Item 1A. Risk Factors
We and our Affiliates face a variety of risks that are substantial and inherent in our businesses. The following are some of
the more important factors that could affect our and our Affiliates’ businesses. Investors should carefully consider these risks,
along with the other information contained in this Annual Report on Form 10-K, before making an investment decision
regarding our common stock or other publicly-listed securities. There may be additional risks of which we are currently
unaware, or which we currently consider immaterial. Any of these risks could have a material adverse effect on our financial
condition, results of operations, and the market price of our common stock. Certain statements in “Risk Factors” are forward-
looking statements. See “Forward-Looking Statements.”
RISKS RELATED TO OUR INDUSTRY, BUSINESS AND OPERATIONS
Our financial results depend on our Affiliates’ receipt of asset- and performance-based fees, and are impacted by investment
performance, as well as changes in fee levels, product mix, and the relative levels of assets under management among our
Affiliates.
Our financial results depend on our Affiliates’ receipt of asset- and performance-based fees, which may vary substantially
from year to year. Our Affiliates’ ability to grow or maintain current fee levels depends on a number of factors, including our
Affiliates’ investment performance, as well as competition and trends in the investment management industry, such as investor
demand for passively-managed products, including index and exchange traded funds, that typically carry lower fee rates, or
preferences for other developing strategies or trends. Further, different types of assets under management can generate different
ratios of asset-based fees to assets under management (“asset-based fee ratio”), based on factors such as the investment strategy
and the type of client. Thus, a change in the composition of our assets under management, either within an Affiliate or among
our Affiliates, could result in a decrease in our aggregate fees even if our aggregate assets under management remains
unchanged or increases. Products that use fee structures based on investment performance may also vary significantly from
period to period, depending on the investment performance of the particular product. For some of our Affiliates, performance-
based fees include benchmarks, such as a high-watermark provision, which generally provide that if a product underperforms
on an absolute basis or relative to a specified benchmark, it must regain such underperformance before the Affiliate will earn
any performance-based fees. In addition, in the ordinary course of business, our Affiliates may reduce or waive fees on certain
products for particular time periods, to attract or retain assets or for other reasons. No assurances can be given that our
Affiliates will be able to grow or maintain current fee structures or levels, or that certain strategies they offer will be in demand
at any given time. A reduction in the fees that our Affiliates receive could have an adverse impact on our financial condition
and results of operations.
Additionally, our structured partnership interests are tailored to meet the needs of each Affiliate and are therefore varied,
and our earnings may be adversely affected by changes in the relative performance or in the relative levels and mix of assets
under management among our Affiliates, including as a result of restructurings or dispositions of our equity interests in an
Affiliate, independent of our aggregate operating performance measures. Challenging market conditions, volatility or
slowdowns affecting a particular asset class, client type, product structure, geographic region, industry or other category of
investment could have a significant adverse impact on a specific Affiliate if its investments are concentrated in that area, which
could result in lower investment returns and in turn, lower fees earned at that Affiliate. Further, certain Affiliates contribute
more significantly to our results than other Affiliates and, therefore, changes in fee levels, particularly with respect to Affiliates
earning performance-based fees, product mix, assets under management, or investment performance, or operational issues or
other events impacting such Affiliates could have a disproportionate adverse impact on our financial condition and results of
operations.
Our financial results could be adversely affected by any reduction in our assets under management, which could reduce the
asset- and performance-based fees earned by our Affiliates.
Our financial results may be impacted by changes in the total level of our assets under management. The total level of our
assets under management generally or with respect to particular products or Affiliates could be adversely affected by conditions
outside of our control, including:
• a decline in the market value of our assets under management, due to declines or heightened volatility in the capital
markets, fluctuations in foreign currency exchange rates and interest rates, inflation, changes in the yield curve, and
other market factors;
• changes in investor risk tolerance or investment preferences, which could result in investor allocations away from
strategies and products offered by our Affiliates;
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• our Affiliates’ ability to attract and retain client assets and market products and services, which may be impacted by
investment performance, client relationships, demand for product and service offerings, their continued development
of products to meet the changing demands of investors, and the prices of securities generally;
• global economic conditions, which may be exacerbated by changes in the equity or debt markets, including impacts
from shifting monetary policies of the U.S. Federal Reserve Bank and other global central banks, or instability and
liquidity issues in the financial system generally;
• financial crises, political or diplomatic developments or instability in the U.S. or globally, including uncertainties
regarding actual and potential changes in domestic, foreign, trade, economic, and other policies, trade tensions, public
health crises, civil unrest, war, terrorism, natural disasters, fluctuations in commodity prices, or risks associated with
global climate change; and
• other factors that are difficult to predict.
A reduction in our assets under management could adversely affect the fees payable to our Affiliates and, ultimately, our
financial condition and results of operations. To the extent any of these conditions or factors adversely affect our or our
Affiliates’ operations or global economic conditions generally, they may also have the effect of heightening other risks
described elsewhere in this “Risk Factors” section.
If our or our Affiliates’ reputations are harmed, we could suffer losses in our business and financial results.
The success of our business depends on earning and maintaining the trust and confidence of our Affiliates and our
stockholders, our ability to compete for future investment opportunities, and our and our Affiliates’ reputations among existing
and potential clients. Our and our Affiliates’ reputations are critical to our business and could be impacted by events that may
be difficult or impossible to control, and costly or impossible to remediate, including:
• alleged or actual failures by us, our Affiliates, or our respective employees or third-party service providers or
counterparties to comply with applicable laws, rules, or regulations, or contractual obligations or instructions;
• errors in our public reports;
• cyber-attack or data breach incidents;
• fund liquidity or valuation issues, or issues relating to the use of leverage, including with respect to assets within
private markets funds, liquid alternative, or similar products of certain of our Affiliates;
• threatened or actual litigation against us, any of our Affiliates, or our respective employees;
• perceived or actual conflict between us and any of our Affiliates or among our Affiliates;
• changes in the structure of our partnership interests in any of our Affiliates, including any repositioning or divestments
of such interests;
• research published by securities or industry analysts about us or any of our Affiliates;
• negative perceptions of our or certain of our Affiliates’ investments or business practices by stakeholder groups who
have increasingly expressed divergent views on a range of environmental, social, and governance matters;
• fraudulent impersonations of us, our Affiliates, or our respective employees by third-party bad actors, including in
social engineering schemes that attempt to manipulate targeted recipients into sharing confidential information,
participating in fraudulent investments, purport to offer investment services, or solicit fraudulent investments,
including through fake phone calls, e-mails, and websites, and on social media platforms and messaging applications;
• other events and factors that are difficult to predict including those that could impact our Affiliates’ ability to compete
effectively with other firms, our ability to successfully pursue our growth strategy, and other risks described elsewhere
in this “Risk Factors” section.
Any of the foregoing events, or the public announcement and potential publicity surrounding these issues, even if
inaccurate, satisfactorily addressed, or if no violation or wrongdoing actually occurred, could adversely impact our Affiliates’
reputations and their relationships with clients, our relationships with our Affiliates and business partners, our access to the
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capital markets or other financing, and our ability to negotiate agreements with new independent investment firms, any of
which could have an adverse effect on our reputation, our financial condition and results of operations, or the market price of
our common stock.
The investment management industry is highly competitive.
Our Affiliates compete with numerous investment management firms globally, including public, private, and client-owned
investment advisers; firms managing passively-managed products, including exchange traded funds; firms associated with
securities broker-dealers, financial institutions, insurance companies, private equity firms, sovereign wealth funds; and other
entities. These firms may have significantly greater financial, technological, and marketing resources, captive distribution and
assets under management, or be subject to less regulation and accordingly have more flexibility to undertake and execute
certain investments with less compliance expense, and many of these firms may offer products and services that our Affiliates
may not in particular investment strategies. These firms may also compete by seeking to capitalize on a trend towards
institutions consolidating the number of investment managers they work with, and advances in technology and digital wealth
and distribution tools.
Competition from these firms may reduce the fees that our Affiliates can obtain for investment management services, or
could impair our Affiliates’ ability to attract and retain client assets, and any failure by our Affiliates to successfully adapt their
strategies and develop competitive new products and services, or effectively manage the associated operational risks, could
harm our Affiliates’ reputations and competitive positions, and expose them to additional costs or regulatory scrutiny, which
could adversely affect our assets under management, financial condition and results of operations. We believe that our
Affiliates’ ability to compete effectively with other firms depends upon the performance of our Affiliates’ investment strategies,
the applicability of products to meet client objectives and preferences, and the continued development of increasingly complex
strategies and products, including those offered on our U.S. wealth distribution platform, to meet the evolving needs and
demands of investors, as well as our Affiliates’ reputations, client relationships, fee structures, client-servicing capabilities, and
the marketing and distribution of their investment strategies, among other factors. See “Competition” in Item 1. Our Affiliates
may not compare favorably with their competitors in any or all of these categories, and technological developments, including
financial applications and services based on generative artificial intelligence, machine-learning algorithms, and large language
models (“AI”), may over time reduce the demand for, or clients’ willingness to pay for, certain products and services. From
time to time, our Affiliates may also compete with each other for clients and investment opportunities.
Investment management contracts are subject to termination on short notice.
Through our Affiliates, we derive almost all of our asset- and performance-based fees from clients pursuant to investment
management contracts. While certain of our Affiliates’ private equity and alternative products have long-term commitment
periods, many of our Affiliates’ investment management contracts are terminable by the client without penalty upon relatively
short notice (typically not longer than 60 days). We cannot be certain that our Affiliates will be able to retain their existing
clients or attract new clients. If our Affiliates’ clients, in particular a significant client or a series of significant clients,
terminate their investment management contracts or withdraw a substantial amount of assets for any number of reasons,
including poor investment performance, loss of key investment personnel, changes in the client’s decision makers, or
reputational, regulatory, or compliance issues, it is likely to harm our results of operations. In addition, investment
management contracts with mutual funds or other similar products are subject to annual approval by the fund’s board of
directors.
We may need to raise additional capital in the future, and existing or future resources may not be available to us in
sufficient amounts or on acceptable terms.
While we believe that our existing cash resources and cash flow from operations will be sufficient to meet our working
capital needs for normal operations for the foreseeable future, our continuing acquisitions of interests in independent investment
firms and our other strategic initiatives may require additional capital. Further, we have significant purchase obligations
relating to Affiliate equity interests, as well as commitments relating to general partner and seed capital investments, and it is
difficult to predict the frequency and magnitude of these purchases or associated capital calls. Additionally, the valuation of
certain of these assets on our balance sheet may cause volatility from period to period. As of December 31, 2025 , the current
redemption value relating to Affiliate equity interests was $408.0 million , of which $246.8 million was presented as
Redeemable non-controlling interests (including $32.2 million of consolidated Affiliate sponsored investment products
primarily attributable to third-party investors), and $161.2 million was included in Other liabilities. See “Liquidity and Capital
Resources-Affiliate Equity” in Item 7 and Notes 13 and 14 of the Consolidated Financial Statements. Unfunded commitments
relating to general partner and seed capital investments were $285.0 million as of December 31, 2025 . See Notes 2 and 6 of our
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Consolidated Financial Statements. These obligations may require more cash than is then available from our existing cash
resources and cash flows from operations. Thus, we may need to raise capital through additional borrowings or by selling
shares of our common stock or other equity or debt securities, or otherwise refinance a portion of these obligations.
As of December 31, 2025 , we had outstanding debt of $2.7 billion . Our level of indebtedness may increase if we, our
subsidiaries, and/or our consolidated Affiliates fund future investments or other expenses through borrowings. We may also
seek to refinance existing indebtedness for the purpose of managing maturity dates, to seek alternative financing terms or for
other reasons, which may not be available on similar terms as our existing indebtedness, including with respect to interest rates.
Any additional indebtedness could increase our vulnerability to general adverse economic and industry conditions and may
require us to dedicate a greater portion of our cash flows from operations to payments on our indebtedness.
The financing activities described above could increase our Interest expense, decrease our Net income (controlling
interest), or dilute the interests of our existing stockholders. In addition, our access to additional capital, and the cost of capital
we are able to access, is influenced by a number of factors, including the state of global credit and equity markets, interest rates,
credit spreads, and our credit ratings. As a result, we may be unable to enter into new credit facilities or issue debt or equity in
the future on attractive terms, or at all. We are currently rated A3 by Moody’s Investors Service and BBB+ by S&P Global
Ratings. A reduction in our credit ratings could also increase our borrowing costs under our revolver or, in certain cases, give
rise to a termination right by the counterparty under our derivative financial instruments, if any. There can be no assurance that
we will achieve a particular credit rating or maintain any particular rating in the future.
Our debt agreements impose certain covenants relating to the conduct of our business, including financial covenants under
our revolver, any breach of which could result in the acceleration of the repayment of any amounts borrowed or outstanding
thereunder.
Our debt agreements contain customary affirmative operating covenants and negative covenants that, among other things,
place certain limitations on our and our subsidiaries’ ability to incur debt, merge or transfer assets, and create liens and, in the
case of our revolver, require us to maintain specified financial ratios, including a maximum leverage ratio and a minimum
interest coverage ratio. The breach of any covenant (either due to our actions or omissions or, in the case of financial
covenants, due to a significant and prolonged market-driven decline in our operating results) could result in a default under the
applicable debt agreement and, in the case of our revolver, lenders could refuse to make further extensions of credit to us.
Further, in the event of certain defaults, amounts borrowed under our debt agreements, together with accrued interest and other
fees, could become immediately due and payable. If any indebtedness were to become subject to accelerated repayment, we
may not have sufficient liquid assets to repay such indebtedness in full.
We have substantial intangibles on our balance sheet, and any impairment of our intangibles could adversely affect our
financial condition and results of operations.
As of December 31, 2025 , our total assets were $9.2 billion , of which $4.2 billion were intangibles, and $2.9 billion were
equity method investments in Affiliates, an amount primarily composed of intangible assets. We cannot be certain that we will
realize the value of such intangible assets. Our intangible assets may become impaired as a result of any number of factors,
including changes in market conditions, declines in the value of assets under management, client attrition, product performance,
reductions in fee rates, and changes in strategic objectives or growth prospects of an Affiliate. An impairment of our intangible
assets or an other-than-temporary decline in the value of our equity method investments could adversely affect our financial
condition and results of operations. Determining the value of intangible assets, and evaluating them for impairment, requires
management to exercise significant judgment. For the year ended December 31, 2025 , we recorded expenses to reduce the
carrying value to fair value of certain acquired client relationships, and in prior periods we have recorded expenses to reduce the
carrying value to fair value of certain Affiliates and/or certain acquired client relationships, and may experience similar
impairment events in future reporting periods. See “Critical Accounting Estimates and Judgments” in Item 7 and Notes 7 and 8
of the Consolidated Financial Statements.
Market risk management activities may adversely affect our liquidity and results of operations.
Cash management transactions, capital markets financings, and certain investments or other transactions may create
exposure for us or our Affiliates to changes in interest rates, foreign currency exchange rates, marketable securities, and
financial markets generally, which we or our Affiliates may seek to offset by entering into derivative financial instruments. The
scope of these risk management activities is selective and varies based on the level and volatility of interest rates, foreign
currency exchange rates, applicable marketable securities, and other changing market conditions. We and our Affiliates do not
seek to hedge exposure to all market risks, which means that exposure to certain market risks is not limited. Further, the use of
derivative financial instruments does not entirely eliminate the possibility of fluctuations in the value of the underlying position
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or prevent losses if the value of the position declines, and also can limit the opportunity for gain if the value of the position
increases. There can be no assurance that our or our Affiliates’ derivative financial instruments will meet their overall objective
or that we or our Affiliates will be successful in entering into such instruments in the future. Further, while hedging
arrangements may reduce certain risks, such arrangements themselves may entail other risks, may generate significant
transaction costs, and may require the posting of cash collateral. For example, if our or our Affiliates’ counterparties fail to
honor their obligations in a timely manner, including any obligations to return posted collateral, our liquidity and results of
operations could be adversely impacted.
RISKS RELATED TO OUR STRATEGY AND OUR STRUCTURED PARTNERSHIPS WITH AFFILIATES
Our growth strategy depends in part upon our ability to identify and consummate investments in suitable independent
investment firms.
Our continued success in investing in independent investment firms will depend upon our ability to find suitable firms in
which to invest or make additional investments in our existing Affiliates, our ability to negotiate agreements with such firms on
acceptable terms, maintaining our relationships with prospects and our reputation as a leading partner to these firms, and our
ability to raise the capital necessary to finance such transactions. The market for acquisitions of interests in these firms is
highly competitive. Many other public and private financial services companies, including commercial and investment banks,
private equity firms, sovereign wealth funds, insurance companies, and investment management firms, also invest in
independent investment firms and may have significantly greater resources than we do. In addition to direct competition on
particular prospects, these firms can also negatively impact the volume and value of transactions more broadly. Further, our
innovative partnership approach with our Affiliates is designed to enhance our Affiliates’ ability to achieve their long-term
strategic objectives, while preserving their independence and autonomy, and, therefore, their unique entrepreneurial and
investment-centric cultures, and the management of some target firms may prefer terms and structures offered by our
competitors.
We may not be successful in making investments in new firms or maintaining existing investments, and any firms that we
do invest in may not have favorable results or performance following our initial investment or any subsequent investment,
which could have an adverse effect on our financial condition and results of operations. Our investments involve a number of
risks, including regulatory considerations and the existence of unknown liabilities that may arise after making an investment,
some of which may depend upon factors that are not under our control. We may also make new investments using complex or
innovative structures and terms, including joint ventures, deferred economics, or product development partnerships, which may
introduce additional risks and uncertainties. Further, the consummation of our announced investments is generally subject to a
number of closing conditions, contingencies, and approvals, including, but not limited to, obtaining certain consents of the
independent investment firm’s clients and applicable regulatory approvals. In the event that an announced transaction is not
consummated, we may experience a decline in the price of our common stock.
Our growth strategy also includes selectively pursuing strategic partnerships, transactions, joint ventures, and initiatives,
which could involve additional risks and uncertainties.
Our growth strategy also includes selectively pursuing strategic partnerships, transactions, joint ventures, and initiatives in
areas where we can assist our Affiliates in growing and diversifying their businesses (including through seed capital, general
partner commitments, and other strategic investments in our Affiliates and their funds), to further enhance our competitive
position, or where we believe we can add value and generate meaningful returns. These strategic partnerships, transactions,
joint ventures, and initiatives may be complementary to our existing business or involve new operational areas, product
structures, or strategies (including in private markets and liquid alternatives), which includes, among others, initiatives to
increase the number and type of investment products offered to high-net-worth individuals and families through our U.S. wealth
and global distribution platforms, and expanding the geography and scope of our operations. These initiatives involve risks and
uncertainties, including compliance with additional regulatory and disclosure requirements, increased potential for disputes,
exposure to more volatile market segments and reputational risks, and significant commitments of capital over extended periods
of time. Addressing these risks and uncertainties may require additional resources and investment, including the
implementation of new operational controls and procedures, as well as require complex contractual arrangements, structures,
and specialized skills. There is no certainty that such initiatives will deliver the anticipated benefits over the expected time
frame or at all, or that our stockholders will react favorably. Any failure to successfully execute on strategic partnerships,
transactions, joint ventures, or initiatives, including in connection with our entry into new operational areas or effectively
managing associated risks, or by our Affiliates in deploying strategic capital into suitable new investment opportunities, could
harm our reputation and expose us to additional costs or divert resources from other opportunities, which could adversely affect
our assets under management, financial condition, and results of operations.
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The structure of our partnership interests in our Affiliates may expose us to unanticipated changes in Affiliate revenue,
operating expenses, and other commitments, which we may not anticipate and may have limited ability to control.
The form of our structured partnership interests in our Affiliates differs from Affiliate to Affiliate, and may change during
the course of our investment.
In the case of structures where we contractually share in the Affiliate’s revenue without regard to expenses, comprising
Affiliates that contribute a majority of Consolidated revenue, the Affiliate allocates a specified percentage of its revenue to us
and Affiliate management, while using the remainder for operating expenses and additional distributions to Affiliate
management. In these types of structures, while our distributions generally have priority, our agreed allocations may not
anticipate changes in the revenue and operating expense base of the Affiliate, and the revenue remaining after our specified
share is allocated to us may not be large enough to cover all of the Affiliate’s operating expenses, which could result in a
reduction of the amount allocated to us or could negatively impact the Affiliate’s operations and prospects.
In the case of structures where we contractually share in the Affiliate’s revenue less agreed-upon expenses, we benefit from
any increase in revenue or any decrease in the agreed-upon expenses, but also have exposure to any decrease in revenue or any
increase in such expenses. The degree of our exposure to agreed-upon expenses from these structured partnership interests
varies by Affiliate (and may change during the course of our investment), and includes several Affiliates in which we fully
share in the expenses of the business. In these types of structures, we may have limited or no ability to control the level of
expenses at the Affiliate, and our distributions generally do not have priority. Further, the impact of Affiliate expenses on our
earnings and our stock price could increase if the portion of our earnings derived from such Affiliates increases.
As a result of these factors, unanticipated changes in revenue, operating expenses, or other commitments at any of our
Affiliates could leave the Affiliate with a shortfall in remaining funds for distribution to us or Affiliate management, or for
funding their operations. Changes in the global marketplace in particular could result in rapid changes to our Affiliates’
earnings or expenses, and our Affiliates may be unable to make appropriate expense reductions in a timely manner to respond
to such changes. Any of these developments could have an adverse effect on our financial condition generally, and on our
results of operations for the applicable reporting period.
Additionally, regardless of the particular structure, we may agree to change the structure, or may elect to defer or forgo the
receipt of our share of an Affiliate’s revenue or earnings, or adjust expenses allocated to us, to permit the Affiliate to fund
expenses in light of unanticipated changes in revenue or operating expenses, with the aim of maximizing the long-term benefits
for us and the Affiliate. These types of activities could increase during periods where an Affiliate’s revenues decline rapidly or
other events occur that impact the Affiliate’s expenses or operations. We cannot be certain that any such deferral or
forbearance would be of any greater long-term benefit to us, and such a deferral or forbearance may have an adverse effect on
our near- or long-term financial condition and results of operations.
We may reposition or divest our equity interests in our Affiliates, and we cannot be certain that any such repositioning or
divestment will benefit us in the near- or long-term.
From time to time, we may reposition our relationships with our Affiliates, which could, among other things, include
changes to our structured partnership interests, including changes in our ownership level and in the calculation of our share of
revenue and/or operating expenses. Such repositioning may be done in order to address an Affiliate’s succession planning,
changes in its revenue or operating expense base, our or the Affiliate’s strategic planning, regulatory considerations, or other
developments. Any repositioning of our interest in an Affiliate may result in increased exposure to changes in the Affiliate’s
revenue and/or operating expenses, or in additional investments or commitments from us, or could increase or reduce, or
change the structure of, our interest in the Affiliate, or cause misalignment with Affiliate management. In some cases, this
could result in the partial or full divestment of our interest to Affiliate management or to a third-party, or in our acquisition of
all of the equity interests of the Affiliate. The divestment of our interests in an Affiliate may result in changes in the
composition of our assets under management or client cash flows, and there can be no assurance that the proceeds from any
such transactions will be deployed more effectively, including for new investments or other strategic initiatives, than if we
retained our interest in such Affiliate. In addition, certain of our Affiliates have customary rights in certain circumstances to
restructure or sell their interests in their firm to a third-party, which could be through a direct majority or minority sale
transaction, a private or public offering, or otherwise, and to cause us to participate in such restructuring or sale, which could be
on terms that we view as less favorable than an alternative transaction or to retaining our interest, or that we may view
favorably, but results in reduced control for us, shifting incentives, and creating additional risks and uncertainties. The
occurrence of any of the above transactions or changes, increases in the frequency thereof, or disputes in relation to such
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transactions or changes, could have an adverse impact on our reputation, financial condition, and results of operations, as well
as on our relationships with existing and prospective Affiliates, and could divert capital from other opportunities.
We and our Affiliates rely on certain key personnel and cannot guarantee their continued service.
We depend on the efforts of our executive officers and our other officers and employees. Our executive officers, in
particular, play an important role in the stability and growth of our existing Affiliates and in identifying potential investments in
independent investment firms. There is no guarantee that these executive officers will remain with the Company. We do not
have employment agreements with our executive officers, although each has a significant deferred equity interest in the
Company and is subject to non-solicitation and non-competition restrictions that may be triggered upon their departure.
Further, we seek to attract and retain our key officers and employees through a number of initiatives and programs, including
developing a strong values-based culture, a commitment to career development, employee engagement, attractive compensation
and benefits programs, attention to succession planning, and fostering of organizational diversity, any of which may not be
successful in contributing to the retention of such employees. Changes in our management team, in particular, may be
disruptive to our business, and failure to attract and retain members of our executive or senior management team, or to
effectively implement and manage appropriate succession plans, could adversely affect our business, financial condition, and
results of operations.
In addition, our Affiliates depend heavily on the services of key principals who, in many cases, have managed their firms
for many years. These principals often are primarily responsible for their firm’s investment decisions. Although we use a
combination of economic incentives, transfer restrictions and, in some instances, non-solicitation, non-competition, and
employment agreements in an effort to retain key Affiliate personnel, there is no guarantee that these principals will remain
with their firms or refrain from competing with us if they depart their firms. The market for highly skilled professionals in the
investment management industry is highly competitive, particularly in alternative strategies, and further technological
advancements, including with respect to AI, could result in increased demand and competition for individuals with certain
specialized skills and technological knowledge. These individuals also have an increasing number of employment options
outside of asset management firms, such as family offices and multi-manager platforms. Further, the departure of key
individuals at an Affiliate could also cause investors to reduce or terminate their investments in such Affiliates’ funds or
products, or trigger certain provisions tied to the departure of, or cessation of committed time, by specified persons (known as
“key person” provisions) in the documentation governing certain Affiliate products and funds, which could permit the
suspension or termination of those products’ investment periods. In addition, the pervasiveness of social media and public
focus on the externalities of business activities could lead to wider dissemination of adverse or inaccurate information relating
to such key individuals, making remediation more difficult and magnifying reputational risk. Since certain of our Affiliates
contribute more significantly to our results than other Affiliates, the loss of key personnel at these Affiliates could have a
disproportionately adverse impact on our business, financial condition, and results of operations.
RISKS RELATED TO OUR COMMON STOCK
Equity markets and our common stock have been volatile.
The market price of our common stock has experienced and may continue to experience volatility, and the broader equity
markets have experienced and may continue to experience significant price and volume fluctuations. In addition,
announcements of our financial and operating results or other material information, including changes in net client cash flows
and assets under management, announcements and activity regarding our share repurchase programs, changes in our financial
guidance or our failure to meet such guidance, our new investments activity, changes in general conditions in the economy or
the financial markets, perceptions regarding our environmental, social, and governance profile or sustainable investment
decisions of our Affiliates, and other developments affecting us, our Affiliates, or our competitors, as well as geopolitical,
social, regulatory, capital markets, economic, public health, and other factors unrelated to us, could cause the market price of
our common stock to fluctuate substantially.
The sale or issuance of substantial amounts of our common stock, or the expectation that such sales or issuances will occur,
could adversely impact the price of our common stock.
The sale or issuance of substantial amounts of our common stock in the public market could adversely impact its price. In
connection with our financing activities we maintain an equity distribution program, under which we may issue shares of our
common stock from time to time. We also have outstanding option and restricted stock awards that have been granted under
our share-based incentive plans. Additionally, we have the right to settle certain Affiliate equity purchase obligations with
shares of our common stock. Moreover, in connection with future financing activities, we may issue convertible securities or
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shares of our common stock, including through forward equity transactions. Any such issuance of shares of our common stock
could have the effect of substantially diluting the interests of our current equity holders. In the event that a large number of
shares of our common stock are sold or issued in the public market, or the expectation that such sales or issuances will occur,
the price of our common stock may decline as a result.
Provisions in our organizational documents, Delaware law, and other factors could delay or prevent a change in control of
the Company, or adversely affect our financial results in periods prior to and following a change in control.
Provisions in our charter and by-laws and anti-takeover provisions under Delaware law could discourage, delay, or prevent
an unsolicited change in control of the Company. These provisions may also have the effect of making it more difficult for
third parties to replace our executive officers without the consent of our Board of Directors. These provisions include:
• the ability of our Board of Directors to issue preferred stock and to determine the terms, rights, and preferences of the
preferred stock without stockholder approval;
• the prohibition on the right of stockholders to call meetings or act by written consent and limitations on the right of
stockholders to present proposals or make nominations at stockholder meetings; and
• legal restrictions on mergers and other business combinations between us and any holder of 15 percent or more of our
outstanding common stock.
Further, given our long-term innovative partnership approach with our Affiliates, which is designed to maintain their
independence and autonomy, and, therefore, their unique entrepreneurial and investment-centric cultures, a change in control
may be viewed negatively by our Affiliates, impacting their relationships with us. Additionally, the disposition of certain of our
Affiliates following a change in control could result in the immediate realization of taxes owed on any excess proceeds above
our tax basis in the relevant Affiliate, which could impact the valuation a third-party may apply to us in a change in control.
Any of the forgoing factors may inhibit a change in control in circumstances that could give our stockholders the opportunity to
realize a premium over the market price of our common stock, or may result in negative impacts on our financial results in
periods prior to and following a change in control.
In addition, a change in control of the Company or the acquisition of a large ownership position in shares of our
outstanding common stock by a single holder may constitute a change in control for certain of our Affiliates for purposes of the
Advisers Act and the Investment Company Act. In that case, absent client consents, the Affiliate’s management agreements
may be deemed to be “assigned” in violation of the agreement and, for mutual fund clients, will terminate. We cannot be
certain that any required client consents (which the impacted Affiliates would need to be involved in requesting) would be
obtained if such a change of control occurs. Any termination, deemed assignment or renegotiation of any of our Affiliates’
management agreements could result in a reduction in our assets under management or the fees payable to our Affiliates and,
ultimately, our aggregate fees. Further, certain of our Affiliates operate regulated businesses in jurisdictions outside of the U.S.
that, in some cases, require regulatory notifications and other filings if a single stockholder acquires an ownership position in
the Company exceeding certain specified thresholds, regardless of whether a change in control has occurred for purposes of the
Advisers Act or the Investment Company Act. Such an ownership position could also trigger approvals under FINRA, for
Affiliates operating a broker-dealer in the U.S. As a result, a large ownership position in our stock, whether or not resulting in a
change of control of the Company, could result in increased regulatory reporting and compliance costs, and potential
restrictions on our or our Affiliates’ business activities, and could reduce the fees that our Affiliates receive under investment
management contracts, any of which could have an adverse effect on the Company’s financial condition and results of
operations.
LEGAL AND REGULATORY RISKS
Our and our Affiliates’ businesses are highly regulated.
Our and our Affiliates’ businesses are subject to complex and extensive regulation by regulatory and self-regulatory
authorities and exchanges in various jurisdictions around the world, which, for our Affiliates and our U.S. wealth distribution
subsidiary, include those applicable to investment advisers, as detailed in “Government Regulation” in Item 1. Applicable laws,
rules, and regulations impose requirements, restrictions, and limitations on our and our Affiliates’ businesses, and can result in
significant compliance and operational costs. Further, this regulatory environment may be altered without notice by new laws
or regulations, revisions to existing laws or regulations, or new or revised interpretations, guidance, or enforcement priorities,
and could cause us or our Affiliates to change or curtail operations or product offerings. Any determination of a failure to
comply with applicable laws, rules, or regulations could expose us, our Affiliates, or our respective employees to civil liability,
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criminal liability, or disciplinary or enforcement action, with penalties that could include the disgorgement of fees, fines,
sanctions, suspensions, termination of adviser status, or censure of individual employees or revocation or limitation of business
activities or registration, and may result in monetary losses that are not covered by insurance in adequate amounts or at all, any
of which could have an adverse impact on our stock price, financial condition, and results of operations. Further, if we, any of
our Affiliates, or our respective employees or third-party service providers were to fail to comply with applicable laws, rules, or
regulations, or be named as a subject of an investigation or other regulatory action, the public announcement and potential
publicity surrounding any such failure, investigation, or action could have an adverse effect on our or our Affiliates’ reputations
and on our stock price and result in increased costs, even if we, our Affiliates, or our respective employees or third-party service
providers were found not to have violated such laws, rules, or regulations.
Recently implemented and proposed regulations globally have called for more stringent oversight of the financial services
industry in which we and our Affiliates operate. In the U.S., the SEC has focused its enforcement, examination, and
rulemaking activities on issues relevant to alternative asset management firms, including consistent application of the
methodology, disclosure, and conflicts of interest related to the valuation of private funds to increase transparency and
accountability. Further, in response to shifting enforcement priorities and rulemaking activities at the federal level, certain state
and other governmental entities have maintained, and may continue to seek to maintain, existing, or implement potentially more
rigorous, regulatory requirements in response, which, coupled with legal challenges to a number of significant regulations and
judicial decisions regarding administrative law, may create uncertainty or lead to divergent interpretations of law, or change the
requirements applicable to our and our Affiliates’ businesses.
The use of AI technologies to provide certain business processes, services, and products may also require compliance with
additional U.S. and non-U.S. legal or regulatory frameworks which are not fully developed or tested, and which may subject us
and our Affiliates to litigation and regulatory actions. For example, the European Union (the “EU”) has enacted the Artificial
Intelligence Act, and various other jurisdictions have proposed or finalized laws and regulations that created, or have the
potential to create, regulatory risk around the use of AI or could restrict or eliminate our and our Affiliates’ ability to use certain
AI tools. These evolving laws and regulations could require changes in our and our Affiliates’ implementation of AI
technologies, increase compliance costs and the risk of non-compliance, and restrict or impede our respective abilities to
develop, adopt, and deploy AI technologies efficiently and effectively.
These and other regulatory developments could adversely affect our and our Affiliates’ businesses, increase compliance
and operational costs, require that we or our Affiliates change or curtail operations or investment offerings, or impact our and
our Affiliates’ access to capital and the market for our common stock. Further, in recent years, regulators in the U.S., the UK,
and other jurisdictions have expanded rules and devoted greater resources and attention to the enforcement of anti-bribery and
anti-money laundering laws, and while we and our Affiliates have developed and implemented policies and procedures
designed to comply with these rules, such policies and procedures may not be effective in all instances to prevent violations.
Our and our Affiliates’ international operations are subject to foreign risks, including political, regulatory, economic, and
currency risks.
We and certain of our Affiliates conduct business outside the U.S., and a number of our Affiliates are based or have offices
outside the U.S. and, accordingly, are subject to risks inherent in doing business internationally. These risks may include
difficulties in staffing and managing foreign operations, longer payment cycles, difficulties in collecting investment advisory
and other fees receivable, different (and in some cases less stringent) legal, regulatory and accounting regimes, political
instability, exposure to fluctuations in currency exchange rates, expatriation controls, expropriation risks, and potential adverse
tax consequences. For example, regulations in the EU pertaining to the integration of environmental, social, and governance
topics into, among other things, the organizational, risk, and governance arrangements of certain financial entities, and
increased disclosure requirements with regard to such factors generally, may materially impact the investment management
industry in member states that have adopted, or may in the future adopt, such legislation. Conversely, opposition to
environmental, social, and governance initiatives has gained momentum in the U.S., with several states and Congress having
proposed, enacted, or indicated an intent to pursue policies, legislation, or initiatives opposing such efforts, including engaging
in related inquiries, investigations, and litigation. The dynamic nature of environmental, social, and governance-related
regulations could impact our or our Affiliates’ businesses, increase regulatory and compliance costs, and adversely affect our
profitability, which effects could be exacerbated in the event of regulatory uncertainty or conflicting or inconsistent regulatory
guidance related thereto, including in the U.S. and the UK, as applicable. In addition, as a result of operating internationally,
certain of our Affiliates and our global capital distribution platform are subject to requirements under non-U.S. regulations to
maintain minimum levels of net capital. Such capital requirements may be increased from time to time with limited advance
notice, which may have the effect of limiting withdrawals of capital by us and the payment of distributions to us or, if there
were a significant change in the required capital or an extraordinary loss or charge against net capital at a particular Affiliate,
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could adversely impact such Affiliate’s ability to expand or maintain operations. These or other risks related to our and our
Affiliates’ international operations may have an adverse effect on our business, financial condition, and results of operations.
Changes in tax laws or exposure to additional tax liabilities could have an adverse impact on our business, financial
condition, and results of operations.
We are subject to income taxes as well as non-income based taxes in the U.S. and certain foreign jurisdictions, and our
Affiliates are generally subject to taxes in the jurisdictions in which they operate. Tax laws, regulations, and administrative
practices in these jurisdictions may be subject to significant change, with or without notice, and significant judgment is required
in estimating and evaluating tax provisions and accruals. Our and our Affiliates’ effective tax rates could be affected by a
change in the mix of earnings with differing statutory tax rates, changes to our or their existing businesses, and changes in
relevant tax, accounting or other laws, regulations, administrative practices, and interpretations. In the U.S., An Act to Provide
for Reconciliation Pursuant to Title II of the H. Con. Res. 14 (the “Act”) was signed into law in July 2025, which included
certain modifications to federal tax law. Although the Act is not expected to have a material impact on our net income and cash
flows, any future tax reform proposals, if ultimately enacted into legislation, could materially impact our tax provision, deferred
tax assets, and tax liabilities, or impact decisions on how to return value to stockholders in the most efficient manner. Further, a
portion of our earnings is from outside of the U.S., and the foreign government agencies in jurisdictions in which we and our
Affiliates do business continue to focus on the taxation of multinational companies, and could implement changes to their tax
laws. The potential effects may vary depending on the specific provisions and rules implemented by each jurisdiction. We
cannot predict future changes in the tax laws, regulations, administrative guidance, or judicial decisions to which we and our
Affiliates are subject or that could apply to our and our Affiliates’ businesses, and any changes to federal, state or foreign tax
laws, regulations, accounting standards or administrative practices, or the release of additional guidance, interpretations or other
information, could impact our estimated effective tax rate and overall tax expense, as well as our earnings estimates, and could
result in adjustments to our treatment of deferred taxes, including the realization or value thereof, or in unanticipated additional
tax liabilities, or cause us or our Affiliates to change or curtail product offerings, any of which could have an adverse effect on
our business, financial condition, and results of operations.
In addition, we and our Affiliates may be subject to tax examinations and inquiries by certain federal, state, and foreign tax
authorities. We regularly assess the likely outcomes of examinations that we are subject to, in order to determine the
appropriateness of our tax provision; however, tax authorities may disagree with certain positions we have taken or may take,
and may assess additional taxes and/or penalties and interest. There can be no assurance that we will accurately predict the
outcomes of any examinations and the actual outcomes could have an adverse impact on our financial condition and results of
operations.
We or our Affiliates may be involved in legal proceedings and regulatory matters from time to time, and we may be held
responsible for liabilities incurred by certain of our Affiliates.
Our operating agreements with our Affiliates provide for governance structures that give Affiliate management the
authority to manage and operate their businesses on a day-to-day basis, including investment management operations,
marketing, product development, client relationships, employee matters, compensation programs, and compliance activities. As
a consequence, our financial condition and results of operations may be adversely affected by problems stemming from the day-
to-day operations of our Affiliates that we are not involved in, and where weaknesses or failures in internal processes or
systems, legal or regulatory matters, or other operational challenges could lead to a disruption or cessation of our Affiliates’
operations, liability to their clients, exposure to claims or disciplinary action, or reputational harm.
Certain of our Affiliates are limited liability companies or limited partnerships (or equivalent non-U.S. forms) of which we,
or entities controlled by us, are the managing member or general partner (or equivalent). Consequently, to the extent that any of
these Affiliates incur liabilities or expenses that exceed their ability to pay for them, we may be directly or indirectly liable for
their payment. Similarly, an Affiliate’s payment of distributions to us may be subject to claims by potential creditors, and an
Affiliate may default on distributions that are payable to us. In addition, with respect to each of these Affiliates, creditors,
regulators, or other counterparties or claimants may seek to hold us directly or indirectly liable in certain circumstances as a
control person for the acts of the Affiliate or its employees. Such claims, even if ultimately unsuccessful, could result in
significant costs, diversion of management attention, reputational harm, or adverse financial consequences. Further, we also
conduct compliance, governance, and operational activities, including with respect to distribution, sales, and marketing, through
our U.S. wealth and global distribution platforms to extend the reach of our Affiliates, and any liability arising in connection
with these activities, whether as a result of our own actions or the actions of our participating Affiliates or third-party service
providers, could result in direct liability to us. Accordingly, we and our Affiliates may face various claims, litigation, or
complaints from time to time, and we cannot predict the eventual outcome of such matters, some of which may be resolved in a
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manner unfavorable to us or our Affiliates, or whether any such matters could become material to a particular Affiliate or us in
any reporting period. See “Legal Proceedings” in Item 3. While we and our Affiliates maintain errors and omissions and
general liability insurance in amounts believed to be adequate to cover potential liabilities, we cannot be certain that we or our
Affiliates will not have claims or related expenses that exceed the limits of available insurance coverage, that the insurers will
remain solvent and will meet their obligations to provide coverage, or that insurance coverage will continue to be available to us
and our Affiliates with sufficient limits and at a reasonable cost. Any legal proceedings or regulatory matters that we or our
Affiliates are subject to could, whether with or without merit, be time consuming and expensive to defend and could divert
management attention and resources, and could result in judgments, findings, settlements, or allegations of wrongdoing that
could adversely affect our or their reputation, current and future business relationships, and our financial condition and results
of operations.
Our or our Affiliates’ controls and procedures and risk management policies may be inadequate, fail or be circumvented,
and operational risk could adversely affect our or our Affiliates’ reputation and financial position.
We and our Affiliates have adopted various controls, procedures, policies, and systems to monitor and manage risk in our
and their businesses. While we currently believe that our and our Affiliates’ operational controls, including controls over
compliance and over financial reporting, are effective, we cannot provide assurance that those controls, procedures, policies,
and systems will always be adequate to identify and manage the internal and external risks in our and our Affiliates’ various
businesses. Furthermore, we or our Affiliates may have errors in business processes or fail to implement proper procedures in
operating our respective businesses, which may expose us or our Affiliates to risk of financial loss or failure to comply with
regulatory requirements. Additionally, although we and our Affiliates have systems and practices in place to monitor our
respective third-party service providers, such third parties are subject to similar risks. For example, as we and our Affiliates
increasingly rely on outsourced support services, including for certain fund administration and compliance functions, any
disruptions or operational difficulties by such service providers (including to their information technology infrastructure), and
our or our Affiliates’ inability to make alternative arrangements in a timely manner, could result in significant disruption to our
respective business operations. We and our Affiliates, as well as our respective third-party service providers, are also subject to
the risk that employees or contractors, or other third parties, may deliberately seek to circumvent established controls to commit
fraud or act in ways that are inconsistent with our or their controls, policies, and procedures, and which may be harder to
monitor in remote work environments. The financial and reputational impact of control failures can be significant.
In addition, our and our Affiliates’ businesses and the markets in which we and our Affiliates operate are continuously
evolving. For example, the use of AI technologies by us, our Affiliates, or our respective third-party service providers could
result in new and expanded risks, particularly as the use of AI applications increases in prevalence and scope. Failure by us to
effectively manage the development and use of AI, our competitors’ development or use of AI, and an evolving AI regulatory
environment could have an adverse effect on our growth prospects, reputation, or business and results of operations. If our or
our Affiliates’ risk frameworks are ineffective, either because of a failure to keep pace with changes in the financial markets,
technological advancements, or regulatory requirements, our or our Affiliates’ businesses, counterparties, clients, or respective
third-party service providers, or for other reasons, we or our Affiliates could incur losses, suffer reputational damage, or be out
of compliance with applicable regulatory or contractual mandates or expectations.
Failure to maintain and properly safeguard an adequate technology infrastructure may limit our or our Affiliates’ growth,
result in losses or disrupt our or our Affiliates’ businesses.
Our and our Affiliates’ businesses are reliant upon financial, accounting, and technology systems and networks to process,
transmit, and store information, including sensitive client and proprietary information, and to conduct many business activities
and transactions with clients, advisers, regulators, vendors, and other third parties. The failure to implement, maintain, and
safeguard an infrastructure commensurate with the size and scope of our and our Affiliates’ businesses could impede
productivity and growth, which could adversely impact our financial condition and results of operations. Further, we and our
Affiliates rely on third parties for certain aspects of our respective businesses, including financial intermediaries, providers of
technology infrastructure, and other service providers such as broker-dealers, custodians, administrators and other agents, as
well as accounting, legal, and other professional advisors, and these parties are susceptible to similar risks, which risks are
further heightened by the concentration of certain key services such as cloud storage and e-mail services with certain third-party
service providers, which have experienced outages.
Our computer systems, software, internal and cloud-based networks, and mobile devices are vulnerable to cyber-attacks,
data privacy or security breaches, phishing schemes and related fraud attempts, ransomware, social engineering, unauthorized
access, theft, misuse, computer viruses, or other malicious code and other events that could have a security impact, and bad
actors may target us and our Affiliates because they believe we hold personal, confidential, and other price sensitive
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information about our clients, and existing and potential investments, as applicable. Any such cyber-attacks could have a
material impact on our financial conditions or results of operations. Further, third parties on whom we and our Affiliates rely,
including those providing cloud-based network services, may have similar vulnerabilities and may lack the necessary
infrastructure or resources, or may otherwise fail, to adequately protect against or respond to any cyber-attacks, data breaches,
or other incidents. If any such events occur, it could jeopardize confidential, proprietary, or other sensitive information of ours,
our Affiliates and our respective clients, employees or counterparties that may be stored in, or transmitted through, internal or
third-party computer systems, networks, and mobile devices, the volume of which has increased rapidly in recent years, or
could otherwise cause interruptions or malfunctions in our and our Affiliates’ operations or those of our respective clients or
counterparties, or in the operations of third parties on whom we and our Affiliates rely. The rapid evolution and increased
availability of AI has intensified cybersecurity risk, and given rise to additional vulnerabilities and potential entry points for
cyber threats, providing threat actors with additional tools to automate attacks, evade detection, generate sophisticated phishing
emails, or impersonate legitimate businesses or individuals. Despite efforts to ensure the integrity of systems and networks, it is
possible that we, our Affiliates, or our respective third-party service providers may not be able to anticipate or to implement
effective preventive measures against all threats, especially because the techniques used change frequently and can originate
from a wide variety of sources. Further, human errors may occur from time to time at our third-party service providers’ staff or
among our or our Affiliates’ employees, which can lead to or exacerbate security vulnerabilities or attacks. The increasing
frequency, scope, and sophistication of these cyber threats, and involvement of large criminal organizations that share tactics
and strategies, including in foreign jurisdictions in which we and our Affiliates operate, along with the continued reliance on
work-from-home environments, personal mobile and computing technologies, and third-party web conferencing services, have
increased exposures to these security-related risks. As a result, we or our Affiliates could experience disruption, significant
losses, increased costs, reputational harm, regulatory actions, or legal liability, any of which could have an adverse effect on our
financial condition and results of operations. We or our Affiliates may be required to spend significant additional resources to
modify protective measures or to investigate and remediate vulnerabilities or other exposures, and may be subject to litigation,
regulatory investigations, and potential fines, and financial losses that are either not insured against fully or not fully covered
through any insurance that we or our Affiliates maintain. Additionally, given our business model of providing our Affiliates
with autonomy in managing their businesses, we do not control, and may have limited involvement in, the design, oversight,
and maintenance of their technology systems and networks, as well as in the identification of or response to any cyber-attacks,
data breaches, or other incidents. See “Cybersecurity” in Item 1C.
Further, government and regulatory oversight of data privacy in particular has become a priority for regulators around the
world, including as examples, through the EU’s General Data Protection Regulation and the California Privacy Rights Act,
resulting in heightened data security and handling requirements, increased enforcement risk and fines, increased compliance
costs, and expanded incident response, reporting, and notification obligations. More recently, the SEC has implemented new
rules related to cybersecurity risk management for public companies and indicated that the implementation and testing of
cybersecurity procedures and controls is a continued examination priority. Recent well-publicized security breaches and
service outages at other companies and third-party service providers have exemplified security-related vulnerabilities, and may
lead to further government and regulatory scrutiny and heightened security requirements both in the U.S. and in other
jurisdictions in which we and our Affiliates operate.
