We regularly provide seed capital to new company-sponsored investment funds. As such, we may consolidate or de-consolidate a variety of company-sponsored investment funds each quarter. Due to the similarity of risks related to our involvement with each company-sponsored investment fund, disclosures required under the VIE model are aggregated, such as disclosures regarding the carrying amount and classification of assets.

We are not required to provide financial support to company-sponsored investment funds, and only the assets of such funds are available to settle each fund's own liabilities. Our exposure to loss regarding consolidated company-sponsored investment funds is limited to our investment in, and our management fee earned from, such funds. Equity and debt holders of such funds have no recourse to AB’s assets or to the general credit of AB.



	June 30, 2020						December 31, 2019
	(in thousands)
	VIEs		VOEs		Total		VIEs		VOEs		Total
Cash and cash equivalents	$	28,657	$	4,419	$	33,076	$	9,623	$	1,810	$	11,433
Investments	128,941		105,155		234,096		404,624		176,380		581,004
Other assets	3,779		4,118		7,897		9,618		10,192		19,810
Total assets	$	161,377	$	113,692	$	275,069	$	423,865	$	188,382	$	612,247

Liabilities	$	6,438	$	19,984	$	26,422	$	12,147	$	18,870	$	31,017
Redeemable non-controlling interest	35,486		15,595		51,081		273,219		52,342		325,561
Partners' capital attributable to AB Unitholders	119,453		78,113		197,566		138,499		117,170		255,669
Total liabilities, redeemable non-controlling interest and partners' capital	$	161,377	$	113,692	$	275,069	$	423,865	$	188,382	$	612,247

During the second quarter of 2020, we deconsolidated three funds in which we had a seed investment of approximately $59.0 million due to no longer having a controlling financial interest. These VIEs had significant consolidated assets and liabilities as of December 31, 2019.

Cash and cash equivalents include cash on hand, demand deposits, overnight commercial paper and highly liquid investments with original maturities of three months or less. Due to the short-term nature of these instruments, the recorded value has been determined to approximate fair value.

Valuation of consolidated company-sponsored investment funds' financial instruments by pricing observability levels as of June 30, 2020 and December 31, 2019 was as follows (in thousands):



	Level 1		Level 2		Level 3		Total
June 30, 2020:
Investments - VIEs	$	16,924	$	111,541	$	476	$	128,941
Investments - VOEs	3,185		101,929		41		105,155
Derivatives - VIEs	245		1,087		—		1,332
Derivatives - VOEs	48		650		—		698
Total assets measured at fair value	$	20,402	$	215,207	$	517	$	236,126

Derivatives - VIEs	133		4,176		—		4,309
Derivatives - VOEs	58		1,688		—		1,746
Total liabilities measured at fair value	$	191	$	5,864	$	—	$	6,055

December 31, 2019:
Investments - VIEs	$	28,270	$	375,559	$	795	$	404,624
Investments - VOEs	104,069		72,252		59		176,380
Derivatives - VIEs	139		4,694		—		4,833
Derivatives - VOEs	76		4,263		—		4,339
Total assets measured at fair value	$	132,554	$	456,768	$	854	$	590,176

Derivatives - VIEs	$	835	$	3,724	$	—	$	4,559
Derivatives - VOEs	101		4,982		—		5,083
Total liabilities measured at fair value	$	936	$	8,706	$	—	$	9,642

See Note 11 for a description of the fair value methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.



	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(in thousands)
Balance as of beginning of period	$	534		$	10,261		$	854		$	8,373
Deconsolidated funds	(135		)	—			(135		)	—
Transfers (out) in	340			(89		)	571			(186		)
Purchases	13			5,680			46			7,791
Sales	(82		)	(4,065		)	(444		)	(4,349		)
Realized gains (losses), net	(14		)	21			(14		)	23
Unrealized gains (losses), net	(138		)	20			(362		)	169
Accrued discounts	(1		)	6			1			13
Balance as of end of period	$	517		$	11,834		$	517		$	11,834

The Level 3 securities primarily consist of corporate bonds that are vendor priced with no ratings available, bank loans, non-agency collateralized mortgage obligations and asset-backed securities.

Transfers into and out of all levels of the fair value hierarchy are reflected at end-of-period fair values. Realized and unrealized gains and losses on Level 3 financial instruments are recorded in investment gains and losses in the condensed consolidated statements of income.

As of June 30, 2020 and December 31, 2019, the VIEs held $3.0 million and $0.3 million (net) of futures, forwards and swaps within their portfolios, respectively. For the three and six months ended June 30, 2020, we recognized $1.0 million of gains and $0.7 million of losses, respectively, on these derivatives. For the three and six months ended June 30, 2019, we recognized $1.6 million and $2.7 million of gains, respectively, on these derivatives. These losses and gains are recognized in investment gains (losses) in the condensed consolidated statements of income.

As of June 30, 2020 and December 31, 2019, the VIEs held $0.3 million and $1.6 million, respectively, of cash collateral payable to trade counterparties. This obligation to return cash is reported in the liabilities of consolidated company-sponsored investment funds in our condensed consolidated statements of financial condition.

As of June 30, 2020 and December 31, 2019, the VIEs delivered $3.8 million and $3.2 million, respectively, of cash collateral into brokerage accounts. The VIEs report this cash collateral in the consolidated company-sponsored investment funds cash and cash equivalents in our condensed consolidated statements of financial condition.

As of June 30, 2020 and December 31, 2019, the VOEs held $1.0 million and $0.7 million, respectively, (net) of futures, forwards, options and swaps within their portfolios. For the three and six months ended June 30, 2020, we recognized $0.8 million and $0.9 million of losses, respectively, on these derivatives. For the three and six months ended June 30, 2019, we recognized $0.6 million and $0.5 million of losses, respectively, on these derivatives. These gains and losses are recognized in investment gains (losses) in the condensed consolidated statements of income.

As of June 30, 2020 and December 31, 2019, the VOEs held $0.9 million and $0.5 million, respectively, of cash collateral payable to trade counterparties. This obligation to return cash is reported in the liabilities of consolidated company-sponsored investment funds in our condensed consolidated statements of financial condition.

As of June 30, 2020 and December 31, 2019, the VOEs delivered $2.0 million and $1.2 million, respectively, of cash collateral in brokerage accounts. The VOEs report this cash collateral in the consolidated company-sponsored investment funds cash and cash equivalents in our condensed consolidated statements of financial condition.



	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Condition		Net Amounts of Assets Presented in the Statement of Financial Condition		Financial Instruments		Cash Collateral Received			Net Amount
	(in thousands)
June 30, 2020:
Derivatives - VIEs	$	1,332	$	—	$	1,332	$	—	$	(270	)	$	1,062
Derivatives - VOEs	$	698	$	—	$	698	$	—	$	(698	)	$	—
December 31, 2019:
Derivatives - VIEs	$	4,833	$	—	$	4,833	$	—	$	(1,631	)	$	3,202
Derivatives - VOEs	$	4,339	$	—	$	4,339	$	—	$	(534	)	$	3,805



	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Condition		Net Amounts of Liabilities Presented in the Statement of Financial Condition		Financial Instruments		Cash Collateral Pledged			Net Amount
	(in thousands)
June 30, 2020:
Derivatives - VIEs	$	4,309	$	—	$	4,309	$	—	$	(3,800	)	$	509
Derivatives - VOEs	$	1,746	$	—	$	1,746	$	—	$	(1,746	)	$	—
December 31, 2019:
Derivatives - VIEs	$	4,559	$	—	$	4,559	$	—	$	(3,155	)	$	1,404
Derivatives - VOEs	$	5,083	$	—	$	5,083	$	—	$	(1,201	)	$	3,882

As of June 30, 2020, the net assets of company-sponsored investment products that are non-consolidated VIEs are approximately $63.5 billion, and our maximum risk of loss is our investment of $12.5 million in these VIEs and our advisory fee receivables from these VIEs, which are not material.