Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Liabilities Measured at Fair Value on a Recurring Basis

The following tables set forth the measurement at fair value on a recurring basis of the investments in money market funds, short-term cash instruments and U.S. government securities. The securities are categorized as a Level 1 asset, as their valuation is based on quoted prices for identical assets in active markets. See “Note 3 — Cash and Cash Equivalents”.

Assets Measured at Fair Value on a Recurring Basis as of December 31, 2018

	Quoted Prices in Active  Markets for Identical Assets (Level 1)		Significant Other Observable  Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Balance as of December 31, 2018
	(in thousands)
Assets
Cash equivalents	$	72,193	$	—	$	—	$	72,193
Total	$	72,193	$	—	$	—	$	72,193

Assets Measured at Fair Value on a Recurring Basis as of December 31, 2017

	Quoted Prices in Active  Markets for Identical Assets (Level 1)		Significant Other Observable  Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Balance as of December 31, 2017
	(in thousands)
Assets
Cash equivalents	$	183,369	$	—	$	—	$	183,369
Total	$	183,369	$	—	$	—	$	183,369

Liabilities Measured at Fair Value on a Recurring Basis

In connection with the acquisition in April 2015 of Cogent Partners, LP and its affiliates (“Cogent,” now known as the secondary capital advisory business) (the “Acquisition”), the Company agreed to pay to the sellers in the future $18.9 million in cash and 334,048 shares of Greenhill common stock if certain agreed revenue targets are achieved (the “Earnout”). The cash payment and the issuance of common shares related to the Earnout were to be made if secondary capital advisory revenues of $80.0 million or more are earned during either the two year period ending on the second anniversary of the closing or the two year period ending on the fourth anniversary of the closing. The revenue generated by the secondary capital advisory business for the first two year period ended March 31, 2017 was slightly less than required to achieve the Earnout. In the third quarter of 2018, the Earnout for the second two year period ending March 31, 2019 was achieved, and in accordance with terms of the purchase agreement, the contingent consideration will be paid promptly after the fourth anniversary of the Acquisition. The fair value of the contingent cash consideration was valued on the date of the acquisition at $13.1 million and has been remeasured quarterly based on a probability weighted present value discount that the revenue target may be achieved. At December 31, 2018, based on the present value of the remaining term, the contingent cash consideration that will be paid as a result of the Earnout being achieved was valued at $18.3 million based on a 13.2% discount rate. Due to the remeasurement of the Earnout, the Company recognized an increase in other operating expenses of $4.5 million for the year ended December 31, 2018, a decrease in other operating expenses of $1.3 million for the year ended December 31, 2017 and an increase in other operating expenses of $1.5 million for the year ended December 31, 2016. See “Note 11 — Earnings per Share”.

The following tables set forth the measurement at fair value on a recurring basis of the contingent cash consideration due to the selling unitholders of Cogent related to the Earnout. The liability arose as a result of the Acquisition and, until September 30, 2018, was categorized as a Level 3 liability and remeasured each quarterly period based on the probability of achieving the target revenue threshold and weighted average discount rate as discussed below. In the third quarter of 2018, the liability was transferred to Level 2 due to the achievement of the revenue target and the only remaining fair value input is the present value discount until the Earnout is paid.

Liabilities Measured at Fair Value on a Recurring Basis as of December 31, 2018

	Quoted Prices in Active  Markets for Identical Assets (Level 1)		Significant Other Observable  Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Balance as of December 31, 2018
	(in thousands)
Liabilities
Contingent obligation due selling unitholders of Cogent	$	—	$	18,293	$	—	$	18,293
Total	$	—	$	18,293	$	—	$	18,293

Liabilities Measured at Fair Value on a Recurring Basis as of December 31, 2017

	Quoted Prices in Active  Markets for Identical Assets (Level 1)		Significant Other Observable  Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Balance as of December 31, 2017
	(in thousands)
Liabilities
Contingent obligation due selling unitholders of Cogent	$	—	$	—	$	13,763	$	13,763
Total	$	—	$	—	$	13,763	$	13,763

Changes in Level 3 Measured at Fair Value

Changes in Level 3 liabilities measured at fair value on a recurring basis for the year ended December 31, 2018

	Opening Balance as of January 1, 2018		Total realized and unrealized gains (losses) included in Net Income			Unrealized gains (losses) included in Other Comprehensive Income		Purchases		Issues		Sales		Transfers Out			Closing Balance as of December 31, 2018		Unrealized gains (losses) for Level 3 liabilities outstanding at December 31, 2018
	(in thousands)
Liabilities
Contingent obligation due selling unitholders of Cogent	$	13,763	$	(4,021	)	$	—	$	—	$	—	$	—	$	(17,784	)	$	—	$	—
Total	$	13,763	$	(4,021	)	$	—	$	—	$	—	$	—	$	(17,784	)	$	—	$	—

Changes in Level 3 liabilities measured at fair value on a recurring basis for the year ended December 31, 2017

	Opening Balance as of January 1, 2017		Total realized and unrealized gains (losses) included in Net Income		Unrealized gains (losses) included in Other Comprehensive Income		Purchases		Issues		Sales		Transfers Out		Closing Balance as of December 31, 2017		Unrealized gains (losses) for Level 3 liabilities outstanding at December 31, 2017
	(in thousands)
Liabilities
Contingent obligation due selling unitholders of Cogent	$	15,095	$	1,332	$	—	$	—	$	—	$	—	$	—	$	13,763	$	1,332
Total	$	15,095	$	1,332	$	—	$	—	$	—	$	—	$	—	$	13,763	$	1,332

Changes in Level 3 liabilities measured at fair value on a recurring basis for the year ended December 31, 2016

	Opening Balance as of January 1, 2016		Total realized and unrealized gains (losses) included in Net Income			Unrealized gains (losses) included in Other Comprehensive Income		Purchases		Issues		Sales		Transfers Out		Closing Balance as of December 31, 2016		Unrealized gains (losses) for Level 3 liabilities outstanding at December 31, 2016
	(in thousands)
Liabilities
Contingent obligation due selling unitholders of Cogent	$	13,647	$	(1,448	)	$	—	$	—	$	—	$	—	$	—	$	15,095	$	(1,448	)
Total	$	13,647	$	(1,448	)	$	—	$	—	$	—	$	—	$	—	$	15,095	$	(1,448	)

Quantitative Information

The following table presents quantitative information about the significant unobservable inputs utilized by the Company in the fair value measure of Level 3 liabilities measured at fair value on a recurring basis, as of December 31, 2017:

	Fair Value as of December 31, 2017		Valuation Technique(s)	Unobservable  Input(s)		Range (Weighted Average)
	(in thousands)
Liabilities
Contingent obligation due selling unitholders of Cogent	$	13,763	Present value of expected payments	Discount rate		13	%
				Forecast revenue	(a)

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(a) The Company’s estimate of contingent consideration as of December 31, 2017 was principally based on the acquired business’ (i) actual revenue generation from April 1, 2015 through March 31, 2017 and (ii) actual and projected revenue generation from April 1, 2017 through March 31, 2019.