company held by the third-party owners of Class A Units of the Operating Company. Non-controlling interests in Bridge Investment Group Holdings Inc. are allocated a share of income or loss in the Operating Company in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss.

For additional discussion of components of our consolidated financial statements, refer to Note 2, “Significant Accounting Policies,” to our consolidated financial statements included in this annual report on Form 10-K.

Operating Metrics

We monitor certain operating metrics that are either common to the asset management industry or that we believe provide important data regarding our business.

Assets Under Management

AUM refers to the assets we manage. Our AUM represents the sum of (a) the fair value of the assets of the funds and vehicles we manage, plus (b) the contractual amount of any uncalled capital commitments to those funds and vehicles (including our commitments to the funds and vehicles and those of Bridge affiliates), plus (c) the fair value of the assets of any REITs managed by our affiliates, including Bridge Investment Group Industrial Real Estate Income Trust (“BIGi”). Our AUM is not reduced by any outstanding indebtedness or other accrued but unpaid liabilities of the assets we manage. We view AUM as a metric to measure our investment and fundraising performance as it reflects assets generally at fair value plus available uncalled capital. Our calculations of AUM and fee-earning AUM may differ from the calculations of other investment managers. As a result, these measures may not be comparable to similar measures presented by other investment managers, and differs from the manner in which our affiliates registered with the SEC report “Regulatory Assets Under Management” on Form ADV and Form PF. In addition, our calculation of AUM (but not fee-earning AUM) includes uncalled commitments to (and the fair value of the assets in) the funds and vehicles we manage from Bridge and Bridge affiliates, regardless of whether such commitments or investments are subject to fees. Our definition of AUM is not based on any definition contained in the agreements governing the funds and vehicles we manage or advise.

The following table presents a rollforward of our AUM for the years ended December 31, 2024, 2023, and 2022 (dollar amounts in millions):

Year Ended December 31,

AUM as of beginning of period

New capital / commitments raised (1)

Distributions / return of capital (2)

Change in fair value and acquisitions (3)

AUM as of end of period

Increase

Increase %

(1) New capital / commitments raised generally represents limited partner capital raised by our funds and other vehicles, including any reinvestments in our open-ended vehicles. New capital / commitments raised for the year ended December 31, 2023 includes $5.1 billion of AUM attributed to the Newbury Acquisition.

(2) Distributions / return of capital generally represents the proceeds realized from the disposition of assets, current income, or capital returned to investors.

(3) Change in fair value and acquisitions generally represents realized and unrealized activity on investments held by our funds and other vehicles (including changes in fair value and changes in leverage) as well as the net impact of fees, expenses, and non-investment income.

Fee-Earning AUM

Fee-earning AUM reflects the assets from which we earn management fee revenue. The assets we manage that are included in our fee-earning AUM typically pay management fees based on capital commitments, invested capital or, in certain cases, NAV, depending on the fee terms.

Management fees are only marginally affected by market appreciation or depreciation because substantially all of the funds pay management fees based on commitments or invested capital.

Our calculation of fee-earning AUM may differ from the calculations of other investment managers and, as a result, may not be comparable to similar measures presented by other investments managers. The following table presents a rollforward of our total fee-earning AUM for the years ended December 31, 2024, 2023, and 2022 (dollar amounts in millions):

Year Ended December 31,

Fee-earning AUM as of beginning of period

Increases (capital raised/deployment) (1)

Changes in fair market value

Decreases (liquidations/other) (2)

Fee-earning AUM as of end of period

Increase

Increase %

(1) Increases generally represent limited partner capital raised or deployed by our funds and other vehicles that is fee-earning when raised or deployed, respectively, including any reinvestments in our open-ended vehicles. Increases for the year ended December 31, 2023 includes $4.3 billion of fee-earning AUM attributed to the Newbury Acquisition.

(2) Decreases generally represent liquidations of investments held by our funds or other vehicles or other changes in fee basis, including the change from committed capital to invested capital after the expiration or termination of the investment period.

Capital raising activities and deployment in our logistics, credit and workforce and affordable housing funds led fee-earning AUM to increase by approximately $2.0 billion from December 31, 2023 to December 31, 2024. However, these increases were partially offset by $1.5 billion of reductions in fee-earning AUM largely attributed to the conversion of Newbury Fund III’s management fee basis from committed capital to NAV, the timing of liquidations for Bridge Debt Strategies II, III and IV, as well asset realizations during 2024.

The following table summarizes the balances of fee-earning AUM by fund as of December 31, 2024, 2023, and 2022 (in millions):

As of December 31,

Fee-Earning AUM by Fund

Bridge Debt Strategies Fund IV

Bridge Multifamily Fund V

Newbury Equity Partners Fund V

Bridge Opportunity Zone Fund IV

Bridge Workforce Fund II

Newbury Equity Partners Fund IV

Bridge Multifamily Fund IV

Bridge Opportunity Zone Fund III

Bridge Debt Strategies Fund III

Bridge Seniors Housing Fund II

Bridge Seniors Housing Fund I

Bridge Opportunity Zone Fund V

Bridge Logistics U.S. Venture II

Bridge Debt Strategies Fund V

Bridge Workforce Fund I

Bridge Opportunity Zone Fund I

Newbury Equity Partners Fund III

Bridge Opportunity Zone Fund II

Bridge Debt Strategies IV JV Partners

Bridge Logistics U.S. Venture I

Bridge Net Lease Industrial Income Fund

Bridge Agency MBS Fund

Tamina Homes, Inc (1)

Bridge Debt Strategies Fund II

Bridge Opportunity Zone Fund VI

Bridge Single-Family Rental Fund IV

Newbury Equity Partners Fund VI

Bridge Workforce Fund III

Bridge Multifamily Continuation Fund

Bridge Office Fund II

Bridge Office III JV Partners

Bridge Debt Strategies III JV Partners

Bridge Seniors Housing Fund III

Bridge Office I JV Partners

Bridge Industrial Real Estate Income Trust

Bridge Single-Family Rental Fund III

Bridge Solar Energy Development Fund I

Bridge Debt Strategies II JV Partners

Bridge Office II JV Partners

Bridge Debt Strategies V JV Partners

Bridge Workforce II JV Partners

Bridge Solar I JV Partners

Bridge Office Fund I

Bridge Multifamily Fund III

Bridge Multifamily III JV Partners

Bridge Debt Strategies I JV Partners

Total Fee-Earning AUM

Average remaining fund life of closed-end funds, in years

(1)     Tamina Homes, Inc. is a single-family rental fund managed by Bridge Single-Family Rental Fund Manager LLC, which is a subsidiary of the Company.

Undeployed Capital

As of December 31, 2024, we had $3.5 billion of undeployed capital available to be deployed for future investment or reinvestment. Of this amount, approximately $1.7 billion is currently fee-earning based on commitments and approximately $1.8 billion will be fee-earning if and when it is deployed.

Our Performance

We have a demonstrated record of producing attractive returns for our fund investors across our platforms. Our historical investment returns for our closed-end funds by platform are shown in the chart below (dollar amounts in millions):

Investment Performance Summary as of December 31, 2024

Closed-End Funds (1)

(Investment Period Beginning, Ending Date)

Cumulative Fund Committed Capital (2)

Unreturned Drawn Capital plus Accrued Pref (3)

Cumulative Investment Invested Capital (4)

Realized Investment Value (5)

Unrealized Investment Value (6)

Unrealized Investment MOIC (7)

Total Investment Fair Value (8)

Total Investment MOIC (9)

Investor Levered Net IRR (10)

Investor Unlevered Net IRR (11)

(in millions)

Equity Strategies Funds

Multifamily

Bridge Multifamily I

(Mar 2009, Mar 2013)

Bridge Multifamily II

(Apr 2012, Apr 2015)

Bridge Multifamily III

(Jan 2015, Jan 2018)

Bridge Multifamily IV

(Jun 2018, Jun 2021)

Bridge Multifamily V

(Jul 2021, to present)

Bridge MF Continuation Vehicle

Total Multifamily Funds

Workforce & Affordable Housing

Bridge Workforce Housing I

(Aug 2017, Aug 2020)

Bridge Workforce Housing II

(Aug 2020, Aug 2024)

Total Workforce & Affordable Housing Funds

Secondaries

Newbury Equity Partners I

(Sep 2006, Mar 2013)

Newbury Equity Partners II

(Oct 2009, Oct 2015)

Newbury Equity Partners III

(Jul 2013, Mar 2019)

Newbury Equity Partners IV

(May 2017, Feb 2023)

Newbury Equity Partners V

(Nov 2019, to present)

Total Secondaries Funds

Single-Family Rental

Bridge SFR Predecessor Fund I

(Jan 2013, Jan 2015)

Bridge SFR Predecessor Fund II

(Jan 2015, Jan 2017)

Bridge SFR Predecessor Fund III

(Aug 2019, Aug 2022)

Bridge Single-Family Rental IV

(Jan 2022, to present)

Total Single-Family Rental Funds

Investment Performance Summary as of December 31, 2024

Closed-End Funds (1)

(Investment Period Beginning, Ending Date)

Cumulative Fund Committed Capital (2)

Unreturned Drawn Capital plus Accrued Pref (3)

Cumulative Investment Invested Capital (4)

Realized Investment Value (5)

Unrealized Investment Value (6)

Unrealized Investment MOIC (7)

Total Investment Fair Value (8)

Total Investment MOIC (9)

Investor Levered Net IRR (10)

Investor Unlevered Net IRR (11)

(in millions)

Opportunity Zone

Opportunity Zone I

(Apr 2019, Dec 2019)

Opportunity Zone II

(Nov 2019, Jun 2020)

Total Opportunity Zone Fund

Office

Bridge Office I

(Jul 2017, Jul 2020)

Bridge Office II

(Dec 2019, Dec 2022)

Total Office Funds

Seniors Housing

Bridge Seniors I

(Jan 2014, Jan 2018)

Bridge Seniors II

(Mar 2017, Mar 2020)

Bridge Seniors III

(Nov 2020, Nov 2024)

Total Seniors Housing Funds

Logistics Value

Bridge Logistics Value I

(Nov 2021, Dec 2024)

Total Logistics Value Fund

Debt Strategies Funds

Bridge Debt I

(Sep 2014, Sep 2017)

Bridge Debt II

(July 2016, July 2019)

Bridge Debt III

(May 2018, May 2021)

Bridge Debt IV

(Nov 2020, Nov 2024)

Total Debt Strategies Funds

Footnotes:

The investment performance presented herein is intended to illustrate the performance of investments held by the funds and other vehicles we manage and the potential for which is relevant to the performance-based fees to Bridge. Other than the Investor Unlevered Net IRR and the Investor Levered Net IRR numbers presented herein, the cash flows in the investment performance do not reflect the cash flows used in presentations of fund performance due to the fund level expenses, reserves, and reinvested capital.

(1) Closed-End Funds represented herein does not include performance for (i) certain Opportunity Zone funds with investments which have not been marked-to-market, and (ii) funds that are currently raising capital, including our open-ended funds. Each fund identified contemplates all associated parallel and feeder limited partnerships in which investors subscribe and accordingly share common management. All intercompany accounts and transactions have been eliminated in the combined presentation. Values and performance presented herein are the combined investor returns gross of any applicable legal entity taxes.

(2) Cumulative Fund Committed Capital represents total capital commitments to the fund (excluding joint ventures or separately managed accounts).

(3) Unreturned Drawn Capital + Accrued Pref represents the amount the fund needs to distribute to its investors as a return of capital and a preferred return before the General Partner is entitled to receive performance fees or allocations from the fund.

(4) Cumulative Investment Invested Capital represents the total cost of investments since inception (including any recycling or refinancing of investments). This figure will differ from Cumulative Paid-In Capital, which represents the total contributions or drawn down commitments from all investors since inception.

(5) Realized Investment Value represents net cash proceeds received in connection with all investments, including distributions from investments and disposition proceeds.

(6) Unrealized Investment Value represents the estimated liquidation values that are generally based upon appraisals, contracts and internal estimates. There can be no assurance that Unrealized Investment Fair Value will be realized at valuations shown, and realized values will depend on numerous factors including, among others, future asset-level operating results, asset values and market conditions at the time of disposition, transaction costs, and the timing and manner of disposition, all of which may differ from the assumptions on which the Unrealized Investment Fair Value are based. Direct fund investments in real property are held at cost minus transaction expenses for the first six months.

(7) Unrealized Investment MOIC represents the Multiple on Invested Capital (“MOIC”) for Total Investment Fair Value associated with unrealized investments before management fees, fund level expenses and carried interest, divided by Cumulative Investment Invested Capital attributable to those unrealized investments.

(8) Total Investment Fair Value represents the sum of Realized Investment Value and Unrealized Investment Value, before management fees, expenses and carried interest.

(9) Total Investment MOIC represents MOIC for Total Investment Fair Value divided by Cumulative Investment Invested Capital.

(10) Investor Levered Net IRR is an annualized realized and unrealized internal rate of return to fee-paying fund investors, computed from inception based on the effective dates of cash inflows (capital contributions) and cash outflows (distributions) and the remaining fair value, net of the investors actual management fees, fund level expenses, and carried interest. Net return information reflects aggregated fund-level returns for fee-paying investors using actual management fees paid by the fund. The actual management fee rates from individual investors will be higher and lower than the actual aggregate fund level rate. This return may differ from actual investor level returns due to timing, variance in fees paid by investors, and other investor-specific investment costs such as taxes. Because IRRs are time-weighted calculations, for newer funds with short measurement periods, IRRs may be amplified by fund leverage and early fund expenses and may not be meaningful. For IRRs calculated with an initial date less than one year from the reporting date, the IRR presented is de-annualized, representing such period’s return.

(11) Investor Unlevered Net IRR is an annualized realized and unrealized internal rate of return to fee-paying fund investors, computed from inception based on the effective dates of cash inflows (capital contributions and drawdowns on fund lines of credit) and cash outflows (distributions and repayments on fund lines of credit) and the remaining fair value (after removing outstanding balances on fund lines of credit), net of the investors actual management fees, fund level expenses, and carried interest. Net return information reflects aggregated fund-level returns for fee-paying investors using actual management fees paid by the fund. The actual management fee rates from individual investors will be higher and lower than the actual aggregate fund level rate. Because IRRs are time-weighted calculations, for newer funds with short measurement periods, this IRR may be amplified by early fund expenses and may not be meaningful. For IRRs calculated with an initial date less than one year from the reporting date, the IRR presented is de-annualized, representing such period’s return.

(12) Any composite returns presented herein do not represent actual returns received by any one investor and are for illustrative purposes only. Composite performance is based on actual cash flows of the funds within a strategy over the applicable timeframes and are prepared using certain assumptions. Each fund has varied investment periods and investments were made during different market environments; past performance of prior funds within a strategy is not a guarantee of future results. Fund investors generally pay fees based on a defined percentage of total commitments during the investment period and invested capital thereafter, but some fund investors may pay fees based on invested capital for the life of the fund according to the applicable governing documents. Additional information on the calculation of this composite performance, including applicable assumptions and supporting data, can be made available promptly upon request.

***     Indicates a negative return that results in an IRR that is incalculable. The returns for Total Office Funds are not presented because Bridge Office I is incalculable.

The returns presented above are those of the primary funds in each platform and not those of the Company. The returns presented above do not include returns for joint ventures or separately managed accounts. An investment in our Class A common stock is not an investment in any of our funds. The historical returns attributable to our platforms are presented for illustrative purposes only and should not be considered as indicative of the future returns of our Class A common stock or any of our current or future funds. These returns are presented by platform and include multiple funds of varied vintage, including funds that are fully realized, and performance of a specific fund within a platform can vary materially from the return of the platform as a whole. The returns represent aggregate returns for the U.S. domiciled partnerships, and such aggregate returns may differ materially from the fund-level returns for each individual partnership co-investment vehicles or separately managed accounts or each non-U.S. partnership due to varied management fee structures, timing of investments, contributions and distributions and additional structuring costs and taxes.

There is no guarantee that any fund or other vehicle within a platform will achieve its investment objectives or achieve comparable investment returns.

Results of Operations

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Revenues

Year Ended December 31,

Amount

Change

Change

(in thousands)

Revenues:

Fund management fees

Property management and leasing fees

Construction management fees

Development fees

Transaction fees

Fund administration fees

Insurance premiums

Other asset management and property income

Total revenues

Fund Management Fees . Our fee-earning AUM increased by $0.6 billion, or 2.8%, primarily attributed to capital raising activities and deployment in our logistics, credit and workforce and affordable housing funds, which was partially offset by reductions in fee-earning AUM largely attributed to the conversion of Newbury Fund III’s management fee basis from committed capital to NAV, the timing of liquidations for Bridge Debt Strategies II, III and IV, as well asset realizations during 2024. Our weighted-average management fee, which varies largely due to the size of investor commitments, was 1.34% as of December 31, 2024 compared to 1.35% as of December 31, 2023.

Fund management fees increased by $15.4 million, or 7%, primarily attributed to the Newbury Acquisition, the timing of capital raising for funds launched in 2023 and 2024, and from deployment by Bridge Debt Strategies Fund IV, whose fees are primarily based on invested capital, and by Bridge Net Lease Industrial Income Fund, whose fees are based on NAV. These factors contributed an additional $20.3 million of fund management fees for the year ended December 31, 2024 compared to the year ended December 31, 2023. These increases were partially offset by decreases of $4.9 million largely due to the timing of reductions in fee-earning AUM from the conversion of certain funds’ management fee basis from committed to invested capital or NAV, the timing of catch up fees recognized between periods, and from reductions attributed to BOF I and certain of its related joint ventures due to unfavorable market conditions in the commercial office sector.

Property Management and Leasing Fees . Property management and leasing fees decreased by $5.1 million, or 7%, primarily due to a reduction in the number of commercial office and seniors housing properties managed. These decreases were partially offset by additional fees, which were primarily attributed to an increase in the number of multifamily, workforce and affordable housing and opportunity zone properties managed as well as leasing commissions recognized in 2024.

Construction Management Fees . Construction management fees decreased by $4.1 million, or 35%, primarily due to the timing of projects for commercial office, multifamily housing and workforce and affordable housing properties, which was attributed to the timing of real estate asset acquisitions during the past 12 months. For assets acquired with value-add opportunities, the majority of the exterior construction is completed within the first year after acquisition.

Development Fees . Development fees increased by $0.5 million, or 16%, primarily due to the timing of projects.

Transaction Fees . Transaction fees increased by $7.0 million, or 34%, primarily driven by a $6.7 million increase in due diligence fees driven by the deployment of capital in our development and multifamily equity funds during the year ended December 31, 2024. An additional increase of $0.3 million was attributed to debt origination fees largely due to multifamily housing properties.

Fund Administration Fees. Fund administration fees increased $0.4 million, or 2%, largely due to an increase in fee-earning AUM for certain of our credit, opportunity zone, workforce and affordable housing and secondaries funds compared to 2023, which was partially offset by credit losses written off or reserved related to BOF I and II recognized during 2024.

Insurance Premiums . Insurance premiums increased by $4.3 million, or 24%, largely due to an increase in property and general liability premiums.

Other Asset Management and Property Income . Other asset management and property income increased by $3.5 million, or 29%, primarily due to an increase in accounting, legal and tax services fees compared to 2023 as well as rebates received during 2024.

Investment income

Year Ended December 31,

Amount

Change

Change

(in thousands)

Investment income (loss):

Incentive fees

Performance allocations:

Realized

Unrealized

Earnings from investments in real estate

Total investment income (loss)

Performance Allocations. Net performance allocations increased by $138.4 million, or 105%. The following table reflects our carried interest and incentive fees by fund (in thousands):

Year Ended December 31, 2024

Year Ended December 31, 2023

Realized

Unrealized

Realized

Unrealized

BMF IV GP

BWH I GP

BDS II GP

BNLI GP

BSFR IV GP

BMF CV GP

BDS III GP

BOF II GP

BWH II GP

BLV I GP

BIGi Trust GP

NEP V GP (1)

BSH III GP

BMF III GP

BDS V GP

BLD GP

NEP VI GP

BAMBS GP

BDS IV GP

Total

(1)    The performance allocation income for Newbury Partners Fund V represents the portion payable to former employees of Newbury Partners and therefore no portion of such amount will be retained by the Company.

For the years ended December 31, 2024 and 2023, the realized performance income allocations were primarily related to the timing of tax distributions in Bridge Debt Strategies Funds II, III and IV between periods as well as fee-related performance revenue earned in 2024 by our general partner in our open-end Bridge Net Lease Industrial Income Fund and Bridge Agency MBS Fund. In 2023, the realized performance income in Bridge Multifamily Fund III was related to dispositions, including the recapitalization of assets into a continuation vehicle.

The unrealized performance (loss) income allocation is recorded one quarter in arrears due to timing of the information provided by the funds and third-party entities unless information is available on a more timely basis, and as such the performance allocation loss for the years ended December 31, 2024 and 2023 reflects asset valuations as of September 30, 2024 and 2023, respectively. However, our unrealized performance (loss) income allocation attributed to our perpetual open-end REIT is based on the current period NAV. The change in unrealized performance allocations was largely due to the underlying market fundamentals between 2024 and 2023, which contributed to the depreciation of properties within our multifamily, single-family rental, and workforce and affordable housing funds, and includes the reversal of realized performance allocation income during the respective periods. Additionally, 2024 benefited from appreciation of investments within Newbury Fund VI, launched in 2023, and from the completion of development projects within a Bridge Logistics joint venture.

Earnings From Investments In Real Estate. Earnings from investments in real estate decreased by $0.8 million, or 100%, primarily due to timing of distributions from certain investments.

Expenses

Year Ended December 31,

Amount

Change

Change

(in thousands)

Expenses:

Employee compensation and benefits

Incentive fee compensation

Performance allocations compensation:

Realized

Unrealized

Loss and loss adjustment expenses

Third-party operating expenses

General and administrative expenses

Depreciation and amortization

Total expenses

Employee Compensation and Benefits . Employee compensation and benefits increased by $30.5 million, or 14%, largely due to a net increase of $23.1 million in salaries and benefits attributed to changes in headcount, inflation adjustments to compensation, and increased variable compensation. An additional increase of $7.4 million was attributed to Restricted Stock and RSU awards granted in January 2024 and the additional expense related to the 2023 profits interests awards that were granted in March 2023.

Performance Allocations Compensation. Performance allocation compensation increased by $34.1 million, or 1,222%, primarily due to a $14.6 million increase in unrealized performance allocations compensation and an increase of $19.5 million related to realized performance allocation awards, which is directly correlated to the decrease in our performance allocation income (loss) during the year ended December 31, 2024 compared to the year ended December 31, 2023.

Loss and Loss Adjustment Expenses . Loss and loss adjustment expenses increased by $10.7 million, or 91%, primarily due to losses associated with claims in our captive insurance company during 2024, which resulted in an increase in our incurred but not reported reserves. The remaining increase was attributed to rising costs (correlated with an increase in insurance premiums) and property losses, which are subject to stop loss amounts.

Third-party Operating Expenses. Third-party operating expenses decreased by $8.2 million, or 37%, primarily due to a reduction in the number of seniors housing properties managed as well as a reduction in leasing commissions attributed to the timing of leasing activity.

General and Administrative Expenses . General and administrative expenses decreased by $10.4 million, or 19%, primarily due to $3.6 million of non-recurring transaction costs incurred related to the Newbury Acquisition, a $3.0 million reduction in consolidated fund-level expenses, with the remaining decrease attributed to overall reduction in overhead expenses during 2024, as well as lease termination and severance costs incurred in 2023 that were non-recurring.

Depreciation and Amortization . Depreciation and amortization increased by $3.5 million, or 21%, primarily attributed to additional amortization for intangibles acquired as part of the Newbury Acquisition.

Other income (expense)

Year Ended December 31,

Amount

Change

Change

(in thousands)

Other (expense) income

Realized and unrealized gains (losses), net

Interest income

Other (expense) income, net

Interest expense

Total other (expense) income

Realized and Unrealized Gains (Losses), Net . Net realized and unrealized gains (losses) decreased by $3.3 million, or 52%, for the year ended December 31, 2024, which was primarily attributed to depreciation recognized on certain other investments, including those investments acquired as part of the Newbury Acquisition.

Interest Income . Interest income increased by $1.2 million, or 6%, largely due to the timing of distribution income for interests acquired in the Newbury Acquisition.

Other (Expense) Income, Net . Net other (expense) income decreased by $0.7 million, or 32%, which was attributed to changes in the TRA liability during 2024 compared to 2023.

Interest Expense . Interest expense decreased by $1.7 million, or 6%, which was largely attributed to a lower weighted-average outstanding balance on the Credit Facility in 2024 compared to 2023, which resulted in a reduction of $3.1 million in interest expense. This decrease was partially offset by additional interest expense in 2024 related to the timing of the 2023 Private Placement Notes, which funded in March 2023.

Income tax expense

Income tax expense decreased by $4.6 million, or 76%, which was primarily attributed to changes in the effective tax rate due to changes in the TRA for the year ended December 31, 2024 compared to 2023.

For the year ended December 31, 2024, our effective tax was 8.22% compared to (7.53)% for the year ended December 31, 2023. The negative effective tax rate during 2023 was largely due to investment losses in the period and as a result of our organizational structure as a holding company, whose principal asset is a controlling financial interest in the Operating Company. The Operating Company and its subsidiaries, other than BIGRM and BPM, are limited liability companies or limited partnerships and, as such, are not subject to income taxes. The individual owners of the Operating Company and its subsidiaries are required to report their distributive share of realized income, gains, losses, deductions, or credits on their individual income tax returns.

Net (Loss) Income Attributable to Non-Controlling Interests in Bridge Investment Group Holdings LLC. Net (loss) income attributable to non-controlling interests in Bridge Investment Group Holdings LLC comprises non-controlling interests related to the Operating Company’s subsidiaries and to our profits interests programs. The following table summarizes the allocation of net (loss) income to the non-controlling interests in the Operating Company (in thousands):

Year Ended December 31,

Non-controlling interests related to General Partners — realized

Non-controlling interests related to General Partners — unrealized

Non-controlling interests related to Fund Managers

Non-controlling interests related to 2019 profits interests awards

Non-controlling interests related to 2020 profits interests awards

Non-controlling interests related to 2021 profits interests awards

Non-controlling interests related to 2023 profits interests awards

Net loss attributable to non-controlling interests in Bridge Investment Group Holdings LLC

Net (Loss) Income Attributable to Non-Controlling Interests in Bridge Investment Group Holdings Inc. Net loss attributable to non-controlling interests in Bridge Investment Group Holdings Inc. was $25.3 million and net income attributable to non-controlling interests in Bridge Investment Group Holdings Inc. was $(0.7) million during the years ended December 31, 2024 and 2023, respectively.

On January 1, 2023, certain of the Company’s 2020 profits interests awards were collapsed into 801,927 shares of our Class A common stock and 2,025,953 Class A Units. On July 1, 2023, certain of the Company’s 2021 profits interests awards were collapsed into 489,407 shares of our Class A common stock and 2,429,453 Class A Units. The 2020 and 2021 profits interests were collapsed based on their then-current fair values and the relative value of the Company, based on Distributable Earnings (as defined subsequently) attributable to the Operating Company, Distributable Earnings of the applicable subsidiary where such profits interests are currently held, and the market price of our Class A common stock, in each case as of the date of the collapse. This resulted in a decrease in net income attributable to non-controlling interests for the applicable periods; however, there was also a corresponding increase in the aggregate number of outstanding Class A Units at the Operating Company and shares of our Class A common stock.

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

Revenues

Year Ended December 31,

Amount

Change

Change

(in thousands)

Revenues:

Fund management fees

Property management and leasing fees

Construction management fees

Development fees

Transaction fees

Fund administration fees

Insurance premiums

Other asset management and property income

Total revenues

Fund Management Fees . Our fee-earning AUM increased by $0.1 billion, or 0.7%, exclusive of the Newbury Acquisition, from December 31, 2022 to December 31, 2023. Our weighted-average management fee, which varies largely due to the size of investor commitments, was 1.35% as of December 31, 2023 compared to 1.50% as of December 31, 2022. The decrease in the weighted-average management fee from December 31, 2022 was partially attributed to the Newbury Acquisition as these secondary funds generally have a lower weighted-average management fee range than other Bridge-sponsored funds.

Fund management fees increased by $9.0 million, or 4%, primarily attributed to the Newbury Acquisition, deployment by Bridge Debt Strategies Fund IV, whose fees are primarily based on invested capital, and the timing of capital raising for funds launched in 2022 and 2023. These factors contributed an additional $51.3 million of fund management fees for the year ended December 31, 2023 compared to the year ended December 31, 2022. These increases were partially offset by decreases of $35.7 million largely due to the timing of one-time catch-up fees, reductions in fee-earning AUM attributed to asset realizations and from the conversion of certain funds management fee basis from committed to invested capital, and the recognition of $6.6 million of credit loss reserves attributed to unfavorable market conditions in BOF I, and certain related joint ventures, during 2023.

Included in fund management fees are one-time catch-up fees of $2.8 million for the year ended December 31, 2023, which were primarily related to Bridge Multifamily Fund V and Bridge Opportunity Zone Fund V, compared to one-time catch-up fees of $28.6 million for the year ended December 31, 2022, which were primarily attributed to the timing of capital raising for Bridge Multifamily Fund V, Bridge Workforce and Affordable Housing Fund II, and Bridge Debt Strategies Fund IV. The following chart presents the composition of our fund management fees for the year ended December 31, 2023 and 2022 (dollar amounts in millions) (1) :

(1) Fund management fees for the year ended December 31, 2022 excludes fees for funds launched subsequent to such date.

Property Management and Leasing Fees . Property management and leasing fees increased by $1.5 million, or 2%, primarily due to an approximate 8% increase in the number of properties managed, which was primarily workforce and affordable housing properties.

Construction Management Fees . Construction management fees increased by $0.6 million, or 6%, primarily due to commercial office, seniors housing, and logistics properties completing more value-add construction.

Development Fees . Development fees decreased by $1.8 million, or 38%, primarily due to the timing of projects.

Transaction Fees . Transaction fees decreased by $35.7 million, or 64%, primarily driven by a $30.5 million decrease in due diligence fees attributed to a slowdown in the deployment of capital primarily related to our equity funds during the year ended December 31, 2023 driven by general macroeconomic trends. The remaining $5.2 million decrease was related to a reduction of debt origination fees, which was driven by lower deployment of capital in our equity funds.

Fund Administration Fees. Fund administration fees increased $2.5 million, or 16%, primarily due to the increase in fee-earning AUM.

Insurance Premiums . Insurance premiums increased by $5.2 million, or 41%, largely due to the increase in AUM and higher property and general liability premiums.

Other Asset Management and Property Income . Other asset management and property income increased by $0.3 million, or 3%, primarily due to an increase in ancillary fees during 2023, which were partially offset by a reduction in additional management fees related to the final closing of Bridge Workforce Fund II in 2022 that were non-recurring.

Investment Income

Year Ended December 31,

Amount

Change

Change

(in thousands)

Investment income (loss):

Incentive fees

Performance allocations:

Realized

Unrealized

Earnings from investments in real estate

Total investment income (loss)

Performance Allocations. Net performance allocations decreased by $316.1 million, or 171%. The following table reflects our carried interest and incentive fees by fund (in thousands):

Year Ended December 31, 2023

Year Ended December 31, 2022

Realized

Unrealized

Realized

Unrealized

BMF III GP

BMF IV GP

BWH I GP

BDS III GP

BOF II GP

BWH II GP

BDS II GP

BSFR IV GP

BLV I GP

BOF I GP

BAMBS GP

BSH III GP

NEP V GP (1)

BNLI GP

BMF CV GP

BDS IV GP

Total

(1)    The performance allocation income for Newbury Partners Fund V represents the portion payable to former employees of Newbury Partners and therefore no portion of such amount will be retained by the Company.

For the years ended December 31, 2023 and 2022, the realized performance allocations were primarily related to timing of dispositions in Bridge Multifamily Fund III, including the recapitalization of assets into a continuation vehicle in July 2023, and the timing of tax distributions in Bridge Debt Strategies Funds II, III and IV between periods.

The unrealized performance (loss) income allocation is recorded one quarter in arrears due to timing of the information provided by the funds and third-party entities unless information is available on a more timely basis, and as such the performance allocation (loss) income for the years ended December 31, 2023 and 2022 reflects asset valuations as of September 30, 2023 and 2022, respectively. For the year ended December 31, 2023, the decrease in unrealized performance allocations was largely due to the recapitalization of assets from Bridge Multifamily Fund III into a continuation vehicle that closed in July 2023, market depreciation from properties within our multifamily, workforce and affordable housing funds, commercial office and credit funds, and includes the reversal of realized performance allocation income during the period. For the year ended December 31, 2022, the unrealized performance allocations were largely due to market appreciation, including from Bridge Net Lease Income Fund and Bridge Logistics U.S. Venture I that launched in 2021, and Bridge Single-Family Rental Fund IV that launched in 2022. These increases were partially offset by the reversal of realized performance allocations income attributed to dispositions in Bridge Multifamily Fund III and tax distributions in Bridge Debt Strategies Funds II and III.

Earnings From Investments In Real Estate. Earnings from investments in real estate decreased by $1.4 million, or 65%, primarily due to timing of distributions from certain investments.

Year Ended December 31,

Amount

Change

Change

(in thousands)

Expenses:

Employee compensation and benefits

Incentive fee compensation

Performance allocations compensation:

Realized

Unrealized

Loss and loss adjustment expenses

Third-party operating expenses

General and administrative expenses

Depreciation and amortization

Total expenses

Employee Compensation and Benefits . Employee compensation and benefits increased by $24.2 million, or 12%, largely due to a net increase of $15.6 million in salaries and benefits attributed to higher headcount driven by the increase in our AUM and the number of Bridge-sponsored funds, which was partially offset by a reduction in bonus expense. An additional increase of $8.7 million was attributed to Restricted Stock and RSU awards granted in January 2023 and the additional expense related to the 2022 profits interests awards that were granted in the third quarter of 2022 and the 2023 profits interests awards that were granted in the first quarter of 2023.

Performance Allocations Compensation. Performance allocations compensation decreased by $32.1 million, or 110%, primarily due to a $35.4 million decrease in unrealized performance allocations compensation and an increase of $3.4 million related to realized performance allocations awards, which is directly correlated to the decrease in our performance allocation (loss) income during the year ended December 31, 2023 compared to the performance allocation income during the year ended December 31, 2022.

Loss and Loss Adjustment Expenses . Loss and loss adjustment expenses increased by $5.3 million, or 82%, primarily related to losses incurred or paid related to rising costs and the property losses which are subject to stop loss amounts during the year ended December 31, 2023 compared to the year ended December 31, 2022, and is correlated with an increase in insurance premiums.

Third-party Operating Expenses. Third-party operating expenses decreased by $3.7 million, or 14%, primarily due to a reduction in operating expenses related to the number of seniors housing properties managed, coupled with a decrease in leasing commissions.

General and Administrative Expenses . General and administrative expenses increased by $13.1 million, or 32%, primarily due to $3.6 million of transaction costs incurred related to the Newbury Acquisition, $4.0 million of consolidated fund-level expenses, and $2.1 million of credit losses related to BOF I recognized during the fourth quarter of 2023, with the remaining net increase of $3.5 million largely attributed to lease termination costs for one of our corporate offices, severance costs related to a reduction in force, and other expenses correlated with the increase in AUM and the number of properties managed.

Depreciation and Amortization . Depreciation and amortization increased by $13.4 million, or 457%, primarily attributed to additional amortization for intangibles acquired as part of the Newbury Acquisition.

Other Income (Expense)

Year Ended December 31,

Amount

Change

Change

(in thousands)

Other income (expense)

Investment income

Interest income

Other income (expense), net

Interest expense

Total other income

Realized and Unrealized Gains (Losses), Net . Net realized and unrealized gains (losses) decreased by $10.6 million, or 251%, for the year ended December 31, 2023, largely due to unrealized losses on other investments, including those acquired in the Newbury Acquisition, during 2023 compared to unrealized appreciation recognized on other investments during 2022 and a realized loss of $1.9 million related to the redemption of our investment in the Bridge Agency MBS Fund in July 2023, and includes the reversal of the unrealized losses related to the investment.

Interest Income . Interest income increased by $10.5 million, or 134%, largely due to the timing of distribution income for interests acquired in the Newbury Acquisition, the timing of short-term borrowings by Bridge-sponsored funds, as well as an increase in the interest rate earned on the weighted-average outstanding cash and cash equivalents between periods.

Other (Expense) Income, Net . Net other (expense) income decreased by $3.4 million, or 270%, which was attributed to changes in the TRA liability during 2023 compared to 2022.

Interest Expense . Interest expense increased by $16.2 million, or 131%, primarily due to the $150.0 million of 2022 Private Placement Notes that funded in July 2022, which have a weighted-average interest rate of 5.05%, $150.0 million of 2023 Private Placement Notes that funded in March 2023, which have a weighted-average interest rate of 6.01%, and the outstanding balance on the Credit Facility during 2023.

Income tax expense

Income tax expense decreased by $16.1 million, or 72%, primarily due to a net loss for the year ended December 31, 2023 compared to net income for the year ended December 31, 2022, which was largely attributed to investment (loss) income recognized during the respective periods.

For the year ended December 31, 2023, our effective tax was (7.53)% compared to 7.53% for the year ended December 31, 2022. The negative effective tax rate during 2023 was largely due to investment losses in the period and as a result of our organizational structure as a holding company, whose principal asset is a controlling financial interest in the Operating Company. The Operating Company and its subsidiaries, other than BIGRM and BPM, are limited liability companies or limited partnerships and, as such, are not subject to income taxes. The individual owners of the Operating Company and its subsidiaries are required to report their distributive share of realized income, gains, losses, deductions, or credits on their individual income tax returns.

Net (Loss) Income Attributable to Non-Controlling Interests in Bridge Investment Group Holdings LLC. Net (loss) income attributable to non-controlling interests in Bridge Investment Group Holdings LLC comprises non-controlling interests related to the Operating Company’s subsidiaries and to our profits interests programs. The following table summarizes the allocation of net (loss) income to the non-controlling interests in the Operating Company (in thousands):

Year Ended December 31,

(in thousands)

Non-controlling interests related to General Partners — realized

Non-controlling interests related to General Partners — unrealized

Non-controlling interests related to Fund Managers

Non-controlling interests related to 2019 profits interests awards

Non-controlling interests related to 2020 profits interests awards

Non-controlling interests related to 2021 profits interests awards

Net (loss) income attributable to non-controlling interests in Bridge Investment Group Holdings LLC

Net (Loss) Income Attributable to Non-Controlling Interests in Bridge Investment Group Holdings Inc. Net loss attributable to non-controlling interests in Bridge Investment Group Holdings Inc. was $0.7 million and net income attributable to non-controlling interests in Bridge Investment Group Holdings Inc. was $157.0 million during the years ended December 31, 2023 and 2022, respectively.

On January 1, 2023, certain of the Company’s 2020 profits interests awards were collapsed into 801,927 shares of our Class A common stock and 2,025,953 Class A Units. On July 1, 2023, certain of the Company’s 2021 profits interests awards were collapsed into 489,407 shares of our Class A common stock and 2,429,453 Class A Units. The 2020 and 2021 profits interests were collapsed based on their then-current fair values and the relative value of the Company, based on Distributable Earnings (as defined subsequently) attributable to the Operating Company, Distributable Earnings of the applicable subsidiary where such profits interests are currently held, and the market price of our Class A common stock, in each case as of the date of the collapse. This resulted in a decrease in net income attributable to non-controlling interests for the applicable periods; however, there was also a corresponding increase in the aggregate number of outstanding Class A Units at the Operating Company and shares of our Class A common stock.

Non-GAAP financial measures

We use non-GAAP financial measures, such as Distributable Earnings, Fee Related Earnings, Fee Related Revenues and Fee Related Expenses, to supplement financial information presented in accordance with GAAP. We believe that excluding certain items from our GAAP results allows management to better understand our consolidated financial performance from period to period and better project our future consolidated financial performance as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Fee Related Revenues and Fee Related Expenses are presented separately in our calculation of non-GAAP measures in order to better illustrate the profitability of our Fee Related Earnings. Moreover, we believe these non-GAAP financial measures provide our stakeholders with useful information to help them evaluate our operating results by facilitating an enhanced understanding of our operating performance and enabling them to make more meaningful period to period comparisons.

There are limitations to the use of the non-GAAP financial measures presented in this report. For example, our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.

The non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as a substitute for measures prepared in accordance with GAAP, and should be read only in conjunction with financial information presented on a GAAP basis. Reconciliations of each of Distributable Earnings, Fee Related Earnings, Fee Related Revenues and Fee Related Expenses to its most directly comparable GAAP financial measure are presented below. We encourage you to review the reconciliations in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. In future fiscal periods, we may exclude such items and may incur income and expenses similar to these excluded items.

Distributable Earnings . Distributable Earnings is a key performance measure used in our industry and is evaluated regularly by management in making resource deployment and compensation decisions, and in assessing our performance. We believe that reporting Distributable Earnings is helpful to understanding our business and that investors should review the same supplemental financial measure that management uses to analyze our performance.

Distributable Earnings differs from net income before the provision for income taxes, computed in accordance with GAAP in that it does not include depreciation and amortization, income (loss) from consolidated Bridge-sponsored funds, unrealized performance allocations and related compensation expense, unrealized gains (losses), share-based compensation, cash net income attributable to non-controlling interests, charges (credits) related to corporate actions and non-recurring items. Such items, where applicable, include: charges associated with acquisitions or strategic investments, changes in the TRA liability, corporate conversion costs, amortization and any impairment charges associated with acquired intangible assets, transaction costs associated with acquisitions, impairment charges associated with lease right-of-use assets, gains and losses from the retirement of debt, charges associated with contract terminations and employee severance. Distributable Earnings is not a measure of performance calculated in accordance with GAAP. Although we believe the inclusion or exclusion of these items provides investors with a meaningful indication of our core operating performance, the use of Distributable Earnings without consideration of the related GAAP measures is not adequate due to the adjustments described herein. This measure supplements and should be considered in addition to and not in lieu of the results of operations discussed further under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” prepared in accordance with GAAP. Our calculations of Distributable Earnings may differ from the calculations of other investment managers. As a result, these measures may not be comparable to similar measures presented by other investment managers.

Fee Related Earnings . Fee Related Earnings is a supplemental performance measure used to assess our ability to generate profits from fee-based revenues that are measured and received on a recurring basis. Fee Related Earnings differs from net income (loss) before provision for income taxes, computed in accordance with GAAP in that it adjusts for the items included in the calculation of Distributable Earnings, and also adjusts Distributable Earnings to exclude realized performance allocations income and related compensation expense, net insurance income, earnings from investments, net interest (interest income less interest expense), net realized gain (loss), income (loss) from consolidated fund investments, and, if applicable, certain general and net administrative expenses when the timing of any future payment is uncertain. Fee Related Earnings is not a measure of performance calculated in accordance with GAAP. The use of Fee Related Earnings without consideration of the related GAAP measures is not adequate due to the adjustments described herein. Our calculations of Fee Related Earnings may differ from the calculations of other investment managers. As a result, these measures may not be comparable to similar measures presented by other investment managers. During 2024, we revised our definition of Fee Related Earnings to account for the impact of fee related performance revenue related to our open-end funds, which have become more meaningful to our results of operations. However, this does not impact historical performance measures as no such fees have yet been realized, and therefore the revised definition will only effect Fee Related Earnings on a prospective basis.

Fee Related Revenues . Fee Related Revenues is a component of Fee Related Earnings. Fee Related Revenues includes fund management fees, transaction fees net of any third-party operating expenses, fee related performance revenue net of fee related performance compensation, net earnings from Bridge property operators, development fees, fund administration fees, and other asset management and property income.

Fee related performance revenue comprises performance-based fees earned by our general partners from open-end funds. These fees are generally based on the investment returns, subject to preferred returns and/or high-watermarks, for the applicable measurement period of the open-end fund. Fee related performance revenues are measured and eligible to be received on a recurring basis and are not dependent on realization events from the underlying investments.

Net earnings from Bridge property operators is calculated as a summation of property management, leasing fees and construction management fees less third-party operating expenses and property operating expenses. Property operating expenses is calculated as a summation of employee compensation and benefits, general and administrative expenses and interest expense at our property operators. We believe our vertical integration enhances returns to our shareholders and fund investors, and we view the net earnings from Bridge property operators as part of our fee related revenue as these services are provided to essentially all of the real estate properties in our equity funds. Net earnings from Bridge property operators is a metric that is included in management’s review of our business. Please refer to the reconciliation below to the comparable line items on the consolidated statements of operations. Fee Related Revenues differs from revenue computed in accordance with GAAP in that it excludes insurance premiums and income (loss) from consolidated fund investments. Additionally, Fee Related Revenues is reduced by the costs associated with our property operations, which are managed internally in order to enhance returns to the Limited Partners in our funds.

Fee Related Expenses . Fee Related Expenses is a component of Fee Related Earnings. Fee Related Expenses differs from expenses computed in accordance with GAAP in that it does not include incentive fee compensation, performance allocations compensation, share-based compensation, loss and loss adjustment expenses associated with our insurance business, depreciation and amortization, or charges (credits) related to corporate actions and non-recurring items, expenses from consolidated fund investments, and expenses attributable to non-controlling interests in consolidated entities. Additionally, Fee Related Expenses is reduced by the costs associated with our property operations, which are managed internally in order to enhance returns to the Limited Partners in our funds. Fee Related Expenses are used in management’s review of the business. Please refer to the reconciliation below to the comparable line items on the consolidated statements of operations.

Fee Related Revenues and Fee Related Expenses are presented separately in our calculation of non-GAAP measures in order to better illustrate the profitability of our Fee Related Earnings.

Income (loss) before provision for income taxes is the GAAP financial measure most comparable to Distributable Earnings and Fee Related Earnings. The following table sets forth a reconciliation of net income (loss) to Distributable Earnings attributable to the Operating Company and to Total Fee Related Earnings attributable to the Operating Company for the years ended December 31, 2024, 2023, and 2022 (in thousands):

Year Ended December 31,

Net income (loss)

Income tax expense

Income (loss) before provision for income taxes

Depreciation and amortization

Impact of fund consolidation

Less: Unrealized performance allocations

Plus: Unrealized performance allocations compensation

Less: Unrealized (gains) losses, net

Plus: Other (income) expenses, net

Plus: Share-based compensation

Plus: Transaction and non-recurring costs (1)

Less: Cash income attributable to non-controlling interests in subsidiaries

Less: Net realized performance allocations attributable to non-controlling interests

Distributable Earnings attributable to the Operating Company

Realized performance allocations and incentive fees

Realized performance allocations and incentive fees compensation

Net realized performance allocations to non-controlling interests

Net insurance (income) loss

(Earnings) losses from investments in real estate

Net investment and interest (income) expense and realized (gain) loss

Plus: Fee related income attributable to non-controlling interests in subsidiaries

Total Fee Related Earnings

Total Fee Related Earnings attributable to non-controlling interests

Total Fee Related Earnings attributable to the Operating Company

(1)     Transaction costs and non-recurring expenses represent transaction costs related to the Newbury Acquisition, severance and additional credit loss reserves written off related to BOF I as well as lease termination costs recognized in 2023 related to one of our corporate offices.

The following table sets forth our total Fee Related Earnings and Distributable Earnings for the years ended December 31, 2024, 2023, and 2022 (in thousands):

Year Ended December 31,

Fund-level fee revenues

Fund management fees

Fee related performance revenue

Transaction fees

Total net fund-level fee revenues

Net earnings from Bridge property operators

Development fees

Fund administration fees

Other asset management and property income

Fee Related Revenues

Cash-based employee compensation and benefits

Net administrative expenses

Fee Related Expenses

Total Fee Related Earnings

Total Fee Related Earnings attributable to non-controlling interests

Total Fee Related Earnings to the Operating Company

Realized performance allocations and incentive fees

Realized performance allocations and incentive fees compensation

Net realized performance allocations attributable to non-controlling interests

Net insurance income

Earnings from investments in real estate

Net investment and interest income (expense) and realized gain (loss)

Distributable Earnings attributable to the Operating Company

The following table sets forth the components of the employee compensation and benefits, general and administrative expenses, and total other income (expense) line items on our consolidated statements of operations. Other income (expense) is disclosed in our non-GAAP measures based upon the nature of the income. Realized amounts are disclosed separately in order to determine Distributable Earnings. Other income from Bridge property operators is included in net earnings from Bridge property operators. The following table sets forth these components for the years ended December 31, 2024, 2023, and 2022 (in thousands):

Year Ended December 31,

Fund management fees

Impact of fund consolidation

Total fund management fees

Cash-based employee compensation and benefits

Compensation expense of Bridge property operators

Share-based compensation

Employee compensation and benefits

Administrative expenses, net of Bridge property operators

Administrative expenses of Bridge property operators

Transaction and non-recurring costs

Impact of fund consolidation

General and administrative expenses

Unrealized (losses) gains

Other expenses from Bridge property operators

Other income (expense), net

Net investment and interest income (expense) and realized gain (loss)

Impact of fund consolidation

Non-FRE income attributable to non-controlling interest in subsidiaries

Total other expense

Fee Related and Distributable Earnings Related Earnings to the Operating Company

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Total Fee Related Earnings to the Operating Company increased by $6.0 million, or 5%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, while Distributable Earnings to the Operating Company decreased by $6.1 million, or 4%, during the same period due to the following:

• Total fee related revenues increased by $29.2 million, or 10%, principally due to:

◦ Fund management fees increased by $15.0 million, or 6%, primarily due to the timing of capital raising between 2024 and 2023 and the Newbury Acquisition;

◦ Fee related performance revenue of $6.2 million, which was largely attributed to the timing of performance fees earned from our open-end funds, including Bridge Net Lease Industrial Income Fund and Bridge Agency MBS Fund; and

◦ Transaction fees increased by $7.0 million, or 34%, due to the increased volume of real estate transactions driven by the deployment of capital in our development and multifamily equity funds during 2024;

• Net earnings from Bridge property operators decreased by $3.1 million, or 28%, driven by a reduction in the number of internally managed seniors housing and commercial office properties as of December 31, 2023 to December 31, 2024.

• Other asset management and property income increased by $3.4 million, or 29%, which was attributed to additional accounting, legal and tax services fees as well as rebates received during 2024.

• Fee Related Expenses increased by $21.6 million, or 13%, principally due to:

◦ Cash-based employee compensation and benefits increased by $22.8 million, or 16%, primarily due to an increase in salaries and benefits attributed to changes in headcount, inflation adjustments to compensation, and increased variable compensation;

◦ These increases were offset by a decrease in net administrative expenses of $1.1 million, or 4%, primarily due to a reduction in consolidated fund-level expenses and one-time expenses.

• Net of related compensation, realized performance allocations and incentive fees decreased by $11.4 million, or 34%, compared to 2023, primarily due to the timing of realizations in Bridge Debt Strategies Funds II, III and IV as well as fee related performance compensation paid in the third quarter of 2024 for our open-end Bridge Net Lease Industrial Income Fund compared to the realized compensation for Bridge Multifamily Fund III in 2023.

• Net investment and interest (income) expense and realized (gain) loss increased $2.2 million, or 14%, largely due additional interest income attributed to the timing of distribution income for interests acquired in the Newbury Acquisition, which was partially offset by an increase in interest expense attributed to the 2023 Private Placement Notes.

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

Total Fee Related Earnings to the Operating Company decreased by $27.8 million, or 18%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, while Distributable Earnings to the Operating Company decreased by $53.4 million, or 28%, during the same period due to the following:

• Total fee related revenues decreased by $24.6 million, or 8%, principally due to:

◦ Transaction fees decreased by $35.7 million, or 64%, due to reduced volume of real estate transactions attributed to the current macroeconomic environment, including increased interest rates and limited availability of debt financing;

◦ The decrease in transaction fees was partially offset by a net increase in fund management fees of $9.2 million, or 4%, largely due to contributions from the Newbury Acquisition and due to the timing of capital raising between 2023 and 2022. These increases in fund management fees were partially offset by decreases attributed to the timing of one-time catch-up fees, reductions in fee-earning AUM attributed to asset realizations and from the conversion of certain funds management fee basis from committed to invested capital, and the recognition of credit loss reserves attributed to unfavorable market conditions in BOF I during 2023.

• Net earnings from Bridge property operators increased by $0.6 million, or 6%, driven by an increase in the number of workforce and affordable housing and multifamily units managed from December 31, 2022 to December 31, 2023.

• Fee Related Expenses increased by $10.9 million, or 7%, principally due to:

◦ Cash-based employee compensation and benefits increased by $13.4 million, or 11%, primarily due to increased headcount driven by the increase in our fee-earning AUM, which was partially offset by a reduction in 2023 bonuses;

◦ These increases were offset by a decrease in net administrative expenses of $2.5 million, or 9%, primarily due to an increase in general and administrative and property management operating expenses in 2023 compared to 2022, which was offset by the consolidation of fund-level and one-time expenses.

• Net of related compensation, realized performance allocations and incentive fees decreased by $31.5 million, or 49%, compared to 2022, due to the timing of realizations in Bridge Multifamily Fund III and Bridge Debt Strategies Funds II, III and IV.

• Net investment and interest (income) expense and realized (gain) loss increased $11.7 million, or 263%, largely due to an increase in interest expense attributed to the 2023 Private Placement Notes and the outstanding balance of the Credit Facility during 2023, partially offset by additional interest income attributed to the timing of distribution income for interests acquired in the Newbury Acquisition.

Liquidity and Capital Resources

Our liquidity needs primarily include working capital and debt service requirements. We believe that our current sources of liquidity, which include cash generated by our operating activities, and cash and funds available under our credit sources, will be sufficient to meet our projected operating and debt service requirements for at least the next 12 months. To the extent that our current liquidity is insufficient to fund future activities, we may need to raise additional funds. In the future, we may raise additional capital through the sale of equity securities or through debt financing arrangements. If we raise additional funds by issuing equity securities, the ownership of our existing stockholders will be diluted. The incurrence of additional debt financing would result in debt service obligations, and any future instruments governing such debt could provide for operating and financial covenants that could restrict our operations. We operate in a rapidly evolving and unpredictable business environment that may change the timing or amount of expected future cash receipts and expenditures. Accordingly, there can be no assurance that we may not be required to raise additional funds through the sale of equity or debt securities or from credit facilities. Additional capital, if needed, may not be available on satisfactory terms, or at all.

As of December 31, 2024 and 2023, we had total assets of $1,247.4 million and $1,288.8 million, respectively, which included $90.6 million and $57.7 million of cash and cash equivalents, respectively, and total liabilities of $741.5 million and $743.5 million, respectively. There were no borrowings outstanding under the Credit Facility as of December 31, 2024, with $150.0 million of available capacity. We generate cash primarily from fund management fees, property and construction management fees, leasing fees, development fees, transaction fees, and fund administration fees. We have historically managed our liquidity and capital resource needs through (a) cash generated from our operating activities and (b) borrowings under credit agreements and other borrowing arrangements.

Ongoing sources of cash include (a) fund management fees, fund administration fees, property management and leasing fees, which are collected monthly or quarterly, (b) transaction fee income, and (c) borrowings under our Credit Facility. In the future, we will also evaluate opportunities, based on market conditions, to access the capital markets. We use cash flow from operations to pay compensation and related expenses, general and administrative expenses, income taxes, debt service, capital expenditures and to make distributions to our equity holders.

We do not have any off-balance sheet arrangements that would expose us to any liability or require us to fund losses or guarantee target returns to investors in our funds that are not reflected in our consolidated financial statements. Refer to Note 17, “Commitments and Contingencies” and Note 18, “Variable Interest Entities” to our consolidated financial statements included in this annual report on Form 10-K for additional information on commitments and contingencies and variable interest entities, respectively.

The following table presents a summary of our cash flows for the years ended December 31, 2024, 2023, and 2022 (in thousands):

Year Ended December 31,

Net cash provided by operating activities

Net cash provided by (used in) investing activities

Net cash (used in) provided by financing activities

Net increase (decrease) in cash, cash equivalents, and restricted cash

Operating Activities

Cash provided by operating activities was primarily driven by our earnings in the respective periods after adjusting for significant non-cash activity, including non-cash performance allocations and incentive fees, the related non-cash performance allocations and incentive fee related compensation expense, non-cash investment income, non-cash share-based compensation, depreciation, amortization and impairments, and the effect of changes in working capital and other activities. Operating cash inflows primarily included the receipt of management fees, property management and leasing fees, and realized performance allocations and incentive fees, while operating cash outflows primarily include payments for operating expenses, including compensation and general and administrative expenses.

For the year ended December 31, 2024 — cash provided by operating activities was $145.2 million, primarily consisting of net income of $16.7 million and adjustments for non-cash items of $131.0 million, which was partially offset by cash used by operating assets and liabilities of $2.5 million. Adjustments for non-cash items primarily consisted of $42.4 million unrealized performance allocations, $47.5 million of share-based compensation, depreciation and amortization of $19.9 million, $11.5 million of equity in income from equity method investments, and $4.1 million of unrealized accrued performance allocations compensation.

For the year ended December 31, 2023 — cash provided by operating activities was $174.8 million, primarily consisting of adjustments for non-cash items of $241.4 million and cash provided by operating assets and liabilities of $20.8 million offset by a net loss of $87.4 million. Adjustments for non-cash items primarily consisted of $172.7 million unrealized performance allocations, $40.8 million of share-based compensation, depreciation and amortization of $16.4 million, $10.8 million of equity in income from equity method investments, which were partially offset by $10.6 million of unrealized accrued performance allocations compensation.

For the year ended December 31, 2022 — net cash provided by operating activities was $228.4 million, primarily consisting of net income of $272.4 million offset by adjustments for non-cash items of $46.4 million and cash provided by operating assets and liabilities of $2.4 million. Adjustments for non-cash items primarily consisted of $115.2 million unrealized performance allocations and $2.0 million of equity in income from equity method investments, which was offset by $32.1 million of share-based compensation, $24.9 million of unrealized accrued performance allocations compensation and a $12.8 million change in the deferred income taxes.

Investing Activities

Our investing activities primarily consist of lending to affiliate entities and investing activities related to our other investments.

For the year ended December 31, 2024 — cash provided by investing activities of $10.7 million primarily consisted of $311.8 million in collections of notes receivable and proceeds from the sale of investments of $17.2 million and marketable securities of $18.1 million, which was partially offset by issuances of notes receivables of $310.2 million related to our lending activities to affiliated entities and $29.3 million used for the purchase of investments.

For the year ended December 31, 2023 — cash used in investing activities of $343.2 million primarily consisted of $319.4 million used for the Newbury Acquisition, issuances of notes receivables of $245.8 million related to our lending activities to affiliated entities, and $68.5 million for purchases of investments, which was partially offset by $264.7 million in collections of notes receivable and proceeds from the sale of investments of $20.5 million.

For the year ended December 31, 2022 — net cash used in investing activities of $21.9 million primarily consisted of $548.8 million in collections of notes receivable related to our lending activities to affiliate entities, which was offset by issuances of notes receivables of $472.4 million, $83.3 million for purchases of investments, and $15.1 million used for the GBC Acquisition.

Financing Activities

Our financing activities primarily consist of distributions to our shareholders and non-controlling interests as well as borrowings associated with our private placement notes and the Credit Facility, and at times proceeds from issuances of our common stock.

For the year ended December 31, 2024 — cash used in financing activities of $120.7 million was largely due to payments of $369.0 million on the Credit Facility, $83.1 million of distributions paid to non-controlling interests and $17.5 million of dividends paid to our Class A common stockholders. These decreases in cash were partially offset by $335.0 million in proceeds from our Credit Facility and $14.8 million of capital contributions from non-controlling interests.

For the year ended December 31, 2023 — cash provided by financing activities of $42.4 million was largely due to $436.0 million in proceeds from our Credit Facility, $150.0 million in proceeds received from our 2023 Private Placement Notes, and $17.9 million of capital contributions from non-controlling interests. These cash flows were offset by payments of $402.0 million on the Credit Facility, $133.8 million of distributions paid to non-controlling interests, $21.9 million of dividends paid to our Class A common stockholders, and the payment of deferred financing costs related to the 2023 Private Placement Notes.

For the year ended December 31, 2022 — net cash used in financing activities of $97.1 million was largely due to $213.7 million of distributions paid to non-controlling interests and $30.2 million of dividends paid to our Class A common stockholders, and the payment of deferred financing costs related to the new Credit Facility entered into in June 2022 and the 2022 Private Placement Notes. These cash outflows were offset by $150.0 million in proceeds received from our 2022 Private Placement Notes.

Corporate Credit Facilities

On June 3, 2022, the Operating Company entered into a credit agreement (the “Credit Agreement”) with CIBC, Inc. and Zions Bancorporation, N.A. d/b/a Zions First National Bank as Joint Lead Arrangers, which allows for revolving commitments (the “Credit Facility”).

On January 31, 2023, the Operating Company entered into an amendment to the Credit Agreement, pursuant to which (i) the Operating Company exercised its option to increase the total revolving commitments under the Credit Facility to $225.0 million, (ii) the variable interest rates under the applicable pricing grid were each increased by 15 basis points and (iii) the quarterly unused commitment fee was increased to 0.25%.

On February 28, 2024, the Operating Company entered into an amendment to the Credit Agreement with CIBC, Zions and Manufacturers and Traders Trust Company, as Joint Lead Arrangers, which included a reduction in the total aggregate commitments under the Credit Facility from $225.0 million to $150.0 million, with the ability to increase aggregate commitments up to an additional $75.0 million, and extended the maturity date from June 3, 2024 to June 3, 2026.

Borrowings under the Credit Agreement bear interest based on a pricing grid with a range of a 2.65% to 3.15% over Term SOFR as determined by the Operating Company’s leverage ratio, or upon achievement of an investment grade rating, interest is then based on a range of 1.90% to 2.40% over Term SOFR. The Credit Facility is also subject to a quarterly unused commitment fee of up to 0.25%, which is based on the daily unused portion of the Credit Facility. Borrowings under the Credit Facility may be repaid at any time during the term of the Credit Agreement, but the Credit Facility requires paydown at least once annually or if the aggregate commitment exceed certain thresholds for an extended period of time.

Under the terms of the Credit Agreement, certain of the Operating Company’s assets serve as pledged collateral. In addition, the Credit Agreement contains covenants that, among other things, limit the Operating Company’s ability to: incur indebtedness; create, incur or allow liens; merge with other companies; pay dividends or make distributions; engage in new or different lines of business; and engage in transactions with affiliates. The Credit Agreement also contains financial covenants requiring the Operating Company to maintain (1) a debt to EBITDA ratio of no more than 3.75x, (2) minimum liquidity of $15.0 million and (3) minimum quarterly EBITDA of $15 million and minimum EBITDA for the trailing four fiscal quarters of $80.0 million.

The interest rate in effect for the Credit Facility as of December 31, 2024 was approximately 6.48%. As of December 31, 2024, there was no outstanding balance on the Credit Facility.

Subsequent to December 31, 2024, the Company had net draws of $16.0 million on its Credit Facility. As of March 7, 2025, the Company had $134.0 million of remaining availability.

Private Placement Notes

On July 22, 2020, the Operating Company entered into a $150.0 million note purchase agreement, pursuant to which the Operating Company issued two tranches of notes in a private placement offering. The transaction consisted of $75.0 million of 3.90% notes with a five-year term maturing on July 22, 2025, and $75.0 million of 4.15% notes with a seven-year term maturing on July 22, 2027 (the “2020 Private Placement Notes”).

On June 3, 2022, the Operating Company entered into a $150.0 million note purchase agreement pursuant to which the Operating Company issued two tranches of notes in a private placement offering. The transaction consisted of $75.0 million of 5.00% notes with a ten-year term maturing on July 12, 2032, and $75.0 million of 5.10% notes with a twelve-year term maturing on July 12, 2034 (the “2022 Private Placement Notes”).

On February 13, 2023, the Operating Company entered into a $150.0 million note purchase agreement pursuant to which the Operating Company issued two tranches of notes in a private placement offering. The transaction consisted of $120.0 million of 5.99% notes with a seven-year term maturing on March 29, 2030, and $30.0 million of 6.10% notes with a ten-year term maturing on March 29, 2033 (the “2023 Private Placement Notes” and together with the 2020 and 2022 Private Placement Notes, the “Private Placement Notes”). The 2023 Private Placement Notes closed in connection with the closing of the Newbury Acquisition.

Under the terms of the Private Placement Notes, certain of the Operating Company’s assets are pledged as collateral. The Private Placement Notes contain covenants that, among other things, limit the Operating Company’s ability to: incur indebtedness; create, incur or allow liens; merge with other companies; engage in new or different lines of business; and engage in transactions with affiliates. The Private Placement Notes also contain financial covenants requiring the Operating Company to maintain (1) a debt to EBITDA ratio of no more than 3.75x, (2) minimum liquidity of $15.0 million and (3) minimum quarterly EBITDA of $15.0 million and minimum EBITDA for the trailing four fiscal quarters of $80.0 million.

Debt Covenants

As of December 31, 2024 and 2023, the Company was in full compliance with all debt covenants.

Contractual Obligations and Commitments

Our principal contractual obligations and commitments consist of obligations under our Private Placement Notes, capital commitments, and lease obligations. The amount of the obligations presented in the table summarizes our commitments to settle contractual obligations in cash as of the time periods presented. The following table summarizes our contractual obligations as of December 31, 2024:

Payments Due by Time Period

(in thousands)

Total

One year

or less

Over one

year

through

three years

Over three

years

through

five years

Over

five

years

Indeterminable

maturity

Operating lease obligations

Long-term debt obligations (1)

Interest on debt obligations (2)

Revolving line of credit (3)

Standby letters of credits

Capital commitments (4)

Total contractual obligations

(1) Estimated principal payments on our debt obligations reflect amounts that would be paid over the term of the Private Placement Notes assuming the debt is held until final maturity.

(2) Estimated interest payments on our debt obligations reflect amounts that would be paid over the term of the Private Placement Notes based on the contractual interest rates and assuming the debt is held until final maturity.

(3) As of December 31, 2024, there was no outstanding balance on the revolving line of credit with full availability of $150.0 million.

(4) Capital commitments represent our GP commitments in addition to obligations as a limited partner to fund certain property technology investments. These amounts are generally due on demand, and accordingly, have been presented as indeterminable. Capital commitments are expected to be called over a period of several years.

The payments that we may be required to make under the TRA are expected to be substantial. Because the timing of amounts to be paid under the TRA cannot be determined as they are dependent on future taxable income, this contractual commitment has not been presented in the table above.

In addition to the commitments specifically noted previously, we enter into a number of contractual commitments in the ordinary course of business. These include software licensing and maintenance, telecommunications services, facilities maintenance and equipment servicing, supplies purchasing, and other goods and services used in the operation of our business. Some of these contracts are renewable or cancellable at least annually, and in certain cases, to secure favorable pricing concessions, we have committed to contracts that may extend to several years.

Critical Accounting Estimates

The preparation of our consolidated financial statements in accordance with GAAP requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent liabilities. We base our judgments on our historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies could potentially produce materially different results if we were to change the underlying assumptions, estimates or judgments. Refer to Note 2, “Significant Accounting Policies” to our consolidated financial statements included in this annual report on Form 10-K for a summary of our significant accounting policies.

Consolidation

The Company consolidates entities in which it has a controlling financial interest by first considering if an entity meets the definition of a variable interest entity (“VIE”) for which the Company is deemed to be the primary beneficiary, or if the Company has the power to control an entity through a majority of voting interest or through other arrangements. The application of the consolidation guidance requires significant judgement, which includes an assessment of (1) whether the Company holds a variable interest in an entity, (2) whether the entity is a VIE, and (3) whether the Company’s involvement would make it the primary beneficiary.

In evaluating whether the Company holds a variable interest, we make judgements as to whether the fees (including management fees, incentive fees and performance allocations) that we earn are commensurate with the level of effort required for those fees and if the fees are at market rates. In making these judgments, we consider, among other things, the extent of third party investment in the entity and the terms of any other interests we hold in the VIE.

The determination of whether an entity is a VIE, and whether the Company is the primary beneficiary, involves significant judgments in determining which activities most significantly affect the entities’ performance, and estimates about the current and future fair values and performance of assets held by the VIE. As part of this assessment, the Company considers interests held by its related parties, including de facto agents. The Company may perform a related party analysis to assess whether it is a member of a related party group that collectively meets the power and benefits criteria and, if so, whether the Company is most closely associated with the VIE. In performing the related party analysis, the Company considers both qualitative and quantitative factors, including, but not limited to: the amount and characteristics of its investment relative to the related party; the Company’s and the related party’s ability to control or significantly influence key decisions of the VIE including consideration of involvement by de facto agents; the obligation or likelihood for the Company or the related party to fund operating losses of the VIE; and the similarity and significance of the VIE’s business activities to those of the Company and the related party.

Entities that do not qualify as VIEs are generally assessed for consolidation as voting interest entities. Under the voting interest entity model, the Company consolidates those entities it controls through a majority voting interest.

At each reporting period, the Company reassesses whether changes in facts and circumstances cause a change in the status of an entity as a VIE or voting interest entity, and/or a change in the Company’s consolidation assessment. Changes in consolidation status are applied prospectively. An entity may be consolidated as a result of this reassessment, in which case, the assets, liabilities and non-controlling interest in the entity are recorded at fair value upon initial consolidation. Any existing equity interest held by the Company in the entity prior to the Company obtaining control will be remeasured at fair value, which may result in a gain or loss recognized upon initial consolidation. The Company may also deconsolidate a subsidiary as a result of this reassessment, which may result in a gain or loss recognized upon deconsolidation depending on the carrying values of deconsolidated assets and liabilities compared to the fair value of any interests retained.

The determination that the Company holds a controlling financial interest in a Bridge-sponsored fund or investment vehicle significantly changes the presentation of our consolidated financial statements. In our consolidated balance sheets, we present 100% of the assets and liabilities of consolidated VIEs along with a non-controlling interest which represents the portion of the consolidated vehicle’s interests held by third parties. However, assets of our consolidated VIEs can only be used to settle obligations of the consolidated VIE and are not available for general use by the Company.

Fair Value

GAAP establishes a hierarchical disclosure framework that prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market price observability. Market price observability is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value.

Financial assets and liabilities measured and reported at fair value are classified as follows:

• Level 1 — Pricing inputs are unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date.

• Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in inactive markets; and model-derived valuations with directly or indirectly observable significant inputs. Level 2 inputs include prices in markets with few transactions, non-current prices, prices for which little public information exists or prices that vary substantially over time or among brokered market makers. Level 2 inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates.

• Level 3 — Valuations that rely on one or more significant unobservable inputs. These inputs reflect the Company’s assessment of the assumptions that market participants would use to value the instrument based on the best information available.

In some instances, an instrument may fall into more than one level of the fair value hierarchy. In such instances, the instrument’s level within the fair value hierarchy is based on the lowest of the three levels (with Level 3 being the lowest) that is significant to the fair value measurement. The Company’s assessment of the significance of an input requires judgment and considers factors specific to the instrument.

The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors including, for example, the type of instrument, whether the instrument has recently been issued, whether the instrument is traded on an active exchange or in the secondary market, and current market conditions. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for financial instruments categorized in Level III. The variability and availability of the observable inputs affected by the factors described above may result in transfers between Levels I, II, and III.

Performance Allocations

The Company accounts for accrued performance obligations (commonly referred to as carried interest), which represents a performance-based capital allocation from a fund General Partner to the Company, as earnings from financial assets within the scope of ASC 323, Investments—Equity Method and Joint Ventures. The underlying investments in the funds upon which the allocation is based reflect valuations on an up to three-month lag. The Company recognizes performance allocations as a separate revenue line item in the consolidated statements of operations with uncollected carried interest as of the reporting date reported within accrued performance allocations in the consolidated balance sheets. As of December 31, 2024 and 2023, the Company had accrued performance allocations of $339.6 million and $382.0 million, respectively.

Carried interest is allocated to the Company based on cumulative fund performance to date, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s partnership agreement or other governing documents. At the end of each reporting period, a fund will allocate carried interest applicable to the Company based upon an assumed liquidation of that fund’s net assets on the reporting date, irrespective of whether such amounts have been realized. Carried interest is recorded to the extent such amounts have been allocated and may be subject to reversal to the extent that the amount allocated exceeds the amount due to the general partner based on a fund’s cumulative investment returns. Accordingly, the amount recognized as performance allocation revenue reflects our share of the gains and losses of the associated fund’s underlying investments measured at their then-fair values, relative to the fair values as of the end of the prior period.

Fair value varies between reporting periods, therefore it is necessary to make adjustments to amounts recorded as carried interest to reflect either (i) positive performance resulting in an increase in the carried interest allocated to the Company or (ii) negative performance that would cause the amount due to the Company to be less than the amount previously recognized as revenue, resulting in a reversal of previously recognized carried interest allocated to the Company. The Company ceases to record negative performance allocations once previously accrued performance allocations for such fund have been fully reversed. The Company is not obligated to pay guaranteed returns or hurdles in this situation, and therefore, cannot have negative performance allocations over the life of a fund. Because of the inherent uncertainty in measuring the fair value of investments in the absence of observable market prices, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is reasonably possible that the difference could be material.

Carried interest is realized when an underlying investment is profitably disposed of, and the fund’s cumulative returns are in excess of the specific hurdle rates as defined in the applicable investment management agreements or fund or joint venture governing documents. Since carried interest is subject to reversal, the Company may need to accrue for potential repayment of previously received carried interest. This accrual represents all amounts previously distributed to the Company that would need to be repaid to the funds if the funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual repayment obligations, however, generally do not become realized until the end of a fund’s life.

As of December 31, 2024 and 2023, if the Company assumed all existing investments were worthless, the amount of performance income subject to potential repayment by the Bridge GPs, net of tax distributions, which may differ from the recognition of revenue, would have been approximately $203.2 million and $197.8 million, respectively, of which $159.5 million and $155.4 million, respectively, is reimbursable to the Bridge GPs by certain professionals who are the recipients of such performance income. Management believes the possibility of all of the investments becoming worthless is remote. If the funds were liquidated at their fair values as of December 31, 2024, there would be no contingent repayment obligation or liability.

Incentive Fees and Performance Allocations Compensation

The Company records incentive fee compensation when it is probable that a liability has been incurred and the amount is reasonably estimable. The incentive fee compensation accrual is based on a number of factors, including the cumulative activity for the period and the expected timing of the distribution of the net proceeds in accordance with the applicable governing agreement.

A portion of the performance allocations earned is awarded to employees. The Company evaluates performance allocations to determine if they are compensatory awards or equity-classified awards based on the underlying terms of the award agreements on the grant date.

Performance allocations awards granted to employees and other participants are accounted for as a component of compensation and benefits expense contemporaneously with our recognition of the related realized and unrealized performance allocation revenue. Upon a reversal of performance allocation revenue, the related compensation expense, if any, is also reversed. Liabilities recognized for carried interest amounts due to affiliates are not paid until the related performance allocation revenue is realized.

Income Taxes

Prior to the IPO, other than our subsidiaries BIGRM and Bridge PM, Inc., the Operating Company and its subsidiaries were limited liability companies or limited partnerships and, as such, were not subject to income taxes and the individual owners of the Operating Company and its subsidiaries were required to report their distributive share of the Operating Company’s realized income, gains, losses, deductions, or credits on their individual income tax returns. In preparation for the IPO, the Company was incorporated as a corporation for U.S. federal income tax purposes, and is subject to U.S. federal and state income taxes on its share of taxable income generated by the Operating Company.

Taxes are accounted for using the asset and liability method of accounting, which is based on estimates and assumptions that involve significant judgements. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases, using tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period when the change is enacted. The principal items giving rise to temporary differences are certain basis differences resulting from exchanges of units in the Operating Company.

Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is dependent on the amount, timing and character of the Company’s future taxable income. When evaluating the realizability of deferred tax assets, all evidence – both positive and negative – is considered. This evidence includes, but is not limited to, expectations regarding future earnings, future reversals of existing temporary tax differences and tax planning strategies.

The Company is subject to the provisions of ASC Subtopic 740-10, Accounting for Uncertainty in Income Taxes. This standard establishes consistent thresholds as it relates to accounting for income taxes. It defines the threshold for recognizing the benefits of tax return positions in the financial statements as more likely than not to be sustained by the relevant taxing authority and requires measurement of a tax position meeting the more likely than not criterion, based on the largest benefit that is more than 50% likely to be realized. If upon performance of an assessment pursuant to this subtopic, management determines that uncertainties in tax positions exist that do not meet the minimum threshold for recognition of the related tax benefit, a liability is recorded in the consolidated financial statements. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as general, administrative and other expenses in the consolidated statements of operations.

Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties under GAAP. We review our tax positions quarterly and adjust our tax balances as new legislation is passed or new information becomes available.

Tax Receivable Agreements

The TRA with the Operating Company and each of the Continuing Equity Owners provides for the payment by the Company to the Continuing Equity Owners of 85% of the amount of tax benefits, if any, that the Company actually realizes (or in some circumstances is deemed to realize) as a result of (1) increases in the Company’s allocable share of the tax basis of the Operating Company’s assets resulting from (a) the Company’s purchase of Class A Units directly from the Operating Company and the partial redemption of Class A Units by the Operating Company in connection with the IPO, (b) future redemptions or exchanges (or deemed exchanges in certain circumstances) of Class A Units for our Class A common stock or cash and (c) certain distributions (or deemed distributions) by the Operating Company; (2) the Company’s allocable share of the existing tax basis of the Operating Company’s assets at the time of any redemption or exchange of Class A Units (including in connection with the IPO), which tax basis is allocated to the Class A Units being redeemed or exchanged and acquired by the Company and (3) certain additional tax benefits arising from payments made under the TRA, including as the result of incremental value to the Company from strategic acquisitions. The Company will retain the benefit of the remaining 15% of these net cash tax savings under the TRA. The Company has accrued a contingent liability representing 85% of the incremental net cash tax savings for the Company due to the exchanging Original Equity Owners.

If the Mergers are consummated, the Second A&R TRA by and between the Company, Operating Company, Apollo and Continuing Equity Owners will become effective, which provides, among other things, that, (i) the Continuing Equity Owners will forego the acceleration of certain payments that would otherwise have been payable under the TRA to the Continuing Equity Owners by the Company as a result of the Mergers, (ii) following the consummation of the Mergers, the utilization of the tax attributes covered by the Second A&R TRA and corresponding payments to which the Continuing Equity Owners are entitled will be made by reference to Apollo’s consolidated group’s tax liability, and (iii) no accelerated payments will be due in connection with any future change of control of Apollo or any material breach by Apollo of the Second A&R TRA.

Recent Accounting Pronouncements

For a discussion of new accounting pronouncements recently adopted and not yet adopted, refer to Note 2, “Significant Accounting Policies” to our consolidated financial statements included in this annual report on Form 10-K.

JOBS Act

As an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), we can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. We intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of Sarbanes-Oxley. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the IPO, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Class A common stock held by non-affiliates exceeded $700 million as of the last business day of the second fiscal quarter of such year, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.