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Fair Value of Financial Assets and Liabilities
 9 Months Ended
Sep. 30, 2022
Fair Value Disclosures [Abstract]  
Fair Value of Financial Assets and Liabilities Fair Value of Financial Assets and Liabilities
Fair Value Measurements on a Recurring Basis
U.S. GAAP guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
Level 1 measurements—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 measurements—Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly.
Level 3 measurements—Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
As required by U.S. GAAP guidance, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The following tables set forth by level within the fair value hierarchy financial assets and liabilities accounted for at fair value under U.S. GAAP guidance (in thousands):
Assets at Fair Value at September 30, 2022
Level 1Level 2Level 3Netting and
Collateral		Total
Financial instruments owned, at fair value—Domestic government debt$31,703 $— $— $— $31,703 
Financial instruments owned, at fair value—Foreign government debt— 5,906 — — 5,906 
Financial instruments owned, at fair value—Equities567 — — — 567 
Financial instruments owned, at fair value—Corporate bonds— 270 — — 270 
Forwards— 29 — (1)28 
FX swaps— 13,257 — (3,148)10,109 
Futures— 107,721 — (106,895)826 
Interest rate swaps— 483 — (478)5 
Total$32,270 $127,666 $— $(110,522)$49,414 
Liabilities at Fair Value at September 30, 2022
Level 1Level 2Level 3Netting and
Collateral		Total
FX swaps$— $10,658 $— $(3,148)$7,510 
Forwards— 618 — (1)617 
Futures— 106,895 — (106,895)— 
Interest rate swaps— 478 — (478)— 
Contingent consideration— — 22,729 — 22,729 
Total$— $118,649 $22,729 $(110,522)$30,856 
Assets at Fair Value at December 31, 2021
Level 1Level 2Level 3Netting and
Collateral		Total
Financial instruments owned, at fair value—Domestic government debt$30,956 $— $— $— $30,956 
Financial instruments owned, at fair value—Foreign government debt— 9,647 — — 9,647 
Financial instruments owned, at fair value—Equities641 — — — 641 
FX/commodities options— — — — — 
Forwards— 452 — (60)392 
FX swaps— 3,025 — (538)2,487 
Futures— 70,497 — (70,497)— 
Total$31,597 $83,621 $— $(71,095)$44,123 
Liabilities at Fair Value at December 31, 2021
Level 1Level 2Level 3Netting and
Collateral		Total
Futures$— $71,437 $— $(70,497)$940 
FX swaps— 2,028 — (538)1,490 
Forwards— 479 — (60)419 
Contingent consideration— — 29,756 — 29,756 
Total$— $73,944 $29,756 $(71,095)$32,605 
Level 3 Financial Liabilities
Changes in Level 3 liabilities measured at fair value on a recurring basis for the three months ended September 30, 2022 were as follows (in thousands):
Unrealized (gains) losses
for the period included in:
Opening Balance at July 1, 2022Total
realized and
unrealized
(gains) losses
included in
Net income
(loss)¹		Unrealized
(gains) losses
included in
Other
comprehensive
income
 (loss)²		Purchases/
Issuances		Sales/
Settlements		Closing Balance at September 30, 2022Net income (loss) on Level 3 Assets / Liabilities Outstanding at September 30, 2022Other comprehensive income (loss) on Level 3 Assets / Liabilities Outstanding at September 30, 2022
Liabilities
Accounts payable,
   accrued and other
   liabilities:
Contingent
   consideration		$22,791 $(62)$— $— $— $22,729 $(62)$— 
____________________________
1Realized and unrealized gains (losses) are reported in “Other expenses” and “Other income (loss),” as applicable, in the Company’s unaudited Condensed Consolidated Statements of Operations.
2Unrealized gains (losses) are reported in “Foreign currency translation adjustments,” in the Company’s unaudited Condensed Consolidated Statements of Comprehensive Income (Loss).
Changes in Level 3 liabilities measured at fair value on a recurring basis for the three months ended September 30, 2021 were as follows (in thousands):
Unrealized (gains) losses
for the period included in:
Opening Balance at July 1, 2021Total
realized and
unrealized
(gains) losses
included in
Net income
(loss)¹		Unrealized
(gains) losses
included in
Other
comprehensive
income
 (loss)²		Purchases/
Issuances		Sales/
Settlements		Closing Balance at September 30, 2021Net income (loss) on Level 3 Assets / Liabilities Outstanding at September 30, 2021Other comprehensive income (loss) on Level 3 Assets / Liabilities Outstanding at September 30, 2021
Liabilities
Accounts payable,
   accrued and other
   liabilities:
Contingent
   consideration		$32,975 $74 $— $— $(5,565)$27,484 $74 $— 
____________________________
1Realized and unrealized gains (losses) are reported in “Other expenses” and “Other income (loss),” as applicable, in the Company’s unaudited Condensed Consolidated Statements of Operations.
2Unrealized gains (losses) are reported in “Foreign currency translation adjustments,” in the Company’s unaudited Condensed Consolidated Statements of Comprehensive Income (Loss).
Changes in Level 3 liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2022 were as follows (in thousands):
Unrealized (gains) losses
for the period included in:
Opening Balance at January 1, 2022Total
realized and
unrealized
(gains) losses
included in
Net income
(loss)¹		Unrealized
(gains) losses
included in
Other
comprehensive
income
 (loss)²		Purchases/
Issuances		Sales/
Settlements		Closing Balance at September 30, 2022Net income (loss) on Level 3 Assets / Liabilities Outstanding at September 30, 2022Other comprehensive income (loss) on Level 3 Assets / Liabilities Outstanding at September 30, 2022
Liabilities
Accounts payable,
   accrued and other
   liabilities:
Contingent
   consideration		$29,756 $(516)$— $— $(6,511)$22,729 $(516)$— 
____________________________
1Realized and unrealized gains (losses) are reported in “Other expenses” and “Other income (loss),” as applicable, in the Company’s unaudited Condensed Consolidated Statements of Operations.
2Unrealized gains (losses) are reported in “Foreign currency translation adjustments,” in the Company’s unaudited Condensed Consolidated Statements of Comprehensive Income (Loss).
Changes in Level 3 liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2021 were as follows (in thousands):
Unrealized (gains) losses
for the period included in:
Opening Balance at January 1, 2021Total
realized and
unrealized
(gains) losses
included in
Net income
(loss)¹		Unrealized
(gains) losses
included in
Other
comprehensive
income
 (loss)²		Purchases/
Issuances		Sales/
Settlements		Closing Balance at September 30, 2021Net income (loss) on Level 3 Assets / Liabilities Outstanding at September 30, 2021Other comprehensive income (loss) on Level 3 Assets / Liabilities Outstanding at September 30, 2021
Liabilities
Accounts payable,
   accrued and other
   liabilities:
Contingent
   consideration		$39,791 $2,013 $— $— $(14,320)$27,484 $2,013 $— 
____________________________
1Realized and unrealized gains (losses) are reported in “Other expenses” and “Other income (loss),” as applicable, in the Company’s unaudited Condensed Consolidated Statements of Operations.
2Unrealized gains (losses) are reported in “Foreign currency translation adjustments,” in the Company’s unaudited Condensed Consolidated Statements of Comprehensive Income (Loss).
Quantitative Information About Level 3 Fair Value Measurements on a Recurring Basis
The following tables present quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurement of Level 3 liabilities measured at fair value on a recurring basis (in thousands):
Fair Value as of September 30, 2022
AssetsLiabilitiesValuation TechniqueUnobservable InputsRangeWeighted
Average
Discount rate1
6.8%-10.3%
9.9%
Contingent consideration$— $22,729 Present value of
expected payments		Probability
of meeting earnout
and contingencies
5%-100%
70.1%2
____________________________
1The discount rate is based on the Company’s calculated weighted-average cost of capital.
2The probability of meeting the earnout targets was based on the acquirees’ projected future financial performance, including revenues.
Fair Value as of December 31, 2021
AssetsLiabilitiesValuation TechniqueUnobservable InputsRangeWeighted
Average
Discount rate1
6.8%-10.3%
9.8%
Contingent consideration$— $29,756 Present value of
expected payments		Probability
of meeting earnout
and contingencies
11%-100%
71.8%2
____________________________
1The discount rate is based on the Company’s calculated weighted-average cost of capital.
2The probability of meeting the earnout targets was based on the acquirees’ projected future financial performance, including revenues.
Information About Uncertainty of Level 3 Fair Value Measurements
The significant unobservable inputs used in the fair value of the Company’s contingent consideration are the discount rate and forecasted financial information. Significant increases (decreases) in the discount rate would have resulted in a significantly lower (higher) fair value measurement. Significant increases (decreases) in the forecasted financial information
would have resulted in a significantly higher (lower) fair value measurement. As of September 30, 2022 and December 31, 2021, the present value of expected payments related to the Company’s contingent consideration was $22.7 million and $29.8 million, respectively. The undiscounted value of the payments, assuming that all contingencies are met, would be $33.2 million and $40.6 million, as of September 30, 2022 and December 31, 2021, respectively.
Fair Value Measurements on a Non-Recurring Basis
Pursuant to the recognition and measurement guidance for equity investments, effective January 1, 2018, equity investments carried under the measurement alternative are remeasured at fair value on a non-recurring basis to reflect observable transactions which occurred during the period. The Company applied the measurement alternative to equity securities with the fair value of $83.9 million and $82.0 million, which were included in “Other assets” in the Company’s unaudited Condensed Consolidated Statements of Financial Condition as of September 30, 2022 and December 31, 2021, respectively. These investments are classified within Level 2 in the fair value hierarchy, because their estimated fair value is based on valuation methods using the observable transaction price at the transaction date.