FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2017

The Company’s other financial assets and financial liabilities by fair-value hierarchy level are set forth below. Please see notes 9 and 16 for the fair value of the Company’s outstanding debt obligations and amounts due from/to affiliates, respectively.



	As of September 30, 2017											As of December 31, 2016
	Level I		Level II			Level III			Total			Level I		Level II			Level III			Total
Assets
U.S. Treasury and other securities ⁽¹⁾	$	324,478	$	—		$	—		$	324,478		$	757,578	$	—		$	—		$	757,578
Corporate investments	—		52,670			75,640			128,310			—		27,551			74,663			102,214
Foreign-currency forward contracts ⁽²⁾	—		4,391			—			4,391			—		16,142			—			16,142
Total assets	$	324,478	$	57,061		$	75,640		$	457,179		$	757,578	$	43,693		$	74,663		$	875,934

Liabilities
Contingent consideration ⁽³⁾	$	—	$	—		$	(19,108	)	$	(19,108	)	$	—	$	—		$	(23,567	)	$	(23,567	)
Foreign-currency forward contracts ⁽⁴⁾	—		(18,311		)	—			(18,311		)	—		(7,805		)	—			(7,805		)
Interest-rate swaps ⁽³⁾	—		—			—			—			—		(60		)	—			(60		)
Total liabilities	$	—	$	(18,311	)	$	(19,108	)	$	(37,419	)	$	—	$	(7,865	)	$	(23,567	)	$	(31,432	)


(1)	Carrying value approximates fair value due to the short-term nature.


(2)	Amounts are included in other assets in the condensed consolidated statements of financial condition, except for $5,377 as of December 31, 2016, which is included within corporate investments in the condensed consolidated statements of financial condition.


(3)	Amounts are included in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition.


(4)	Amounts are included in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition, except for $8,019 as of September 30, 2017, which is included within corporate investments in the condensed consolidated statements of financial condition.

Summary of Changes in Fair Value of Level III Investments

The table below sets forth a summary of changes in the fair value of Level III financial instruments:



	Three Months Ended September 30,
	2017						2016
	Corporate Investments			Contingent Consideration Liability			Corporate Investments		Contingent Consideration Liability

Beginning balance	$	77,657		$	(24,029	)	$	26,581	$	(24,995	)
Contributions or additions	5			—			—		—
Distributions	(5,482		)	—			—		—
Net gain (loss) included in earnings	3,460			4,921			808		1,254
Ending balance	$	75,640		$	(19,108	)	$	27,389	$	(23,741	)

Net change in unrealized gains (losses) attributable to financial instruments still held at end of period	$	(239	)	$	4,921		$	808	$	1,254



	Nine Months Ended September 30,
	2017						2016
	Corporate Investments			Contingent Consideration Liability			Corporate Investments		Contingent Consideration Liability

Beginning balance	$	74,663		$	(23,567	)	$	25,750	$	(28,494	)
Contributions or additions	209			—			—		—
Distributions	(9,052		)	—			—		—
Net gain (loss) included in earnings	9,820			4,459			1,639		4,753
Ending balance	$	75,640		$	(19,108	)	$	27,389	$	(23,741	)

Net change in unrealized gains (losses) attributable to financial instruments still held at end of period	$	3,788		$	4,459		$	1,639	$	4,753

Summary of Changes in Fair Value of Level III Investments

The table below sets forth a summary of changes in the fair value of Level III financial instruments:



	Three Months Ended September 30,
	2017						2016
	Corporate Investments			Contingent Consideration Liability			Corporate Investments		Contingent Consideration Liability

Beginning balance	$	77,657		$	(24,029	)	$	26,581	$	(24,995	)
Contributions or additions	5			—			—		—
Distributions	(5,482		)	—			—		—
Net gain (loss) included in earnings	3,460			4,921			808		1,254
Ending balance	$	75,640		$	(19,108	)	$	27,389	$	(23,741	)

Net change in unrealized gains (losses) attributable to financial instruments still held at end of period	$	(239	)	$	4,921		$	808	$	1,254



	Nine Months Ended September 30,
	2017						2016
	Corporate Investments			Contingent Consideration Liability			Corporate Investments		Contingent Consideration Liability

Beginning balance	$	74,663		$	(23,567	)	$	25,750	$	(28,494	)
Contributions or additions	209			—			—		—
Distributions	(9,052		)	—			—		—
Net gain (loss) included in earnings	9,820			4,459			1,639		4,753
Ending balance	$	75,640		$	(19,108	)	$	27,389	$	(23,741	)

Net change in unrealized gains (losses) attributable to financial instruments still held at end of period	$	3,788		$	4,459		$	1,639	$	4,753

The following tables set forth a summary of changes in the fair value of Level III investments:



	Corporate Debt – Bank Debt			Corporate Debt – All Other			Equities – Common Stock			Real Estate			Total
Three Months Ended September 30, 2017
Beginning balance	$	151,229		$	43,469		$	7,287		$	—		$	201,985
Transfers into Level III	349			—			—			—			349
Transfers out of Level III	(5,059		)	(1,978		)	—			—			(7,037		)
Purchases	44,199			21,363			—			2,494			68,056
Sales	(28,567		)	(13,347		)	(74		)	(2,005		)	(43,993		)
Realized gains (losses), net	(325		)	175			—			5			(145		)
Unrealized appreciation (depreciation), net	2,842			(548		)	501			11			2,806
Ending balance	$	164,668		$	49,134		$	7,714		$	505		$	222,021
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period	$	2,219		$	(538	)	$	501		$	11		$	2,193
Three Months Ended September 30, 2016
Beginning balance	$	189,909		$	1,890		$	3,974		$	—		$	195,773
Transfers into Level III	20,684			—			2,691			—			23,375
Transfers out of Level III	(765		)	—			—			—			(765		)
Purchases	5,178			6,808			1,144			—			13,130
Sales	(19,918		)	(2		)	(1,791		)	—			(21,711		)
Realized gains (losses), net	132			—			(22		)	—			110
Unrealized appreciation (depreciation), net	4,754			(18		)	329			—			5,065
Ending balance	$	199,974		$	8,678		$	6,325		$	—		$	214,977
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period	$	4,754		$	(18	)	$	329		$	—		$	5,065



	Corporate Debt – Bank Debt			Corporate Debt – All Other			Equities – Common Stock			Equities – Preferred Stock			Real Estate			Real Estate Loan Portfolios			Swaps			Total
Nine Months Ended September 30, 2017
Beginning balance	$	208,868		$	28,793		$	6,693		$	—		$	—		$	—		$	—		$	244,354
Transfers into Level III	22,537			1,978			—			—			—			—			—			24,515
Transfers out of Level III	(54,179		)	(1,978		)	—			—			—			—			—			(56,157		)
Purchases	67,516			48,481			136			—			2,494			—			—			118,627
Sales	(83,772		)	(28,072		)	(713		)	—			(2,005		)	—			—			(114,562		)
Realized gains (losses), net	(114		)	486			87			—			5			—			—			464
Unrealized appreciation (depreciation), net	3,812			(554		)	1,511			—			11			—			—			4,780
Ending balance	$	164,668		$	49,134		$	7,714		$	—		$	505		$	—		$	—		$	222,021
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period	$	3,366		$	(441	)	$	1,511		$	—		$	11		$	—		$	—		$	4,447
Nine Months Ended September 30, 2016
Beginning balance	$	1,871,375		$	3,009,164		$	8,729,202		$	1,363,542		$	9,655,270		$	2,597,405		$	(8,251	)	$	27,217,707
Cumulative-effect adjustment from adoption of accounting guidance	(1,672,305		)	(3,007,287		)	(8,725,026		)	(1,363,542		)	(9,655,270		)	(2,597,405		)	8,251			(27,012,584		)
Transfers into Level III	58,219			—			3,089			—			—			—			—			61,308
Transfers out of Level III	(43,435		)	—			—			—			—			—			—			(43,435		)
Purchases	14,556			6,810			1,301			—			—			—			—			22,667
Sales	(32,790		)	(2		)	(2,612		)	—			—			—			—			(35,404		)
Realized gains (losses), net	247			—			(22		)	—			—			—			—			225
Unrealized appreciation (depreciation), net	4,107			(7		)	393			—			—			—			—			4,493
Ending balance	$	199,974		$	8,678		$	6,325		$	—		$	—		$	—		$	—		$	214,977
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period	$	4,107		$	(7	)	$	393		$	—		$	—		$	—		$	—		$	4,493

Summary of Valuation Techniques and Quantitative Information

The following table sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the consolidated funds’ Level III investments as of September 30, 2017:

Investment Type

Fair Value

Valuation Technique

Significant Unobservable
Inputs⁽¹⁾⁽²⁾

Range

Weighted Average ⁽³⁾

Credit-oriented investments:

Consumer
discretionary:

2,066

Discounted cash flow ⁽⁴⁾

Discount rate

11% – 19%

16%

52,487

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

Consumer staples:

1,636

Discounted cash flow ⁽⁴⁾

Discount rate

12% – 14%

13%

12,607

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

Financials:

30,148

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

406

Recent transaction price ⁽⁸⁾

Not applicable

Health care

9,314

Discounted cash flow ⁽⁴⁾

Discount rate

8% – 15%

11%

726

Market approach
(comparable companies) ⁽⁶⁾

Earnings multiple ⁽⁷⁾

9x - 11x

10x

4,809

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

Industrials:

14,627

Discounted cash flow ⁽⁴⁾

Discount rate

6% – 11%

4,210

Market approach
(comparable companies) ⁽⁶⁾

Earnings multiple ⁽⁷⁾

4x - 6x

19,362

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

Information
technology:

4,766

Discounted cash flow ⁽⁴⁾

Discount rate

11% – 12%

12%

8,780

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

Real estate:

3,129

Discounted cash flow ⁽⁴⁾

Discount rate

11% – 13%

12%

18,120

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

335

Recent transaction price ⁽⁸⁾

Not applicable

Other:

4,284

Discounted cash flow ⁽⁴⁾

Discount rate

10% – 12%

11%

22,496

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

Equity investments:

4,150

Market approach
(comparable companies) ⁽⁶⁾

Earnings multiple ⁽⁷⁾

4x – 11x

1,323

Discounted cash flow ⁽⁴⁾

Discount rate

11% – 30%

13%

2,240

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

Total Level III
investments

222,021

Investment Type

Fair Value

Valuation Technique

Significant Unobservable

Inputs⁽¹⁾⁽²⁾

Range

Weighted Average ⁽³⁾

Credit-oriented investments:

Consumer
discretionary:

7,658

Discounted cash flow ⁽⁴⁾

Discount rate

5% – 13%

64,147

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

Consumer Staples:

7,356

Discounted cash flow ⁽⁴⁾

Discount rate

6% – 12%

23,182

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

Energy:

12,758

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

Industrials:

10,574

Discounted cash flow ⁽⁴⁾

Discount rate

5% – 7%

4,230

Market approach
(comparable companies) ⁽⁶⁾

Earnings multiple ⁽⁷⁾

5x - 7x

30,531

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

Information
technology:

11,681

Discounted cash flow ⁽⁴⁾

Discount rate

6% – 13%

5,076

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

Materials:

1,206

Discounted cash flow ⁽⁴⁾

Discount rate

11% – 13%

12%

15,586

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

Other:

13,754

Discounted cash flow ⁽⁴⁾

Discount rate

8% – 16%

12%

9,137

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

20,785

Recent transaction price ⁽⁸⁾

Not applicable

Equity investments:

3,542

Market approach
(comparable companies) ⁽⁶⁾

Earnings multiple ⁽⁷⁾

4x – 11x

1,352

Discounted cash flow ⁽⁴⁾

Discount rate

11% – 33%

14%

1,799

Recent market information ⁽⁵⁾

Quoted prices

Not applicable

Total Level III
investments

244,354


(1)	The discount rate is the significant unobservable input used in the fair-value measurement of performing credit-oriented investments in which the consolidated funds do not have a controlling interest in the underlying issuer, as well as certain equity investments and real estate loan portfolios. An increase (decrease) in the discount rate would result in a lower (higher) fair-value measurement.

(2)

Multiple of either earnings or underlying assets is the significant unobservable input used in the market approach for the fair-value measurement of distressed credit-oriented investments, credit-oriented investments in which the consolidated funds have a controlling interest in the underlying issuer, equity investments and certain real estate-oriented investments. An increase (decrease) in the multiple would result in a higher (lower) fair-value measurement.


(3)	The weighted average is based on the fair value of the investments included in the range.


(4)	A discounted cash-flow method is generally used to value performing credit-oriented investments in which the consolidated funds do not have a controlling interest in the underlying issuer, as well as certain equity investments, real estate-oriented investments and real estate loan portfolios.


(5)	Certain investments are valued using quoted prices for the subject or similar securities. Generally, investments valued in this manner are classified as Level III because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities, or may require adjustment for investment-specific factors or restrictions.


(6)	A market approach is generally used to value distressed investments and investments in which the consolidated funds have a controlling interest in the underlying issuer.

(7)

Earnings multiples are based on comparable public companies and transactions with comparable companies. The Company typically utilizes multiples of EBITDA; however, in certain cases the Company may use other earnings multiples believed to be most relevant to the investment. The Company typically applies the multiple to trailing twelve-months’ EBITDA. However, in certain cases other earnings measures, such as pro forma EBITDA, may be utilized if deemed to be more relevant.


(8)	Certain investments are valued based on recent transactions, generally defined as investments purchased or sold within six months of the valuation date. The fair value may also be based on a pending transaction expected to close after the valuation date.

The table below sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the Company’s Level III financial instruments:

Fair Value as of

Significant Unobservable Input

Financial Instrument

September 30, 2017

December 31, 2016

Valuation Technique

Range

Weighted Average

Corporate investment – Limited partnership interests

75,640

74,663

Market approach
(value of underlying assets)

Not applicable

Contingent consideration liability

19,108

23,567

Discounted cash flow

Assumed % of total potential contingent payments

0% – 100%

36%

Valuation of Investments and Other Financial Instruments

The table below summarizes the investments and other financial instruments of the consolidated funds by fair-value hierarchy level:



	As of September 30, 2017											As of December 31, 2016
	Level I			Level II			Level III		Total			Level I			Level II			Level III		Total
Assets
Investments:
Corporate debt – bank debt	$	—		$	4,193,434		$	164,668	$	4,358,102		$	—		$	2,973,482		$	208,868	$	3,182,350
Corporate debt – all other	—			538,733			49,134		587,867			—			460,975			28,793		489,768
Equities – common stock	238,461			122			7,714		246,297			129,362			61			6,693		136,116
Equities – preferred stock	2,486			268			—		2,754			—			—			—		—
Real estate	—			—			505		505			—			—			—		—
Total investments	240,947			4,732,557			222,021		5,195,525			129,362			3,434,518			244,354		3,808,234
Derivatives:
Foreign-currency forward contracts	—			146			—		146			—			216			—		216
Options and futures	7			—			—		7			—			—			—		—
Swaps	—			159			—		159			—			141			—		141
Total derivatives	7			305			—		312			—			357			—		357
Total assets	$	240,954		$	4,732,862		$	222,021	$	5,195,837		$	129,362		$	3,434,875		$	244,354	$	3,808,591

Liabilities
CLO debt obligations:
Senior secured notes ⁽¹⁾	$	—		$	(3,040,449	)	$	—	$	(3,040,449	)	$	—		$	(2,953,880	)	$	—	$	(2,953,880	)
Subordinated notes ⁽¹⁾	—			(110,664		)	—		(110,664		)	—			(100,330		)	—		(100,330		)
Total CLO debt obligations	—			(3,151,113		)	—		(3,151,113		)	—			(3,054,210		)	—		(3,054,210		)
Securities sold short:
Equity securities	(74,228		)	—			—		(74,228		)	(41,016		)	—			—		(41,016		)
Derivatives:
Foreign-currency forward contracts	—			(299		)	—		(299		)	—			(4		)	—		(4		)
Options and futures	(29		)	—			—		(29		)	—			—			—		—
Swaps	—			(9		)	—		(9		)	—			(1,082		)	—		(1,082		)
Total derivatives	(29		)	(308		)	—		(337		)	—			(1,086		)	—		(1,086		)
Total liabilities	$	(74,257	)	$	(3,151,421	)	$	—	$	(3,225,678	)	$	(41,016	)	$	(3,055,296	)	$	—	$	(3,096,312	)


(1)	The fair value of CLO liabilities is classified based on the more observable fair value of CLO assets. Please see notes 2 and 9 for more information.