Variable Interest Entities

3 Months Ended

Jun. 30, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

In accordance with ASC 810, an enterprise is determined to be the primary beneficiary of a VIE if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The consolidation guidance requires an analysis to determine (a) whether an entity in which Ben holds a variable interest is a VIE and (b) whether Ben’s involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (for example, management and performance-related fees), would give it a controlling financial interest. The performance of that analysis requires the exercise of judgment. Based on management’s analysis, there are no VIEs that require consolidation, other than those described below.

VIEs for Which the Company is the Primary Beneficiary

CT Risk Management, L.L.C.

CT, a Delaware limited liability company, is currently governed by the Fourth Amended and Restated Limited Liability Company Agreement entered into on April 27, 2022. CT was created to reduce the impact of a potential market downturn on the interests in alternative assets held by the Customer ExAlt Trusts that collateralize the loans receivable from the Customer ExAlt Trusts held by BFF, or other Ben entities (such loans receivable are eliminated solely for financial reporting purposes in our consolidated financial statements) by distributing any potential profits to certain of the Customer ExAlt Trusts thereby offsetting any reduction in the value of the alternative assets.

CT is considered a VIE as the at-risk equity holder, BFF, does not have all of the characteristics of a controlling financial interest due to BFF’s receipt of returns being limited to its initial investment in CT. The Company concluded that BFF is the primary beneficiary of CT as BFF has the power to direct the most significant activities and has an obligation to absorb potential losses of CT. Accordingly, the results of CT are included in the Company’s consolidated financial statements.

As of June 30, 2025 and March 31, 2025, the consolidated statements of financial condition include assets of this consolidated VIE with a carrying value of nil. No options were held as of and during the three months ended June 30, 2025 and 2024.

Customer ExAlt Trusts

The Company determined that all of the Customer ExAlt Trusts used in connection with its operations are VIEs of which Ben is the primary beneficiary as defined under ASC 810. The Company concluded that it is the primary beneficiary of the Customer ExAlt Trusts as it has the power to direct the most significant activities and has an obligation to absorb potential losses of the Customer ExAlt Trusts. Accordingly, the results of the Customer ExAlt Trusts are included in the Company’s consolidated financial statements. Although the Company is deemed to be the primary beneficiary of the Customer ExAlt Trusts for purposes of ASC 810, it is neither designated as a beneficiary under the trust agreements nor recognized as a beneficiary of such trusts under applicable state trust law. The assets of the Customer ExAlt Trusts may only be used to settle obligations of the Customer ExAlt Trusts. Other than potentially funding capital calls above the related reserve (refer to Note 17), there is no recourse to the Company for the Customer ExAlt Trusts’ liabilities. The cash flows generated by these VIEs are included within the Company’s consolidated statements of cash flows.

The consolidated statements of financial condition includes the following amounts from these consolidated VIEs as of the dates presented:


(Dollars in thousands)	June 30, 2025		March 31, 2025
Assets:
Cash and cash equivalents	$	1,165	$	717

Investments, at fair value	263,769		291,371
Other assets	50		378
Total Assets of VIEs	$	264,984	$	292,466

Liabilities:
Accounts payable and accrued expense	$	3,515	$	3,107
Other liabilities	—		95

Total Liabilities of VIEs	$	3,515	$	3,202

Equity:
Treasury stock	$	(3,444)	$	(3,444)
Noncontrolling interests	(218,356)		(201,518)
Accumulated other comprehensive income	(2)		(2)
Total Equity of VIEs	$	(221,802)	$	(204,964)

The consolidated statements of comprehensive income (loss) for the periods presented include the following amounts from these consolidated VIEs:


	Three Months Ended June 30,
	2025		2024
(Dollars in thousands)
Revenues
Investment income (loss), net	$	(12,776)	$	11,028
Gain (loss) on financial instruments, net	(75)		(1,175)



Total revenues	(12,851)		9,853

Operating expenses

Provision for credit losses	—		522
Professional services	407		622
Other expenses	394		121
Total operating expenses	801		1,265

Net income (loss)	$	(13,652)	$	8,588
Net income (loss) attributable to noncontrolling interests	$	(16,212)	$	(526)