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Fair Value
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Fair Value
See Note 15, Consolidated Company-Sponsored Investment Funds, for disclosure of fair value of our consolidated company-sponsored investment funds.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. The three broad levels of fair value hierarchy are as follows:
•Level 1—Quoted prices in active markets are available for identical assets or liabilities as of the reported date.
•Level 2—Quoted prices in markets that are not active or other pricing inputs that are either directly or indirectly observable as of the reported date.
•Level 3—Prices or valuation techniques that are both significant to the fair value measurement and unobservable as of the reported date. These financial instruments do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Valuation of our financial instruments by pricing observability levels as of December 31, 2025 and 2024 was as follows (in thousands):
 Level 1Level 2Level 3
NAV Expedient(1)
Total
December 31, 2025
Money markets$175,029 $— $— $— $175,029 
Securities segregated (U.S. Treasury Bills)— 498,649 — — 498,649 
Derivatives 832 12,153 — — 12,985 
Equity securities145,217 66,519 127 37 211,900 
Other Investments9,003 — — — 9,003 
Total assets measured at fair value$330,081 $577,321 $127 $37 $907,566 
Derivatives$366 $17,249 $— $— $17,615 
Contingent payment arrangements— — 8,605 — 8,605 
Total liabilities measured at fair value$366 $17,249 $8,605 $— $26,220 
December 31, 2024:
Money markets$146,781 $— $— $— $146,781 
Securities segregated (U.S. Treasury Bills)— 499,245 — — 499,245 
Derivatives 2,835 18,106 — — 20,941 
Equity securities193,766 5,921 121 2,016 201,824 
Other investments8,593 — — — 8,593 
Total assets measured at fair value$351,975 $523,272 $121 $2,016 $877,384 
    
Derivatives$33 $14,911 $— $— $14,944 
Contingent payment arrangements— — 9,385 — 9,385 
Total liabilities measured at fair value$33 $14,911 $9,385 $— $24,329 
(1)Investments measured at fair value using NAV (or its equivalent) as a practical expedient.
Other investments included in Level 1 of the fair value hierarchy include our investment in a mutual fund measured at fair value.
We provide below 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:
•Money markets: We invest excess cash in various money market funds that are valued based on quoted prices in active markets; these are included in Level 1 of the valuation hierarchy.
•Treasury Bills: We hold U.S. Treasury Bills, which are primarily segregated in a special reserve bank custody account as required by Rule 15c3-3 of the Exchange Act. These securities are valued based on quoted yields in secondary markets and are included in Level 2 of the valuation hierarchy.
•Equity securities: Our equity securities consist principally of company-sponsored mutual funds with NAVs and various separately managed portfolios consisting primarily of equity and fixed income mutual funds with quoted prices in active markets, which are included in Level 1 of the valuation hierarchy. In addition, some securities are valued based on observable inputs from recognized pricing vendors, which are included in Level 2 of the valuation hierarchy.
•Derivatives: We hold exchange-traded futures with counterparties that are included in Level 1 of the valuation hierarchy. In addition, we also hold currency forward contracts, interest rate swaps, credit default swaps, option swaps and total return swaps with counterparties that are valued based on observable inputs from recognized pricing vendors, which are included in Level 2 of the valuation hierarchy.
•Contingent payment arrangements: Contingent payment arrangements relate to contingent payment liabilities associated with various acquisitions. At each reporting date, we estimate the fair values of the contingent consideration expected to be paid upon probability-weighted AUM and revenue projections, using unobservable market data inputs, which are included in Level 3 of the valuation hierarchy.
During the years ended December 31, 2025 and 2024, there were no transfers between Level 2 and Level 3 securities.
The change in carrying value associated with Level 3 financial instruments carried at fair value, classified as equity securities, is as follows:
December 31
20252024
(in thousands)
Balance as of beginning of period$121 $118 
Unrealized gains (losses), net6 3 
Balance as of end of period$127 $121 
Realized and unrealized gains and losses on Level 3 financial instruments are recorded in investment gains and losses in the consolidated statements of income.
Our acquisitions may include contingent consideration arrangements as part of the purchase price. The change in carrying value associated with Level 3 financial instruments carried at fair value, classified as contingent payment arrangements, is as follows:
December 31
20252024
(in thousands)
Balance as of beginning of period$9,385 $252,690 
Accretion191 9,005 
Changes in estimates— (130,901)
Payments(971)(2,640)
Reclassification of AB CarVal contingent liability— (118,769)
Balance as of end of period$8,605 $9,385 
As of December 31, 2025, the expected revenue growth rates ranged from 2.0% to 13.3%, with a weighted average of 6.8%, calculated using cumulative revenues and range of revenue growth rate and a discount rate of 1.9%.
As of December 31, 2024, the expected revenue growth rates range from 2.0% to 29.3%, with a weighted average of 5.5%, calculated using cumulative revenues and range of revenue growth rates. The discount rates ranged from 1.9% to 10.4%, with a weighted average of 7.3%, calculated using total contingent liabilities and range of discount rates.
During 2022, we acquired CarVal Investors which included a contingent consideration liability ranging from zero to $650.0 million and is based on CarVal achieving certain performance objectives over a six-year period ending December 31, 2027. During 2024, we remeasured the contingent liability and recorded a gain reflected within contingent payment arrangements in the consolidated statements of income of $128.5 million. The fair value of the contingent consideration was remeasured using forecasted future cash flows using the Real Options valuation methodology. The most significant assumptions used to remeasure the liability were expected revenue growth rates and discount rates.
In December 2024, the company agreed to finalize its contingent consideration liability with AB CarVal for a value of $134.0 million. This liability will be paid predominantly in AB Units issued within 10 days of December 31, 2027. Given the liability was no longer contingent, the liability of approximately $118.8 million was reclassified to accounts payable and accrued expenses on the consolidated statements of financial condition. The current carrying value of the liability as of December 31, 2025 is $123.8 million which will accrete up to 134.0 million through December 31, 2027. This expense is recognized as general and administrative expenses on the consolidated statements of income.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
We did not have any material assets or liabilities that were measured at fair value for impairment on a nonrecurring basis during the years ended December 31, 2025 or 2024.