DigitalBridge Group, Inc.DBRG
DigitalBridge Group, Inc. Fair Value Disclosure
9. Fair Value
Recurring Fair Values
Financial assets and financial liabilities carried at fair value on a recurring basis include financial instruments for which the fair value option was elected. Fair value is categorized into a three tier hierarchy that is prioritized based upon the level of transparency in inputs used in the valuation techniques.
| Fair Value Measurement Hierarchy | ||||||||||||||||||||||||||
| (In thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
Investments (Note 3) | ||||||||||||||||||||||||||
| Other equity investments—Marketable equity securities | $ | 401 | $ | — | $ | — | $ | 401 | ||||||||||||||||||
| CLO subordinated notes | — | — | 30,490 | 30,490 | ||||||||||||||||||||||
| Equity investments of consolidated funds | 115,102 | — | 121,239 | 236,341 | ||||||||||||||||||||||
| Fair Value Option: | ||||||||||||||||||||||||||
| Equity method investment | — | — | 144,037 | 144,037 | ||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Other liabilities | ||||||||||||||||||||||||||
InfraBridge contingent consideration | — | — | 2,500 | 2,500 | ||||||||||||||||||||||
DBRG stock warrants | — | — | 400 | 400 | ||||||||||||||||||||||
Securities of consolidated fund sold short | 74,287 | — | — | 74,287 | ||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
Investments (Note 3) | ||||||||||||||||||||||||||
| Other equity investments—Marketable equity securities | $ | 242 | $ | — | $ | — | $ | 242 | ||||||||||||||||||
| CLO subordinated notes | — | — | 35,122 | 35,122 | ||||||||||||||||||||||
| Equity investments of consolidated funds | 83,269 | — | 63,154 | 146,423 | ||||||||||||||||||||||
| Fair Value Option: | ||||||||||||||||||||||||||
| Equity method investment | — | — | 137,154 | 137,154 | ||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Other liabilities | ||||||||||||||||||||||||||
InfraBridge contingent consideration | — | — | 6,100 | 6,100 | ||||||||||||||||||||||
DBRG stock warrants | — | — | 700 | 700 | ||||||||||||||||||||||
Securities of consolidated fund sold short | 47,930 | — | — | 47,930 | ||||||||||||||||||||||
Equity Investments of Consolidated Funds
Equity investments of consolidated funds include marketable equity securities held by our liquid strategy funds and a venture investment held by a single asset fund. The marketable equity securities comprise publicly listed stocks in U.S. and Europe, primarily in the digital infrastructure, real estate, technology, media and telecommunications sectors, valued based upon listed prices in active markets, classified as Level 1. The venture investment, classified as level 3, was valued using a recent transacted price at December 31, 2025 and a market approach that considers revenue multiples of other comparable companies at December 31, 2024.
Fair Value Option
Equity Method Investments
The Company has elected to account for a co-investment in a portfolio company as an equity method investment under the fair value option. Fair value was determined using a discounted cash flow model based upon the portfolio company's projected earnings, discounting unlevered cash flows at an 8.2% weighted average cost of capital at December 31, 2025, and levered cash flows at a cost of equity of 11.0% at December 31, 2024. The fair value is classified as Level 3 of the fair value hierarchy and changes in fair value are recorded in principal investment income.
DBRG Stock Warrants
The Company previously issued five warrants to affiliates of Wafra, Inc. (collectively "Wafra"), a private investment firm in connection with Wafra's investment in the Company's investment management business in 2020. Wafra's
investment was subsequently redeemed in 2022, while the warrants remain outstanding. Each warrant entitled Wafra to purchase up to 1,338,000 shares of the Company's class A common stock at staggered strike prices between $9.72 and $24.00 each, exercisable through July 17, 2026.
The terms of the warrant purchase agreement provided for net cash settlement upon exercise of the warrants, at election of either the Company or Wafra, if such exercise would result in Wafra beneficially owning in excess of 9.8% of the issued and outstanding shares of the Company's class A common stock. Inclusion of the cash settlement feature resulted in a liability classification, which subjected the warrants to fair value remeasurement each period through earnings.
In March 2024, three of the five warrants were sold by Wafra to a third party and in conjunction therewith, the terms of the warrants were amended which removed the cash settlement feature, resulting in a reclassification of the warrants from liability to equity. Under equity classification, the three warrants are no longer subject to fair value remeasurement.
No warrants have been exercised to-date.
At December 31, 2025, the two liability-classified warrants were carried at fair value, classified as Level 3, measured using a Black-Scholes option pricing model by applying the following inputs: (a) estimated volatility for DBRG's class A common stock of 30.0% (34.7% at December 31, 2024); (b) closing stock price of DBRG's class A common stock on the last trading day of the quarter; (c) the strike price for each warrant; (d) remaining term to expiration of the warrants; and (e) risk free rate of 3.58% per annum (4.21% per annum at December 31, 2024), derived from the daily U.S. Treasury yield curve rates to correspond to the remaining term to expiration of the warrants.
Contingent Consideration—InfraBridge
In connection with the Company's acquisition of InfraBridge in February 2023, contingent consideration may become payable by the Company if prescribed fundraising targets are met for follow-on InfraBridge flagship funds and co-investments. The contingent consideration was measured at December 31, 2025 and December 31, 2024 by applying a probability-weighted approach to the likelihood of meeting various fundraising targets and discounting the estimated future contingent consideration payment at 6.6% and 7.3%, respectively, to derive a present value amount, classified as Level 3 of the fair value hierarchy.
Changes in Level 3 Fair Value
The following table presents changes in recurring Level 3 fair value assets held for investment. Realized and unrealized gains (losses) are included in other gain (loss).
| Level 3 Assets | Level 3 Liabilities | |||||||||||||||||||||||||||||||
| Fair Value Option - Equity Method Investments | Equity Investments of Consolidated Funds | DBRG Stock Warrants | Contingent Consideration—InfraBridge | Contingent Consideration—Consolidated Fund | ||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||
| Fair value at December 31, 2023 | $ | 6,700 | $ | 416,614 | $ | (39,200) | $ | (11,338) | $ | — | ||||||||||||||||||||||
| Election of fair value option | 130,320 | — | — | — | — | |||||||||||||||||||||||||||
| Unrealized gain (loss) in earnings, net | 134 | 40,154 | 5,500 | 5,238 | — | |||||||||||||||||||||||||||
| Reclassification to equity | — | — | 33,000 | — | — | |||||||||||||||||||||||||||
| Deconsolidation of sponsored funds | — | (393,614) | — | — | — | |||||||||||||||||||||||||||
| Fair value at December 31, 2024 | $ | 137,154 | $ | 63,154 | $ | (700) | $ | (6,100) | $ | — | ||||||||||||||||||||||
| Net unrealized gain (loss) in earnings on instruments held at December 31, 2024 | $ | 134 | $ | 40,154 | $ | 8,400 | $ | 5,238 | $ | — | ||||||||||||||||||||||
| Fair value at December 31, 2024 | $ | 137,154 | $ | 63,154 | $ | (700) | $ | (6,100) | $ | — | ||||||||||||||||||||||
| Contributions | — | 40,683 | — | — | — | |||||||||||||||||||||||||||
| Consolidation of sponsored fund | — | 115,539 | — | — | (11,186) | |||||||||||||||||||||||||||
Change in consolidated fund's share of interest in portfolio company (1) | — | 8,779 | — | — | (2,996) | |||||||||||||||||||||||||||
Change in fair value of contingent consideration of consolidated fund (2) | — | 619 | — | — | (619) | |||||||||||||||||||||||||||
| Realized and unrealized gain (loss) in earnings, net | 6,883 | 50,541 | 300 | 3,600 | — | |||||||||||||||||||||||||||
| Disposition | — | (9,790) | — | — | — | |||||||||||||||||||||||||||
| Deconsolidation of sponsored funds | — | (148,286) | — | — | 14,801 | |||||||||||||||||||||||||||
| Fair value at December 31, 2025 | $ | 144,037 | $ | 121,239 | $ | (400) | $ | (2,500) | $ | — | ||||||||||||||||||||||
| Net unrealized gain (loss) in earnings on instruments held at December 31, 2025 | $ | 6,883 | $ | 43,763 | $ | 300 | $ | 3,600 | $ | — | ||||||||||||||||||||||
__________
(1) Represents additional allocation to consolidated fund following further syndication of interest in portfolio company from a non-consolidated fund to the consolidated fund. Fund was deconsolidated in the fourth quarter of 2025.
(2) Represents contingent consideration of a single-asset fund which was consolidated in the third quarter of 2025 and deconsolidated in the fourth quarter of 2025. Changes in fair value of the contingent consideration was reflected as an equivalent change in the cost of the fund's corresponding investment, with no effect to earnings.
Nonrecurring Fair Values
The Company measures fair value of certain assets on a nonrecurring basis: (i) on the acquisition date for business combinations; (ii) when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable or based upon availability of observable prices for equity investments under the measurement alternative; and (iii) upon deconsolidation of a subsidiary for any retained interest. Adjustments to fair value generally result from application of the lower of amortized cost or fair value for assets held for disposition or otherwise, an adjustment of asset values due to impairment or observable price changes.
An equity investment accounted for under the measurement alternative was carried at its estimated fair value of $3.7 million at December 31, 2025 based upon a recent transaction price. Two equity investments accounted for under he measurement alternative were carried at an aggregate estimated fair value of $15.0 million at December 31, 2024 based upon pricing from a recent funding, and applying a probability-weighted approach to different recovery outcomes. These represent level 3 fair values.
Fair Value of Financial Instruments Reported at Cost
The Company's debt obligation, specifically its secured fund fee revenue notes had fair values of $294.8 million at December 31, 2025 and $285.8 million at December 31, 2024, estimated based upon indicative quotes.
The carrying values of cash and cash equivalents, accounts receivable, due from and to affiliates, interest payable and accounts payable generally approximate fair value due to their short term nature, and credit risk, if any, is negligible.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Feb 28, 2017 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.