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COMMITMENTS AND CONTINGENCIES
 9 Months Ended
Sep. 30, 2021
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES
9. COMMITMENTS AND CONTINGENCIES
Indemnification Arrangements
Consistent with standard business practices in the normal course of business, the Company enters into contracts that contain indemnities for affiliates of the Company, persons acting on behalf of the Company or such affiliates and third parties. The terms of the indemnities vary from contract to contract and the Company’s maximum exposure under these arrangements cannot be determined and has not been recorded in the Condensed Consolidated Statements of Financial Condition. As of September 30, 2021, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
Commitments
As of September 30, 2021 and December 31, 2020, the Company had aggregate unfunded commitments to invest in funds it manages or to support certain strategic initiatives of $732.8 million and $784.2 million, respectively.
Contingent Liabilities
In connection with the Landmark Acquisition, the Company established a management incentive program (the “Landmark MIP”) with certain professionals of Landmark. The Landmark MIP represents a contingent liability not to exceed $300.0 million and is based on the achievement of fundraising targets for certain Landmark funds during a measurement period.
The Company expects to settle this liability with a combination of 15% cash and 85% equity awards. Expense associated with the cash component is recognized ratably over the measurement period, which will end on the earlier of the final fundraising date or December 31, 2022. Expense associated with the equity component is recognized ratably over the service period, which will continue for four years beyond the measurement period end date. The Landmark MIP is remeasured each period with incremental changes in fair value included within compensation and benefits expense within the Condensed Consolidated Statements of Operations. At the measurement period end date, the cash component will be paid and restricted units for the balance of the Landmark MIP will be granted at fair value. The unpaid liability at the measurement period end date will be reclassified from liability to additional paid-in-capital and any difference between the fair value of the Landmark MIP at the measurement period end date and the previously recorded compensation expense will be recognized over the remaining four year service period as equity-based compensation expense. As of September 30, 2021, the fair value of the contingent liability was estimated to be $236.0 million. Compensation expense of $14.7 million and $19.3 million for the three months ended September 30, 2021 and for the period from June 2, 2021 through September 30, 2021, respectively, was recorded in the Condensed Consolidated Statements of Operations.
The purchase agreement with Black Creek contains provisions obligating the Company to make payments in an aggregate amount not to exceed $275.0 million to certain senior professionals and advisors upon the achievement of certain revenue targets through a measurement period no later than December 31, 2024. Because these future payments require continued service through the measurement period, this consideration is accounted for as compensation expense instead of as purchase consideration. The fair value of this contingent liability is remeasured at each reporting date with compensation expense recorded ratably over the service period, which is the Black Creek Acquisition date through the measurement period end date. As of September 30, 2021, the fair value of the contingent liability was $206.7 million and the Company recorded a contingent liability of $13.5 million within accrued compensation in the Consolidated Statements of Financial Condition. For the three months ended September 30 2021, compensation expense of $13.5 million was recorded within compensation and benefits expense within the Condensed Consolidated Statements of Operations.

The purchase agreement with Black Creek also contains a provision obligating the Company to make a payment to the sellers equal to 50% of the performance income realized for certain Black Creek funds for the year ended December 31, 2021. The fair value of this contingent obligation as of the acquisition date was $28.6 million. The contingent obligation is subject to remeasurement until settlement and changes in fair value from the acquisition date are recorded within other income (expense), net within the Condensed Consolidated Statements of Operations. As of September 30, 2021, the fair value of the contingent obligation was $32.8 million and recorded within due to affiliates within the Consolidated Statements of Financial Condition.
Performance Income
Performance income is affected by changes in the fair values of the underlying investments in the funds that are advised by the Company. Valuations, on an unrealized basis, can be significantly affected by a variety of external factors including, but not limited to, public equity market volatility, industry trading multiples and interest rates. Generally, if at the termination of a fund (and increasingly at interim points in the life of a fund), the fund has not achieved investment returns that (in most cases) exceed the preferred return threshold or (in all cases) the general partner receives net profits over the life of the fund in excess of its allocable share under the applicable partnership agreement, the Company will be obligated to repay carried interest that was received by the Company in excess of the amounts to which the Company is entitled. This contingent obligation is normally reduced by income taxes paid by the Company related to its carried interest. 
Senior professionals of the Company who have received carried interest distributions are responsible for funding their proportionate share of any contingent repayment obligations. However, the governing agreements of certain of the Company's funds provide that if a current or former professional does not fund his or her respective share for such fund, then the Company may have to fund additional amounts beyond what was received in carried interest, although the Company will generally retain the right to pursue any remedies under such governing agreements against those carried interest recipients who fail to fund their obligations.
Additionally, at the end of the life of the funds there could be a payment due to a fund by the Company if the Company has recognized more performance income than was ultimately earned. The general partner obligation amount, if any, will depend on final realized values of investments at the end of the life of the fund.
At September 30, 2021 and December 31, 2020, if the Company assumed all existing investments were worthless, the amount of performance income subject to potential repayment, net of tax distributions, which may differ from the recognition of revenue, would have been approximately $202.3 million and $326.4 million, respectively, of which approximately $158.0 million and $252.4 million, respectively, is reimbursable to the Company by certain professionals who are the recipients of such performance income. Management believes the possibility of all of the investments becoming worthless is remote. As of September 30, 2021 and December 31, 2020, if the funds were liquidated at their fair values, there would be no contingent repayment obligation or liability.
Litigation
From time to time, the Company is named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial condition or cash flows.
Leases

The Company leases office space and certain office equipment. The Company's leases have remaining lease terms of one to twelve years. The tables below present certain supplemental quantitative disclosures regarding the Company's leases:

As of September 30,As of December 31,
Classification20212020
Operating lease assetsRight-of-use operating lease assets$176,511 $154,742 
Finance lease assets
Other assets(1)
1,164 1,386 
Total lease assets$177,675 $156,128 
Operating lease liabilitiesOperating lease liabilities$214,681 $180,236 
Finance lease obligationsAccounts payable, accrued expenses and other liabilities977 1,273 
Total lease liabilities$215,658 $181,509 
(1) Finance lease assets are recorded net of accumulated amortization of $1.4 million and $1.0 million as of September 30, 2021 and December 31, 2020, respectively.
Maturity of lease liabilitiesOperating LeasesFinance Leases
2021$10,591 $73 
202241,989 598 
202338,277 164 
202436,579 162 
202536,251 11 
After 202566,683 — 
Total future payments230,370 1,008 
Less: interest15,689 31 
Total lease liabilities$214,681 $977 
Three months ended September 30,Nine months ended September 30,
Classification2021202020212020
Operating lease expenseGeneral, administrative and other expenses$9,697 $7,701 $27,203 $23,138 
Finance lease expense:
Amortization of finance lease assetsGeneral, administrative and other expenses154 127 408 346 
Interest on finance lease liabilitiesInterest expense7 11 24 33 
Total lease expense$9,858 $7,839 $27,635 $23,517 
Nine months ended September 30,
Other information20212020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$26,704 $23,098 
Operating cash flows for finance leases34 48 
Financing cash flows for finance leases463 412 
Leased assets obtained in exchange for new finance lease liabilities189 — 
Leased assets obtained in exchange for new operating lease liabilities55,461 12,477 
As of September 30,As of December 31,
Lease term and discount rate20212020
Weighted-average remaining lease terms (in years):
Operating leases6.16.0
Finance leases2.12.6
Weighted-average discount rate:
Operating leases2.97 %3.59 %
Finance leases2.91 %3.26 %