Investments

3 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Investments

Note 3—Investments

Investments are as follows (in millions):

	March 31,		December 31,
	2023		2022
Non-marketable equity securities	$	124.0	$	124.0
Seed capital investments		31.3		30.6
Marketable equity securities		24.4		24.3
Partnership interests in private equity funds		13.2		15.0
Total investments	$	192.9	$	193.9

Realized and unrealized gains and losses for our equity securities are as follows (in millions):

	Three Months Ended March 31,
	2023		2022
Unrealized gains (losses) on equity securities held as of the end of the period	$	2.3	$	(3.9	)
Realized losses for equity securities sold during the period		—		(0.1	)
Total gains (losses) recognized in other income, net	$	2.3	$	(4.0	)

Fair Value Measurement

Authoritative accounting guidance on fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of March 31, 2023 and December 31, 2022, we held certain investment assets and certain liabilities that are required to be measured at fair value on a recurring basis. These investments include money market funds and marketable equity securities where fair value is determined using quoted prices in active markets. Accordingly, the fair value measurements of these investments have been classified as Level 1 in the tables below. Investments for which we elected net asset value as a practical expedient for fair value and investments measured using the fair value measurement alternative are excluded from the tables below. Fair value for deferred compensation liabilities that are credited with deemed gains or losses of the underlying hypothetical investments, primarily equity securities, have been classified as Level 1 in the tables below.

The following tables present assets and liabilities measured at fair value on a recurring basis (in millions):

				Fair Value Measurements at Reporting Date Using
	March 31, 2023			Quoted prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds (1)	$	293.5		$	293.5		$	—	$	—
Seed capital investments (2)		31.3			31.3			—		—
Marketable equity securities (2)		24.4			24.4			—		—
Deferred compensation liabilities (3)		(13.0	)		(13.0	)		—		—
Total	$	336.2		$	336.2		$	—	$	—

				Fair Value Measurements at Reporting Date Using
	December 31, 2022			Quoted prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds (1)	$	674.5		$	674.5		$	—	$	—
Seed capital investments (2)		30.6			30.6			—		—
Marketable equity securities (2)		24.3			24.3			—		—
Deferred compensation liabilities (3)		(13.6	)		(13.6	)		—		—
Total	$	715.8		$	715.8		$	—	$	—

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(1)Included in Cash and cash equivalents and Funds receivable and funds held on behalf of clients on the Condensed Consolidated Balance Sheet.

(2)Included in Investments on the Condensed Consolidated Balance Sheet.

(3)Included in Other long-term liabilities on the Condensed Consolidated Balance Sheet.

We have partnership interests in various private equity funds that are not included in the tables above. Our investments in private equity funds were $13.2 million and $15.0 million at March 31, 2023 and December 31, 2022, respectively, of which $10.4 million and $10.8 million, respectively, were measured using net asset value as a practical expedient for fair value and $2.8 million and $4.2 million, respectively, were accounted for under the equity method of accounting. The investments in private equity funds represent underlying investments in domestic and international markets across various industry sectors.

Generally, our investments in private equity funds are non-transferable or are subject to long holding periods, and withdrawals from the private equity firm partnerships are typically not permitted. The maximum risk of loss related to our private equity fund investments is limited to the carrying value of its investments in the entities.

We add new investment products such as mutual funds and exchange traded funds, through our subsidiary, ALPS Advisors, from time to time by providing the initial cash investments as seed capital. We consolidate seed capital investments when our ownership percentage exceeds 50%. Shares in those investments not owned by us are reflected as a redeemable noncontrolling interest on the condensed consolidated balance sheet.