Note 18 - Related Party Transactions

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

18

. Related Party Transactions

The Company earns base management fees and incentive fees from serving as investment advisor for various entities, including corporations, partnerships

limited liability companies, and offshore investment companies. The Company also owns an investment in some of such affiliated entities. As of

March 31, 2019 

and

December 31, 2018,

the aggregate fair value of the Company’s investments in the affiliated entities for which the Company serves as the investment advisor was

$22.5

million and

$18.6

 million, respectively, which consisted of investments in hedge and other private funds of

$12.2

 million and

$8.6

 million, respectively, and an investment in HCC common stock of

$10.3

 million and

$10.0

 million, respectively. Base management fees earnedfrom these affiliated entities were

$1.7

 million and

$3.1

 million for the quarters ended

March 31, 2019 

and

2018.

Also, the Company earned incentive fees of

zero

and

$3.4

million, from these affiliated entities for the

three

months ended

March 31, 2019 

and

2018.

 

On

September 19, 2017,

the Company made a loan to a registered investment adviser of

$3.4

million, at an interest rate of

15%

per year. In

October 2017,

the Company sold

30%

of the loan, or

$1.0

 million, to an affiliate. As of

March 

31,

2019

 and

December 

31,

 

2018,

the Company’s portion of the outstanding loan balance to this entity was both 

$

2.4

million.

The Company determined the fair value of loans held for investment to be

$2.4

 

million as of

March 

31,

2019

 and

$2.3

million as of

December 31, 2018

, using anticipated cash flows, discounted at an appropriate market credit adjusted interest rate.

On

January 9, 2018,

an affiliate purchased a

$0.8

million note from the Company. As of

March 31, 2019

,

the carrying value of note payable

 was

$0.8

million

.

On

January 9, 2018,

the Company sold a

30%

subscription into an investment series held by a subsidiary to an affiliate. The transaction resulted in the admission of the affiliate into the limited liability company subsidiary as a non-controlling member. The Company recorded

$0.5

 million as capital attributable to non-controlling interest upon execution as of December

31,

2018.

The Company has allocated income on the investment based on the affiliates' pro-rata share of ownership of the investment series of

$57

thousand for the year ended

 December 31, 2018

and

$15

thousand for the

three

months ended

March 31, 2019.