Fair Value

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

Accounting Standards Codification Topic 820, Fair Value Measurement (ASC 820) specifies a hierarchy of valuation classifications based on whether the inputs to the valuation techniques used in each valuation classification are observable or unobservable. These classifications are summarized in the three broad levels listed below:

• Level 1—Unadjusted quoted prices for identical instruments in active markets.

• Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable. If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.

• Level 3—Valuations derived from valuation techniques in which significant inputs or significant value drivers are unobservable.

Inputs used to measure fair value might fall in different levels of the fair value hierarchy, in which case the Company defaults to the lowest level input that is significant to the fair value measurement in its entirety. These levels are not necessarily an indication of the risk or liquidity associated with the investments. In determining the appropriate levels, the Company performed a detailed analysis of the assets and liabilities that are subject to ASC 820.

The following tables present fair value measurements:

	December 31, 2019
(in thousands)	Level 1		Level 2		Level 3		Investments Measured at NAV as FV		Investments Carried at Amortized Cost		Total
Cash equivalents	$	85,889	$	—	$	—	$	—	$	—	$	85,889
Equity investments at fair value
Common stocks	$	87,408	$	—	$	—	$	—	$	—	$	87,408
Company-sponsored funds	132		—		—		—		—		132
Limited partnership interests	1,048		—		—		337		—		1,385
Preferred securities	704		108		—		—		—		812
Other	—		—		—		135		—		135
Total	$	89,292	$	108	$	—	$	472	$	—	$	89,872
Trading investments
Fixed income	$	—	$	14,980	$	—	$	—	$	—	$	14,980
Total	$	—	$	14,980	$	—	$	—	$	—	$	14,980
Held-to-maturity investments
Fixed income	$	—	$	—	$	—	$	—	$	49,807	$	49,807
Total	$	—	$	—	$	—	$	—	$	49,807	$	49,807
Equity method investments	$	—	$	—	$	—	$	554	$	—	$	554
Total investments	$	89,292	$	15,088	$	—	$	1,026	$	49,807	$	155,213
Derivatives - assets
Commodity futures contracts	$	570	$	—	$	—	$	—	$	—	$	570
Foreign exchange contracts	—		74		—		—		—		74
Total	$	570	$	74	$	—	$	—	$	—	$	644
Derivatives - liabilities
Commodity futures contracts	$	339	$	—	$	—	$	—	$	—	$	339
Commodity swap contracts	—		173		—		—		—		173
Foreign exchange contracts	—		44		—		—		—		44
Total	$	339	$	217	$	—	$	—	$	—	$	556

	December 31, 2018
(in thousands)	Level 1		Level 2		Level 3		Investments Measured at NAV as FV		Investments Carried at Amortized Cost		Total
Cash equivalents	$	78,147	$	—	$	—	$	—	$	—	$	78,147
Equity investments at fair value
Common stocks	21,982		$	—	$	—	$	—	$	—	$	21,982
Company-sponsored funds	9,456		—		—		—		—		9,456
Limited partnership interests	1,056		—		—		550		—		1,606
Preferred securities	30,448		3,193		—		—		—		33,641
Other	—		—		—		110		—		110
Total	$	62,942	$	3,193	$	—	$	660	$	—	$	66,795
Trading investments
Fixed income	$	—	$	108,363	$	—	$	—	$	—	$	108,363
Total	$	—	$	108,363	$	—	$	—	$	—	$	108,363
Held-to-maturity investments
Fixed income	$	—	$	—	$	—	$	—	$	49,748	$	49,748
Total	$	—	$	—	$	—	$	—	$	49,748	$	49,748
Equity method investments	$	—	$	—	$	—	$	26	$	—	$	26
Total investments	$	62,942	$	111,556	$	—	$	686	$	49,748	$	224,932
Derivatives - assets
Commodity futures contracts	$	486	$	—	$	—	$	—	$	—	$	486
Commodity swap contracts	—		739		—		—		—		739
Total	$	486	$	739	$	—	$	—	$	—	$	1,225
Derivatives - liabilities
Commodity futures contracts	$	2,181	$	—	$	—	$	—	$	—	$	2,181
Foreign exchange contracts	—		205		—		—		—		205
Total	$	2,181	$	205	$	—	$	—	$	—	$	2,386

Cash equivalents were comprised of investments in actively traded U.S. Treasury money market funds measured at NAV.

Equity investments at fair value classified as level 2 were comprised of certain preferred securities with predominately equity-like characteristics whose fair values are generally determined using third-party pricing services. The pricing services may utilize pricing models, and inputs into those models may include reported trades, executable bid and ask prices, broker-dealer quotations, prices or yields of similar securities, benchmark curves and other market information. The pricing services may use a matrix approach, which considers information regarding securities with similar characteristics to determine the valuation for a security.

Trading investments classified as level 2 were comprised of U.S. Treasury securities held within consolidated funds carried at amortized cost, which approximates fair value, corporate debt securities, as well as certain preferred securities with predominately debt-like characteristics. The fair value amounts were generally determined using third-party pricing services. The pricing services may utilize evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information. Since these securities do not trade on a daily basis, the pricing services evaluate pricing applications and apply available information through processes such as yield curves, benchmarking of like securities, sector groupings, and matrix pricing, to prepare evaluations.

Investments measured at NAV were comprised of certain investments measured at fair value using NAV (or its equivalent) as a practical expedient. These investments were comprised of:

• Equity investments at fair value - limited partner interests in limited partnership vehicles that invest in non-registered real estate funds and the Company's co-investment in a Cayman trust invested in global listed infrastructure securities, both of which are valued based on the NAVs of the underlying investments. At December 31, 2019 and 2018, the Company did not have the ability to redeem the interests in the limited partnership vehicles; there were no contractual restrictions on the Company's ability to redeem its interest in the Cayman trust.

• Equity method investments - includes the Company's partnership interests in the Cohen & Steers Global Realty Partners III-TE, L.P. (GRP-TE) and the Cohen & Steers Global Realty Focus Fund, a series of Cohen & Steers Series LP (GRF). GRP-TE invests in non-registered real estate funds. The Company's ownership interest was approximately 0.2% and the Company did not have the ability to redeem the investment at either December 31, 2019 or 2018. GRF was seeded in 2019 and invests in global real estate investment trusts and other publicly traded real estate companies. The Company's ownership interest was approximately 2.2% and the Company had the ability to redeem the investment in GRF with 15 days' notice at December 31, 2019. The Company's risk with respect to both investments is limited to its equity ownership interest and any uncollected management fees.

Held-to-maturity investments were comprised of U.S. Treasury securities, which were directly issued by the U.S. government, with original maturities of 12 to 24 months at December 31, 2019 and 6 to 24 months at December 31, 2018. These securities were purchased with the intent to hold to maturity and are recorded at amortized cost.

Investments measured at NAV and held-to-maturity investments have not been classified in the fair value hierarchy. The amounts presented in the above tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the consolidated statement of financial position.

Commodity swap contracts classified as level 2 were valued based on the underlying futures contracts.

Foreign currency exchange contracts classified as level 2 were valued based on the prevailing forward exchange rate.

The following table summarizes the changes in level 3 limited partnership interests in trading investments measured at fair value on a recurring basis:

	Trading Investments
	Limited Partnership Interests
	2019		2018
Balance at beginning of year	$	—	$	605
Purchases / contributions	—		—
Sales / distributions	—		(598		)
Realized gains (losses)	—		(68		)
Unrealized gains (losses)	—		61
Transfers into (out of) level 3	—		—
Balance at end of year	$	—	$	—

 

Realized and unrealized gains (losses) in the above table were recorded as gain (loss) from investments—net in the Company's consolidated statements of operations.

Valuation Techniques

In certain instances, debt, equity and preferred securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable broker-dealers or independent pricing services. In determining the value of a particular investment, independent pricing services may use information with respect to transactions in such investments,

broker quotes, pricing matrices, market transactions in comparable investments and various relationships between investments. As part of its independent price verification process, the Company generally performs reviews of valuations provided by broker-dealers or independent pricing services. Investments in Company-sponsored funds are valued at their closing price or NAV (or its equivalent) as a practical expedient.

Foreign exchange contracts are valued based on the prevailing forward exchange rate, which is an input that is observable in active markets.

In the absence of observable market prices, the Company values its investments using valuation methodologies applied on a consistent basis. For some investments, little market activity may exist; management's determination of fair value is then based on the best information available in the circumstances, and may incorporate management's own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors. Such investments are valued on a quarterly basis, taking into consideration any changes in key inputs and changes in economic and other relevant conditions, and valuation models are updated accordingly. The valuation process also includes a review by the Company's valuation committee which is comprised of senior members from various departments within the Company, including investment management. The valuation committee provides independent oversight of the valuation policies and procedures.