(Mark One) | |
Q | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2019 | |
or | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
Delaware (State or Other Jurisdiction of Incorporation or Organization) | 27-0423711 (I.R.S. Employer Identification No.) |
599 Lexington Avenue New York, New York (Address of Principal Executive Offices) | 10022 (Zip Code) |
Title of Each Class | Trading Symbol | Name of Exchange on Which Registered | ||
Class A Common Stock, par value $0.01 per share | COWN | The Nasdaq Global Market | ||
7.35% Senior Notes due 2027 | COWNZ | The Nasdaq Global Market | ||
7.75% Senior Notes due 2033 | COWNL | The Nasdaq Global Market |
Large accelerated filer o | Accelerated filer Q | Non-accelerated filer o | Smaller reporting company o | Emerging growth company o |
Item No. | Page No. | |||
Cowen Inc. Condensed Consolidated Statements of Financial Condition (dollars in thousands, except share and per share data) (unaudited) | |||||||
Assets | As of June 30, 2019 | As of December 31, 2018 | |||||
Cash and cash equivalents | $ | 182,400 | $ | 259,148 | |||
Cash collateral pledged | 7,097 | 6,318 | |||||
Segregated cash | 139,070 | 176,647 | |||||
Securities owned, at fair value ($224,264 and $57,583 were pledged to various parties) | 900,346 | 520,888 | |||||
Receivable on derivative contracts, at fair value | 32,220 | 25,125 | |||||
Securities borrowed | 1,390,366 | 407,795 | |||||
Other investments ($146,133 and $141,236 at fair value, respectively) | 200,297 | 181,407 | |||||
Deposits with clearing organizations, brokers and banks | 97,723 | 89,423 | |||||
Receivable from brokers, dealers and clearing organizations, net of allowance of $780 and $472, respectively | 617,368 | 786,113 | |||||
Receivable from customers, net of allowance of $563 and $516, respectively | 87,480 | 37,858 | |||||
Fees receivable, net of allowance of $915 and $1,569, respectively | 126,500 | 111,946 | |||||
Due from related parties | 29,007 | 33,870 | |||||
Fixed assets, net of accumulated depreciation and amortization of $29,684 and $31,630, respectively | 27,728 | 26,443 | |||||
Operating lease right-of-use assets | 101,628 | — | |||||
Goodwill | 137,728 | 60,678 | |||||
Intangible assets, net of accumulated amortization of $44,633 and $38,093, respectively | 40,604 | 24,943 | |||||
Deferred tax asset, net | 86,464 | 93,057 | |||||
Other assets, net of allowance of $11 and $0, respectively | 105,265 | 79,014 | |||||
Consolidated Funds | |||||||
Cash and cash equivalents | 3,357 | 38,118 | |||||
Securities owned, at fair value | 345,292 | 187,633 | |||||
Receivable on derivative contracts, at fair value | 4,454 | 4,416 | |||||
Other investments | 177,828 | 186,395 | |||||
Receivable from brokers | 19,524 | 8,328 | |||||
Other assets | 2,436 | 740 | |||||
Total Assets | $ | 4,862,182 | $ | 3,346,303 | |||
Liabilities and Stockholders' Equity | |||||||
Liabilities | |||||||
Securities sold, not yet purchased, at fair value | $ | 438,584 | $ | 195,307 | |||
Payable for derivative contracts, at fair value | 22,445 | 16,082 | |||||
Securities loaned | 1,492,986 | 414,852 | |||||
Payables to brokers, dealers and clearing organizations | 241,012 | 228,731 | |||||
Payable to customers | 428,146 | 525,153 | |||||
Commission management payable | 96,731 | 95,270 | |||||
Compensation payable | 117,634 | 223,994 | |||||
Operating lease liabilities | 106,873 | — | |||||
Notes payable and other debt | 315,290 | 262,965 | |||||
Convertible debt | 116,273 | 134,489 | |||||
Fees payable | 45,881 | 22,565 | |||||
Due to related parties | 675 | 571 | |||||
Accounts payable, accrued expenses and other liabilities | 162,921 | 110,423 | |||||
Consolidated Funds | |||||||
Payable for derivative contracts, at fair value | 2,616 | 1,663 | |||||
Payable to brokers | 11,126 | 23,521 | |||||
Capital withdrawals payable | 4,759 | 11,106 | |||||
Accounts payable, accrued expenses and other liabilities | 494 | 424 | |||||
Total Liabilities | $ | 3,604,446 | $ | 2,267,116 |
Cowen Inc. Condensed Consolidated Statements of Financial Condition (dollars in thousands, except share and per share data) (unaudited) | |||||||
As of June 30, 2019 | As of December 31, 2018 | ||||||
(continued) | |||||||
Commitments and Contingencies (Note 17) | |||||||
Redeemable non-controlling interests | $ | 440,312 | $ | 284,780 | |||
Stockholders' equity | |||||||
Preferred stock, par value $0.01 per share: 10,000,000 shares authorized, 120,750 shares issued and outstanding as of June 30, 2019 (aggregate liquidation preference of $120,750,000) and 10,000,000 shares authorized, 120,750 shares issued and outstanding as of December 31, 2018 (aggregate liquidation preference of $120,750,000), respectively | $ | 1 | $ | 1 | |||
Class A common stock, par value $0.01 per share: 62,500,000 shares authorized, 46,144,900 shares issued and 29,480,287 outstanding as of June 30, 2019 and 62,500,000 shares authorized, 43,774,731 shares issued and 28,437,860 outstanding as of December 31, 2018, respectively (including 174,285 and 253,772 restricted shares, respectively) | 334 | 324 | |||||
Class B common stock, par value $0.01 per share: 62,500,000 authorized, no shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively | — | — | |||||
Additional paid-in capital | 1,093,898 | 1,062,877 | |||||
(Accumulated deficit) retained earnings | (22,449 | ) | (34,648 | ) | |||
Accumulated other comprehensive income (loss) | (3 | ) | (5 | ) | |||
Less: Class A common stock held in treasury, at cost, 16,664,613 and 15,336,871 shares as of June 30, 2019 and December 31, 2018, respectively | (254,357 | ) | (234,142 | ) | |||
Total Stockholders' Equity | $ | 817,424 | $ | 794,407 | |||
Total Liabilities and Stockholders' Equity | $ | 4,862,182 | $ | 3,346,303 |
Cowen Inc. Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenues | |||||||||||||||
Investment banking | $ | 114,705 | $ | 84,826 | $ | 194,811 | $ | 182,814 | |||||||
Brokerage | 111,382 | 103,285 | 208,845 | 209,018 | |||||||||||
Management fees | 7,039 | 7,373 | 14,180 | 14,790 | |||||||||||
Incentive income | 8 | 48 | 23 | 64 | |||||||||||
Interest and dividends | 40,047 | 25,109 | 69,139 | 51,063 | |||||||||||
Reimbursement from affiliates | 254 | 336 | 542 | 713 | |||||||||||
Aircraft lease revenue | — | 419 | — | 1,134 | |||||||||||
Reinsurance premiums | 14,331 | 9,226 | 20,922 | 17,873 | |||||||||||
Other revenues | 930 | 876 | 1,991 | 2,212 | |||||||||||
Consolidated Funds | |||||||||||||||
Interest and dividends | 3,449 | 3,075 | 5,774 | 6,271 | |||||||||||
Other revenues | 19 | — | 34 | 5 | |||||||||||
Total revenues | 292,164 | 234,573 | 516,261 | 485,957 | |||||||||||
Interest and dividends expense | 39,528 | 24,306 | 68,612 | 48,846 | |||||||||||
Total net revenues | 252,636 | 210,267 | 447,649 | 437,111 | |||||||||||
Expenses | |||||||||||||||
Employee compensation and benefits | 135,984 | 131,845 | 266,172 | 266,985 | |||||||||||
Brokerage and trade execution costs | 27,124 | 28,902 | 52,770 | 59,100 | |||||||||||
Underwriting expenses | 6,406 | 4,785 | 9,537 | 8,848 | |||||||||||
Professional, advisory and other fees | 13,620 | 5,819 | 23,861 | 12,843 | |||||||||||
Service fees | 5,659 | 4,852 | 11,323 | 10,047 | |||||||||||
Communications | 8,278 | 7,106 | 16,359 | 14,672 | |||||||||||
Occupancy and equipment | 10,454 | 10,384 | 20,376 | 20,245 | |||||||||||
Depreciation and amortization | 4,952 | 3,194 | 9,908 | 6,419 | |||||||||||
Client services and business development | 11,884 | 7,865 | 23,185 | 16,096 | |||||||||||
Goodwill impairment | 4,100 | — | 4,100 | — | |||||||||||
Reinsurance claims, commissions and amortization of deferred acquisition costs | 10,782 | 9,924 | 16,944 | 18,655 | |||||||||||
Other expenses | 5,638 | 5,591 | 9,653 | 9,672 | |||||||||||
Consolidated Funds | |||||||||||||||
Interest and dividends | 1,356 | 2,479 | 2,223 | 4,390 | |||||||||||
Professional, advisory and other fees | 373 | 345 | 518 | 557 | |||||||||||
Brokerage and trade execution costs | 35 | 89 | 88 | 153 | |||||||||||
Other expenses | 467 | 236 | 884 | 480 | |||||||||||
Total expenses | 247,112 | 223,416 | 467,901 | 449,162 | |||||||||||
Other income (loss) | |||||||||||||||
Net gains (losses) on securities, derivatives and other investments | 3,910 | 16,719 | 42,994 | 32,688 | |||||||||||
Gain/(loss) on debt extinguishment | — | (556 | ) | — | (556 | ) | |||||||||
Consolidated Funds | |||||||||||||||
Net realized and unrealized gains (losses) on investments and other transactions | 6,536 | 28,268 | 9,180 | 44,004 | |||||||||||
Net realized and unrealized gains (losses) on derivatives | (719 | ) | 2,119 | (1,481 | ) | 4,594 | |||||||||
Net gains (losses) on foreign currency transactions | (35 | ) | 598 | (59 | ) | 252 | |||||||||
Total other income (loss) | 9,692 | 47,148 | 50,634 | 80,982 | |||||||||||
Income (loss) before income taxes | 15,216 | 33,999 | 30,382 | 68,931 | |||||||||||
Income tax expense (benefit) | 5,073 | 3,993 | 8,250 | 10,916 | |||||||||||
Net income (loss) | 10,143 | 30,006 | 22,132 | 58,015 | |||||||||||
Cowen Inc. Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(continued) | |||||||||||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | 4,331 | 24,607 | 6,537 | 35,763 | |||||||||||
Net income (loss) attributable to Cowen Inc. | 5,812 | 5,399 | 15,595 | 22,252 | |||||||||||
Preferred stock dividends | 1,698 | 1,698 | 3,396 | 3,396 | |||||||||||
Net income (loss) attributable to Cowen Inc. common stockholders | $ | 4,114 | $ | 3,701 | $ | 12,199 | $ | 18,856 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 29,769 | 29,769 | 29,766 | 29,688 | |||||||||||
Diluted | 31,522 | 30,720 | 31,572 | 30,460 | |||||||||||
Earnings (loss) per share: | |||||||||||||||
Basic | $ | 0.14 | $ | 0.12 | $ | 0.41 | $ | 0.64 | |||||||
Diluted | $ | 0.13 | $ | 0.12 | $ | 0.39 | $ | 0.62 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||
Net income (loss) | $ | 10,143 | $ | 30,006 | $ | 22,132 | $ | 58,015 | |||||||||||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||||||
Foreign currency translation | 2 | — | 2 | 1 | |||||||||||||||||||||||
Total other comprehensive income (loss), net of tax | 2 | — | 2 | 1 | |||||||||||||||||||||||
Comprehensive income (loss) | $ | 10,145 | $ | 30,006 | $ | 22,134 | $ | 58,016 |
Common Shares Outstanding | Common Stock | Preferred Shares Outstanding | Preferred Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings/ (Accumulated deficit) | Total Stockholders' Equity | Redeemable Non-controlling Interest | ||||||||||||||||||||||||||||
Balance, March 31, 2019 | 29,580,687 | $ | 334 | 120,750 | $ | 1 | $ | (243,519 | ) | $ | 1,084,534 | $ | (5 | ) | $ | (26,563 | ) | $ | 814,782 | $ | 418,277 | ||||||||||||||||
Net income (loss) attributable to Cowen Inc. | — | — | — | — | — | — | — | 5,812 | 5,812 | — | |||||||||||||||||||||||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | — | — | — | — | — | — | — | — | — | 4,331 | |||||||||||||||||||||||||||
Foreign currency translation | — | — | — | — | — | — | 2 | — | 2 | — | |||||||||||||||||||||||||||
Capital contributions | — | — | — | — | — | — | — | — | — | 40,622 | |||||||||||||||||||||||||||
Capital withdrawals | — | — | — | — | — | — | — | — | — | (22,918 | ) | ||||||||||||||||||||||||||
Restricted stock awards issued | 585,383 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Purchase of treasury stock, at cost | (685,783 | ) | — | — | — | (10,838 | ) | — | — | — | (10,838 | ) | |||||||||||||||||||||||||
Preferred stock dividends, $0.06/share (See Note 19) | — | — | — | — | — | — | — | (1,698 | ) | (1,698 | ) | — | |||||||||||||||||||||||||
Amortization of share-based compensation | — | — | — | — | — | 9,364 | — | — | 9,364 | — | |||||||||||||||||||||||||||
Balance, June 30, 2019 | 29,480,287 | $ | 334 | 120,750 | $ | 1 | $ | (254,357 | ) | $ | 1,093,898 | $ | (3 | ) | $ | (22,449 | ) | $ | 817,424 | $ | 440,312 | ||||||||||||||||
Common Shares Outstanding | Common Stock | Preferred Shares Outstanding | Preferred Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings/ (Accumulated deficit) | Total Stockholders' Equity | Redeemable Non-controlling Interest | ||||||||||||||||||||||||||||
Balance, March 31, 2018 | 29,517,218 | $ | 324 | 120,750 | $ | 1 | $ | (200,915 | ) | $ | 1,014,904 | $ | (7 | ) | $ | (55,520 | ) | $ | 758,787 | $ | 392,326 | ||||||||||||||||
Net income (loss) attributable to Cowen Inc. | — | — | — | — | — | — | — | 5,399 | 5,399 | — | |||||||||||||||||||||||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | — | — | — | — | — | — | — | — | — | 24,607 | |||||||||||||||||||||||||||
Capital contributions | — | — | — | — | — | — | — | — | — | 10,876 | |||||||||||||||||||||||||||
Capital withdrawals | — | — | — | — | — | — | — | — | — | (15,742 | ) | ||||||||||||||||||||||||||
Restricted stock awards issued | 558,723 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Purchase of treasury stock, at cost | (466,469 | ) | — | — | — | (7,094 | ) | — | — | — | (7,094 | ) | — | ||||||||||||||||||||||||
Preferred stock dividends (See Note 19) | — | — | — | — | — | — | — | (1,698 | ) | (1,698 | ) | — | |||||||||||||||||||||||||
Embedded cash conversion option (See Note 19) | — | — | — | — | — | 28,973 | — | — | 28,973 | — | |||||||||||||||||||||||||||
Amortization of share-based compensation | — | — | — | — | — | 8,840 | — | — | 8,840 | — | |||||||||||||||||||||||||||
Balance, June 30, 2018 | 29,609,472 | $ | 324 | 120,750 | $ | 1 | $ | (208,009 | ) | $ | 1,052,717 | $ | (7 | ) | $ | (51,819 | ) | $ | 793,207 | $ | 412,067 |
Common Shares Outstanding | Common Stock | Preferred Shares Outstanding | Preferred Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings/ (Accumulated deficit) | Total Stockholders' Equity | Redeemable Non-controlling Interest | ||||||||||||||||||||||||||||
Balance, December 31, 2018 | 28,437,860 | $ | 324 | 120,750 | $ | 1 | $ | (234,142 | ) | $ | 1,062,877 | $ | (5 | ) | $ | (34,648 | ) | $ | 794,407 | $ | 284,780 | ||||||||||||||||
Net income (loss) attributable to Cowen Inc. | — | — | — | — | — | — | — | 15,595 | 15,595 | — | |||||||||||||||||||||||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | — | — | — | — | — | — | — | — | — | 6,537 | |||||||||||||||||||||||||||
Foreign currency translation | — | — | — | — | — | — | 2 | — | 2 | — | |||||||||||||||||||||||||||
Capital contributions | — | — | — | — | — | — | — | — | — | 202,595 | |||||||||||||||||||||||||||
Capital withdrawals | — | — | — | — | — | — | — | — | — | (53,600 | ) | ||||||||||||||||||||||||||
Restricted stock awards issued | 1,336,819 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Purchase of treasury stock, at cost | (1,327,742 | ) | — | — | — | (20,215 | ) | — | — | — | (20,215 | ) | — | ||||||||||||||||||||||||
Common stock issuance upon acquisition (See Note 3) | 1,033,350 | 10 | — | — | — | 14,436 | — | — | 14,446 | — | |||||||||||||||||||||||||||
Preferred stock dividends, $0.06/share (See Note 19) | — | — | — | — | — | — | — | (3,396 | ) | (3,396 | ) | — | |||||||||||||||||||||||||
Embedded cash conversion option, net of tax (See Note 19) | — | — | — | — | — | (596 | ) | — | — | (596 | ) | — | |||||||||||||||||||||||||
Amortization of share-based compensation | — | — | — | — | — | 17,181 | — | — | 17,181 | — | |||||||||||||||||||||||||||
Balance, June 30, 2019 | 29,480,287 | $ | 334 | 120,750 | $ | 1 | $ | (254,357 | ) | $ | 1,093,898 | $ | (3 | ) | $ | (22,449 | ) | $ | 817,424 | $ | 440,312 | ||||||||||||||||
Common Shares Outstanding | Common Stock | Preferred Shares Outstanding | Preferred Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings/ (Accumulated deficit) | Total Stockholders' Equity | Redeemable Non-controlling Interest | ||||||||||||||||||||||||||||
Balance, December 31, 2017 | 29,632,020 | $ | 324 | 120,750 | $ | 1 | $ | (186,846 | ) | $ | 1,004,664 | $ | (8 | ) | $ | (70,116 | ) | $ | 748,019 | $ | 440,604 | ||||||||||||||||
Cumulative effect of the adoption of the new revenue recognition standard (See Note 2) | — | — | — | — | — | — | — | (559 | ) | (559 | ) | — | |||||||||||||||||||||||||
Net income (loss) attributable to Cowen Inc. | — | — | — | — | — | — | — | 22,252 | 22,252 | — | |||||||||||||||||||||||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | — | — | — | — | — | — | — | — | — | 35,763 | |||||||||||||||||||||||||||
Foreign currency translation | — | — | — | — | — | — | 1 | — | 1 | — | |||||||||||||||||||||||||||
Capital contributions | — | — | — | — | — | — | — | — | — | 19,136 | |||||||||||||||||||||||||||
Capital withdrawals | — | — | — | — | — | — | — | — | — | (50,877 | ) | ||||||||||||||||||||||||||
Deconsolidation of entity | — | — | — | — | — | — | — | — | — | (32,559 | ) | ||||||||||||||||||||||||||
Restricted stock awards issued | 1,439,755 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Purchase of treasury stock, at cost | (1,462,303 | ) | — | — | — | (21,163 | ) | — | — | — | (21,163 | ) | — | ||||||||||||||||||||||||
Preferred stock dividends (See Note 19) | — | — | — | — | — | — | — | (3,396 | ) | (3,396 | ) | — | |||||||||||||||||||||||||
Embedded cash conversion option (See Note 19) | — | — | — | — | — | 28,973 | — | — | 28,973 | — | |||||||||||||||||||||||||||
Amortization of share-based compensation | — | — | — | — | — | 19,080 | — | — | 19,080 | — | |||||||||||||||||||||||||||
Balance, June 30, 2018 | 29,609,472 | $ | 324 | 120,750 | $ | 1 | $ | (208,009 | ) | $ | 1,052,717 | $ | (7 | ) | $ | (51,819 | ) | $ | 793,207 | $ | 412,067 |
Cowen Inc. Condensed Consolidated Statements of Cash Flows (dollars in thousands (unaudited) | |||||||
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 22,132 | $ | 58,015 | |||
Adjustments to reconcile net income (loss) to net cash provided by / (used in) operating activities: | |||||||
Depreciation and amortization | 9,908 | 6,419 | |||||
Amortization of debt issuance costs | 509 | 656 | |||||
Amortization of debt discount | 2,419 | 2,871 | |||||
Noncash lease expense | (1,632 | ) | — | ||||
Gain / (loss) on extinguishment of debt | — | 652 | |||||
Share-based compensation | 17,181 | 19,080 | |||||
Change in deferred taxes | 5,997 | 10,953 | |||||
Deferred rent obligations | — | (939 | ) | ||||
Net loss (gain) on disposal of fixed assets | 97 | 155 | |||||
Goodwill impairment | 4,100 | — | |||||
Purchases of securities owned, at fair value | (900,815 | ) | (2,525,789 | ) | |||
Proceeds from sales of securities owned, at fair value | 751,611 | 2,779,569 | |||||
Proceeds from sales of securities sold, not yet purchased, at fair value | 639,630 | 1,789,059 | |||||
Payments to cover securities sold, not yet purchased, at fair value | (590,363 | ) | (1,940,907 | ) | |||
Proceeds from the sale of other investments | 8,174 | 3,870 | |||||
Net (gains) losses on securities, derivatives and other investments | (42,314 | ) | (28,237 | ) | |||
Consolidated Funds | |||||||
Purchases of securities owned, at fair value | (1,421,720 | ) | (306,995 | ) | |||
Proceeds from sales of securities owned, at fair value | 1,280,181 | 344,079 | |||||
Purchases of other investments | (2,798 | ) | (1,414 | ) | |||
Proceeds from sales of other investments | 17,168 | 10,289 | |||||
Net realized and unrealized (gains) losses on investments and other transactions | (22,496 | ) | (47,628 | ) | |||
(Increase) decrease in operating assets: | |||||||
Securities owned, at fair value, held at broker-dealer | (201,355 | ) | (89,077 | ) | |||
Receivable on derivative contracts, at fair value | (7,095 | ) | 43,982 | ||||
Securities borrowed | (982,571 | ) | (104,973 | ) | |||
Deposits with clearing organizations, brokers and banks | (8,300 | ) | (660 | ) | |||
Receivable from brokers, dealers and clearing organizations | 168,745 | (159,702 | ) | ||||
Receivable from customers, net of allowance | (49,622 | ) | (5,321 | ) | |||
Fees receivable, net of allowance | (7,285 | ) | (32,917 | ) | |||
Due from related parties | 4,862 | 2,448 | |||||
Other assets | (27,269 | ) | 13,027 | ||||
Consolidated Funds | |||||||
Cash and cash equivalents | 34,816 | 5,590 | |||||
Receivable on derivative contracts, at fair value | (38 | ) | 882 | ||||
Receivable from brokers | (11,196 | ) | (3,294 | ) | |||
Other assets | (963 | ) | (91 | ) | |||
Increase (decrease) in operating liabilities: | |||||||
Securities sold, not yet purchased, at fair value, held at broker-dealer | 177,006 | 30,292 | |||||
Payable for derivative contracts, at fair value | 6,363 | 10,097 | |||||
Securities loaned | 1,078,134 | (22,365 | ) | ||||
Payable to brokers, dealers and clearing organizations | 12,281 | (11,510 | ) | ||||
Payable to customers | (97,007 | ) | 168,099 | ||||
Commission management payable | 1,461 | 21,721 | |||||
Compensation payable | (119,012 | ) | (28,644 | ) | |||
Fees payable | 23,316 | 15,562 | |||||
Due to related parties | (4,646 | ) | 4 | ||||
Accounts payable, accrued expenses and other liabilities | 18,221 | 6,747 | |||||
Cowen Inc. Condensed Consolidated Statements of Cash Flows (dollars in thousands (unaudited) | |||||||
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
(continued) | |||||||
Consolidated Funds | |||||||
Payable to brokers | (12,395 | ) | 1,241 | ||||
Payable for derivative contracts, at fair value | 953 | (6,085 | ) | ||||
Accounts payable, accrued expenses and other liabilities | (144 | ) | 225 | ||||
Net cash provided by / (used in) operating activities | (225,771 | ) | 29,036 | ||||
Cash flows from investing activities: | |||||||
Purchases of other investments | (9,513 | ) | (20,227 | ) | |||
Purchase of business (See Note 3) | (48,581 | ) | — | ||||
Proceeds from sales of other investments | 12,867 | 13,295 | |||||
Proceeds from loans held for investment | — | 13 | |||||
Purchase of fixed assets | (3,666 | ) | (1,397 | ) | |||
Net cash provided by / (used in) investing activities | (48,893 | ) | (8,316 | ) | |||
Cash flows from financing activities: | |||||||
Repayments on convertible debt | (20,860 | ) | (13,500 | ) | |||
Deferred debt issuance cost | (1,480 | ) | (3,883 | ) | |||
Borrowings on notes and other debt | 55,175 | 105,516 | |||||
Repayments on notes and other debt | (5,051 | ) | (2,987 | ) | |||
Purchase of treasury stock | (8,079 | ) | (10,862 | ) | |||
Contingent liability payment | (1,235 | ) | (570 | ) | |||
Capital contributions by redeemable non-controlling interests in operating entities | 11,110 | 200 | |||||
Capital withdrawals to redeemable non-controlling interests in operating entities | (1,346 | ) | (1,113 | ) | |||
Consolidated Funds | |||||||
Capital contributions by redeemable non-controlling interests in Consolidated Funds | 191,485 | 18,937 | |||||
Capital withdrawals to redeemable non-controlling interests in Consolidated Funds | (58,601 | ) | (58,136 | ) | |||
Net cash provided by / (used in) financing activities | 161,118 | 33,602 | |||||
Change in cash and cash equivalents | (113,546 | ) | 54,322 | ||||
Cash and cash equivalents, including cash collateral pledged and segregated cash, beginning of period | 442,113 | 264,208 | |||||
Cash and equivalents at end of period: | |||||||
Cash and cash equivalents | 182,400 | 207,708 | |||||
Cash collateral pledged | 7,097 | 15,513 | |||||
Segregated cash | 139,070 | 95,309 | |||||
Cash and cash equivalents, including cash collateral pledged and segregated cash, end of period | $ | 328,567 | $ | 318,530 | |||
Supplemental information | |||||||
Cash paid during the year for interest | $ | 52,260 | $ | 39,061 | |||
Cash paid during the year for taxes | $ | 3,580 | $ | 2,233 | |||
Supplemental non-cash information | |||||||
Purchase of treasury stock, at cost, through net settlement (See Note 19) | $ | 12,015 | $ | 8,376 | |||
Preferred stock dividends declared (See Note 19) | $ | 3,396 | $ | 3,396 | |||
Net assets (liabilities) acquired upon acquisition (net of cash) | $ | 90,727 | $ | — | |||
Transfer of investment from consolidated funds, securities owned, fair value to securities owned, fair value | $ | — | $ | 8,820 | |||
Initial recognition of operating lease right-of-use assets | $ | 103,694 | $ | — | |||
Initial recognition of operating lease liabilities | $ | 110,505 | $ | — | |||
Noncash transfer of net assets from Unconsolidated Master Fund to Consolidated Fund | $ | 97,655 | $ | — | |||
Net decrease in redeemable non-controlling interests in Consolidated Funds due to deconsolidation of consolidated fund (See Note 2) | $ | — | $ | 32,559 | |||
Separately recognized conversion option reclassification from a derivative liability to equity (Note 19) | $ | — | $ | 28,973 | |||
Common stock issuance upon close of acquisition (see Note 3) | $ | 14,446 | $ | — |
Notes to Condensed Consolidated Financial Statements | Page | ||
• | The Op Co segment consists of four divisions: Cowen Investment Management, Investment Banking, Markets, and Research. Each of Op Co’s four divisions leverage the Research division’s core domain expertise to drive harmonized repeatable revenue for the segment. |
– | The CIM division offers innovative investment products and solutions across the liquidity spectrum to institutional and private clients. CIM offers investors access to a number of strategies to meet their specific needs including merger arbitrage, activism, healthcare royalties, private healthcare investing and private sustainable investing which leverage the content and domain expertise that are aligned with the Company's core areas of expertise ("Cowen DNA"). |
– | The Investment Banking division includes public and private capital raising transactions and providing strategic advisory services. |
– | The Markets division includes trading equity and equity-linked securities on behalf of institutional investors as well as a full-service suite of prime brokerage services, cross-asset trading, securities finance, global execution, clearing and commission management businesses. |
– | The Research division provides the thought leadership and domain expertise that drives Cowen DNA. The research content that is created helps to facilitate brokerage revenue in the Markets division, drive deal flow in the Investment Banking division and facilitate investor relationships and investing within CIM’s innovative investment products and solutions. |
• | The Asset Co segment consists of certain of the Company’s private investments, private real estate business and other legacy multi-strategy funds. While the Asset Co segment is not a reportable segment, the Company will provide segment level information for Asset Co. |
b. | Principles of consolidation |
c. | Use of estimates |
d. | Allowance for credit losses |
e. | Valuation of investments and derivative contracts |
i. | Portfolio funds—Portfolio funds (“Portfolio Funds”) include interests in private investment partnerships, foreign investment companies and other collective investment vehicles which may be managed by the Company or its affiliates. The Company follows US GAAP regarding fair value measurements and disclosures relating to investments in certain entities that calculate net asset value (“NAV”) per share (or its equivalent). The guidance permits, as a practical expedient, an entity holding investments in certain entities that (a) do not have readily determinable fair values, (b) are investments in an investment company within the scope of ASC 946 Financial Services - Investment Companies (“ASC 946”) and (c) whose NAV is calculated in a manner consistent with the measurement principles of ASC 946 as of the reporting date, to measure the fair value of such investments on the basis of that NAV per share, or its equivalent, without adjustment. In accordance with US GAAP, investments which are valued using NAV per share as a practical expedient are not categorized within the fair value hierarchy. |
ii. | Real estate investments—Real estate debt and equity investments are valued at fair value. The fair value of real estate investments is estimated based on the price that would be received to sell an asset in an orderly transaction between marketplace participants at the measurement date. Real estate investments without a public market are valued based on assumptions and valuation techniques used by the Company. Such valuation techniques may include discounted cash flow analysis, prevailing market capitalization rates or earnings multiples applied to earnings from the investment, analysis of recent comparable sales transactions, actual sale negotiations and bona fide purchase offers received from third parties, consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence, as well as independent external appraisals. In general, the Company considers several valuation techniques when measuring the fair value of a real estate investment. However, in certain circumstances, a single valuation technique may be appropriate. Real estate investments are reviewed on a quarterly basis by the Company for significant changes at the property level or a significant change in the overall market which would impact the value of the real estate investment resulting in unrealized appreciation or depreciation. |
f. | Fees receivable |
g. | Securities financing arrangements |
h. | Fixed assets |
Asset | Depreciable Lives | Depreciation and/or Amortization Method | |
Telephone and computer equipment | 3-5 years | Straight-line | |
Computer software | 3-8 years | Straight-line | |
Furniture and fixtures | 5 years | Straight-line | |
Leasehold improvements | Term of Lease | Straight-line | |
Finance lease right-of-use asset | 5 years | Straight-line |
i. | Goodwill and intangible assets |
j. | Debt |
k. | Right-of-use assets and lease liabilities |
• | Underwriting fees. The Company earns underwriting fees in securities offerings in which the Company acts as an underwriter, such as initial public offerings, follow-on equity offerings, debt offerings, and convertible securities offerings. Fee revenue relating to underwriting commitments is recorded at the point in time when all significant items relating to the underwriting process have been completed and the amount of the underwriting revenue has been determined. This generally is the point at which all of the following have occurred: (i) the issuer's registration statement has become effective with the SEC or the other offering documents are finalized; (ii) the Company has made a firm commitment for the purchase of securities from the issuer; (iii) the Company has been informed of the number of securities that it has been allotted; and (iv) the issuer obtains control and benefits of the offering; which generally occurs on trade date. |
• | Strategic/financial advisory fees. The Company's strategic advisory revenue includes success fees earned in connection with advising companies, principally in mergers, acquisitions and restructuring transactions. The Company also earns fees for related advisory work such as providing fairness opinions. A significant portion of the Company's advisory revenue (i.e., success related advisory fees) is considered variable consideration and recognized when it is probable that the variable consideration will not be reversed in a future period. The variable consideration is constrained until satisfaction of the performance obligation. The Company records strategic advisory revenues at the point in time, gross of related expenses, when the services for the transactions are completed or the contract is canceled under the terms of each assignment or engagement. |
• | Placement and sales agent fees. The Company earns agency placement fees and sales agent commissions in non-underwritten transactions, such as private placements of loans and debt and equity securities, including, private investment in public equity transactions (“PIPEs”), and as sales agent in at-the-market offerings of equity securities. The Company records placement revenues (which may be in cash and/or securities) at the point in time when the services for the transactions are completed under the terms of each assignment or engagement. The Company records sales agent commissions on a trade-date basis. |
• | Expense reimbursements from clients. Investment banking revenue includes expense reimbursements for transaction-related expenses, primarily consisting of legal, travel and other costs directly associated with the transaction. Expense reimbursements associated with investment banking engagements are recognized in revenue at the point in time when the Company is contractually entitled to reimbursement. The related expenses are presented gross within their respective expense category in the accompanying condensed consolidated statements of operations. |
• | Commissions. Commission revenue includes fees from executing and clearing client transactions and commission sharing arrangements. Trade execution and clearing services, when provided together, represent a single performance |
• | Principal transactions. Principal transactions revenue includes net trading gains and losses from the Company's market-making activities in over-the-counter equity and fixed income securities, trading of convertible securities, and trading gains and losses on inventory and other Company positions, which include securities previously received as part of investment banking transactions. In certain cases, the Company provides liquidity to clients by buying or selling blocks of shares of listed stocks without previously identifying the other side of the trade at execution, which subjects the Company to market risk. These positions are typically held for a short duration. |
• | Equity and credit research fees. Equity and credit research fees are paid to the Company for providing its equity and credit research. In the US, revenue is recognized once an arrangement exists, access to research has been provided and the customer has benefited from the research. As part of MiFID II, the Company’s international broker-dealers have executed equity and credit research contacts with its clients. The contracts either contain a fixed price for providing access to research or a price at the discretion of the customer with a contract minimum. Fixed equity and credit research fees are recognized over the contract period as the customer is benefiting from the research throughout the contracts term. When the equity and credit research fees are based on the customer’s discretion with a contract minimum, the Company recognizes the contract minimum over the life of the contract as the customer benefits from the research provided and adjusts the revenue when the Company can estimate the amount of equity and credit research fees over the contract minimum. Additionally, the Company earns variable consideration for attending client conferences and events. Revenue is recognized when the Company attends a client conference or event. |
• | Trade conversion revenue. Trade conversion revenue includes fees earned from converting foreign securities into an American Depository Receipt (“ADR”) and fees earned from converting an ADR into foreign securities on behalf of customers, and margins earned from facilitating customer foreign exchange transactions. Trade conversion revenue is recognized on a trade-date basis. |
• | Hedge Funds. Management fees for the Company's hedge funds are generally charged at an annual rate of up to 2% of utilized invested capital, committed capital or notional trading level. Management fees are generally calculated monthly at the end of each month. |
• | Private Equity Funds. Management fees for the Company's private equity or debt funds are generally charged at an annual rate of 1% to 2% of committed capital during the investment period (as defined in the relevant partnership agreement). After the investment period, management fees for these private equity funds are generally charged at an annual rate of 0.5% to 2% of the net asset value or the aggregate cost basis of the unrealized investments held by the private equity funds. For certain other private equity funds (and managed accounts), the management fees range from 0.2% to 1% and there is no adjustment based on the investment period. Management fees for the Company's private equity funds are generally paid on a quarterly basis. |
• | Cowen Trading Strategies. Advisory fees for the Company's collateral management advisory business are typically paid quarterly based on utilized invested capital or committed capital, generally subject to a minimum fee. |
• | Hedge Funds. Management fees for the Company's hedge funds are generally charged at an annual rate of up to 2% of utilized invested capital, committed capital or notional trading level. Management fees are generally calculated monthly at the end of each month. |
• | Real Estate. Management fees from the Company's real estate business are generally charged at an annual rate from 0.25% to 1.50% of total capital commitments during the investment period and of invested capital or net asset value of the applicable real estate fund after the investment period has ended. Management fees are typically paid to the general partners on a quarterly basis, at the beginning of the quarter in arrears. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
(dollars in thousands) | ||||||||||||||||||
Revenue from contracts with customers | Operating Company | |||||||||||||||||
Investment Banking | ||||||||||||||||||
Underwriting fees | $ | 75,169 | $ | 62,751 | $ | 123,204 | $ | 134,519 | ||||||||||
Strategic/financial advisory fees | 11,131 | 14,498 | 31,676 | 28,858 | ||||||||||||||
Placement and sales agent fees | 23,515 | 7,577 | 33,013 | 19,437 | ||||||||||||||
Expense reimbursements from clients | 4,890 | — | 6,918 | — | ||||||||||||||
Total Investment Banking Revenue | 114,705 | 84,826 | 194,811 | 182,814 | ||||||||||||||
Brokerage | ||||||||||||||||||
Commissions | 96,341 | 91,008 | 181,116 | 185,303 | ||||||||||||||
Trade conversion revenue | 4,559 | 5,815 | 8,665 | 9,337 | ||||||||||||||
Equity and credit research fees | 5,355 | 5,724 | 8,945 | 9,563 | ||||||||||||||
Total Brokerage Revenue from Customers | 106,255 | 102,547 | 198,726 | 204,203 | ||||||||||||||
Management Fees | 6,796 | 6,287 | 13,439 | 12,960 | ||||||||||||||
Incentive Income | 8 | 48 | 8 | 64 | ||||||||||||||
Total revenue from contracts with customers - Op Co | $ | 227,764 | $ | 193,708 | $ | 406,984 | $ | 400,041 | ||||||||||
Asset Company | ||||||||||||||||||
Management Fees | 243 | 1,086 | 741 | 1,830 | ||||||||||||||
Incentive Income | — | — | 15 | — | ||||||||||||||
Total revenue from contracts with customers - Asset Co | 243 | 1,086 | 756 | 1,830 | ||||||||||||||
Total revenue from contracts with customers | $ | 228,007 | $ | 194,794 | $ | 407,740 | $ | 401,871 |
(dollars in thousands) | |||
Cash and cash equivalents | $ | 12,236 | |
Fees receivable | 7,269 | ||
Fixed assets | 1,085 | ||
Operating lease right-of-use assets | 3,200 | ||
Intangible assets | 22,200 | ||
Other assets | 667 | ||
Compensation payable | (637 | ) | |
Operating lease liabilities | (3,200 | ) | |
Due to related parties | (4,750 | ) | |
Accounts payable, accrued expenses and other liabilities | (16,257 | ) | |
Total identifiable net assets acquired and liabilities assumed | 21,813 | ||
Goodwill | 81,150 | ||
Total estimated purchase price | $ | 102,963 |
Estimated intangible assets acquired | Estimated average remaining useful lives | ||||
(dollars in thousands) | (in years) | ||||
Intangible asset class | |||||
Trade name | $ | 900 | 3 | ||
Customer relationships | 7,100 | 4 | |||
Backlog | 12,600 | 2 | |||
Proprietary software | 1,600 | 3 | |||
Total intangible assets | $ | 22,200 |
(dollars in thousands) | |||
2019 | $ | 4,454 | |
2020 | 8,908 | ||
2021 | 2,608 | ||
2022 | 1,775 | ||
2023 | — | ||
Thereafter | — | ||
$ | 17,745 |
Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | ||||||
(dollars in thousands, except per share data) | |||||||
Net revenues | $ | 218,625 | $ | 454,962 | |||
Net income (loss) attributable to Cowen Inc. common stockholders | 3,057 | 19,888 | |||||
Net income (loss) per common share: | |||||||
Basic | $ | 0.10 | $ | 0.65 | |||
Diluted | 0.10 | 0.63 |
a. | Operating Entities |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Common stock | $ | 824,881 | $ | 472,299 | |||
Preferred stock | 9,772 | 5,617 | |||||
Warrants and rights | 9,874 | 7,990 | |||||
Government bonds (a) | 12,892 | 13,398 | |||||
Corporate bonds (d) | 24,625 | 13,041 | |||||
Convertible bonds (b) (c) | 6,318 | 3,000 | |||||
Term loan (b) | 1,496 | — | |||||
Trade claims (b) | 10,488 | 5,543 | |||||
$ | 900,346 | $ | 520,888 |
(a) | As of June 30, 2019, maturities range from August 2019 to October 2019 with an interest rate of 0%. As of December 31, 2018, maturities ranged from April 2019 to August 2019 with an interest rate of 0%. |
(b) | The Company has elected the fair value option for investments in securities of trade claims, convertible bond and term loan with a fair value of $10.5 million, $6.3 million and $1.5 million, respectively, at June 30, 2019. The Company has elected the fair value option for investments in securities of trade claims and convertible bond at a fair value of $5.5 million and $3.0 million, respectively, at December 31, 2018. |
(c) | As of June 30, 2019, maturities range from April 2020 to May 2024 with an interest rate of 8%. As of December 31, 2018, the maturity was June 2020 with an interest rate of 8%. |
(d) | As of June 30, 2019, maturities ranged from October 2019 to March 2038 and interest rates ranged from 4.88% to 10.75%. As of December 31, 2018, maturities ranged from April 2019 to April 2049 and interest rates ranged from 2% to 15.50%. |
Receivable on derivative contracts | As of June 30, 2019 | As of December 31, 2018 | |||||||||||||
Number of contracts / Notional Value | Fair value | Number of contracts / Notional Value | Fair value | ||||||||||||
(dollars in thousands) | |||||||||||||||
Futures | $ | — | $ | — | $ | 42,288 | $ | 334 | |||||||
Currency forwards | $ | 105,769 | 279 | $ | 395 | 1 | |||||||||
Swaps | $ | 121,469 | 9,440 | $ | 13,702 | 917 | |||||||||
Options other (a) | 325,493 | 22,501 | 654,506 | 23,130 | |||||||||||
Pay to hold | $ | — | — | $ | — | 743 | |||||||||
$ | 32,220 | $ | 25,125 |
Payable for derivative contracts | As of June 30, 2019 | As of December 31, 2018 | |||||||||||||
Number of contracts / Notional Value | Fair value | Number of contracts / Notional Value | Fair value | ||||||||||||
(dollars in thousands) | |||||||||||||||
Futures | $ | 29,986 | $ | 434 | $ | — | $ | — | |||||||
Currency forwards | $ | 960 | 1 | $ | 96,406 | 709 | |||||||||
Swaps | $ | 79,407 | 2,231 | $ | 52,905 | 2,162 | |||||||||
Options other (a) | 136,420 | 19,779 | 90,730 | 13,211 | |||||||||||
$ | 22,445 | $ | 16,082 |
Gross amounts not offset in the Condensed Consolidated Statement of Financial Condition | |||||||||||||||||||||||
Gross amounts recognized | Gross amounts offset on the Condensed Consolidated Statements of Financial Condition (a) | Net amounts included on the Condensed Consolidated Statements of Financial Condition | Financial instruments | Cash Collateral pledged (b) | Net amounts | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
As of June 30, 2019 | |||||||||||||||||||||||
Receivable on derivative contracts, at fair value | $ | 32,220 | $ | — | $ | 32,220 | $ | — | $ | 9,719 | $ | 22,501 | |||||||||||
Payable for derivative contracts, at fair value | 22,445 | — | 22,445 | — | 2,232 | 20,213 | |||||||||||||||||
As of December 31, 2018 | |||||||||||||||||||||||
Receivable on derivative contracts, at fair value | $ | 25,125 | $ | — | $ | 25,125 | $ | — | $ | 1,662 | $ | 23,463 | |||||||||||
Payable for derivative contracts, at fair value | 16,082 | — | 16,082 | — | 2,871 | 13,211 |
(a) | Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. |
(b) | Includes the amount of collateral held or posted. |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Portfolio Funds, at fair value (1) | $ | 146,133 | $ | 141,236 | |||
Equity method investments (2) | 54,164 | 40,171 | |||||
$ | 200,297 | $ | 181,407 |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Starboard Value and Opportunity Fund LP (c)(*) | $ | 36,585 | $ | 32,579 | |||
Formation8 Partners Fund I, L.P. (f) | 33,613 | 34,099 | |||||
RCG Longview Debt Fund V, L.P. (g)(*) | 2,110 | 4,394 | |||||
RCG Longview II LP (g) (*) | 4,461 | 4,400 | |||||
Cowen Healthcare Investments II LP (i) (*) | 23,925 | 21,717 | |||||
Eclipse Ventures Fund I, L.P. (b) | 4,580 | 4,412 | |||||
HealthCare Royalty Partners LP (a)(*) | 1,368 | 1,833 | |||||
Lagunita Biosciences, LLC (d) | 5,054 | 3,833 | |||||
RCG IO Renergys Sarl (i) (*) | 868 | 6,369 | |||||
Starboard Leaders Fund LP (e)(*) | 1,454 | 1,230 | |||||
Eclipse SPV I, LP (j)(*) | 1,447 | 1,447 | |||||
RCG Longview Equity Fund, LP (g) (*) | 795 | 802 | |||||
RCG Longview Debt Fund VI, LP (g) (*) | 2,003 | 1,586 | |||||
RCG Park Liberty GP Member LLC (g) (*) | 1,102 | 1,023 | |||||
HealthCare Royalty Partners II LP (a)(*) | 1,653 | 1,037 | |||||
RCGL PE MPA, LLC (g)(*) | 646 | 618 | |||||
RCG LPP2 PNW5 Co-Invest, L.P. (h)(*) | 12 | 296 | |||||
Other private investment (k)(*) | 19,900 | 15,898 | |||||
Other affiliated funds (l)(*) | 4,557 | 3,663 | |||||
$ | 146,133 | $ | 141,236 |
(a) | HealthCare Royalty Partners, L.P. and HealthCare Royalty Partners II, L.P. are private equity funds and therefore distributions will be made when cash flows are received from the underlying investments, typically on a quarterly basis. |
(b) | Eclipse Ventures Fund I, L.P. is a private equity fund which invests in early stage and growth hardware companies. Distributions will be made when the underlying investments are liquidated. |
(c) | Starboard Value and Opportunity Fund LP permits quarterly withdrawals upon 90 days' notice. |
(d) | Lagunita Biosciences, LLC, is a healthcare investment company that creates and grows early stage companies to commercialize impactful translational science that addresses significant clinical needs, is a private equity structure and therefore distributions will be made when the underlying investments are liquidated. |
(e) | Starboard Leaders Fund LP does not permit withdrawals, but instead allows terminations with respect to capital commitments upon 30 days' prior written notice at any time following the first anniversary of an investor's initial capital contribution. |
(f) | Formation8 Partners Fund I, L.P. is a private equity fund which invests in early stage and growth transformational information and energy technology companies. Distributions will be made when the underlying investments are liquidated. |
(g) | RCG Longview Debt Fund V, L.P., RCG Longview II LP, RCG Park Liberty GP Member LLC, RCG Longview Equity Fund, LP, RCGL PE MPA, LLC and RCG Longview Debt Fund VI, LP are real estate private equity structures. The timing of distributions depends on the nature of the underlying investments and therefore will be made either quarterly or when the underlying investments are liquidated. |
(h) | RCG LPP2 PNW5 Co-Invest, L.P. is a single purpose entity formed to participate in a joint venture which acquired five multi-unit residential rental properties located in the Pacific Northwest. RCG LPP2 PNW5 Co-Invest, L.P. is a private equity structure and therefore distributions will be made when the underlying investments are liquidated. |
(i) | Cowen Healthcare Investments II LP and RCG IO Renergys Sarl are private equity funds. Distributions are made from these funds when cash flows or securities are received from the underlying investments. Investors do not have redemption rights. |
(j) | Eclipse SPV I, L.P. is a co-investment vehicle organized to invest in a private company focused on software-driven automation projects. Distributions will be made when the underlying investments are liquidated. |
(k) | Other private investment represents the Company's closed end investment in a Portfolio Fund that invests in a wireless broadband communication provider in Italy. |
(l) | The majority of these investment funds are affiliates of the Company or are managed by the Company and the investors can redeem from these funds as investments are liquidated. |
(2) | Equity method investments |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Surf House Ocean Views Holdings, LLC | $ | 8,493 | $ | 7,589 | |||
Starboard Value LP | 27,472 | 12,699 | |||||
RCG Longview Debt Fund V Partners, LLC | 4,845 | 11,000 | |||||
RCG Longview Management, LLC | 4,407 | 1,167 | |||||
RCG Longview Debt Fund VI Partners LLC | 1,431 | 1,254 | |||||
HealthCare Royalty GP, LLC | 112 | 149 | |||||
HealthCare Royalty GP II, LLC | 280 | 176 | |||||
RCG Longview Debt Fund IV Management, LLC | 331 | 331 | |||||
HealthCare Royalty GP III, LLC | 2,016 | 1,573 | |||||
Triartisan ES Partners LLC | 1,026 | 1,500 | |||||
Triartisan PFC Partners LLC | 1,000 | — | |||||
RCG Kennedy House, LLC | 131 | 131 | |||||
RCG Longview Equity Management, LLC | 107 | 114 | |||||
RCG LPP II GP, LLC | 94 | 272 | |||||
RCG Park Liberty GP Member Manager, LLC | 1,248 | 1,248 | |||||
Other | 1,171 | 968 | |||||
$ | 54,164 | $ | 40,171 |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Assets | |||||||
Cash | $ | 532 | $ | 37 | |||
Performance & management fee receivable | 81,031 | 16,594 | |||||
Investments | 4,211 | 3,599 | |||||
Liabilities | — | — | |||||
Equity | $ | 85,774 | $ | 20,230 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Revenues | $ | 10,144 | $ | 21,356 | $ | 78,723 | $ | 25,926 | |||||||
Expenses | — | — | — | — | |||||||||||
Net realized and unrealized gains (losses) | 102 | 191 | 662 | 242 | |||||||||||
Net Income | $ | 10,246 | $ | 21,547 | $ | 79,385 | $ | 26,168 |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Common stock | $ | 409,034 | $ | 194,305 | |||
Corporate bonds (a) | 2,581 | 750 | |||||
Government bonds (b) | 4,681 | — | |||||
Preferred stock | 2,088 | 199 | |||||
Warrants and rights | 20,200 | 53 | |||||
$ | 438,584 | $ | 195,307 |
(a) | As of June 30, 2019, the maturities ranged from October 2020 to May 2029 and interest rates ranged from 1.88% to 15.50%. As of December 31, 2018, the maturities ranged from October 2022 to January 2034 and interest rates ranged from 2.25% to 9.38%. |
(b) | As of June 30, 2019, the maturities ranged from October 2019 to March 2038 and interest rates ranged from 7.00% to 8.25%. |
Gross amounts not offset on the Condensed Consolidated Statement of Financial Condition | |||||||||||||||||||||||||||
Gross amounts recognized | Gross amounts offset on the Condensed Consolidated Statements of Financial Condition (a) | Net amounts included on the Condensed Consolidated Statements of Financial Condition | Additional Amounts Available | Financial instruments | Cash Collateral pledged (b) | Net amounts | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||
As of June 30, 2019 | |||||||||||||||||||||||||||
Securities borrowed | $ | 1,390,366 | $ | — | $ | 1,390,366 | $ | — | $ | 1,343,751 | $ | — | $ | 46,615 | |||||||||||||
Securities loaned | 1,492,986 | — | 1,492,986 | — | 1,445,362 | — | 47,624 | ||||||||||||||||||||
As of December 31, 2018 | |||||||||||||||||||||||||||
Securities borrowed | $ | 407,795 | $ | — | $ | 407,795 | $ | — | $ | 383,593 | $ | — | $ | 24,202 | |||||||||||||
Securities loaned | 414,852 | — | 414,852 | — | 391,310 | — | 23,542 |
(a) | Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. |
(b) | Includes the amount of cash collateral held/posted. |
Open and Overnight | Up to 30 days | 31 - 90 days | Greater than 90 days | Total | |||||||||||||||
(dollars in thousands) | |||||||||||||||||||
As of June 30, 2019 | |||||||||||||||||||
Securities loaned | |||||||||||||||||||
Common stock | $ | 1,195,846 | $ | — | $ | — | $ | — | $ | 1,195,846 | |||||||||
Corporate bonds | 297,140 | — | — | — | 297,140 | ||||||||||||||
As of December 31, 2018 | |||||||||||||||||||
Securities loaned | |||||||||||||||||||
Common stock | $ | 414,852 | $ | — | $ | — | $ | — | $ | 414,852 |
b. | Consolidated Funds |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Preferred stock | $ | 24,322 | $ | 24,314 | |||
Common stock | 236,066 | 95,565 | |||||
Government bonds (a) | — | 38,377 | |||||
Corporate bonds (b) | 78,630 | 24,098 | |||||
Warrants and rights | 6,274 | 5,279 | |||||
$ | 345,292 | $ | 187,633 |
(a) | As of December 31, 2018, maturities ranged from January 2019 to April 2019 and interest rates were 0%. |
(b) | As of June 30,2019, maturities ranged from May 2022 to November 2025 and interest rates ranged from 4.87% to 6.50%. As of December 31, 2018, maturities ranged from August 2020 to March 2026 and interest rates ranged from 5.88% to 7.63%. |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Currency forwards | $ | 379 | $ | 186 | |||
Equity swaps | 1,273 | 2,477 | |||||
Options | 2,802 | 1,753 | |||||
$ | 4,454 | $ | 4,416 |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Currency forwards | $ | 103 | $ | 96 | |||
Equity swaps | 2,405 | 713 | |||||
Options | 108 | 854 | |||||
$ | 2,616 | $ | 1,663 |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Investments of Enterprise LP | $ | 99,493 | $ | 97,656 | |||
Investments of Merger Fund | 78,335 | 88,739 | |||||
$ | 177,828 | $ | 186,395 |
Investment's percentage of the Company's equity | ||||||||||||||
Issuer | Security Type | Country | Industry | Percentage of Equity | Market Value | |||||||||
(dollars in thousands) | ||||||||||||||
As of June 30, 2019 | Linkem | Equity | Italy | Wireless Broadband | 8.82 | % | $ | 72,036 | ||||||
As of December 31, 2018 | Linkem | Equity | Italy | Wireless Broadband | 8.36 | % | $ | 66,439 |
As of December 31, 2018 | |||
(dollars in thousands) | |||
Common stock | $ | 469 | |
$ | 469 |
As of December 31, 2018 | ||||
Strategy | (dollars in thousands) | |||
RCG Special Opportunities Fund, Ltd* | Multi-Strategy | $ | 111,548 | |
Other Private Investments | Various | 846 | ||
$ | 112,394 |
* | Affiliates of the Company. |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Securities owned by Merger Master, at fair value | |||||||
Common stock | $ | 324,742 | $ | 162,811 | |||
Corporate bonds | 70,194 | 116,488 | |||||
$ | 394,936 | $ | 279,299 | ||||
Securities sold, not yet purchased, by Merger Master, at fair value | |||||||
Common stock | $ | 111,074 | $ | 9,610 | |||
$ | 111,074 | $ | 9,610 |
As of June 30, 2019 | As of December 31, 2018 | ||||||
Description | (dollars in thousands) | ||||||
Options | $ | 4,291 | $ | 3,450 | |||
Equity swaps | 102 | 5,320 | |||||
$ | 4,393 | $ | 8,770 |
As of June 30, 2019 | As of December 31, 2018 | ||||||
Description | (dollars in thousands) | ||||||
Options | $ | 194 | $ | 1,430 | |||
Currency forwards | 37,309 | 270 | |||||
Equity swaps | 347 | 28 | |||||
$ | 37,850 | $ | 1,728 |
Assets at Fair Value as of June 30, 2019 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(dollars in thousands) | |||||||||||||||
Operating Entities | |||||||||||||||
Securities owned, at fair value | |||||||||||||||
Government bonds | $ | 12,892 | $ | — | $ | — | $ | 12,892 | |||||||
Preferred stock | 2,371 | — | 7,401 | 9,772 | |||||||||||
Common stock | 811,041 | 2,834 | 11,006 | 824,881 | |||||||||||
Convertible bonds | — | — | 6,318 | 6,318 | |||||||||||
Corporate bonds | — | 23,850 | 775 | 24,625 | |||||||||||
Trade claims | — | — | 10,488 | 10,488 | |||||||||||
Term Loan | — | 1,496 | — | 1,496 | |||||||||||
Warrants and rights | 9,279 | — | 595 | 9,874 | |||||||||||
Receivable on derivative contracts, at fair value | |||||||||||||||
Currency forwards | — | 279 | — | 279 | |||||||||||
Swaps | — | 9,440 | — | 9,440 | |||||||||||
Options | 22,501 | — | — | 22,501 | |||||||||||
Consolidated Funds | |||||||||||||||
Securities owned, at fair value | |||||||||||||||
Preferred stock | — | — | 24,322 | 24,322 | |||||||||||
Common stock | 235,049 | — | 1,017 | 236,066 | |||||||||||
Corporate bonds | — | 78,630 | — | 78,630 | |||||||||||
Warrants and rights | — | — | 6,274 | 6,274 | |||||||||||
Receivable on derivative contracts, at fair value | |||||||||||||||
Currency forwards | — | 379 | — | 379 | |||||||||||
Equity swaps | — | 1,273 | — | 1,273 | |||||||||||
Options | 2,802 | — | — | 2,802 | |||||||||||
$ | 1,095,935 | $ | 118,181 | $ | 68,196 | $ | 1,282,312 | ||||||||
Percentage of total assets measured at fair value on a recurring basis | 85.5 | % | 9.2 | % | 5.3 | % | |||||||||
Portfolio Funds measured at net asset value (a) | 146,133 | ||||||||||||||
Consolidated Funds' Portfolio Funds measured at net asset value (a) | 177,828 | ||||||||||||||
Equity method investments | 54,164 | ||||||||||||||
Total investments | $ | 1,660,437 |
Liabilities at Fair Value as of June 30, 2019 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(dollars in thousands) | |||||||||||||||
Operating Entities | |||||||||||||||
Securities sold, not yet purchased, at fair value | |||||||||||||||
Government bonds | $ | — | $ | 4,681 | $ | — | $ | 4,681 | |||||||
Common stock | 409,034 | — | — | 409,034 | |||||||||||
Corporate bonds | — | 2,581 | — | 2,581 | |||||||||||
Preferred stock | 2,088 | — | — | 2,088 | |||||||||||
Warrants and rights | 20,200 | — | — | 20,200 | |||||||||||
Payable for derivative contracts, at fair value | |||||||||||||||
Futures | 434 | — | — | 434 | |||||||||||
Currency forwards | — | 1 | — | 1 | |||||||||||
Swaps | — | 2,231 | — | 2,231 | |||||||||||
Options | 17,000 | — | 2,779 | 19,779 | |||||||||||
Accounts payable, accrued expenses and other liabilities | |||||||||||||||
Contingent consideration liability (b) | — | — | 29,536 | 29,536 | |||||||||||
Consolidated Funds | |||||||||||||||
Payable for derivative contracts, at fair value | |||||||||||||||
Currency forwards | — | 103 | — | 103 | |||||||||||
Options | 108 | — | — | 108 | |||||||||||
Equity swaps | — | 2,405 | — | 2,405 | |||||||||||
$ | 448,864 | $ | 12,002 | $ | 32,315 | $ | 493,181 | ||||||||
Percentage of total liabilities measured at fair value | 91.0 | % | 2.4 | % | 6.6 | % |
Assets at Fair Value as of December 31, 2018 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(dollars in thousands) | |||||||||||||||
Operating Entities | |||||||||||||||
Securities owned, at fair value | |||||||||||||||
Government bonds | $ | 13,398 | $ | — | $ | — | $ | 13,398 | |||||||
Preferred stock | 449 | — | 5,168 | 5,617 | |||||||||||
Common stock | 459,601 | 2,848 | 9,850 | 472,299 | |||||||||||
Convertible bonds | — | — | 3,000 | 3,000 | |||||||||||
Corporate bonds | — | 13,041 | — | 13,041 | |||||||||||
Trade claims | — | — | 5,543 | 5,543 | |||||||||||
Warrants and rights | 6,324 | — | 1,666 | 7,990 | |||||||||||
Receivable on derivative contracts, at fair value | |||||||||||||||
Futures | 334 | — | — | 334 | |||||||||||
Currency forwards | — | 1 | — | 1 | |||||||||||
Swaps | — | 917 | — | 917 | |||||||||||
Options | 23,130 | — | — | 23,130 | |||||||||||
Pay to hold | — | 743 | — | 743 | |||||||||||
Consolidated Funds | |||||||||||||||
Securities owned, at fair value | |||||||||||||||
Government bonds | 38,377 | — | — | 38,377 | |||||||||||
Preferred stock | — | — | 24,314 | 24,314 | |||||||||||
Common stock | 95,471 | — | 94 | 95,565 | |||||||||||
Corporate bonds | — | 24,098 | — | 24,098 | |||||||||||
Warrants and rights | — | — | 5,279 | 5,279 | |||||||||||
Receivable on derivative contracts, at fair value | |||||||||||||||
Currency forwards | — | 186 | — | 186 | |||||||||||
Equity swaps | — | 2,477 | — | 2,477 | |||||||||||
Options | 1,753 | — | — | 1,753 | |||||||||||
$ | 638,837 | $ | 44,311 | $ | 54,914 | $ | 738,062 | ||||||||
Percentage of total assets measured at fair value on a recurring basis | 86.6 | % | 6.0 | % | 7.4 | % | |||||||||
Portfolio Funds measured at net asset value (a) | 141,236 | ||||||||||||||
Consolidated Funds' Portfolio Funds measured at net asset value (a) | 186,395 | ||||||||||||||
Equity method investments | 40,171 | ||||||||||||||
Total investments | $ | 1,105,864 |
Liabilities at Fair Value as of December 31, 2018 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(dollars in thousands) | |||||||||||||||
Operating Entities | |||||||||||||||
Securities sold, not yet purchased, at fair value | |||||||||||||||
Common stock | $ | 194,305 | $ | — | $ | — | $ | 194,305 | |||||||
Corporate bonds | — | 750 | — | 750 | |||||||||||
Preferred stock | 199 | — | — | 199 | |||||||||||
Warrants and rights | 53 | — | — | 53 | |||||||||||
Payable for derivative contracts, at fair value | |||||||||||||||
Currency forwards | — | 709 | — | 709 | |||||||||||
Swaps | — | 2,162 | — | 2,162 | |||||||||||
Options | 11,115 | — | 2,096 | 13,211 | |||||||||||
Accounts payable, accrued expenses and other liabilities | |||||||||||||||
Contingent consideration liability (b) | — | — | 3,070 | 3,070 | |||||||||||
Consolidated Funds | |||||||||||||||
Payable for derivative contracts, at fair value | |||||||||||||||
Currency forwards | — | 96 | — | 96 | |||||||||||
Options | 854 | — | — | 854 | |||||||||||
Equity swaps | — | 713 | — | 713 | |||||||||||
$ | 206,526 | $ | 4,430 | $ | 5,166 | $ | 216,122 | ||||||||
Percentage of total liabilities measured at fair value | 95.6 | % | 2.0 | % | 2.4 | % |
Three Months Ended June 30, 2019 | |||||||||||||||||||||||||||||||
Balance at March 31, 2019 | Transfers in | Transfers out | Purchases/(covers) | (Sales)/shorts | Realized and Unrealized gains/losses | Balance at June 30, 2019 | Change in unrealized gains/losses relating to instruments still held (1) | ||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||
Operating Entities | |||||||||||||||||||||||||||||||
Preferred stock | $ | 7,157 | $ | — | $ | — | $ | 1,243 | $ | (1,000 | ) | $ | 1 | $ | 7,401 | $ | 1 | ||||||||||||||
Common stock | 4,951 | — | — | 12,896 | (6,519 | ) | (322 | ) | 11,006 | (325 | ) | ||||||||||||||||||||
Convertible bonds | 5,000 | (2,025 | ) | (b) | 9,971 | (6,692 | ) | 64 | 6,318 | 64 | |||||||||||||||||||||
Corporate bond | 261 | — | — | 514 | — | — | 775 | — | |||||||||||||||||||||||
Options, liability | 1,733 | — | — | — | — | 1,046 | 2,779 | 1,046 | |||||||||||||||||||||||
Warrants and rights | 454 | — | — | — | — | 141 | 595 | 141 | |||||||||||||||||||||||
Trade claims | 5,487 | — | — | 5,095 | (96 | ) | 2 | 10,488 | — | ||||||||||||||||||||||
Contingent consideration liability | 29,536 | — | — | — | — | — | 29,536 | — | |||||||||||||||||||||||
Consolidated Funds | |||||||||||||||||||||||||||||||
Preferred stock | 24,322 | — | — | — | — | — | 24,322 | — | |||||||||||||||||||||||
Common stock | 1,017 | — | — | — | — | — | 1,017 | — | |||||||||||||||||||||||
Warrants and rights | 4,708 | — | — | — | — | 1,566 | 6,274 | 1,566 |
Three Months Ended June 30, 2018 | |||||||||||||||||||||||||||||||
Balance at March 31, 2018 | Transfers in | Transfers out | Purchases/(covers) | (Sales)/shorts | Realized and Unrealized gains/losses | Balance at June 30, 2018 | Change in unrealized gains/losses relating to instruments still held (1) | ||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||
Operating Entities | |||||||||||||||||||||||||||||||
Preferred stock | $ | 8,817 | $ | — | $ | — | $ | — | $ | (217 | ) | $ | (1,178 | ) | $ | 7,422 | $ | (1,817 | ) | ||||||||||||
Common stock | 7,400 | — | — | 221 | (1,200 | ) | (572 | ) | 5,849 | (547 | ) | ||||||||||||||||||||
Options, liability | 21,395 | — | (28,973 | ) | (c) | — | (259 | ) | 8,138 | 301 | 8,138 | ||||||||||||||||||||
Warrants and rights | 1,702 | — | (374 | ) | (b) | — | (143 | ) | 71 | 1,256 | (1,176 | ) | |||||||||||||||||||
Trade claims | 5,955 | — | — | — | (334 | ) | 78 | 5,699 | 14 | ||||||||||||||||||||||
Lehman claim | 312 | — | — | — | — | (17 | ) | 295 | (18 | ) | |||||||||||||||||||||
Contingent consideration liability | 3,440 | — | — | — | (570 | ) | — | 2,870 | — | ||||||||||||||||||||||
Consolidated Funds | |||||||||||||||||||||||||||||||
Preferred stock | 11,893 | — | — | 3,066 | — | 9,355 | 24,314 | 9,356 | |||||||||||||||||||||||
Common stock | 50 | — | — | — | — | 44 | 94 | 43 | |||||||||||||||||||||||
Warrants and rights | 5,254 | — | — | (1,340 | ) | — | 824 | 4,738 | (516 | ) |
Six Months Ended June 30, 2019 | |||||||||||||||||||||||||||||||
Balance at December 31, 2018 | Transfers in | Transfers out | Purchases/(covers) | (Sales)/shorts | Realized and Unrealized gains/losses | Balance at June 30, 2019 | Change in unrealized gains/losses relating to instruments still held (1) | ||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||
Operating Entities | |||||||||||||||||||||||||||||||
Preferred stock | $ | 5,168 | $ | — | $ | — | $ | 3,243 | $ | (1,000 | ) | $ | (10 | ) | $ | 7,401 | $ | (10 | ) | ||||||||||||
Common stock | 9,850 | — | — | 14,158 | (12,472 | ) | (530 | ) | 11,006 | (332 | ) | ||||||||||||||||||||
Convertible bonds | 3,000 | — | (2,025 | ) | (b) | 14,971 | (9,692 | ) | 64 | 6,318 | 64 | ||||||||||||||||||||
Corporate bond | — | — | — | 775 | — | — | 775 | — | |||||||||||||||||||||||
Options, liability | 2,096 | — | — | — | (4 | ) | 687 | 2,779 | 687 | ||||||||||||||||||||||
Warrants and rights | 1,666 | — | — | — | (116 | ) | (955 | ) | 595 | 32 | |||||||||||||||||||||
Trade claims | 5,543 | — | — | 5,095 | (152 | ) | 2 | 10,488 | — | ||||||||||||||||||||||
Contingent consideration liability | 3,070 | — | — | 27,700 | (1,234 | ) | — | 29,536 | — | ||||||||||||||||||||||
Consolidated Funds | |||||||||||||||||||||||||||||||
Preferred stock | 24,314 | — | — | — | — | 8 | 24,322 | 8 | |||||||||||||||||||||||
Common stock | 94 | — | — | 407 | — | 516 | 1,017 | 516 | |||||||||||||||||||||||
Warrants and rights | 5,279 | — | — | — | (1,088 | ) | 2,083 | 6,274 | 995 |
Six Months Ended June 30, 2018 | |||||||||||||||||||||||||||||||
Balance at December 31, 2017 | Transfers in | Transfers out | Purchases/(covers) | (Sales)/shorts | Realized and Unrealized gains/losses | Balance at June 30, 2018 | Change in unrealized gains/losses relating to instruments still held (1) | ||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||
Operating Entities | |||||||||||||||||||||||||||||||
Preferred stock | $ | 8,115 | $ | — | $ | — | $ | 1,415 | $ | (695 | ) | $ | (1,413 | ) | $ | 7,422 | $ | (1,331 | ) | ||||||||||||
Common stock | 7,570 | — | — | 531 | (1,333 | ) | (919 | ) | 5,849 | (959 | ) | ||||||||||||||||||||
Convertible bonds | 282 | — | — | — | (307 | ) | 25 | — | — | ||||||||||||||||||||||
Options, asset | 1,455 | — | — | — | (1,455 | ) | — | — | — | ||||||||||||||||||||||
Options, liability | 22,401 | — | (28,973 | ) | (c) | — | (259 | ) | 7,132 | 301 | 7,132 | ||||||||||||||||||||
Warrants and rights | 2,517 | — | (374 | ) | (b) | — | (143 | ) | (744 | ) | 1,256 | (666 | ) | ||||||||||||||||||
Trade claim | 5,950 | — | — | — | (334 | ) | 83 | 5,699 | 20 | ||||||||||||||||||||||
Lehman claim | 301 | — | — | — | — | (6 | ) | 295 | (6 | ) | |||||||||||||||||||||
Contingent consideration liability | 3,440 | — | — | — | (570 | ) | — | 2,870 | — | ||||||||||||||||||||||
Consolidated Funds | |||||||||||||||||||||||||||||||
Preferred stock | 50,445 | — | (38,552 | ) | (a) | 3,066 | — | 9,355 | 24,314 | 9,356 | |||||||||||||||||||||
Common stock | 50 | — | — | — | — | 44 | 94 | 43 | |||||||||||||||||||||||
Warrants and rights | 3,568 | — | (20 | ) | (a) | (1,340 | ) | — | 2,530 | 4,738 | 1,190 |
Quantitative Information about Level 3 Fair Value Measurements | |||||||||
Fair Value at June 30, 2019 | Valuation Techniques | Unobservable Inputs | Range | ||||||
Level 3 Assets | (dollars in thousands) | ||||||||
Common and preferred stocks | $ | 325 | Discounted cash flows | Discount rate | 8% | ||||
Trade claims | 27 | Discounted cash flows | Discount rate | 20% | |||||
Warrants and rights | 6,865 | Model based Discounted cash flows | Volatility Discount rate | 30% 6% to 7% | |||||
Corporate and convertible bonds | 514 | Discounted cash flows Recovery | Discount rate Probability of recovery | 20% 15% to 70% | |||||
Other level 3 assets (a) | 60,465 | ||||||||
Total level 3 assets | $ | 68,196 | |||||||
Level 3 Liabilities | |||||||||
Options | 2,779 | Option pricing models | Volatility | 35% to 40% | |||||
Contingent consideration liability | 29,536 | Discounted cash flows Monte Carlo simulation | Discount rate Volatility | 14%-23% 14%-20% | |||||
Total level 3 liabilities | $ | 32,315 |
Quantitative Information about Level 3 Fair Value Measurements | |||||||||
Fair Value at December 31, 2018 | Valuation Techniques | Unobservable Inputs | Range | ||||||
Level 3 Assets | (dollars in thousands) | ||||||||
Common and preferred stocks | $ | 4,323 | Guideline companies/Discounted cash flows | Discount rate Market multiples | 8%-14% 6.5x to 7x | ||||
Trade claims | 25 | Discounted cash flows | Discount rate | 20% | |||||
Warrants and rights | 1,666 | Model based Discounted cash flows | Discount rate | 7% to 9% | |||||
Other level 3 assets (a) | 48,900 | ||||||||
Total level 3 assets | $ | 54,914 | |||||||
Level 3 Liabilities | |||||||||
Options | 2,096 | Option pricing models | Volatility | 35% to 40% | |||||
Contingent consideration liability | 3,070 | Discounted cash flows | Projected cash flow and discount rate | 23% | |||||
Total level 3 liabilities | $ | 5,166 |
(a) | The quantitative disclosures exclude financial instruments for which the determination of fair value is based on prices from recent transactions. |
June 30, 2019 | December 31, 2018 | Fair Value Hierarchy | |||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||
(dollars in thousands) | |||||||||||||||||
Financial Assets | |||||||||||||||||
Operating companies | |||||||||||||||||
Cash and cash equivalents | $ | 182,400 | $ | 182,400 | $ | 259,148 | $ | 259,148 | Level 1 | ||||||||
Cash collateral pledged | 7,097 | 7,097 | 6,318 | 6,318 | Level 2 | ||||||||||||
Segregated cash | 139,070 | 139,070 | 176,647 | 176,647 | Level 1 | ||||||||||||
Securities borrowed | 1,390,366 | 1,343,751 | 407,795 | 383,593 | Level 2 | ||||||||||||
Loans receivable | 36,190 | 36,190 | (d) | 36,021 | 36,021 | (d) | Level 3 | ||||||||||
Consolidated Funds | |||||||||||||||||
Cash and cash equivalents | 3,357 | 3,357 | 38,118 | 38,118 | Level 1 | ||||||||||||
Financial Liabilities | |||||||||||||||||
Securities loaned | 1,492,986 | 1,445,362 | 414,852 | 391,310 | Level 2 | ||||||||||||
Convertible debt | 116,273 | (a) | 157,386 | (b) | 134,489 | (a) | 157,433 | (b) | Level 2 | ||||||||
Notes payable and other debt | 315,290 | 330,848 | (c) | 262,965 | 258,546 | (c) | Level 2 |
(a) | The carrying amount of the convertible debt includes an unamortized discount of $17.1 million and $19.5 million as of June 30, 2019 and December 31, 2018, respectively. |
(b) | The convertible debt includes the conversion option and is based on the last broker quote available. |
(c) | Notes payable and other debt are based on the last broker quote available. |
(d) | The fair market value of level 3 loans is calculated using discounted cash flows. |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Broker-dealers | $ | 547,293 | $ | 692,581 | |||
Securities failed to deliver | 33,373 | 72,918 | |||||
Clearing organizations | 22,683 | 15,319 | |||||
Securities borrowed interest receivable | 14,019 | 5,295 | |||||
$ | 617,368 | $ | 786,113 |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Broker-dealers | $ | 166,728 | $ | 159,443 | |||
Securities failed to receive | 52,482 | 28,826 | |||||
Clearing organizations | 9,648 | 36,338 | |||||
Securities loaned interest payable | 12,154 | 4,124 | |||||
$ | 241,012 | $ | 228,731 |
Investment Management | Investment Bank | Cowen Investment Management | Asset Co | Total | |||||||||||||||
(dollars in thousands) | |||||||||||||||||||
Beginning balance - December 31, 2017 | |||||||||||||||||||
Goodwill | $ | 29,026 | $ | 51,337 | $ | — | $ | — | 80,363 | ||||||||||
Accumulated impairment charges | (10,200 | ) | (9,485 | ) | — | — | (19,685 | ) | |||||||||||
Net | 18,826 | 41,852 | — | — | 60,678 | ||||||||||||||
Activity: 2018 | |||||||||||||||||||
Recognized goodwill | — | — | — | ||||||||||||||||
Goodwill impairment charges | — | — | — | ||||||||||||||||
Ending balance: December 31, 2018 | |||||||||||||||||||
Goodwill | 29,026 | 51,337 | — | — | 80,363 | ||||||||||||||
Accumulated impairment charges | (10,200 | ) | (9,485 | ) | — | — | (19,685 | ) | |||||||||||
Net | 18,826 | 41,852 | — | — | 60,678 | ||||||||||||||
Activity: 2019 | |||||||||||||||||||
Recognized goodwill (See note 3) | — | 81,150 | — | — | 81,150 | ||||||||||||||
Realignment of segment goodwill: | |||||||||||||||||||
Goodwill | (29,026 | ) | — | 22,705 | 6,321 | — | |||||||||||||
Accumulated impairment charges | 10,200 | — | (7,979 | ) | (2,221 | ) | — | ||||||||||||
Goodwill impairment charges | — | — | — | (4,100 | ) | (4,100 | ) | ||||||||||||
Ending balance: June 30, 2019 | |||||||||||||||||||
Goodwill | — | 132,487 | 22,705 | 6,321 | 161,513 | ||||||||||||||
Accumulated impairment charges | — | (9,485 | ) | (7,979 | ) | (6,321 | ) | (23,785 | ) | ||||||||||
Net | $ | — | $ | 123,002 | $ | 14,726 | $ | — | $ | 137,728 |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Redeemable non-controlling interests in consolidated subsidiaries and investment funds | |||||||
Operating companies | $ | 22,857 | $ | 10,434 | |||
Consolidated Funds | 417,455 | 274,346 | |||||
$ | 440,312 | $ | 284,780 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | |||||||||||||||
Operating companies | $ | 853 | $ | 1,954 | $ | 2,659 | $ | 3,574 | |||||||
Consolidated Funds | 3,478 | 22,653 | 3,878 | 32,189 | |||||||||||
$ | 4,331 | $ | 24,607 | $ | 6,537 | $ | 35,763 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Incurred and paid claims | $ | 4,013 | $ | 4,112 | $ | 6,920 | $ | 7,729 | |||||||
Claims IBNR | 756 | 156 | 10,891 | 8,411 |
Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | ||||||||||||
Nonvested Restricted Class A Common Shares and Class A Common Restricted Stock Units | Weighted-Average Grant Date Fair Value | Nonvested Restricted Class A Common Shares and Class A Common Restricted Stock Units | Weighted-Average Grant Date Fair Value | ||||||||||
Beginning balance outstanding | 5,962,295 | $ | 15.73 | 5,579,293 | $ | 16.33 | |||||||
Granted | 2,194,230 | 16.67 | 2,179,443 | 14.26 | |||||||||
Vested | (1,282,843 | ) | 16.21 | (1,390,392 | ) | 16.11 | |||||||
Canceled | (233,333 | ) | 14.12 | — | — | ||||||||
Forfeited | (153,399 | ) | 13.94 | (44,556 | ) | 13.86 | |||||||
Ending balance outstanding | 6,486,950 | $ | 16.06 | 6,323,788 | $ | 15.68 |
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | ||||||
(dollars in thousands) | |||||||
Lease Cost | |||||||
Operating lease cost | $ | 6,063 | $ | 12,066 | |||
Short-term lease cost | 74 | 91 | |||||
Variable lease cost | 147 | 446 | |||||
Sublease income | (240 | ) | (507 | ) | |||
Total lease costs | $ | 6,044 | $ | 12,096 |
Six Months Ended June 30, 2019 | |||
(dollars in thousands) | |||
Other Information | |||
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ | 13,786 | |
Weighted average remaining lease term - operating leases (in Years) | 5.72 | ||
Weighted average discount rate - operating leases | 4.14 | % |
Equipment Leases (operating) | Real Estate and Other Facility Rental (a) (b) | ||||||
(dollars in thousands) | |||||||
2019 | $ | 307 | $ | 11,893 | |||
2020 | 289 | 24,020 | |||||
2021 | 48 | 23,486 | |||||
2022 | 5 | 20,249 | |||||
2023 | — | 17,179 | |||||
Thereafter | — | 25,925 | |||||
Total Operating Leases | 649 | 122,752 | |||||
Less discount | 16 | 16,421 | |||||
Less short term leases | — | 91 | |||||
Total Lease Liability | $ | 633 | $ | 106,240 |
(a) | The Company has entered into various agreements to sublease certain of its premises. |
(b) | In second quarter of 2019, the Company recognized operating ROU assets and leases liabilities of $3.9 million for real estate leases. |
Equipment Leases (a) | Service Payments | Real Estate and other Facility Rental (b) | |||||||||
(dollars in thousands) | |||||||||||
2019 | $ | 2,434 | $ | 21,758 | $ | 24,584 | |||||
2020 | 1,492 | 7,514 | 22,608 | ||||||||
2021 | 1,382 | 1,877 | 22,321 | ||||||||
2022 | 1,123 | 1,372 | 19,166 | ||||||||
2023 | 374 | 735 | 16,204 | ||||||||
Thereafter | — | 735 | 21,478 | ||||||||
$ | 6,805 | $ | 33,991 | $ | 126,361 |
(a) | Equipment Leases includes the Company's commitments relating to operating and capital leases. See Note 18 for further information on the capital lease minimum payments which are included in the table. |
(b) | The Company has entered into various agreements to sublease certain of its premises. The Company recorded sublease income related to these leases of $1.4 million, $1.1 million, and $2.2 million for the years ended December 31, 2018, 2017, and 2016 respectively. |
Service Payments | ||||
(dollars in thousands) | ||||
2019 | $ | 11,827 | ||
2020 | 10,319 | |||
2021 | 5,425 | |||
2022 | 5,198 | |||
2023 | 3,573 | |||
Thereafter | 6,331 | |||
Total Operating Leases | $ | 42,673 |
Entity | Unfunded Commitments | Commitment term | ||||
(dollars in thousands) | ||||||
Real estate (a) | $ | 23,749 | (a) | |||
HealthCare Royalty Partners funds (b) | 5,665 | 2 years | ||||
Eclipse Ventures Fund I, L.P. (formerly Formation8 Partners Hardware Fund I, L.P.) | 119 | 5 years | ||||
Lagunita Biosciences, LLC | 500 | 3 years | ||||
Eclipse Fund II, L.P. | 225 | 6 years | ||||
Eclipse Continuity Fund I, L.P. | 210 | 7 years | ||||
Cowen Healthcare Investments II LP | 6,891 | 2 years |
As of June 30, 2019 | As of December 31, 2018 | ||||||
(dollars in thousands) | |||||||
Convertible debt | $ | 116,273 | $ | 134,489 | |||
Notes payable | 281,544 | 229,740 | |||||
Term loan | 28,200 | 28,200 | |||||
Other notes payable | 1,189 | — | |||||
Finance lease obligations | 4,357 | 5,025 | |||||
$ | 431,563 | $ | 397,454 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Lease Cost | |||||||||||||||
Finance Lease Cost: | |||||||||||||||
Amortization of finance lease right-of-use assets | $ | 299 | $ | 363 | $ | 667 | $ | 715 | |||||||
Interest on lease liabilities | 56 | 52 | 118 | 97 | |||||||||||
Other Information | |||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||
Operating cash flows from finance leases | 118 | 97 | |||||||||||||
Financing cash flows from finance leases | $ | 668 | $ | 1,133 |
Convertible Debt | Notes Payable | Term loan | Other Notes Payable | Finance Lease Obligation | |||||||||||||||
(dollars in thousands) | |||||||||||||||||||
2019 | $ | 2,025 | $ | 10,868 | $ | 863 | $ | 1,214 | $ | 571 | |||||||||
2020 | 4,050 | 21,736 | 29,034 | — | 1,358 | ||||||||||||||
2021 | 4,050 | 21,736 | — | — | 1,358 | ||||||||||||||
2022 | 139,050 | 21,736 | — | — | 1,127 | ||||||||||||||
2023 | — | 21,736 | — | — | 374 | ||||||||||||||
Thereafter | — | 407,118 | — | — | — | ||||||||||||||
Subtotal | 149,175 | 504,930 | 29,897 | 1,214 | 4,788 | ||||||||||||||
Less (a) | (32,902 | ) | (223,386 | ) | (1,697 | ) | (25 | ) | (431 | ) | |||||||||
Total | $ | 116,273 | $ | 281,544 | $ | 28,200 | $ | 1,189 | $ | 4,357 |
(a) | Amount necessary to reduce net minimum payments to present value calculated at the Company's implicit rate at inception. This amount also includes capitalized debt costs and the unamortized discount on the convertible debt. |
Location | Amount | Maturity | ||||
(dollars in thousands) | ||||||
Boston | $ | 390 | March 2020 | |||
New York | $ | 356 | April 2020 | |||
New York | $ | 71 | October 2019 | |||
New York | $ | 398 | October 2019 | |||
New York | $ | 1,687 | October 2019 | |||
New York | $ | 1,617 | November 2019 | |||
San Francisco | $ | 711 | October 2025 |
Treasury stock shares | Cost (dollars in thousands) | Average cost per share | ||||||||
Balance outstanding at December 31, 2018 | 15,336,871 | $ | 234,142 | $ | 15.27 | |||||
Shares purchased for minimum tax withholding under the Equity Plans or other similar transactions | 542,444 | 8,079 | 14.89 | |||||||
Shares of stock received in respect of indemnification claims | 8,068 | 121 | 15.04 | |||||||
Purchase of treasury stock | 777,230 | 12,015 | 15.46 | |||||||
Balance outstanding at June 30, 2019 | 16,664,613 | $ | 254,357 | $ | 15.26 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Beginning Balance | $ | (5 | ) | $ | (7 | ) | $ | (5 | ) | $ | (8 | ) | |||
Foreign currency translation | 2 | — | 2 | 1 | |||||||||||
Ending Balance | $ | (3 | ) | $ | (7 | ) | $ | (3 | ) | $ | (7 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(dollars in thousands, except share and per share data) | |||||||||||||||
Net income (loss) | $ | 10,143 | $ | 30,006 | $ | 22,132 | $ | 58,015 | |||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | 4,331 | 24,607 | 6,537 | 35,763 | |||||||||||
Net income (loss) attributable to Cowen Inc. | 5,812 | 5,399 | 15,595 | 22,252 | |||||||||||
Preferred stock dividends | 1,698 | 1,698 | 3,396 | 3,396 | |||||||||||
Net income (loss) attributable to Cowen Inc. common stockholders | $ | 4,114 | $ | 3,701 | $ | 12,199 | $ | 18,856 | |||||||
Shares for basic and diluted calculations: | |||||||||||||||
Weighted average shares used in basic computation | 29,769 | 29,769 | 29,766 | 29,688 | |||||||||||
Restricted stock | 1,753 | 951 | 1,806 | 772 | |||||||||||
Weighted average shares used in diluted computation | 31,522 | 30,720 | 31,572 | 30,460 | |||||||||||
Earnings (loss) per share: | |||||||||||||||
Basic | $ | 0.14 | $ | 0.12 | $ | 0.41 | $ | 0.64 | |||||||
Diluted | $ | 0.13 | $ | 0.12 | $ | 0.39 | $ | 0.62 |
Three Months Ended June 30, 2019 | |||||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||
Operating Company | Asset Company | Total Economic Income/(Loss) | Funds Consolidation | Other Adjustments | US GAAP | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||
Investment banking | $ | 104,216 | $ | — | $ | 104,216 | $ | — | $ | 10,489 | (a) | $ | 114,705 | ||||||||||||
Brokerage | 120,672 | — | 120,672 | — | (9,290 | ) | (b) | 111,382 | |||||||||||||||||
Management fees | 9,968 | 500 | 10,468 | (565 | ) | (2,864 | ) | (c) | 7,039 | ||||||||||||||||
Incentive income (loss) | 2,633 | 1,596 | 4,229 | — | (4,221 | ) | (c) | 8 | |||||||||||||||||
Investment income (loss) | (3,141 | ) | 3,626 | 485 | — | (485 | ) | (d) | — | ||||||||||||||||
Interest and dividends | — | — | — | — | 40,047 | (b)(d) | 40,047 | ||||||||||||||||||
Reimbursement from affiliates | — | — | — | (33 | ) | 287 | (e) | 254 | |||||||||||||||||
Reinsurance premiums | — | — | — | — | 14,331 | (f) | 14,331 | ||||||||||||||||||
Other revenue | 4,304 | 15 | 4,319 | 12 | (3,401 | ) | (f) | 930 | |||||||||||||||||
Consolidated Funds revenues | — | — | — | 3,468 | — | 3,468 | |||||||||||||||||||
Total revenues | 238,652 | 5,737 | 244,389 | 2,882 | 44,893 | 292,164 | |||||||||||||||||||
Interest expense (Economic Income/(Loss)) / Interest and dividend expense (US GAAP) | 5,298 | 1,408 | 6,706 | — | 32,822 | (b)(d) | 39,528 | ||||||||||||||||||
Total net revenues | 233,354 | 4,329 | 237,683 | 2,882 | 12,071 | 252,636 | |||||||||||||||||||
Expenses | |||||||||||||||||||||||||
Non interest expense | 215,808 | 3,011 | 218,819 | — | 21,962 | (a)(e)(h)(i) | 240,781 | ||||||||||||||||||
Goodwill impairments | — | — | — | — | 4,100 | 4,100 | |||||||||||||||||||
Consolidated Funds expenses | — | — | — | 2,231 | — | 2,231 | |||||||||||||||||||
Total expenses | 215,808 | 3,011 | 218,819 | 2,231 | 26,062 | 247,112 | |||||||||||||||||||
Total other income (loss) | — | — | — | 2,827 | 6,865 | (c)(d)(i) | 9,692 | ||||||||||||||||||
Income taxes expense / (benefit) | — | — | — | — | 5,073 | (h) | 5,073 | ||||||||||||||||||
Income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | 1,448 | 235 | 1,683 | 3,478 | (830 | ) | 4,331 | ||||||||||||||||||
Income (loss) attributable to Cowen Inc. | 16,098 | 1,083 | 17,181 | — | (11,369 | ) | 5,812 | ||||||||||||||||||
Less: Preferred stock dividends | 1,341 | 357 | 1,698 | — | — | 1,698 | |||||||||||||||||||
Economic income (loss) / Income (loss) attributable to Cowen Inc. common stockholders | 14,757 | 726 | 15,483 | $ | — | $ | (11,369 | ) | $ | 4,114 | |||||||||||||||
Add back: Depreciation and amortization expense | 4,945 | 7 | 4,952 | ||||||||||||||||||||||
Economic operating income (loss) | $ | 19,702 | $ | 733 | $ | 20,435 |
Three Months Ended June 30, 2018 | |||||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||
Operating Company | Asset Company | Total Economic Income/(Loss) | Funds Consolidation | Other Adjustments | US GAAP | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||
Investment banking | $ | 80,042 | $ | — | $ | 80,042 | $ | — | $ | 4,784 | (a) | $ | 84,826 | ||||||||||||
Brokerage | 113,186 | — | 113,186 | — | (9,901 | ) | (b) | 103,285 | |||||||||||||||||
Management fees | 10,938 | 1,548 | 12,486 | (612 | ) | (4,501 | ) | (c) | 7,373 | ||||||||||||||||
Incentive income (loss) | 12,321 | (2,958 | ) | 9,363 | (8 | ) | (9,307 | ) | (c) | 48 | |||||||||||||||
Investment income (loss) | 18,476 | 1,478 | 19,954 | — | (19,954 | ) | (d)(g) | — | |||||||||||||||||
Interest and dividends | — | — | — | — | 25,109 | (b)(d) | 25,109 | ||||||||||||||||||
Reimbursement from affiliates | — | — | — | (65 | ) | 401 | (e) | 336 | |||||||||||||||||
Aircraft lease revenue | — | — | — | — | 419 | (g) | 419 | ||||||||||||||||||
Reinsurance premiums | — | — | — | — | 9,226 | (f) | 9,226 | ||||||||||||||||||
Other revenue | (811 | ) | 90 | (721 | ) | — | 1,597 | (f) | 876 | ||||||||||||||||
Consolidated Funds revenues | — | — | — | 3,075 | — | 3,075 | |||||||||||||||||||
Total revenues | 234,152 | 158 | 234,310 | 2,390 | (2,127 | ) | 234,573 | ||||||||||||||||||
Interest expense (Economic Income/(Loss)) / Interest and dividend expense (US GAAP) | 3,134 | 990 | 4,124 | — | 20,182 | (b)(d) | $ | 24,306 | |||||||||||||||||
Total net revenues | 231,018 | (832 | ) | 230,186 | 2,390 | (22,309 | ) | 210,267 | |||||||||||||||||
Expenses | |||||||||||||||||||||||||
Non interest expense | 203,684 | 2,281 | 205,965 | — | 14,302 | (a)(e)(h)(i) | 220,267 | ||||||||||||||||||
Consolidated Funds expenses | — | — | — | 3,149 | — | 3,149 | |||||||||||||||||||
Total expenses | 203,684 | 2,281 | 205,965 | 3,149 | 14,302 | 223,416 | |||||||||||||||||||
Total other income (loss) | — | — | — | 23,411 | 23,737 | (c)(d)(i)(j) | 47,148 | ||||||||||||||||||
Income taxes expense / (benefit) | — | — | — | — | 3,993 | (h) | 3,993 | ||||||||||||||||||
Income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | 1,672 | 808 | 2,480 | 22,652 | (525 | ) | 24,607 | ||||||||||||||||||
Income (loss) attributable to Cowen Inc. | 25,662 | (3,921 | ) | 21,741 | — | (16,342 | ) | 5,399 | |||||||||||||||||
Less: Preferred stock dividends | 1,290 | 408 | 1,698 | — | — | 1,698 | |||||||||||||||||||
Economic income (loss) / Income (loss) attributable to Cowen Inc. common stockholders | 24,372 | (4,329 | ) | 20,043 | $ | — | $ | (16,342 | ) | $ | 3,701 | ||||||||||||||
Add back: Depreciation and amortization expense | 2,913 | 46 | 2,959 | ||||||||||||||||||||||
Economic operating income (loss) | $ | 27,285 | $ | (4,283 | ) | $ | 23,002 |
Six Months Ended June 30, 2019 | |||||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||
Operating Company | Asset Company | Total Economic Income (Loss) | Funds Consolidation | Other Adjustments | US GAAP Net Income (Loss) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||
Investment banking | $ | 187,212 | $ | — | $ | 187,212 | $ | — | $ | 7,599 | (a) | $ | 194,811 | ||||||||||||
Brokerage | 225,829 | — | 225,829 | — | (16,984 | ) | (b) | 208,845 | |||||||||||||||||
Management fees | 19,695 | 1,203 | 20,898 | (1,066 | ) | (5,652 | ) | (c) | 14,180 | ||||||||||||||||
Incentive income (loss) | 19,270 | 1,706 | 20,976 | (544 | ) | (20,409 | ) | (c) | 23 | ||||||||||||||||
Investment income (loss) | 13,001 | 4,467 | 17,468 | — | (17,468 | ) | (d) | — | |||||||||||||||||
Interest and dividends | — | — | — | — | 69,139 | (b)(d) | 69,139 | ||||||||||||||||||
Reimbursement from affiliates | — | — | — | (67 | ) | 609 | (e) | 542 | |||||||||||||||||
Reinsurance premiums | — | — | — | — | 20,922 | (f) | 20,922 | ||||||||||||||||||
Other revenue | 5,427 | 51 | 5,478 | 12 | (3,499 | ) | (f) | 1,991 | |||||||||||||||||
Consolidated Funds revenues | — | — | — | 5,808 | — | 5,808 | |||||||||||||||||||
Total revenues | 470,434 | 7,427 | 477,861 | 4,143 | 34,257 | 516,261 | |||||||||||||||||||
Interest expense (Economic Income/(Loss)) / Interest and dividend expense (US GAAP) | 10,615 | 2,655 | 13,270 | — | 55,342 | (b)(d) | 68,612 | ||||||||||||||||||
Total net revenues | 459,819 | 4,772 | 464,591 | 4,143 | (21,085 | ) | 447,649 | ||||||||||||||||||
Expenses | |||||||||||||||||||||||||
Non interest expense | 421,562 | 4,442 | 426,004 | — | 34,084 | (a)(e)(h)(i) | 460,088 | ||||||||||||||||||
Goodwill impairment | — | — | — | — | 4,100 | 4,100 | |||||||||||||||||||
Consolidated Funds expenses | — | — | — | 3,713 | — | 3,713 | |||||||||||||||||||
Total expenses | 421,562 | 4,442 | 426,004 | 3,713 | 38,184 | 467,901 | |||||||||||||||||||
Total other income (loss) | — | — | — | 3,448 | 47,186 | (c)(d)(i) | 50,634 | ||||||||||||||||||
Income taxes expense / (benefit) | — | — | — | — | 8,250 | (h) | 8,250 | ||||||||||||||||||
Income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | 3,250 | 1,181 | 4,431 | 3,878 | (1,772 | ) | 6,537 | ||||||||||||||||||
Income (loss) attributable to Cowen Inc. | 35,007 | (851 | ) | 34,156 | — | (18,561 | ) | $ | 15,595 | ||||||||||||||||
Less: Preferred stock dividends | 2,717 | 679 | 3,396 | — | — | 3,396 | |||||||||||||||||||
Economic income (loss) / Income (loss) attributable to Cowen Inc. common stockholders | 32,290 | (1,530 | ) | 30,760 | $ | — | $ | (18,561 | ) | $ | 12,199 | ||||||||||||||
Add back: Depreciation and amortization expense | 9,884 | 24 | 9,908 | ||||||||||||||||||||||
Economic operating income (loss) | $ | 42,174 | $ | (1,506 | ) | $ | 40,668 |
Six Months Ended June 30, 2018 | |||||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||
Operating Company | Asset Company | Total Economic Income (Loss) | Funds Consolidation | Other Adjustments | US GAAP Net Income (Loss) | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||
Investment banking | $ | 173,966 | $ | — | $ | 173,966 | $ | — | $ | 8,848 | (a) | $ | 182,814 | ||||||||||||
Brokerage | 227,257 | — | 227,257 | — | (18,239 | ) | (b) | 209,018 | |||||||||||||||||
Management fees | 22,217 | 3,396 | 25,613 | (1,815 | ) | (9,008 | ) | (c) | 14,790 | ||||||||||||||||
Incentive income (loss) | 15,360 | (801 | ) | 14,559 | (17 | ) | (14,478 | ) | (c) | 64 | |||||||||||||||
Investment income (loss) | 36,710 | (2,454 | ) | 34,256 | — | (34,256 | ) | (d)(g) | — | ||||||||||||||||
Interest and dividends | — | — | — | — | 51,063 | (b)(d) | 51,063 | ||||||||||||||||||
Reimbursement from affiliates | — | — | — | (133 | ) | 846 | (e) | 713 | |||||||||||||||||
Aircraft lease revenue | — | — | — | — | 1,134 | (g) | 1,134 | ||||||||||||||||||
Reinsurance premiums | — | — | — | — | 17,873 | (f) | 17,873 | ||||||||||||||||||
Other revenue | (147 | ) | 313 | 166 | — | 2,046 | (f) | 2,212 | |||||||||||||||||
Consolidated Funds revenues | — | — | — | 6,276 | — | 6,276 | |||||||||||||||||||
Total revenues | 475,363 | 454 | 475,817 | 4,311 | 5,829 | 485,957 | |||||||||||||||||||
Interest expense (Economic Income/(Loss)) / Interest and dividend expense (US GAAP) | 7,661 | 2,420 | 10,081 | — | 38,765 | (b)(d) | 48,846 | ||||||||||||||||||
Total net revenues | 467,702 | (1,966 | ) | 465,736 | 4,311 | (32,936 | ) | 437,111 | |||||||||||||||||
Expenses | |||||||||||||||||||||||||
Non interest expense | 410,059 | 5,239 | 415,298 | — | 28,284 | (a)(e)(h)(i) | 443,582 | ||||||||||||||||||
Consolidated Funds expenses | — | — | — | 5,580 | — | 5,580 | |||||||||||||||||||
Total expenses | 410,059 | 5,239 | 415,298 | 5,580 | 28,284 | 449,162 | |||||||||||||||||||
Total other income (loss) | — | — | — | 33,458 | 47,524 | (c)(d)(i)(j) | 80,982 | ||||||||||||||||||
Income taxes expense / (benefit) | — | — | — | — | 10,916 | (h) | 10,916 | ||||||||||||||||||
Income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | 3,812 | 826 | 4,638 | 32,189 | (1,064 | ) | 35,763 | ||||||||||||||||||
Income (loss) attributable to Cowen Inc. | 53,831 | (8,031 | ) | 45,800 | — | (23,548 | ) | 22,252 | |||||||||||||||||
Less: Preferred stock dividends | 2,581 | 815 | 3,396 | — | — | 3,396 | |||||||||||||||||||
Economic income (loss) / Income (loss) attributable to Cowen Inc. common stockholders | 51,250 | (8,846 | ) | 42,404 | $ | — | $ | (23,548 | ) | $ | 18,856 | ||||||||||||||
Add back: Depreciation and amortization expense | 5,842 | 103 | 5,945 | ||||||||||||||||||||||
Economic operating income (loss) | $ | 57,092 | $ | (8,743 | ) | $ | 48,349 |
Subsidiary | Net Capital | Minimum Net Capital Requirement | Excess Net Capital | |||||||||
(dollars in thousands) | ||||||||||||
Cowen and Company | $ | 95,807 | $ | 1,000 | $ | 94,807 | ||||||
Cowen Execution | $ | 116,967 | $ | 2,541 | $ | 114,426 | ||||||
ATM Execution | $ | 5,375 | $ | 250 | $ | 5,125 | ||||||
Cowen Prime | $ | 12,091 | $ | 250 | $ | 11,841 | ||||||
Westminster | $ | 21,602 | $ | 250 | $ | 21,352 | ||||||
Cowen International Ltd | $ | 15,479 | $ | 8,562 | $ | 6,917 | ||||||
Cowen Execution Ltd | $ | 5,158 | $ | 3,087 | $ | 2,071 | ||||||
Cowen and Company (Asia) Limited | $ | 1,092 | $ | 384 | $ | 708 |
Lender | Contractual Amount | Available Amount | Maturity Date | Description | ||||||||
Pledge Lines | (dollars in thousands) | |||||||||||
Texas Capital Bank | $ | 75,000 | $ | 75,000 | None | Secured Depository Trust Company Pledge Line | ||||||
BMO Harris Bank | 75,000 | 75,000 | None | Secured Tri-Party Pledge Facility | ||||||||
BMO Harris Bank | 150,000 | 150,000 | None | Secured Depository Trust Company Pledge Line | ||||||||
Total | 300,000 | 300,000 | ||||||||||
Revolving Credit Facility | ||||||||||||
BMO Harris Bank Canadian Imperial Bank of Commerce Texas Capital Bank | 70,000 | 70,000 | August 23, 2019 | (Syndicated) Unsecured liquidity facility to cover increases in National Securities Clearing Corporation margin deposit requirements | ||||||||
Total Credit Lines | $ | 370,000 | $ | 370,000 |
• | Investment performance. Our revenues from incentive income are linked to the performance of the investment funds and accounts that we manage. Performance also affects assets under management because it influences investors' decisions to invest assets in, or withdraw assets from, the investment funds and accounts managed by us. |
• | Fee and allocation rates. Our management fee revenues are linked to the management fee rates we charge as a percentage of contributed and invested capital. Our incentive income revenues are linked to the incentive allocation rates we charge as a percentage of performance-driven asset growth. Our incentive allocations are generally subject to |
• | Investment performance of our own capital. We invest our own capital and the performance of such invested capital affects our revenues. |
• | Underwriting, private placement and strategic/financial advisory fees. Our revenues from investment banking are directly linked to the underwriting fees we earn in equity and debt securities offerings in which the Company acts as an underwriter, private placement fees earned in non-underwritten transactions, sales commissions earned in at-the-market offerings and success fees earned in connection with advising both buyers and sellers, principally in mergers and acquisitions. As a result, the future performance of our investment banking business will depend on, among other things, our ability to secure lead manager and co-manager roles in clients' capital raising transactions as well as our ability to secure mandates as a client's strategic financial advisor. |
• | Commissions. Our commission revenues depend for the most part on our customer trading volumes and on the notional value of the non-U.S. securities traded by our customers. |
• | Principal transactions. Principal transactions revenue includes net trading gains and losses from the Company's market-making activities and net trading gains and losses on inventory and other Company positions. Commissions associated with these transactions are also included herein. In certain cases, the Company provides liquidity to clients buying or selling blocks of shares of listed stocks without previously identifying the other side of the trade at execution, which subjects the Company to market risk. |
• | Equity and credit research fees. Equity and credit research fees are paid to the Company for providing its equity and credit research. The Company also permits institutional customers to allocate a portion of their commissions to pay for research products and other services provided by third parties. Our ability to generate revenues relating to our equity and credit research depends on the quality of our research and its relevance to our institutional customers and other clients. |
• | Investment performance of our own capital. Investment income in the investment bank business includes gains and losses generated by the capital the Company invests in private capital raising transactions of its investment banking clients. Our revenues from investment income are linked to the performance of the underlying investments. |
• | Liquidity. As a clearing broker-dealer in the U.S., we are subject to cash deposit requirements with clearing organizations, brokers and banks that may be large in relation to our total liquid assets. |
• | Our investment bank business has been, and may continue to be, adversely affected by market conditions. Increased competition continues to affect our investment banking and capital markets businesses. The same factors also affect trading volumes in secondary financial markets, which affect our brokerage business. Commission rates, market volatility, increased competition from larger financial firms and other factors also affect our brokerage revenues and may cause these revenues to vary from period to period. |
• | Our investment bank business focuses primarily on small to mid-capitalization and private companies in specific industry sectors. These sectors may experience growth or downturns independent of general economic and market conditions, or may face market conditions that are disproportionately better or worse than those impacting the economy and markets generally. In addition, increased government regulation has had, and may continue to have, a disproportionate effect on capital formation by smaller companies. Therefore, our investment bank business could be affected differently than overall market trends. |
• | Our investment management business can be adversely affected by unanticipated levels of requested redemptions. We experienced significant levels of requested redemptions during the 2008 financial crisis and, while the environment for investing in investment management products has since improved, it is possible that we could intermittently experience redemptions above historical levels, regardless of investment fund performance. |
• | The Op Co segment consists of four divisions: Cowen Investment Management (“CIM”), Investment Banking, Markets, and Research. Each of Op Co’s four divisions leverage the Research division’s core domain expertise to drive harmonized repeatable revenue for the segment. |
– | The CIM division offers innovative investment products and solutions across the liquidity spectrum to institutional and private clients. CIM offers investors access to a number of strategies to meet their specific needs including merger arbitrage, activism, healthcare royalties, private healthcare investing and private sustainable investing which leverage the content and domain expertise that are aligned with the Company's core areas of expertise ("Cowen DNA"). |
– | The Investment Banking division includes public and private capital raising transactions and providing strategic advisory services. |
– | The Markets division includes trading equity and equity-linked securities on behalf of institutional investors as well as a full-service suite of prime brokerage services, cross-asset trading, securities finance, global execution, clearing and commission management businesses. |
– | The Research division provides the thought leadership and domain expertise that drives Cowen DNA. The research content that is created helps to facilitate brokerage revenue in the Markets division, drive deal flow in the Investment Banking division and facilitate investor relationships and investing within CIM’s innovative investment products and solutions. |
• | The Asset Co segment consists of certain of the Company’s private investments, private real estate business and other legacy multi-strategy funds. While the Asset Co segment is not a reportable segment, the Company will provide segment level information for Asset Co. |
• | Compensation and Benefits. Compensation and benefits is comprised of salaries, benefits, discretionary cash bonuses and equity-based compensation. Annual incentive compensation is variable, and the amount paid is generally based on a combination of employees' performance, their contribution to their business segment, and the Company's performance. Generally, compensation and benefits comprise a significant portion of total expenses, with annual incentive compensation comprising a significant portion of total compensation and benefits expenses. |
• | Reinsurance claims, commissions and amortization of deferred acquisition costs. Reinsurance related expenses reflect loss and claim reserves, acquisition costs and other expenses incurred with respect to our insurance and reinsurance operations. |
• | General, Administrative and Other. General, administrative and other expenses are primarily related to professional services, occupancy and equipment, business development expenses, communications, expenses associated with our reinsurance business and other miscellaneous expenses. These expenses may also include certain one-time charges and non-cash expenses. |
• | Consolidated Funds Expenses. The Company's condensed consolidated financial statements reflect the expenses of the Consolidated Funds and the portion attributable to other investors is allocated to a redeemable non-controlling interest. |
Strategy | Net Value | % of Stockholders' Equity | |||
(dollars in millions) | |||||
Op Co | |||||
Broker dealer capital and related trading | $ | 400.3 | 49% | ||
Public and Private Healthcare | 57.3 | 7% | |||
Liquid Alternative Trading | 71.4 | 9% | |||
Asset Co | |||||
Private Investments | 128.6 | 16% | |||
Private Real Estate | 20.4 | 2% | |||
Total | 678.0 | 83% | |||
Stockholders' Equity | $ | 817.4 | 100% |
Condensed Consolidated Statements of Operations | ||||||||||||||
(unaudited) | ||||||||||||||
Three Months Ended June 30, | Period to Period | |||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
(dollars in thousands) | ||||||||||||||
Revenues | ||||||||||||||
Investment banking | $ | 114,705 | $ | 84,826 | $ | 29,879 | 35 | % | ||||||
Brokerage | 111,382 | 103,285 | 8,097 | 8 | % | |||||||||
Management fees | 7,039 | 7,373 | (334 | ) | (5 | )% | ||||||||
Incentive income | 8 | 48 | (40 | ) | (83 | )% | ||||||||
Interest and dividends | 40,047 | 25,109 | 14,938 | 59 | % | |||||||||
Reimbursement from affiliates | 254 | 336 | (82 | ) | (24 | )% | ||||||||
Aircraft lease revenue | — | 419 | (419 | ) | (100 | )% | ||||||||
Reinsurance premiums | 14,331 | 9,226 | 5,105 | 55 | % | |||||||||
Other revenues | 930 | 876 | 54 | 6 | % | |||||||||
Consolidated Funds revenues | 3,468 | 3,075 | 393 | 13 | % | |||||||||
Total revenues | 292,164 | 234,573 | 57,591 | 25 | % | |||||||||
Interest and dividends expense | 39,528 | 24,306 | 15,222 | 63 | % | |||||||||
Total net revenues | 252,636 | 210,267 | 42,369 | 20 | % | |||||||||
Expenses | ||||||||||||||
Employee compensation and benefits | 135,984 | 131,845 | 4,139 | 3 | % | |||||||||
Reinsurance claims, commissions and amortization of deferred acquisition costs | 10,782 | 9,924 | 858 | 9 | % | |||||||||
Operating, general, administrative and other expenses | 89,063 | 75,304 | 13,759 | 18 | % | |||||||||
Depreciation and amortization expense | 4,952 | 3,194 | 1,758 | 55 | % | |||||||||
Goodwill impairment | 4,100 | — | 4,100 | NM | ||||||||||
Consolidated Funds expenses | 2,231 | 3,149 | (918 | ) | (29 | )% | ||||||||
Total expenses | 247,112 | 223,416 | 23,696 | 11 | % | |||||||||
Other income (loss) | ||||||||||||||
Net gains (losses) on securities, derivatives and other investments | 3,910 | 16,719 | (12,809 | ) | (77 | )% | ||||||||
Gain/(loss) on debt extinguishment | — | (556 | ) | 556 | NM | |||||||||
Consolidated Funds net gains (losses) | 5,782 | 30,985 | (25,203 | ) | (81 | )% | ||||||||
Total other income (loss) | 9,692 | 47,148 | (37,456 | ) | (79 | )% | ||||||||
Income (loss) before income taxes | 15,216 | 33,999 | (18,783 | ) | (55 | )% | ||||||||
Income tax expense (benefit) | 5,073 | 3,993 | 1,080 | 27 | % | |||||||||
Net income (loss) | 10,143 | 30,006 | (19,863 | ) | (66 | )% | ||||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | 4,331 | 24,607 | (20,276 | ) | (82 | )% | ||||||||
Net income (loss) attributable to Cowen Inc. | 5,812 | 5,399 | 413 | 8 | % | |||||||||
Preferred stock dividends | 1,698 | 1,698 | — | — | % | |||||||||
Net income (loss) attributable to Cowen Inc. common stockholders | $ | 4,114 | $ | 3,701 | $ | 413 | 11 | % |
Condensed Consolidated Statements of Operations | ||||||||||||||
(unaudited) | ||||||||||||||
Six Months Ended June 30, | Period to Period | |||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
(dollars in thousands) | ||||||||||||||
Revenues | ||||||||||||||
Investment banking | $ | 194,811 | $ | 182,814 | $ | 11,997 | 7 | % | ||||||
Brokerage | 208,845 | 209,018 | (173 | ) | — | % | ||||||||
Management fees | 14,180 | 14,790 | (610 | ) | (4 | )% | ||||||||
Incentive income | 23 | 64 | (41 | ) | (64 | )% | ||||||||
Interest and dividends | 69,139 | 51,063 | 18,076 | 35 | % | |||||||||
Reimbursement from affiliates | 542 | 713 | (171 | ) | (24 | )% | ||||||||
Aircraft lease revenue | — | 1,134 | (1,134 | ) | (100 | )% | ||||||||
Reinsurance premiums | 20,922 | 17,873 | 3,049 | 17 | % | |||||||||
Other revenues | 1,991 | 2,212 | (221 | ) | (10 | )% | ||||||||
Consolidated Funds revenues | 5,808 | 6,276 | (468 | ) | (7 | )% | ||||||||
Total revenues | 516,261 | 485,957 | 30,304 | 6 | % | |||||||||
Interest and dividends expense | 68,612 | 48,846 | 19,766 | 40 | % | |||||||||
Total net revenues | 447,649 | 437,111 | 10,538 | 2 | % | |||||||||
Expenses | ||||||||||||||
Employee compensation and benefits | 266,172 | 266,985 | (813 | ) | — | % | ||||||||
Reinsurance claims, commissions and amortization of deferred acquisition costs | 16,944 | 18,655 | (1,711 | ) | (9 | )% | ||||||||
Operating, general, administrative and other expenses | 167,064 | 151,523 | 15,541 | 10 | % | |||||||||
Depreciation and amortization expense | 9,908 | 6,419 | 3,489 | 54 | % | |||||||||
Goodwill impairment | 4,100 | — | 4,100 | NM | ||||||||||
Consolidated Funds expenses | 3,713 | 5,580 | (1,867 | ) | (33 | )% | ||||||||
Total expenses | 467,901 | 449,162 | 18,739 | 4 | % | |||||||||
Other income (loss) | ||||||||||||||
Net gains (losses) on securities, derivatives and other investments | 42,994 | 32,688 | 10,306 | 32 | % | |||||||||
Gain/(loss) on debt extinguishment | — | (556 | ) | 556 | NM | |||||||||
Consolidated Funds net gains (losses) | 7,640 | 48,850 | (41,210 | ) | (84 | )% | ||||||||
Total other income (loss) | 50,634 | 80,982 | (30,348 | ) | (37 | )% | ||||||||
Income (loss) before income taxes | 30,382 | 68,931 | (38,549 | ) | (56 | )% | ||||||||
Income tax expense (benefit) | 8,250 | 10,916 | (2,666 | ) | (24 | )% | ||||||||
Net income (loss) | 22,132 | 58,015 | (35,883 | ) | (62 | )% | ||||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | 6,537 | 35,763 | (29,226 | ) | (82 | )% | ||||||||
Net income (loss) attributable to Cowen Inc. | 15,595 | 22,252 | (6,657 | ) | (30 | )% | ||||||||
Preferred stock dividends | 3,396 | 3,396 | — | — | % | |||||||||
Net income (loss) attributable to Cowen Inc. common stockholders | $ | 12,199 | $ | 18,856 | $ | (6,657 | ) | (35 | )% |
(unaudited) | ||||||||||||||||||||||||||||||
Three Months Ended June 30, | Total Period-to-Period | |||||||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||||||||
Operating Company | Asset Company | Total | Operating Company | Asset Company | Total | $ Change | % Change | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||
Economic Income Revenues | ||||||||||||||||||||||||||||||
Investment banking | $ | 104,216 | $ | — | $ | 104,216 | $ | 80,042 | $ | — | $ | 80,042 | $ | 24,174 | 30 | % | ||||||||||||||
Brokerage | 120,672 | — | 120,672 | 113,186 | — | 113,186 | 7,486 | 7 | % | |||||||||||||||||||||
Management fees | 9,968 | 500 | 10,468 | 10,938 | 1,548 | 12,486 | (2,018 | ) | (16 | )% | ||||||||||||||||||||
Incentive income (loss) | 2,633 | 1,596 | 4,229 | 12,321 | (2,958 | ) | 9,363 | (5,134 | ) | (55 | )% | |||||||||||||||||||
Investment income (loss) | (3,141 | ) | 3,626 | 485 | 18,476 | 1,478 | 19,954 | (19,469 | ) | (98 | )% | |||||||||||||||||||
Other income (loss) | 4,304 | 15 | 4,319 | (811 | ) | 90 | (721 | ) | 5,040 | (699 | )% | |||||||||||||||||||
Total economic income revenues | 238,652 | 5,737 | 244,389 | 234,152 | 158 | 234,310 | 10,079 | 4 | % | |||||||||||||||||||||
Interest expense | 5,298 | 1,408 | 6,706 | 3,134 | 990 | 4,124 | 2,582 | 63 | % | |||||||||||||||||||||
Total net revenues | $ | 233,354 | $ | 4,329 | $ | 237,683 | $ | 231,018 | $ | (832 | ) | $ | 230,186 | $ | 7,497 | 3 | % |
Three Months Ended June 30, | Period-to-Period | |||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
(dollars in thousands) | ||||||||||||||
Non-compensation expenses—fixed: | ||||||||||||||
Communications | $ | 7,692 | $ | 7,105 | $ | 587 | 8 | % | ||||||
Professional, advisory and other fees | 7,413 | 5,280 | 2,133 | 40 | % | |||||||||
Occupancy and equipment | 10,113 | 9,923 | 190 | 2 | % | |||||||||
Service fees | 5,653 | 4,809 | 844 | 18 | % | |||||||||
Expenses from equity investments | 2,097 | 2,781 | (684 | ) | (25 | )% | ||||||||
Reimbursement from affiliates | (270 | ) | (401 | ) | 131 | (33 | )% | |||||||
Other | 5,717 | 4,967 | 750 | 15 | % | |||||||||
Total | $ | 38,415 | $ | 34,464 | $ | 3,951 | 11 | % |
Three Months Ended June 30, | Period-to-Period | |||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
(dollars in thousands) | ||||||||||||||
Non-compensation expenses—Variable: | ||||||||||||||
Brokerage and trade execution costs | $ | 26,860 | $ | 28,310 | $ | (1,450 | ) | (5 | )% | |||||
Healthcare Royalty Partners syndication costs | 132 | 132 | — | — | % | |||||||||
Expenses related to Luxembourg reinsurance companies | 669 | 924 | (255 | ) | (28 | )% | ||||||||
Marketing and business development | 11,044 | 7,556 | 3,488 | 46 | % | |||||||||
Other | 1,244 | 315 | 929 | 295 | % | |||||||||
Total | $ | 39,949 | $ | 37,237 | $ | 2,712 | 7 | % |
(unaudited) | ||||||||||||||||||||||||||||||
Six Months Ended June 30, | Total Period-to-Period | |||||||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||||||||
Operating Company | Asset Company | Total | Operating Company | Asset Company | Total | $ Change | % Change | |||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||
Economic Income Revenues | ||||||||||||||||||||||||||||||
Investment banking | $ | 187,212 | $ | — | $ | 187,212 | $ | 173,966 | $ | — | $ | 173,966 | $ | 13,246 | 8 | % | ||||||||||||||
Brokerage | 225,829 | — | 225,829 | 227,257 | — | 227,257 | (1,428 | ) | (1 | )% | ||||||||||||||||||||
Management fees | 19,695 | 1,203 | 20,898 | 22,217 | 3,396 | 25,613 | (4,715 | ) | (18 | )% | ||||||||||||||||||||
Incentive income (loss) | 19,270 | 1,706 | 20,976 | 15,360 | (801 | ) | 14,559 | 6,417 | 44 | % | ||||||||||||||||||||
Investment income (loss) | 13,001 | 4,467 | 17,468 | 36,710 | (2,454 | ) | 34,256 | (16,788 | ) | (49 | )% | |||||||||||||||||||
Other income (loss) | 5,427 | 51 | 5,478 | (147 | ) | 313 | 166 | 5,312 | 3,200 | % | ||||||||||||||||||||
Total economic income revenues | 470,434 | 7,427 | 477,861 | 475,363 | 454 | 475,817 | 2,044 | — | % | |||||||||||||||||||||
Interest expense | 10,615 | 2,655 | 13,270 | 7,661 | 2,420 | 10,081 | 3,189 | 32 | % | |||||||||||||||||||||
Total net revenues | $ | 459,819 | $ | 4,772 | $ | 464,591 | $ | 467,702 | $ | (1,966 | ) | $ | 465,736 | $ | (1,145 | ) | — | % |
Six Months Ended June 30, | Period-to-Period | |||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
(dollars in thousands) | ||||||||||||||
Non-compensation expenses—fixed: | ||||||||||||||
Communications | $ | 15,394 | $ | 14,653 | $ | 741 | 5 | % | ||||||
Professional, advisory and other fees | 14,184 | 11,033 | 3,151 | 29 | % | |||||||||
Occupancy and equipment | 19,691 | 19,404 | 287 | 1 | % | |||||||||
Service fees | 11,308 | 9,975 | 1,333 | 13 | % | |||||||||
Expenses from equity investments | 3,620 | 5,657 | (2,037 | ) | (36 | )% | ||||||||
Reimbursement from affiliates | (600 | ) | (844 | ) | 244 | (29 | )% | |||||||
Other | 9,693 | 8,821 | 872 | 10 | % | |||||||||
Total | $ | 73,290 | $ | 68,699 | $ | 4,591 | 7 | % |
Six Months Ended June 30, | Period-to-Period | |||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
(dollars in thousands) | ||||||||||||||
Non-compensation expenses—Variable: | ||||||||||||||
Brokerage and trade execution costs | $ | 52,292 | $ | 56,936 | $ | (4,644 | ) | (8 | )% | |||||
HealthCare Royalty Partners syndication costs | 264 | 264 | — | — | % | |||||||||
Expenses related to Luxembourg companies | 1,498 | 1,695 | (197 | ) | (12 | )% | ||||||||
Marketing and business development | 22,047 | 15,447 | 6,600 | 43 | % | |||||||||
Other | 1,523 | 882 | 641 | 73 | % | |||||||||
Total | $ | 77,624 | $ | 75,224 | $ | 2,400 | 3 | % |
• | pay our operating expenses, primarily consisting of compensation and benefits, interest on debt and other general and administrative expenses; and |
• | provide capital to facilitate the growth of our existing business. |
Entity | Unfunded Commitments | Commitment term | ||||
(dollars in thousands) | ||||||
Real estate (a) | $ | 23,749 | (a) | |||
HealthCare Royalty Partners funds (b) | 5,665 | 2 years | ||||
Eclipse Ventures Fund I, L.P. (formerly Formation8 Partners Hardware Fund I, L.P.) | 119 | 5 years | ||||
Lagunita Biosciences, LLC | 500 | 3 years | ||||
Eclipse Fund II, L.P. | 225 | 6 years | ||||
Eclipse Continuity Fund I, L.P. | 210 | 7 years | ||||
Cowen Healthcare Investments II LP | 6,891 | 2 years |
Subsidiary | Net Capital | Net Capital Requirement | Excess Net Capital | |||||||||
(dollars in thousands) | ||||||||||||
Cowen and Company | $ | 95,807 | $ | 1,000 | $ | 94,807 | ||||||
Cowen Execution | $ | 116,967 | $ | 2,541 | $ | 114,426 | ||||||
ATM Execution | $ | 5,375 | $ | 250 | $ | 5,125 | ||||||
Cowen Prime | $ | 12,091 | $ | 250 | $ | 11,841 | ||||||
Westminster | $ | 21,602 | $ | 250 | $ | 21,352 | ||||||
Cowen International Ltd | $ | 15,479 | $ | 8,562 | $ | 6,917 | ||||||
Cowen Execution Ltd | $ | 5,158 | $ | 3,087 | $ | 2,071 | ||||||
Cowen and Company (Asia) Limited | $ | 1,092 | $ | 384 | $ | 708 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Lease Cost | |||||||||||||||
Finance Lease Cost: | |||||||||||||||
Amortization of finance lease right-of-use assets | $ | 299 | $ | 363 | $ | 667 | $ | 715 | |||||||
Interest on lease liabilities | 56 | 52 | 118 | 97 | |||||||||||
Other Information | |||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||
Operating cash flows from finance leases | 118 | 97 | |||||||||||||
Financing cash flows from finance leases | $ | 668 | $ | 1,133 |
Location | Amount | Maturity | ||||
(dollars in thousands) | ||||||
Boston | $ | 390 | March 2020 | |||
New York | $ | 356 | April 2020 | |||
New York | $ | 71 | October 2019 | |||
New York | $ | 398 | October 2019 | |||
New York | $ | 1,687 | October 2019 | |||
New York | $ | 1,617 | November 2019 | |||
San Francisco | $ | 711 | October 2025 |
Total | < 1 Year | 1-3 Years | 3-5 Years | More Than 5 Years | |||||||||||||||
(dollars in thousands) | |||||||||||||||||||
Equipment, Aircraft, Service and Facility Leases | |||||||||||||||||||
Real Estate and Other Facility Rental | $ | 122,752 | $ | 11,893 | $ | 47,506 | $ | 37,428 | $ | 25,925 | |||||||||
Service Payments | 42,673 | 11,827 | 15,744 | 8,771 | 6,331 | ||||||||||||||
Operating Equipment Leases | 544 | 202 | 337 | 5 | — | ||||||||||||||
Aircraft Lease | 105 | 105 | — | — | — | ||||||||||||||
Total | 166,074 | 24,027 | 63,587 | 46,204 | 32,256 | ||||||||||||||
Debt | |||||||||||||||||||
Convertible Debt | 149,175 | 2,025 | 8,100 | 139,050 | — | ||||||||||||||
Notes Payable | 504,930 | 10,868 | 43,472 | 43,472 | 407,118 | ||||||||||||||
Finance Lease Obligation | 4,788 | 571 | 2,716 | 1,501 | — | ||||||||||||||
Term Loan | 29,897 | 863 | 29,034 | — | — | ||||||||||||||
Other Notes Payable | 1,214 | 1,214 | — | — | — | ||||||||||||||
Total | $ | 690,004 | $ | 15,541 | $ | 83,322 | $ | 184,023 | $ | 407,118 |
Convertible Debt | Notes Payable | Term Loan | Other Notes Payable | Finance Lease Obligation | |||||||||||||||
(dollars in thousands) | |||||||||||||||||||
2019 | $ | 2,025 | $ | 10,868 | $ | 863 | $ | 1,214 | $ | 571 | |||||||||
2020 | 4,050 | 21,736 | 29,034 | — | 1,358 | ||||||||||||||
2021 | 4,050 | 21,736 | — | — | 1,358 | ||||||||||||||
2022 | 139,050 | 21,736 | — | — | 1,127 | ||||||||||||||
2023 | — | 21,736 | — | — | 374 | ||||||||||||||
Thereafter | — | 407,118 | — | — | — | ||||||||||||||
Subtotal | 149,175 | 504,930 | 29,897 | 1,214 | 4,788 | ||||||||||||||
Less (a) | (32,902 | ) | (223,386 | ) | (1,697 | ) | (25 | ) | (431 | ) | |||||||||
Total | $ | 116,273 | $ | 281,544 | $ | 28,200 | $ | 1,189 | $ | 4,357 |
(a) | Amount necessary to reduce net minimum payments to present value calculated at the Company's implicit rate at inception. This amount also includes capitalized debt costs and the unamortized discount on the convertible debt. |
i. | Portfolio funds—Portfolio funds include interests in private investment partnerships, foreign investment companies and other collective investment vehicles which may be managed by the Company or its affiliates. The Company follows US GAAP regarding fair value measurements and disclosures relating to investments in certain entities that calculate net asset value (“NAV”) per share (or its equivalent). The guidance permits, as a practical expedient, an entity holding investments in certain entities that either are investment companies as defined by the American Institute of Certified Public Accountants ("AICPA") Audit and Accounting Guide, Investment Companies, or have attributes |
ii. | Real estate investments—Real estate debt and equity investments are valued at fair value. The fair value of real estate investments is estimated based on the price that would be received to sell an asset in an orderly transaction between marketplace participants at the measurement date. Real estate investments without a public market are valued based on assumptions and valuation techniques used by the Company. Such valuation techniques may include discounted cash flow analysis, prevailing market capitalization rates or earnings multiples applied to earnings from the investment, analysis of recent comparable sales transactions, actual sale negotiations and bona fide purchase offers received from third parties, consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence, as well as independent external appraisals. In general, the Company considers several valuation techniques when measuring the fair value of a real estate investment. However, in certain circumstances, a single valuation technique may be appropriate. Real estate investments are reviewed on a quarterly basis by the Company for significant changes at the property level or a significant change in the overall market which would impact the value of the real estate investment resulting in unrealized appreciation or depreciation. |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||
Month 4 (April 1, 2019 – April 30, 2019) | ||||||||||||||
Common stock repurchases(1) | — | $ | — | — | $ | 25,000,000 | ||||||||
Employee transactions(2) | 8,961 | 14.65 | — | — | ||||||||||
Other (3) | — | — | — | — | ||||||||||
Total | 8,961 | $ | 14.48 | — | ||||||||||
Month 5 (May 1, 2019 – May 31, 2019) | ||||||||||||||
Common stock repurchases(1) | — | $ | — | — | $ | 25,000,000 | ||||||||
Employee transactions(2) | 8,903 | 15.87 | — | — | ||||||||||
Other (3) | 4,737 | 15.40 | — | — | ||||||||||
Total | 13,640 | $ | 15.71 | — | ||||||||||
Month 6 (June 1, 2019 – June 30, 2019) | ||||||||||||||
Common stock repurchases(1) | 461,830 | $ | 15.93 | 461,830 | $ | 17,643,131 | ||||||||
Employee transactions(2) | 201,353 | 15.57 | — | — | ||||||||||
Other (3) | — | — | — | — | ||||||||||
Total | 663,183 | $ | 15.82 | 461,830 | ||||||||||
Total (April 1, 2019 – June 30, 2019) | ||||||||||||||
Common stock repurchases(1) | 461,830 | $ | 15.93 | 461,830 | $ | 17,643,131 | ||||||||
Employee transactions(2) | 219,217 | 15.55 | — | — | ||||||||||
Other (3) | 4,737 | 15.40 | — | — | ||||||||||
Total | 685,784 | $ | 15.80 | 461,830 |
(1) | The Company's Board of Directors have authorized the repurchase, subject to market conditions, of up to $198.3 million of the Company's outstanding common stock. |
(2) | Represents shares of common stock withheld in satisfaction of tax withholding obligations upon the vesting of equity awards or other similar transactions. |
(3) | Represents shares of common stock distributed to the Company from an escrow account established to satisfy the Company’s indemnification claims arising under the terms of the purchase agreement entered into in connection with the Company’s acquisition of Convergex Group, LLC. |
Exhibit No. | Description | |
101.INS | XBRL INSTANCE DOCUMENT | |
101.SCH | XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT | |
101.CAL | XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT | |
101.DEF | XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT | |
101.LAB | XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT | |
101.PRE | XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT |
COWEN INC. | ||||||
By: | /s/ JEFFREY M. SOLOMON | |||||
Name: | Jeffrey M. Solomon | |||||
Title: | Chief Executive Officer | |||||
By: | /s/ STEPHEN A. LASOTA | |||||
Name: | Stephen A. Lasota | |||||
Date: | August 1, 2019 | Title: | Chief Financial Officer (principal financial officer and principal accounting officer) |
Performance Level* | AROCE | Payout Rate |
Below Threshold | Below 8% | 0% payout |
Threshold | 8% | 50% payout |
Target | 10% | 100% payout |
Above Target | 12% | 150% payout |
Maximum (capped) | Greater than 15% | 200% payout |
1. | I have reviewed this Quarterly Report on Form 10-Q of Cowen Inc: |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 1, 2019 | /s/ JEFFREY M. SOLOMON | ||
Name: Jeffrey M. Solomon Title: Chief Executive Officer (principal executive officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Cowen Inc: |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 1, 2019 | /s/ STEPHEN A. LASOTA | ||
Name: Stephen A. Lasota Title: Chief Financial Officer (principal financial officer and principal accounting officer) |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | August 1, 2019 | /s/ JEFFREY M. SOLOMON | ||
Name: Jeffrey M. Solomon Title: Chief Executive Officer (principal executive officer) | ||||
/s/ STEPHEN A. LASOTA | ||||
Name: Stephen A. Lasota Title: Chief Financial Officer (principal financial officer and principal accounting officer) |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jul. 31, 2019 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Cowen Inc. | |
Entity Central Index Key | 0001466538 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 29,516,652 |
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Security Owned and Pledged as Collateral, Fair Value | $ 224,264,000 | $ 57,583,000 |
Allowance for receivable from customers | 563,000 | 516,000 |
Allowance for fees receivable | 915,000 | 1,569,000 |
Allowance for receivable from brokers | 780,000 | 472,000 |
Other investments fair value | 146,133,000 | 141,236,000 |
Other assets, Allowance for Notes | 11,000 | 0 |
Assets | ||
Fixed assets, accumulated depreciation and amortization (in dollars) | 29,684,000 | 31,630,000 |
Intangible assets, accumulated amortization (in dollars) | $ 44,633,000 | $ 38,093,000 |
Stockholders' equity | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 120,750 | 120,750 |
Preferred stock, shares outstanding | 120,750 | 120,750 |
Preferred Stock, Liquidation Preference, Value | $ 120,750,000 | $ 120,750,000 |
Treasury Stock, Shares | 16,664,613 | 15,336,871 |
Common Stock Class A | ||
Stockholders' equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 62,500,000 | 62,500,000 |
Common stock, shares issued | 46,144,900 | 43,774,371 |
Common stock, shares outstanding | 29,480,287.000 | 28,437,860 |
Common stock, restricted shares | 174,285 | 253,772 |
Treasury Stock, Shares | 16,664,613 | 15,336,871 |
Common Stock Class B | ||
Stockholders' equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 62,500,000 | 62,500,000 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
Consolidated Statements of Operations - USD ($) shares in Thousands |
3 Months Ended | 6 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
||||||||||
Revenues | |||||||||||||
Investment banking | $ 114,705,000 | $ 84,826,000 | $ 194,811,000 | $ 182,814,000 | |||||||||
Brokerage | 111,382,000 | 103,285,000 | 208,845,000 | 209,018,000 | |||||||||
Management fees | 7,039,000 | 7,373,000 | 14,180,000 | 14,790,000 | |||||||||
Incentive income | 8,000 | 48,000 | 23,000 | 64,000 | |||||||||
Interest and dividends | 40,047,000 | 25,109,000 | 69,139,000 | 51,063,000 | |||||||||
Reimbursement from affiliates | 254,000 | 336,000 | 542,000 | 713,000 | |||||||||
Aircraft lease revenue | 0 | 419,000 | 0 | 1,134,000 | |||||||||
Reinsurance premiums | 14,331,000 | 9,226,000 | 20,922,000 | 17,873,000 | |||||||||
Other revenues | 930,000 | 876,000 | 1,991,000 | 2,212,000 | |||||||||
Consolidated Funds | |||||||||||||
Interest and dividends | 3,449,000 | 3,075,000 | 5,774,000 | 6,271,000 | |||||||||
Other revenues | 19,000 | 0 | 34,000 | 5,000 | |||||||||
Total revenues | 292,164,000 | 234,573,000 | 516,261,000 | 485,957,000 | |||||||||
Interest and dividends expense | 39,528,000 | 24,306,000 | 68,612,000 | 48,846,000 | |||||||||
Total net revenues | 252,636,000 | 210,267,000 | 447,649,000 | 437,111,000 | |||||||||
Expenses | |||||||||||||
Employee compensation and benefits | 135,984,000 | 131,845,000 | 266,172,000 | 266,985,000 | |||||||||
Brokerage and trade execution costs | 27,124,000 | 28,902,000 | 52,770,000 | 59,100,000 | |||||||||
Underwriting expenses | 6,406,000 | 4,785,000 | 9,537,000 | 8,848,000 | |||||||||
Professional, advisory and other fees | 13,620,000 | 5,819,000 | 23,861,000 | 12,843,000 | |||||||||
Service fees | 5,659,000 | 4,852,000 | 11,323,000 | 10,047,000 | |||||||||
Communications | 8,278,000 | 7,106,000 | 16,359,000 | 14,672,000 | |||||||||
Occupancy and equipment | 10,454,000 | 10,384,000 | 20,376,000 | 20,245,000 | |||||||||
Depreciation and amortization | 4,952,000 | 3,194,000 | 9,908,000 | 6,419,000 | |||||||||
Client services and business development | 11,884,000 | 7,865,000 | 23,185,000 | 16,096,000 | |||||||||
Goodwill, Impairment Loss | 4,100,000 | [1],[2],[3],[4] | 0 | 4,100,000 | 0 | ||||||||
Reinsurance claims, commissions and amortization of deferred acquisition costs | 10,782,000 | 9,924,000 | 16,944,000 | 18,655,000 | |||||||||
Other expenses | 5,638,000 | 5,591,000 | 9,653,000 | 9,672,000 | |||||||||
Consolidated Funds | |||||||||||||
Interest and dividends | 1,356,000 | 2,479,000 | 2,223,000 | 4,390,000 | |||||||||
Professional, advisory and other fees | 373,000 | 345,000 | 518,000 | 557,000 | |||||||||
Floor brokerage and trade execution | 35,000 | 89,000 | 88,000 | 153,000 | |||||||||
Other expenses | 467,000 | 236,000 | 884,000 | 480,000 | |||||||||
Total expenses | 247,112,000 | 223,416,000 | 467,901,000 | 449,162,000 | |||||||||
Other income (loss) | |||||||||||||
Net gains (losses) on securities, derivatives and other investments | 3,910,000 | 16,719,000 | 42,994,000 | 32,688,000 | |||||||||
Gain (loss) on debt extinguishment | 0 | (556,000) | 0 | (556,000) | |||||||||
Consolidated Funds | |||||||||||||
Net realized and unrealized gains (losses) on investments and other transactions | 6,536,000 | 28,268,000 | 9,180,000 | 44,004,000 | |||||||||
Net realized and unrealized gains (losses) on derivatives | (719,000) | 2,119,000 | (1,481,000) | 4,594,000 | |||||||||
Net gains (losses) on foreign currency transactions | (35,000) | 598,000 | (59,000) | 252,000 | |||||||||
Total other income (loss) | 9,692,000 | 47,148,000 | 50,634,000 | 80,982,000 | |||||||||
Income (loss) before income taxes | 15,216,000 | 33,999,000 | 30,382,000 | 68,931,000 | |||||||||
Income tax expense (benefit) | 5,073,000 | 3,993,000 | 8,250,000 | 10,916,000 | |||||||||
Net income (loss) | 10,143,000 | 30,006,000 | 22,132,000 | 58,015,000 | |||||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | (4,331,000) | (24,607,000) | (6,537,000) | (35,763,000) | |||||||||
Net income (loss) attributable to Cowen Inc. | 5,812,000 | 5,399,000 | 15,595,000 | 22,252,000 | |||||||||
Preferred stock dividends | 1,698,000 | 1,698,000 | 3,396,000 | 3,396,000 | |||||||||
Net income (loss) attributable to Cowen Inc. common stockholders | $ 4,114,000 | $ 3,701,000 | $ 12,199,000 | $ 18,856,000 | |||||||||
Weighted average common shares outstanding: | |||||||||||||
Basic (in shares) | 29,769 | 29,769 | 29,766 | 29,688 | |||||||||
Diluted (in shares) | 31,522 | 30,720 | 31,572 | 30,460 | |||||||||
Earnings (loss) per share: | |||||||||||||
Earnings Per Share, Basic (in dollars per share) | $ 0.14 | $ 0.12 | $ 0.41 | $ 0.64 | |||||||||
Earnings Per Share, Diluted (in dollars per share) | $ 0.13 | $ 0.12 | $ 0.39 | $ 0.62 | |||||||||
|
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 10,143 | $ 30,006 | $ 22,132 | $ 58,015 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation | 2 | 0 | 2 | 1 |
Total other comprehensive income (loss), net of tax | 2 | 0 | 2 | 1 |
Comprehensive income (loss) | $ 10,145 | $ 30,006 | $ 22,134 | $ 58,016 |
Consolidated Statements of Changes in Equity - USD ($) |
Total |
Treasury Stock |
Additional Paid-in Capital |
Accumulated Other Comprehensive Income (Loss) |
Retained Earnings/(Accumulated deficit) |
Common Stock Class A |
Preferred Stock |
Convertible Preferred Stock
Retained Earnings/(Accumulated deficit)
|
---|---|---|---|---|---|---|---|---|
Common stock, shares outstanding, start at Dec. 31, 2017 | 29,632,020.00 | |||||||
Balance, start at Dec. 31, 2017 | $ 748,019,000 | $ (186,846,000) | $ 1,004,664,000 | $ (8,000) | $ (70,116,000) | $ 324,000 | $ 1,000 | |
Preferred stock, shares outstanding, start at Dec. 31, 2017 | 120,750 | |||||||
Redeemable Non-controlling Interest, start at Dec. 31, 2017 | 440,604,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative Effect on Retained Earnings, Net of Tax | (559,000) | |||||||
Net income (loss) attributable to Cowen Inc. | 22,252,000 | 22,252,000 | ||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | 35,763,000 | |||||||
Foreign currency translation | 1,000 | 1,000 | ||||||
Capital contributions | 19,136,000 | |||||||
Capital withdrawals | (50,877,000) | |||||||
Deconsolidation of investment funds | (32,559,000) | |||||||
Common stock issued during period, value, acquisitions | 0 | |||||||
Restricted stock awards issued, shares | 1,439,755 | |||||||
Purchase of treasury stock, at cost, shares | (1,462,303) | |||||||
Purchase of treasury stock, at cost | (21,163,000) | (21,163,000) | ||||||
Preferred stock dividends | (3,396,000) | $ (3,396,000) | ||||||
Embedded Cash Conversion Option | 28,973,000 | 28,973,000 | ||||||
Amortization of share based compensation | 19,080,000 | 19,080,000 | ||||||
Common stock, shares outstanding, end at Jun. 30, 2018 | 29,609,472 | |||||||
Balance, end at Jun. 30, 2018 | 793,207,000 | (208,009,000) | 1,052,717,000 | (7,000) | (51,819,000) | $ 324,000 | $ 1,000 | |
Preferred stock, shares outstanding, end at Jun. 30, 2018 | 120,750 | |||||||
Redeemable Non-controlling Interest, end at Jun. 30, 2018 | 412,067,000 | |||||||
Common stock, shares outstanding, start at Mar. 31, 2018 | 29,517,000 | |||||||
Balance, start at Mar. 31, 2018 | 758,787,000 | (200,915,000) | 1,014,904,000 | (7,000) | (55,520,000) | $ 324,000 | $ 1,000 | |
Preferred stock, shares outstanding, start at Mar. 31, 2018 | 121,000 | |||||||
Redeemable Non-controlling Interest, start at Mar. 31, 2018 | 392,326,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) attributable to Cowen Inc. | 5,399,000 | 5,399,000 | ||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | 24,607,000 | |||||||
Foreign currency translation | 0 | |||||||
Capital contributions | 10,876,000 | |||||||
Capital withdrawals | (15,742,000) | |||||||
Restricted stock awards issued, shares | 559,000 | |||||||
Purchase of treasury stock, at cost, shares | (466,000) | |||||||
Purchase of treasury stock, at cost | (7,094,000) | (7,094,000) | ||||||
Preferred stock dividends | (1,698,000) | (1,698,000) | ||||||
Embedded Cash Conversion Option | 28,973,000 | 28,973,000 | ||||||
Amortization of share based compensation | 8,840,000 | 8,840,000 | ||||||
Common stock, shares outstanding, end at Jun. 30, 2018 | 29,609,472 | |||||||
Balance, end at Jun. 30, 2018 | 793,207,000 | (208,009,000) | 1,052,717,000 | (7,000) | (51,819,000) | $ 324,000 | $ 1,000 | |
Preferred stock, shares outstanding, end at Jun. 30, 2018 | 120,750 | |||||||
Redeemable Non-controlling Interest, end at Jun. 30, 2018 | 412,067,000 | |||||||
Common stock, shares outstanding, start at Dec. 31, 2018 | 28,437,860 | |||||||
Balance, start at Dec. 31, 2018 | $ 794,407,000 | (234,142,000) | 1,062,877,000 | (5,000) | (34,648,000) | $ 324,000 | $ 1,000 | |
Preferred stock, shares outstanding, start at Dec. 31, 2018 | 120,750 | 120,750 | ||||||
Redeemable Non-controlling Interest, start at Dec. 31, 2018 | $ 284,780,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) attributable to Cowen Inc. | 15,595,000 | 15,595,000 | ||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | 6,537,000 | |||||||
Foreign currency translation | 2,000 | 2,000 | ||||||
Capital contributions | 202,595,000 | |||||||
Capital withdrawals | (53,600,000) | |||||||
Common stock issued during period, shares, acquisitions | 1,033,350 | |||||||
Common stock issued during period, value, acquisitions | 14,446,000 | 14,436,000 | $ 10,000 | |||||
Restricted stock awards issued, shares | 1,336,819 | |||||||
Purchase of treasury stock, at cost, shares | (1,327,742) | |||||||
Purchase of treasury stock, at cost | (20,215,000) | (20,215,000) | ||||||
Preferred stock dividends | (3,396,000) | (3,396,000) | ||||||
Embedded Cash Conversion Option | (596,000) | |||||||
Amortization of share based compensation | 17,181,000 | 17,181,000 | ||||||
Common stock, shares outstanding, end at Jun. 30, 2019 | 29,480,287.000 | |||||||
Balance, end at Jun. 30, 2019 | $ 817,424,000 | (254,357,000) | 1,093,898,000 | (3,000) | (22,449,000) | $ 334,000 | $ 1,000 | |
Preferred stock, shares outstanding, end at Jun. 30, 2019 | 120,750 | 120,750 | ||||||
Redeemable Non-controlling Interest, end at Jun. 30, 2019 | $ 440,312,000 | |||||||
Common stock, shares outstanding, start at Mar. 31, 2019 | 29,580,687 | |||||||
Balance, start at Mar. 31, 2019 | 814,782,000 | (243,519,000) | 1,084,534,000 | (5,000) | (26,563,000) | $ 334,000 | $ 1,000 | |
Preferred stock, shares outstanding, start at Mar. 31, 2019 | 120,750 | |||||||
Redeemable Non-controlling Interest, start at Mar. 31, 2019 | 418,277,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) attributable to Cowen Inc. | 5,812,000 | 5,812,000 | ||||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | 4,331,000 | |||||||
Foreign currency translation | 2,000 | 2,000 | ||||||
Capital contributions | 40,622,000 | |||||||
Capital withdrawals | (22,918,000) | |||||||
Restricted stock awards issued, shares | 585,383 | |||||||
Purchase of treasury stock, at cost, shares | (685,783) | |||||||
Purchase of treasury stock, at cost | (10,838,000) | (10,838,000) | ||||||
Preferred stock dividends | (1,698,000) | $ (1,698,000) | ||||||
Amortization of share based compensation | 9,364,000 | 9,364,000 | ||||||
Common stock, shares outstanding, end at Jun. 30, 2019 | 29,480,287.000 | |||||||
Balance, end at Jun. 30, 2019 | $ 817,424,000 | $ (254,357,000) | $ 1,093,898,000 | $ (3,000) | $ (22,449,000) | $ 334,000 | $ 1,000 | |
Preferred stock, shares outstanding, end at Jun. 30, 2019 | 120,750 | 120,750 | ||||||
Redeemable Non-controlling Interest, end at Jun. 30, 2019 | $ 440,312,000 |
Consolidated Statements of Cash Flows - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income (loss) | $ 10,143,000 | $ 30,006,000 | $ 22,132,000 | $ 58,015,000 | ||||||||||
Adjustments to reconcile net income (loss) to net cash provided by / (used in) operating activities: | ||||||||||||||
Depreciation and amortization | 4,952,000 | 3,194,000 | 9,908,000 | 6,419,000 | ||||||||||
Amortization of debt issuance costs | 509,000 | 656,000 | ||||||||||||
Amortization of debt discount | 2,419,000 | 2,871,000 | ||||||||||||
Noncash lease expense | (1,632,000) | 0 | ||||||||||||
Gain / (loss) on extinguishment of debt | 0 | (652,000) | ||||||||||||
Share-based compensation | 17,181,000 | 19,080,000 | ||||||||||||
Change in deferred taxes | 5,997,000 | 10,953,000 | ||||||||||||
Deferred rent obligations | 0 | (939,000) | ||||||||||||
Gain (Loss) on Disposition of Property Plant Equipment | (97,000) | (155,000) | ||||||||||||
Goodwill, Impairment Loss | 4,100,000 | [1],[2],[3],[4] | 0 | 4,100,000 | 0 | $ 0 | ||||||||
Purchases of securities owned, at fair value | (900,815,000) | (2,525,789,000) | ||||||||||||
Proceeds from sales of securities owned, at fair value | 751,611,000 | 2,779,569,000 | ||||||||||||
Proceeds from sales of securities sold, not yet purchased, at fair value | 639,630,000 | 1,789,059,000 | ||||||||||||
Payments to cover securities sold, not yet purchased, at fair value | (590,363,000) | (1,940,907,000) | ||||||||||||
Proceeds from the sale of other investments | 8,174,000 | 3,870,000 | ||||||||||||
Net (gains) losses on securities, derivatives and other investments | (42,314,000) | (28,237,000) | ||||||||||||
Consolidated Funds | ||||||||||||||
Purchases of securities owned, at fair value | (1,421,720,000) | (306,995,000) | ||||||||||||
Proceeds from sales of securities owned, at fair value | 1,280,181,000 | 344,079,000 | ||||||||||||
Purchases of other investments | (2,798,000) | (1,414,000) | ||||||||||||
Proceeds from sales of other investments | 17,168,000 | 10,289,000 | ||||||||||||
Net realized and unrealized (gains) losses on investments and other transactions | (22,496,000) | (47,628,000) | ||||||||||||
(Increase) decrease in operating assets: | ||||||||||||||
Securities owned, at fair value, held at broker-dealer | (201,355,000) | (89,077,000) | ||||||||||||
Receivable on derivative contracts, at fair value | (7,095,000) | 43,982,000 | ||||||||||||
Securities borrowed | (982,571,000) | (104,973,000) | ||||||||||||
Deposits with clearing organizations, brokers and banks | (8,300,000) | (660,000) | ||||||||||||
Receivable from brokers, dealers and clearing organizations | 168,745,000 | (159,702,000) | ||||||||||||
Increase (decrease) from receivable from customers | (49,622,000) | (5,321,000) | ||||||||||||
Fees receivable, net of allowance | (7,285,000) | (32,917,000) | ||||||||||||
Due from related parties | 4,862,000 | 2,448,000 | ||||||||||||
Other assets | (27,269,000) | 13,027,000 | ||||||||||||
Consolidated Funds | ||||||||||||||
Cash and cash equivalents | 34,816,000 | 5,590,000 | ||||||||||||
Receivable on derivative contracts, at fair value | (38,000) | 882,000 | ||||||||||||
Receivable from brokers | (11,196,000) | (3,294,000) | ||||||||||||
Other assets | (963,000) | (91,000) | ||||||||||||
Increase (decrease) in operating liabilities: | ||||||||||||||
Securities sold, not yet purchased, at fair value, held at broker dealer | 177,006,000 | 30,292,000 | ||||||||||||
Payable for derivative contracts, at fair value | 6,363,000 | 10,097,000 | ||||||||||||
Securities loaned | 1,078,134,000 | (22,365,000) | ||||||||||||
Payable to brokers, dealers and clearing organizations | 12,281,000 | (11,510,000) | ||||||||||||
Payable to customers | (97,007,000) | 168,099,000 | ||||||||||||
Commission management payable | 1,461,000 | 21,721,000 | ||||||||||||
Compensation payable | (119,012,000) | (28,644,000) | ||||||||||||
Fees payable | 23,316,000 | 15,562,000 | ||||||||||||
Due to related parties | (4,646,000) | 4,000 | ||||||||||||
Accounts payable, accrued expenses and other liabilities | 18,221,000 | 6,747,000 | ||||||||||||
Consolidated Funds | ||||||||||||||
Payable to brokers | (12,395,000) | 1,241,000 | ||||||||||||
Payable for derivative contracts, at fair value | 953,000 | (6,085,000) | ||||||||||||
Accounts payable, accrued expenses and other liabilities | (144,000) | 225,000 | ||||||||||||
Net Cash Provided by (Used in) Operating Activities | (225,771,000) | 29,036,000 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||
Purchases of other investments | (9,513,000) | (20,227,000) | ||||||||||||
Purchase of business | (48,581,000) | 0 | ||||||||||||
Proceeds from sales of other investments | 12,867,000 | 13,295,000 | ||||||||||||
Proceeds from loans held for investment | 0 | 13,000 | ||||||||||||
Purchase of fixed assets | (3,666,000) | (1,397,000) | ||||||||||||
Net Cash Provided by (Used in) Investing Activities | (48,893,000) | (8,316,000) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||
Repayments on convertible debt | (20,860,000) | (13,500,000) | ||||||||||||
Deferred debt issuance cost | (1,480,000) | (3,883,000) | ||||||||||||
Borrowings on notes and other debt | 55,175,000 | 105,516,000 | ||||||||||||
Repayments on notes and other debt | (5,051,000) | (2,987,000) | ||||||||||||
Purchase of treasury stock | (8,079,000) | (10,862,000) | ||||||||||||
Contingent liability payment | (1,235,000) | (570,000) | ||||||||||||
Capital contributions by redeemable non-controlling interests in operating entities | 11,110,000 | 200,000 | ||||||||||||
Capital withdrawals to redeemable non-controlling interests in operating entities | (1,346,000) | (1,113,000) | ||||||||||||
Consolidated Funds | ||||||||||||||
Capital contributions by redeemable non-controlling interests in Consolidated Funds | 191,485,000 | 18,937,000 | ||||||||||||
Capital withdrawals to redeemable non-controlling interests in Consolidated Funds | (58,601,000) | (58,136,000) | ||||||||||||
Net Cash Provided by (Used in) Financing Activities | 161,118,000 | 33,602,000 | ||||||||||||
Change in cash and cash equivalents | (113,546,000) | 54,322,000 | ||||||||||||
Total cash beginning of period | 442,113,000 | 264,208,000 | 264,208,000 | |||||||||||
Cash and cash equivalents | 182,400,000 | 207,708,000 | 182,400,000 | 207,708,000 | 259,148,000 | |||||||||
Cash collateral pledged | 7,097,000 | 15,513,000 | 7,097,000 | 15,513,000 | 6,318,000 | |||||||||
Segregated cash | 139,070,000 | 95,309,000 | 139,070,000 | 95,309,000 | 176,647,000 | |||||||||
Total cash at end of period | 328,567,000 | 318,530,000 | 328,567,000 | 318,530,000 | 442,113,000 | |||||||||
Supplemental information | ||||||||||||||
Cash paid during the year for interest | 52,260,000 | 39,061,000 | ||||||||||||
Cash paid during the year for taxes | 3,580,000 | 2,233,000 | ||||||||||||
Purchase of treasury stock, at cost, through net settlement | 12,015,000 | 8,376,000 | ||||||||||||
Preferred stock dividends | 1,698,000 | 1,698,000 | 3,396,000 | 3,396,000 | ||||||||||
Net assets (liabilities) acquired upon acquisition (net of cash) | 90,727,000 | 0 | ||||||||||||
Operating right of use assets | 101,628,000 | 101,628,000 | 0 | |||||||||||
Operating Lease, Liability | $ 106,873,000 | 106,873,000 | $ 0 | |||||||||||
Transfer of investment from consolidated funds, securities owned, fair value to securities owned, fair value | 97,655,000 | 8,820,000 | ||||||||||||
Net decrease in redeemable non-controlling interests in Consolidated Funds due to deconsolidation of consolidated fund | 32,559,000 | |||||||||||||
Separately recognized conversion option reclassification from a derivative liability to equity | $ 28,973,000 | 28,973,000 | ||||||||||||
Common stock issuance upon close of acquisition | $ 14,446,000 | $ 0 | ||||||||||||
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Organization and Business |
6 Months Ended | ||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||
Organization and Business | Organization and Business Cowen Inc., a Delaware corporation formed in 2009, is a diversified financial services firm that, together with its consolidated subsidiaries (collectively, "Cowen" or the "Company"), provides investment management, investment banking, research, sales and trading, prime brokerage, global clearing and commission management services through its two business segments: the Operating Company (“Op Co”) and the Asset Company (“Asset Co”). The Op Co segment consists of four divisions: the Cowen Investment Management (“CIM”) division, the Investment Banking division, the Markets division and the Research division. The Company refers to the Investment Banking division, the Markets division and the Research division combined as its investment banking businesses. Op Co’s CIM division includes advisers to investment funds (including privately placed hedge funds and private equity structures) and registered funds. Op Co's investment banking businesses offer investment banking, research, sales and trading, prime brokerage, global clearing and commission management services to companies and primarily institutional investor clients. Op Co's investment banking businesses’ primary target sectors ("Target Sectors") are healthcare, technology, media and telecommunications, information and technology services, consumer, aerospace and defense, industrials, energy and transportation. The Asset Co segment consists of certain of the Company’s private investments, private real estate business and other legacy multi-sector long/short equity strategies. The focus of Asset Co is to drive future monetization of the invested capital of the segment. Change in Segments As noted in the prior reporting period, the Company continually monitors and reviews its segment reporting structure in accordance with authoritative guidance to determine whether any changes have occurred that would impact its reportable segments. Because of the change in the Chief Operating Decision Maker (“CODM”) of the Company at the end of 2017, the Company experienced a strategic shift to refocus the Company’s businesses on a set of differentiated products which are aligned to the content and insight within the Company’s domain of expertise. During the second quarter of 2019, the Company realigned the business and reportable segment information that the CODM regularly reviews to evaluate performance for operating decision-making purposes, including evaluation and allocation of resources. As a result, the Company changed its segment reporting structure based on the Company's domain expertise as a driver of balance sheet harmonization and repeatable revenues for its operating business versus the Company’s long-term monetization strategies. As a result of the change in segments, effective for the quarter ended June 30, 2019, the Company has the following business segments:
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Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies | Significant Accounting Policies a. Basis of Presentation These unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") as promulgated by the Financial Accounting Standards Board ("FASB") through Accounting Standards Codification (the "Accounting Standards") as the source of authoritative accounting principles in the preparation of financial statements, and include the accounts of the Company, its operating and other subsidiaries, and entities in which the Company has a controlling financial interest or a general partner interest. All material intercompany transactions and balances have been eliminated in consolidation. Certain fund entities that are consolidated in these accompanying condensed consolidated financial statements, as further discussed below, are not subject to the consolidation provisions with respect to their own controlled investments pursuant to their specialized accounting. The Company serves as the managing member/general partner and/or investment manager to affiliated fund entities which it sponsors and manages. Funds in which the Company has a controlling financial interest are consolidated with the Company pursuant to US GAAP as described below. Consequently, the Company's condensed consolidated financial statements reflect the assets, liabilities, income and expenses of these funds on a gross basis. The ownership interests in these funds that are not owned by the Company are reflected as redeemable non-controlling interests in consolidated subsidiaries in the accompanying condensed consolidated financial statements. The management fees and incentive income earned by the Company from these funds are eliminated in consolidation. The year-end condensed balance sheet data was derived from the audited financial statements, but does not include all disclosures included in the audited financial statements.
The Company consolidates all entities that it controls through a majority voting interest or otherwise, including those investment funds in which the Company either directly or indirectly has a controlling financial interest. In addition, the Company consolidates all variable interest entities for which it is the primary beneficiary. In accordance with these standards, the Company consolidates four investment funds for which it acts as the general partner and investment manager. As of June 30, 2019, the Company consolidated the following investment funds: Ramius Enterprise LP (“Enterprise LP”), Ramius Merger Fund LLC (the "Merger Fund"), Cowen Private Investments LP ("Cowen Private"), and Ramius Merger Arbitrage UCITS Fund ("UCITS Fund") (each a "Consolidated Fund" and collectively the "Consolidated Funds"). The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting operating entity ("VOE") or a variable interest entity ("VIE") under US GAAP. Voting Operating Entities—VOEs are entities in which (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently, (ii) the equity holders at risk have the obligation to absorb losses, the right to receive residual returns and the right to direct the activities of the entity that most significantly impact the entity's economic performance and (iii) voting rights of equity holders are proportionate to their obligation to absorb losses or the right to receive returns. Under US GAAP, the usual condition for a controlling financial interest in a VOE is ownership of a majority voting interest. Accordingly, the Company consolidates all VOEs in which it owns a majority of the entity's voting shares or units. Variable Interest Entities—VIEs are entities that lack one or more of the characteristics of a VOE. In accordance with US GAAP, an enterprise must consolidate all VIEs of which it is the primary beneficiary. Under the US GAAP consolidation model for VIEs, an enterprise that (1) has the power to direct the activities of a VIE that most significantly impacts the VIE's economic performance, and (2) has an obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE, is considered to be the primary beneficiary of the VIE and thus is required to consolidate it. The Company reconsiders whether it is the primary beneficiary of a VIE by performing a periodic qualitative and/or quantitative analysis of the VIE that includes a review of, among other things, its capital structure, contractual agreements between the Company and the VIE, the economic interests that create or absorb variability, related party relationships and the design of the VIE. As of June 30, 2019, the total assets and total liabilities of the consolidated VIEs were $606.2 million and $11.2 million, respectively. As of December 31, 2018, the total assets and total liabilities of the consolidated VIEs were $468.0 million and $40.5 million, respectively. The increase is primarily related to other investors' subscriptions which increased overall VIEs net assets. The VIEs act as investment managers and/or investment companies that may be managed by the Company or the Company may have equity interest in those investment companies. The VIEs are financed through their operations and/or loan agreements with the Company. As of June 30, 2019, the Company held a variable interest in Ramius Merger Master Fund Ltd ("Merger Master") (the “Unconsolidated Master Fund”) through the Consolidated Funds. As of December 31, 2018, the Company held variable interests in Ramius Enterprise Master Fund Ltd (“Enterprise Master”) and Ramius Merger Master Fund Ltd ("Merger Master") (collectively the “Unconsolidated Master Funds”) through the Consolidated Funds. Investment companies, which account for their investments under the specialized industry accounting guidance for investment companies prescribed under US GAAP, are not subject to the consolidation provisions for their investments. Therefore, the Company has not consolidated the Unconsolidated Master Funds. In the ordinary course of business, the Company also sponsors various other entities that it has determined to be VIEs. These VIEs are primarily investment funds for which the Company serves as the general partner, managing member and/or investment manager with decision-making rights. The reason that the Company does not consolidate the Unconsolidated Master Fund or real estate funds that are VIEs is due to the Company's conclusion that it is not the primary beneficiary in each instance. Investment fund investors are entitled to all of the economics of these VIEs with the exception of the management fee and incentive income, if any, earned by the Company. The company has equity interests in the funds as both GP and Limited partner. In these instances the Company has concluded that the variable interests are not potentially significant to the VIE. Although the Company may advance amounts and pay certain expenses on behalf of the investment funds that it considers to be VIEs, it does not provide, nor is it required to provide, any type of substantive financial support to these entities outside of regular investment management services (see Note 6 for additional disclosures on VIEs). Equity Method Investments—For operating entities over which the Company exercises significant influence but which do not meet the requirements for consolidation as outlined above, the Company uses the equity method of accounting. The Company's investments in equity method investees are recorded in other investments in the accompanying condensed consolidated statements of financial condition. The Company's share of earnings or losses from equity method investees is included in net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. The difference between the carrying value of the equity method investment and its estimated fair value is recognized as an impairment charge when the loss in value is deemed other than temporary. Other—If the Company does not consolidate an entity or apply the equity method of accounting, the Company accounts for such entities (primarily, all securities of such entity which are bought and held principally for the purpose of selling them in the near term as trading securities) in accordance with US GAAP, at fair value with unrealized gains (losses) resulting from changes in fair value reflected within net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Retention of Specialized Accounting—The Consolidated Funds and certain other consolidated companies are investment companies and apply specialized industry accounting for investment companies. The Company has retained this specialized accounting for these investment funds pursuant to US GAAP. The Company reports its investments on the condensed consolidated statements of financial condition at their estimated fair value, with unrealized gains (losses) resulting from changes in fair value reflected within net realized and unrealized gains (losses) on investments and other transactions. Accordingly, the accompanying condensed consolidated financial statements reflect different accounting policies for investments depending on whether or not they are held through a consolidated investment company. In addition, the Company's broker-dealer subsidiaries, Cowen and Company, LLC ("Cowen and Company"), Cowen Execution Services LLC ("Cowen Execution"), Westminster Research Associates LLC ("Westminster"), Cowen Execution Services Limited ("Cowen Execution Ltd"), ATM Execution LLC ("ATM Execution"), Cowen International Limited ("Cowen International Ltd"), and Cowen Prime Services LLC ("Cowen Prime") apply the specialized industry accounting for brokers and dealers in securities also prescribed under US GAAP. The Company also retains specialized accounting upon consolidation.
The preparation of the accompanying condensed consolidated financial statements in conformity with US GAAP requires the management of the Company to make estimates and assumptions that affect the fair value of securities and other investments, the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the accompanying condensed consolidated financial statements, the accounting for goodwill and identifiable intangible assets and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.
The allowance for credit losses is based on the Company’s assessment of the collectability of receivables related to securities transactions, prepaid research and other receivables. The Company considers factors such as historical experience, credit quality, age of balances and current economic conditions that may affect collectability in determining the allowance for credit losses. Specifically, for prepaid research, the Company reviews clients' historical, current and forecasted trading activity in determining the allowance for credit losses. The credit loss expense related to the allowance for credit losses as well as any recoveries of amounts previously charged is reflected in other expenses in the accompanying condensed consolidated statements of operations.
US GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and Level 3 Fair value is determined based on pricing inputs that are unobservable and includes situations where there is little, if any, market activity for the asset or liability. The determination of fair value for assets and liabilities in this category requires significant management judgment or estimation. Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company. The Company considers observable data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Company's perceived risk of that instrument. The Company and its operating subsidiaries act as the manager for the Consolidated Funds. Both the Company and the Consolidated Funds hold certain investments which are valued by the Company, acting as the investment manager. The fair value of these investments is generally estimated based on proprietary models developed by the Company, which include discounted cash flow analysis, public market comparables, and other techniques and may be based, at least in part, on independently sourced market information. The material estimates and assumptions used in these models include the timing and expected amount of cash flows, the appropriateness of discount rates used, and, in some cases, the ability to execute, timing of, and estimated proceeds from expected financings. Significant judgment and estimation impact the selection of an appropriate valuation methodology as well as the assumptions used in these models, and the timing and actual values realized with respect to investments could be materially different from values derived based on the use of those estimates. The valuation methodologies applied impact the reported value of the Company's investments and the investments held by the Consolidated Funds in the condensed consolidated financial statements. Certain of the Company's investments are relatively illiquid or thinly traded and may not be immediately liquidated on demand if needed. Fair values assigned to these investments may differ significantly from the fair values that would have been used had a ready market for the investments existed and such differences could be material. The Company primarily uses the “market approach” to value its financial instruments measured at fair value. In determining an instrument's level within the hierarchy, the Company categorizes the Company's financial instruments into three categories: securities, derivative contracts and other investments. To the extent applicable, each of these categories can further be divided between those held long or sold short. The Company has the option to measure certain financial assets and financial liabilities at fair value with changes in fair value recognized in earnings each period. The election is made on an instrument by instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instrument. The Company has elected the fair value option for certain of its investments held by its operating companies. This option has been elected because the Company believes that it is consistent with the manner in which the business is managed, as well as the way that financial instruments in other parts of the business are recorded. Securities—Securities with values based on quoted market prices in active markets for identical assets are classified within level 1 of the fair value hierarchy. These securities primarily include active listed equities, certain U.S. government and sovereign obligations, Exchange Traded Funds ("ETFs"), mutual funds and certain money market securities. The Company does not adjust the quoted price for such instruments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price. Certain positions for which trading activity may not be readily visible, consisting primarily of convertible debt, corporate debt and loans and restricted equities, are stated at fair value and classified within level 2 of the fair value hierarchy. The estimated fair values assigned by management are determined in good faith and are based on available information considering, trading activity, broker quotes, quotations provided by published pricing services, counterparties and other market participants, and pricing models using quoted inputs, and do not necessarily represent the amounts which might ultimately be realized. As level 2 investments include positions that are not always traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability. Derivative contracts—Derivative contracts can be exchange-traded or privately negotiated over-the-counter (“OTC”). Exchange-traded derivatives, such as futures contracts and exchange-traded option contracts, are typically classified within level 1 or level 2 of the fair value hierarchy depending on whether or not they are deemed to be actively traded. OTC derivatives, such as generic forwards, swaps and options, have inputs which can generally be corroborated by market data and are therefore classified within level 2. OTC derivatives, such as swaps and options where market data is not readily available or observable are classified as level 3. Other investments—Other investments consist primarily of investment funds, real estate investments and equity method investments, which are valued as follows:
Real estate and capital markets are cyclical in nature. Property and investment values are affected by, among other things, the availability of capital, occupancy rates, rental rates and interest and inflation rates. In addition, the Company invests in real estate and real estate related investments for which no liquid market exists. The market prices for such investments may be volatile and may not be readily ascertainable. Amounts ultimately realized by the Company from investments sold may differ from the fair values presented, and the differences could be material. The Company's real estate investments are typically categorized as level 3 investments within the fair value hierarchy as management uses significant unobservable inputs in determining their estimated fair value. See Notes 6 and 7 for further information regarding the Company's investments, including equity method investments and fair value measurements.
Fees related to security transactions are reported net of an allowance for credit losses. An allowance for credit losses is assessed on any commission receivables aged over 180 days. Corporate finance and syndicate receivables, include receivables relating to the Company’s investment banking and advisory engagements net of allowance for credit losses. The Company records this allowance for credit losses on these receivables on a specific identification basis. The future collectability of the receivables is reviewed on a monthly basis based on the following factors: aging (usually if outstanding greater than 90 days), known financial stability of the paying company, as well as any other factors that might impact the collection of the outstanding fees. Management and incentive fees are earned as the managing member, general partner and/or investment manager to the Company's investment funds and are recognized in accordance with appropriate revenue recognition guidance (see Note 2(l)).
Securities borrowed and securities loaned are carried at the amounts of cash collateral advanced or received on a gross basis. The related rebates are recorded in the accompanying condensed consolidated statements of operations as interest and dividends income and interest and dividends expense. Securities borrowed transactions require the Company to deposit cash collateral with the lender. With respect to securities loaned, the Company receives cash or securities as collateral from the borrower. When the Company receives securities as collateral, and has concluded it (i) is the transferor and (ii) can pledge the securities to third parties, the Company recognizes the securities received as collateral at fair value in Securities owned, at fair value with the corresponding obligation to return the securities received as collateral at fair value in Securities sold, not yet purchased, at fair value. Securities received as collateral are not recognized when the Company either (i) is not the transferor or (ii) cannot pledge the securities to third parties. The initial collateral advanced or received approximates or is greater than the market value of securities borrowed or loaned. The Company monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or returned, as necessary. Securities borrowed and loaned may also result in credit exposures for the Company in an event that the counterparties are unable to fulfill their contractual obligations. The Company minimizes its credit risk by continuously monitoring its credit exposure and collateral values by demanding additional or returning excess collateral in accordance with the netting provisions available in the master securities lending contracts in place with the counterparties. Fees and interest received or paid are recorded in interest and dividends income and interest and dividends expense, respectively, on an accrual basis in the accompanying condensed consolidated statements of operations. In cases where the fair value basis of accounting is elected, any resulting change in fair value would be reported in net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Accrued interest income and expense are recorded in receivable from brokers, dealers and clearing organizations and payable to brokers, dealers and clearing organizations, respectively, on an accrual basis in the accompanying condensed consolidated statements of financial condition. At June 30, 2019 and December 31, 2018, the Company did not have any securities lending transactions for which fair value basis of accounting was elected.
Fixed assets are stated at cost less accumulated depreciation or amortization. Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life or lease term. When the Company commits to a plan to abandon fixed assets or leasehold improvements before the end of its original useful life, the estimated depreciation or amortization period is revised to reflect the shortened useful life of the asset. Other fixed assets are depreciated on a straight-line basis over their estimated useful lives.
Goodwill Goodwill represents the excess of the purchase price consideration of acquired companies over the estimated fair value assigned to the individual assets acquired and liabilities assumed. Goodwill is allocated to the Company's reporting units at the date the goodwill is initially recorded. Once goodwill has been allocated to the reporting units, it generally no longer retains its identification with a particular acquisition but instead becomes identifiable with the reporting unit. As a result, all of the fair value of each reporting unit is available to support the value of goodwill allocated to the unit. In January 2017, the FASB issued guidance that simplifies the subsequent measurement of goodwill. The new guidance eliminated Step 2 from the goodwill impairment test which was required in computing the implied fair value of goodwill. Instead, under the new amendments, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company early adopted these amendments during the second quarter of 2019 in conjunction with a quantitative goodwill test performed due to the Company’s change in operating segments and restructuring of reporting units. See Note 11 for the impact of the goodwill impairment test. In accordance with US GAAP, inclusive of the newly adopted amendments, the Company tests goodwill for impairment on an annual basis or at an interim period if events or changed circumstances would more likely than not reduce the fair value of a reporting unit below its carrying amount. In testing for goodwill impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company concludes that fair value exceeds its carrying amount, then performing a quantitative impairment test is not necessary. If the Company concludes otherwise, the Company is required to perform a quantitative impairment test that requires a comparison of the fair value of the reporting unit to its carrying value, including goodwill. If the fair value of the reporting unit exceeds its carrying value, the related goodwill is not considered impaired and no further analysis is required. If the carrying value of the reporting unit exceeds its fair value, then the Company recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. See Note 11 for further discussion. Intangible assets Intangible assets with finite lives are amortized over their estimated average useful lives. The Company does not have any intangible assets deemed to have indefinite lives. Intangible assets are tested for potential impairment whenever events or changes in circumstances suggest that an asset or asset group's carrying value may not be fully recoverable. An impairment loss, calculated as the difference between the estimated fair value and the carrying value of an asset or asset group, is recognized in the accompanying consolidated statements of operations if the sum of the estimated undiscounted cash flows relating to the asset or asset group is less than the corresponding carrying value.
Long-term debt is carried at the principal amount borrowed net of any unamortized discount/premium. The discount is accreted to interest expense using the effective interest method over the remaining life of the underlying debt obligations. Accrued but unpaid coupon interest is included in accounts payable, accrued expenses and other liabilities in the accompanying condensed consolidated statements of financial condition.
Effective January 1, 2019, the Company adopted ASC Topic 842, Leases ("ASC 842"). The new guidance increases transparency and comparability by requiring the recognition of right-of-use assets and lease liabilities on the condensed consolidated statements of financial condition. The recognition of these lease assets and lease liabilities represents a change from previous US GAAP requirements, which did not require lease assets and lease liabilities to be recognized for most leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee, have not significantly changed from previous US GAAP requirements. Under the effective date transition method selected by the Company, leases existing at, or entered into after January 1, 2019 were required to be recognized and measured. Prior period amounts have not been adjusted and continue to be reflected in accordance with the Company’s historical Accounting Standards. In applying ASC 842, the Company made an accounting policy election not to recognize the right-of-use assets and lease liabilities relating to short term leases. Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2018 for discussions related to the Company's previous lease recognition policies. Implementation of ASC 842 included an analysis of contracts, including real estate leases and service contracts to identify embedded leases, to determine the initial recognition of right-of-use assets and lease liabilities, which required subjective assessment over the determination of the associated discount rates. ASC 842 also provided various practical expedients which were assessed to determine the ultimate impact of ASC 842 upon adoption. The standard includes a package of three practical expedients which permit the Company to not reassess (1) whether any expired or existing contracts are or contain a lease, (2) the lease classification for any expired or existing leases and (3) any initial direct costs for any existing leases as of the effective date. The Company has elected to apply the package of practical expedients, hindsight practical expedient, and land easement practical expedient. The adoption of ASC 842 resulted in the recording of operating lease right-of-use assets of $103.7 million and operating lease liabilities of $110.5 million at January 1, 2019. The Company determines if an arrangement is or contains a lease at inception. The Company’s operating lease arrangements are primarily for real estate and facility leases as well as office equipment. The Company has applied an accounting policy election to combine its lease and nonlease components for its real estate and facility leases. ROU assets represent the Company’s right to use the underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company's variable lease payments consist of nonlease services related to the lease. Variable lease payments are excluded from the right-of-use asset and lease liabilities to the extent they are not based on consumer priced index or a market index and are recognized in the period in which the obligation for those payments is incurred. As most of the Company's leases do not provide an implicit rate and the implicit rate is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Right-of-use assets also include any lease payments made and exclude lease incentives. Many of the Company's operating lease agreements include options to extend the lease, which the Company does not include in the determination of the minimum lease term unless the options are reasonably certain to be exercised. Expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term. The Company reconciles the operating lease expense with operating lease payments by presenting the amortization of the operating ROU asset and change in the operating lease liability in a single line item within the adjustments to reconcile net income (loss) to net cash provided by / (used in) operating activities in the accompanying Condensed Consolidated Statements of Cash Flows. Please refer to Note 18 for information on the Company’s finance leases (formerly capital leases). l. Revenue recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"), which requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company follows a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, the Company includes variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. Significant judgments are required in the application of the five-step model including; when determining whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company’s progress under the contract; and whether constraints on variable consideration should be applied due to uncertain future events. The Company's principle sources of revenue are generated within two segments: Op Co and Asset Co as more fully described below. Revenue from contracts with customers includes management fees, incentive income, investment banking revenue and brokerage services revenue excluding principal transactions. ASC Topic 606 does not apply to revenue associated with financial instruments, interest income and expense, leasing and insurance contracts. The following is a description of principal activities, separated by business segments, from which the Company generates its revenue. For more detailed information about reportable segments, see Note 22. Operating Company The Op Co segment generates revenue through five principle sources: investment banking revenue, brokerage revenue, management fees, incentive income and investment income from the Company's own capital. Investment income is excluded from ASC Topic 606. Investment Banking The Company earns investment banking revenue primarily from fees associated with public and private capital raising transactions and providing strategic advisory services. Investment banking revenues are derived primarily from public and private small- and mid-capitalization companies within the Company's Target Sectors. Investment banking revenue consists of underwriting fees, strategic/financial advisory fees, expenses reimbursed from clients and placement and sales agent fees.
Underwriting fees are recognized gross of transaction-related expenses, and such amounts are adjusted to reflect actual expenses in the period in which the Company receives the final settlement, typically within 90 days following the closing of the transaction.
Brokerage Brokerage revenue consists of commissions, principal transactions, equity and credit research fees and trade conversion revenue.
Management fees The Company earns management fees from investment funds and certain managed accounts for which it serves as the investment manager; such fees earned are typically based on committed and invested capital. The Company has determined that the primary drivers of management fees are committed and invested capital relating to private equity funds. The management fees are earned as the investment management services are provided and are not subject to reversals. The performance obligation related to the transfer of these services is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. Several investment managers and/or general partners of the investment funds are owned jointly by the Company and third parties. Accordingly, the management fees generated by these funds are split between the Company and these third parties based on the proportionate ownership of the management company. Pursuant to US GAAP, these fees received by the management companies are accounted for under the equity method of accounting and are reflected under net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Management fees are generally paid on a quarterly basis and are prorated for capital inflows (or commitments) and redemptions (or distributions) and are recognized as revenue at that time as they relate specifically to the services provided in that period, which are distinct from the services provided in other periods. While some investors may have separately negotiated fees, in general the management fees are as follows:
Incentive income The Company earns incentive income based on net profits (as defined in the respective investment management or partnership agreements) with respect to certain of the Company's investment funds and managed accounts. The incentive income is either allocated to the Company or is charged to the investment funds in accordance with their respective investment management or partnership agreements. For the hedge funds the Company offers, incentive income earned is typically up to 20% (in certain cases on performance in excess of a benchmark) of the net profits earned for the full year that are attributable to each fee-paying investor. For the private equity and debt fund products the Company offers, the carried interest earned is typically up to 20% of the distributions made to investors after return of their contributed capital and generally a preferred return. In relation to ASC Topic 606, the Company applies an accounting policy election to recognize incentive income allocated to the Company under an equity ownership model as net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. The Company previously recognized these amounts as incentive income. Under the equity method of accounting the Company recognizes its allocations of incentive income or carried interest within net gains (losses) along with the allocations proportionate to the Company’s ownership interests in the investment funds. The Company recognizes incentive income charged to the Company's hedge funds based on the net profits of the hedge funds. The Company recognizes such incentive income when the fees are no longer subject to reversal or are crystalized. For a majority of the hedge funds, the incentive fee crystallizes annually when the high-water mark for such hedge funds is reset, which delays recognition of the incentive fee until year end. In periods following a period of a net loss attributable to an investor, the Company generally does not earn incentive income on any future profits attributable to such investor until the accumulated net loss from prior periods is recovered, an arrangement commonly referred to as a “high-water mark.” Generally, incentive income or carried interest is earned after the investor has received a full return of their invested capital, plus a preferred return. Several investment managers and/or general partners of the Company's investment funds are jointly owned by the Company and third parties. Accordingly, the incentive fees generated by these investment funds are split between the Company and these third parties. Pursuant to US GAAP, incentive income received by the general partners that are accounted for under the equity method of accounting are reflected under net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Investment Income Investment income earned by the Op Co segment is earned from investing the Company's capital in various strategies which align to existing businesses within Op Co and from investments in private capital raising transactions of its investment banking clients. Asset Company The Asset Co segment generates revenue through three principle sources: management fees, incentive income and investment income from the Company's own capital. Investment income is excluded from ASC Topic 606. Management fees The Company earns management fees from investment funds and certain managed accounts for which it serves as the investment manager; such fees earned are typically based on committed and invested capital. The management fees are earned as the investment management services are provided and are not subject to reversals. The performance obligation related to the transfer of these services is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. Several investment managers and/or general partners of the investment funds are owned jointly by the Company and third parties. Accordingly, the management fees generated by these funds are split between the Company and these third parties based on the proportionate ownership of the management company. Pursuant to US GAAP, these fees received by the management companies are accounted for under the equity method of accounting and are reflected under net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Management fees are generally paid on a quarterly basis and are prorated for capital inflows (or commitments) and redemptions (or distributions) and are recognized as revenue at that time as they relate specifically to the services provided in that period, which are distinct from the services provided in other periods. While some investors may have separately negotiated fees, in general, the management fees are as follows:
Incentive income The Company earns incentive income based on net profits (as defined in the respective investment management or partnership agreement) related to certain of the Company's investment funds and managed accounts. The incentive income is either allocated to the Company or is charged to the investment funds in accordance with their corresponding investment management or partnership agreement. For the hedge funds the Company offers, incentive income earned is typically up to 20% (in certain cases on performance in excess of a benchmark) of the net profits earned for the full year that are attributable to each fee-paying investor. For the private equity and debt fund products the Company offers, the carried interest earned is typically up to 20% of the distributions made to investors after return of their contributed capital and generally a preferred return. In relation to ASC Topic 606, the Company applies an accounting policy election to recognize incentive income allocated to the Company under an equity ownership model as net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. The Company previously recognized these amounts as incentive income. Under the equity method of accounting the Company recognizes its allocations of incentive income or carried interest within net gains (losses) along with the allocations proportionate to the Company’s ownership interests in the investment funds. The Company recognizes incentive income charged to the Company's hedge funds based on the net profits of the hedge funds. The Company recognizes such incentive income when the fees are no longer subject to reversal or are crystalized. For certain hedge funds, the incentive fee crystallizes annually when the high-water mark for such hedge funds is reset, which delays recognition of the incentive fee until year end. In periods following a period of a net loss attributable to an investor, the Company generally does not earn incentive income on any future profits attributable to such investor until the accumulated net loss from prior periods is recovered, an arrangement commonly referred to as a “high-water mark.” Generally, incentive income or carried interest is earned after the investor has received a full return of their invested capital, plus a preferred return. However, for certain private equity structures, the Company is entitled to receive incentive fees earlier, provided that the investors have received their preferred return on a current basis or on an investor by investor basis. These private equity structures are generally subject to a potential clawback of these incentive fees upon the liquidation of the private equity structure if the investor has not received a full return of its invested capital plus the preferred return thereon. Several investment managers and/or general partners of the Company's investment funds are jointly owned by the Company and third parties. Accordingly, the incentive fees generated by these investment funds are split between the Company and these third parties. Pursuant to US GAAP, incentive income received by the general partners that are accounted for under the equity method of accounting are reflected under net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Investment Income Investment income earned by the Asset Co segment is earned from investing the Company's capital in various strategies. Revenue from contracts with customers For the three and six months ended June 30, 2019 and 2018, the following tables presents revenues from contracts with customers disaggregated by fee type and segment.
Interest and dividends Interest and dividends are earned by the Company from various sources. The Company receives interest and dividends primarily from securities finance activities and securities held by the Company for purposes of investing capital, investments held by its Consolidated Funds and its brokerage balances. Interest is recognized on an accrual basis and interest income is recognized on the debt of those issuers that is deemed collectible. Interest income and expense includes premiums and discounts amortized and accreted on debt investments based on criteria determined by the Company using the effective yield method, which assumes the reinvestment of all interest payments. Dividends are recognized on the ex-dividend date. Reimbursement from affiliates The Company allocates, at its discretion, certain expenses incurred on behalf of its investment management businesses. These expenses relate to the administration of such subsidiaries and assets that the Company manages for its investment funds. In addition, pursuant to the investment funds' offering documents, the Company charges certain allowable expenses to the investment funds, including charges and personnel costs for legal, compliance, accounting, tax compliance, risk and technology expenses that directly relate to administering the assets of the investment funds. Such expenses that have been reimbursed at their actual costs are included in the accompanying condensed consolidated statements of operations as employee compensation and benefits, professional, advisory and other fees, communications, occupancy and equipment, client services and business development and other expenses. Reinsurance-related contracts Premiums for reinsurance-related contracts are earned over the coverage period. In most cases, premiums are recognized as revenues ratably over the term of the contract with unearned premiums computed on a monthly basis. For each of its contracts, the Company determines if the contract provides indemnification against loss or liability relating to insurance risk, in accordance with US GAAP. If the Company determines that a contract does not expose it to a reasonable possibility of a significant loss from insurance risk, the Company records the contract under the deposit method of accounting with any net amount receivable reflected as an asset in other assets, and any net amount payable reflected as a liability within accounts payable, accrued expenses and other liabilities on the condensed consolidated statements of financial condition. The liabilities for losses and loss adjustment expenses are recorded at the estimated ultimate payment amounts, including reported losses. Estimated ultimate payment amounts are based upon (1) reports of losses from policyholders, (2) individual case estimates and (3) estimates of incurred but unreported losses. Provisions for losses and loss adjustment expenses are charged to earnings after deducting amounts recovered and estimates of recoverable amounts and are included in other expenses on the condensed consolidated statements of operations. Costs of acquiring new policies, which vary with and are directly related to the production of new policies, have been deferred to the extent that such costs are deemed recoverable from future premiums or gross profits. Such costs include commissions and allowances as well as certain costs of policy issuance and underwriting and are included within other assets in the condensed consolidated statements of financial condition. Interest and dividends expense Interest and dividends expense relates primarily to securities finance activities, trading activity with respect to the Company's investments and interest expense on debt. m. Recent pronouncements Recently adopted In 2018, the FASB issued guidance related to the Tax Cuts and Jobs Act of 2017 (“TCJ Act”) for the optional reclassification of the residual tax effects, arising from the change in corporate tax rate, in accumulated other comprehensive loss to retained earnings. The reclassification is the difference between the amount previously recorded in other comprehensive income at the historical U.S. federal tax rate that remains in accumulated other comprehensive loss at the time the TCJ Act was effective and the amount that would have been recorded using the newly enacted rate. This guidance became effective during the first quarter of 2019; however, we did not elect to make the optional reclassification. In 2018, the FASB issued final guidance aligning the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees, with certain exceptions. Under the guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date, which may lower their cost and reduce volatility in the income statement. The guidance became effective during the first quarter of 2019 and impacted the Company’s recognition and measurement of the retention bonus pool established in connection with the Company’s acquisition of Quarton International AG, which include share based payment to employees and nonemployees. Please refer to Note 3 for more information. In 2017, the FASB issued guidance to amend the amortization period for certain purchased callable debt securities held at a premium. Under prior guidance, entities generally amortized the premium as an adjustment of yield over the contractual life of the instrument. The new guidance shortened the amortization period for the premium to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This guidance became effective during the first quarter of 2019; however, the guidance did not have an impact on the Company's financials as it does not have investments in callable debt securities measured on an amortized cost basis. In 2017, the FASB issued guidance that simplifies the subsequent measurement of goodwill. The new guidance eliminated Step 2 from the goodwill impairment test which was required in computing the implied fair value of goodwill. Instead, under the new amendments, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company early adopted these amendments during the second quarter of 2019. Please refer to Note 2i for more information. In 2016, the FASB issued guidance that amends and supersedes its previous guidance regarding leases. The new guidance requires the lessee to recognize the right to use lease assets and lease liabilities that arise from leases greater than one year, and present them in its statement of financial condition. The guidance became effective during the first quarter of 2019. Please refer to Note 2k for more information. Recently issued In October 2018, the FASB issued guidance that made targeted changes to the related party consolidation guidance. The new guidance changes how entities evaluate decision-making fees under the variable interest entity guidance. To determine whether decision-making fees represent a variable interest, an entity will consider indirect interests held through related parties under common control on a proportionate basis under the new guidance, rather than in their entirety, as has been the case under current guidance. The guidance is effective in annual periods beginning after December 15, 2019 and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact of the new guidance and does not expect this guidance to have a material impact on its consolidated statements of financial condition or its consolidated statements of operations. In August 2018, the FASB issued guidance for accounting for upfront costs and fees paid by a customer in a cloud computing arrangement. The guidance requires capitalization of implementation costs incurred in connection with a hosting arrangement or the development or obtainment of internal use software. The guidance is effective for public business entities for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years for any implementation costs incurred after adoption. The Company is currently evaluating the impact of this guidance on the Company’s consolidated financial statements and does not expect this guidance to have a material impact on its consolidated statements of financial condition or its consolidated statements of operations. In August 2018, as part of its disclosure framework project, the FASB amended the disclosure requirements for fair value measurement. The amendments update and eliminate various disclosure requirements that improve the overall usefulness of the disclosure requirement for financial statement users and reduce costs by eliminating disclosures that may not be useful. The guidance is effective for public business entities for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Since the guidance only relates to disclosure requirements, the Company does not expect this guidance to have a material impact on its consolidated statements of financial condition or its consolidated statements of operations. In June 2016, the FASB issued guidance that impacts the impairment model for certain financial assets measured at amortized cost by requiring a current expected credit loss (“CECL”) methodology to estimate expected credit losses over the entire life of the financial asset, recorded at inception or purchase. CECL will replace the loss model currently applicable to loans, held to maturity securities and other receivables carried at amortized cost. The guidance also eliminates the concept of other-than-temporary impairment for available-for-sale securities. Impairments on available-for-sale securities will be required to be recognized in earnings through an allowance, when the fair value is less than amortized cost and a credit loss exists or the securities are expected to be sold before recovery of amortized cost. Under the accounting update, there may be an ability to determine there are no expected credit losses in certain circumstances, e.g., based on collateral arrangements for lending and financing transactions or based on the credit quality of the borrower or issuer. For public companies, the guidance is effective for reporting periods beginning after December 15, 2019 and interim periods within those fiscal years. The Company is currently evaluating the impact of this guidance on the Company’s consolidated financial statements and does not expect this guidance to have a material impact. |
Acquisition |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisition On January 2, 2019 (the "Acquisition Date"), the Company, together with its indirect wholly owned subsidiaries, Cowen International Ltd and Cowen QN Acquisition LLC, completed its previously announced acquisition (the "Acquisition") of Quarton International AG through the acquisition of all of the outstanding equity interest of Quarton International AG’s affiliated combining companies, Quarton Management AG, Quarton International Europe AG, Quarton Partners, LLC and Quarton Securities GP, LLC (which owns a formerly U.S. Securities Exchange Commission ("SEC") registered broker-dealer that was subsequently renamed to Cowen Securities L.P. ("Cowen Securities") (see Note 23), comprising the U.S. and European operations of the acquired combining companies (collectively "Quarton"). Quarton is a group of leading global financial advisory companies serving the middle market. Quarton's operations were primarily conducted through eight entities based in the United States, Switzerland, and Germany. The acquisition was accounted for under the acquisition method of accounting in accordance with US GAAP. As such, results of operations for Quarton are included in the accompanying condensed consolidated statements of operations since the date of acquisition, and the assets acquired and liabilities assumed were recorded at their fair value as of the acquisition date. Subsequent to the acquisition, the operations of Quarton were integrated within the Company's existing businesses. The aggregate estimated purchase price of the Acquisition was $103.0 million. On the Acquisition Date the Company paid upfront consideration of $75.3 million subject to certain net working capital and other customary adjustments, with additional maximum contingent consideration of $40.0 million that will become payable dependent on the achievement of certain milestones by Quarton in each of the first four years (five years if certain conditions are met) following the Acquisition Date subject to a $10 million maximum in each year and a $40.0 million cumulative maximum. The Company estimated the contingent consideration at $27.7 million using the Monte Carlo valuation model which requires the Company to make estimates and assumptions regarding the future cash flows and profits. The contingent consideration liability is included within accounts payable, accrued expenses and other liabilities on the condensed consolidated statements of financial condition. Changes in these estimates and assumptions could have a significant impact on the amounts recognized. A portion of the preliminary purchase price was deposited into escrow, in the amount of $0.6 million, as a reserve for any future claims against the sellers of Quarton. All consideration, including the upfront consideration and contingent consideration, consists of a combination of 80% cash and 20% shares of the Company’s Class A common stock. Shares issued on the Acquisition Date of 1,033,350 were valued based on the 30-trading day volume-weighted average price per share of $14.52 as of December 31, 2018. The fair value of the shares of Class A common stock issued was determined on the basis of the closing market price of the Company’s shares on the Acquisition Date. Any shares of Class A common stock issued in connection with any such contingent payments will be valued based on the 30-trading day volume-weighted average price per share as of the day immediately prior to the date on which such shares are to be issued. In addition, Quarton and the Company have established a retention bonus pool, for Quarton employees that remain employed at the end of each year there is a contingent payment which will be settled in a combination of 80% cash and 20% shares of the Company’s Class A common stock based on Quarton meeting certain economic performance hurdles. The bonus pool has an aggregate maximum of $10.0 million over a five-year period with $2.5 million maximum in each year. The Company is recognizing the retention bonus over each contingent payment period based upon the Company’s revenue projections for Quarton. The table below summarizes the purchase price allocation of net tangible and intangible assets acquired and liabilities assumed as of January 2, 2019:
As of the acquisition date, the estimated fair value of the Company's intangible assets, as acquired through the Acquisition, was $22.2 million. The allocation of the intangible assets is shown within the following table:
Amortization expense for the three and six months ended June 30, 2019 was $2.2 million and $4.5 million, respectively, and is included in depreciation and amortization in the accompanying condensed consolidated statements of operations. The estimated amortization expense related to these intangible assets in future periods is as follows:
In addition to the purchase price consideration, for the three and six months ended June 30, 2019, the Company has incurred acquisition related expenses of $0.1 million and $1.1 million, respectively, including financial advisory, legal and valuation services, which are included in professional, advisory and other fees in the accompanying condensed consolidated statements of operations. Included in the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2019 are revenues of $6.9 million and $12.2 million, respectively, and net income of $0.8 million and $2.4 million, respectively, related to the results of operations of Quarton. Subsequent to the acquisition, Quarton's businesses were integrated within the Op Co segment of the Company and therefore they are included within their respective line items in the accompanying condensed consolidated statements of operations. The following table provides supplemental pro forma financial information for the three and six months ended June 30, 2018, as if the acquisition were completed as of January 1, 2018. This unaudited supplemental pro forma information has been prepared for comparative purposes only and is not intended to be indicative of what the Company's financial results would have been had the acquisition been completed on January 1, 2018, nor does it purport to be indicative of any future results.
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Jun. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Cash Collateral Pledged | Cash Collateral Pledged As of June 30, 2019 and December 31, 2018, the Company pledged cash collateral in the amount of $5.2 million and $5.3 million, respectively, which relates to letters of credit issued to the landlords of the Company's premises in New York City, Boston, Stamford and San Francisco. The Company also has pledged collateral for reinsurance agreements which amounted to $1.9 million, as of June 30, 2019, and $1.0 million, as of December 31, 2018, which is released annually between March 2020 and March 2023 based on the policy periods covered by the reinsurance agreements (see Note 18). |
Segregated Cash |
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Jun. 30, 2019 | |
Segregated Cash [Abstract] | |
Segregated Cash | Segregated Cash As of June 30, 2019 and December 31, 2018, cash segregated in compliance with federal regulations and other restricted deposits of $139.1 million and $176.6 million, respectively, consisted of cash deposited in Special Reserve Accounts for the exclusive benefit of customers under SEC Rule 15c3-3 and cash held in accounts designated as Special Reserve Bank Accounts for Proprietary Accounts of Broker-Dealers ("PAB"). |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments of Operating Entities and Consolidated Funds | Investments of Operating Entities and Consolidated Funds
Securities owned, at fair value Securities owned, at fair value are held by the Company and are considered held for trading. Substantially all equity securities, which are not part of the Company's self-clearing securities finance activities, are pledged to external clearing brokers under terms which permit the external clearing broker to sell or re-pledge the securities to others subject to certain limitations. As of June 30, 2019 and December 31, 2018, securities owned, at fair value consisted of the following:
Receivable on and Payable for derivative contracts, at fair value The Company's direct involvement with derivative financial instruments includes total return swaps, futures, currency forwards, equity swaps, credit default swaps and options. The Company's derivatives trading activities exposes the Company to certain risks, such as price and interest rate fluctuations, volatility risk, credit risk, counterparty risk, foreign currency movements and changes in the liquidity of markets. The Company's long and short exposure to derivatives is as follows:
(a) Includes index, equity, commodity future and cash conversion options.
(a) Includes index, equity, commodity future and cash conversion options. The following tables present the gross and net derivative positions and the related offsetting amount, as of June 30, 2019 and December 31, 2018. This table does not include the impact of over-collateralization.
The realized and unrealized gains/(losses) related to derivatives trading activities were $(1.8) million and $6.1 million for the three months ended June 30, 2019 and 2018 and $(4.0) million and $14.0 million for the six months ended June 30, 2019 and 2018, respectively, and are included in other income in the accompanying condensed consolidated statements of operations. Pursuant to the various derivatives transactions discussed above, except for the cash convertible note hedge (see Note 18), exchange traded derivatives, and certain options, the Company is required to post/receive collateral. As of June 30, 2019 and December 31, 2018, collateral consisting of $8.6 million and $11.2 million of cash is included in receivable from brokers, dealers and clearing organizations and payable to brokers, dealers and clearing organizations, respectively, on the accompanying condensed consolidated statements of financial condition. As of June 30, 2019 and December 31, 2018, all derivative contracts were with multiple major financial institutions. Other investments As of June 30, 2019 and December 31, 2018, other investments included the following:
(1) Portfolio Funds, at fair value The Portfolio Funds, at fair value as of June 30, 2019 and December 31, 2018, included the following:
* These Portfolio Funds are affiliates of the Company. The Company has no unfunded commitments regarding the Portfolio Funds held by the Company except as noted in Note 17.
Equity method investments include investments held by the Company in several operating companies whose operations primarily include the day to day management of a number of real estate funds, including the portfolio management and administrative services related to the acquisition, disposition, and active monitoring of the real estate funds' underlying debt and equity investments. The Company's ownership interests in these equity method investments range from 1% to 56%. The Company holds a majority of the outstanding ownership interest (i.e., more than 50%) in RCG Longview Partners II, LLC and 40% in Surf House Ocean Views Holdings, LLC (which is a joint venture in a real estate development project). The operating agreement that governs the management of day-to-day operations and affairs of these entities stipulates that certain decisions require support and approval from other members in addition to the support and approval of the Company. As a result, all operating decisions made in these entities requires the support of both the Company and an affirmative vote of a majority of the other managing members who are not affiliates of the Company. As the Company does not possess control over any of these entities, the presumption of consolidation has been overcome pursuant to current Accounting Standards and the Company accounts for these investments under the equity method of accounting. Also included in equity method investments are the investments in (a) HealthCare Royalty Partners General Partners and (b) Starboard Value (and certain related parties) which serves as an operating company whose operations primarily include the day to day management (including portfolio management) of several activist investment funds and related managed accounts. As part of its equity method investment in operating companies, the Company incurs certain expenses on behalf of its equity method investees. These expenses reflect direct and indirect costs associated with the respective business and are included in their respective line items in the accompanying condensed consolidated statements of operations. For the three months ended June 30, 2019 and 2018, the Company incurred $2.0 million and $2.1 million of these costs, respectively. For the six months ended June 30, 2019 and 2018, the Company incurred $4.7 million and $4.0 million, of these costs, respectively. The Company recorded no impairment charges in relation to its equity method investments for the six months ended June 30, 2019 and 2018. The Company elected to use the cumulative earnings approach for the distributions it receives from its equity method investments. Under the cumulative earnings approach, any distributions received up to the amount of cumulative earnings are treated as return on investment and classified in operating activities within the cash flows. Any excess distributions would be considered as return of investments and classified in investing activities. The following table summarizes equity method investments held by the Company:
For the period ended June 30, 2019, one equity method investment has met the significance criteria as defined under Regulation S-X Rule 4-08(g) of the SEC guidance ("Reg S-X 4-08(g)"). As such, the Company is presenting the following summarized financial information for the significant investee for the periods ended June 30, 2019 and December 31, 2018, and three and six months ended June 30, 2019 and 2018, and such information is as follows:
As of June 30, 2019 and December 31, 2018, the Company's share of losses in its equity method investment in RCG Longview Partners II, LLC has exceeded the carrying amount recorded in this investee. These amounts are included in accounts payable, accrued expenses and other liabilities in the accompanying condensed consolidated statements of financial condition. RCG Longview Partners II, LLC, as general partner to a real estate fund, has reversed previously recorded incentive income allocations and has recorded a current clawback obligation to the limited partners in such fund. This obligation is due to a change in unrealized value of the real estate fund on which there have previously been distributed carried interest realizations; however, the settlement of a potential obligation is not due until the end of the life of the respective real estate fund. As the Company is obligated to return previous distributions it received from RCG Longview Partners II, LLC, it has continued to record its share of gains/losses in the investee including reflecting its share of the clawback obligation in the amount of $6.5 million and $6.5 million as of June 30, 2019 and December 31, 2018, respectively. The Company's income (loss) from equity method investments was $4.0 million and $8.0 million for the three months ended June 30, 2019 and 2018, and $20.3 million and $11.9 million for the six months ended June 30, 2019 and 2018, respectively, and is included in net gains (losses) on securities, derivatives and other investments on the accompanying condensed consolidated statements of operations. Securities sold, not yet purchased, at fair value Securities sold, not yet purchased, at fair value represent obligations of the Company to deliver a specified security at a contracted price and, thereby, create a liability to purchase that security at prevailing prices. The Company's liability for securities to be delivered is measured at their fair value as of the date of the condensed consolidated financial statements. However, these transactions result in off-balance sheet risk, as the Company's ultimate cost to satisfy the delivery of securities sold, not yet purchased, at fair value may exceed the amount reflected in the accompanying condensed consolidated statements of financial condition. Substantially all equity securities and options are pledged to the clearing broker under terms which permit the clearing broker to sell or re-pledge the securities to others subject to certain limitations. As of June 30, 2019 and December 31, 2018, securities sold, not yet purchased, at fair value consisted of the following:
Securities lending and borrowing transactions The following tables present the contractual gross and net securities borrowing and lending agreements and the related offsetting amount as of June 30, 2019 and December 31, 2018.
The following tables present gross obligations for securities loaned transactions by remaining contractual maturity and class of collateral pledged as of June 30, 2019 and December 31, 2018:
Variable Interest Entities The total assets and liabilities of the variable interest entities for which the Company has concluded that it holds a variable interest, but for which it is not the primary beneficiary, are $6.1 billion and $331.8 million as of June 30, 2019 and $5.1 billion and $157.6 million as of December 31, 2018, respectively. The carrying value of the Company's exposure to loss for these variable interest entities as of June 30, 2019 was $224.1 million, and as of December 31, 2018 was $301.4 million, all of which is included in other investments, at fair value in the accompanying condensed consolidated statements of financial condition. The exposure to loss primarily relates to the Consolidated Funds' investment in their Unconsolidated Master Funds and the Company's investment in unconsolidated investment companies. Additionally, the Company’s maximum exposure to loss for the variable interest entities noted above as of June 30, 2019 and December 31, 2018, was $256.2 million and $332.4 million, respectively. The maximum exposure to loss often differs from the carrying value of exposure to loss of the variable interests. The maximum exposure to loss is dependent on the nature of the variable interests in the VIEs and is limited to the notional amounts of certain commitments and guarantees.
Securities owned, at fair value As of June 30, 2019 and 2018, securities owned, at fair value, held by the Consolidated Funds consisted of the following:
Receivable on derivative contracts As of June 30, 2019 and December 31, 2018, receivable on derivative contracts, at fair value, held by the Consolidated Funds are comprised of:
Payable for derivative contracts As of June 30, 2019 and December 31, 2018, payable for derivative contracts, at fair value, held by the Consolidated Funds are comprised of:
Other investments, at fair value Investments in Portfolio Funds, at fair value As of June 30, 2019 and December 31, 2018, investments in Portfolio Funds, at fair value, included the following:
Consolidated portfolio fund investments of Enterprise LP On May 12, 2010, the Company announced its intention to close Enterprise Master. Enterprise LP operated under a “master-feeder” structure up until January 1, 2019, when Enterprise Master distributed its capital to each feeder and was liquidated. As of June 30, 2019, the consolidated investments in Portfolio Funds include Enterprise LP's investment in RCG Special Opportunities Fund, Ltd which is a portfolio fund that invests in a limited number of private equity investment directly as well as through affiliated portfolio funds. As of December 31, 2018, the consolidated investments in Portfolio Funds included Enterprise LP's investment of $97.7 million in Enterprise Master. Prior to liquidation, strategies utilized by Enterprise Master included merger arbitrage and activist investing, investments in distressed securities, convertible hedging, capital structure arbitrage, equity market neutral, investments in private placements of convertible securities, proprietary mortgages, structured credit investments, investments in mortgage backed securities and other structured finance products, investments in real estate and real property interests, structured private placements and other relative value strategies. Enterprise Master had broad investment powers and maximum flexibility in seeking to achieve its investment objective. Enterprise Master was permitted to invest in equity securities, debt instruments, options, futures, swaps, credit default swaps and other derivatives. There are no unfunded commitments at Enterprise LP. Consolidated portfolio fund investments of Merger Fund The Merger Fund operates under a “master-feeder” structure, whereby Ramius Merger Master Ltd.'s ("Merger Master") shareholders are Merger Fund and Ramius Merger Fund Ltd. The consolidated investments in Portfolio Funds include Merger Fund's investment of $78.3 million and $88.7 million in Merger Master as of June 30, 2019 and December 31, 2018, respectively. The Merger Master’s investment objective is to achieve consistent absolute returns while emphasizing the preservation of investor capital. The Merger Master seeks to achieve these objectives by taking a fundamental, research-driven approach to investing, primarily in the securities of issuers engaged in, or subject to, announced (or unannounced but otherwise anticipated) extraordinary corporate transactions, which may include, but are not limited to, mergers, acquisitions, leveraged buyouts, tender offers, hostile takeover bids, sale processes, exchange offers, and recapitalizations. Merger Master invests in the securities of one or more issuers engaged in or subject to such extraordinary corporate transactions. Merger Master typically seeks to derive a profit by realizing the price differential, or “spread,” between the market price of securities purchased or sold short and the market price or value of securities realized in connection with the completion or termination of the extraordinary corporate transaction, or in connection with the adjustment of market prices in anticipation thereof, while seeking to minimize the market risk associated with the aforementioned investment activities. Merger Master will, depending on market conditions, generally focus the majority of its investment program on announced transactions. If the investment manager of Merger Master considers it necessary, it may either alone or as part of a group, also initiate shareholder actions seeking to maximize value. Such shareholder actions may include, but are not limited to, re-orienting management’s focus or initiating the sale of the company (or one or more of its divisions) to a third party. There are no unfunded commitments at Merger Fund. Indirect Concentration of the Underlying Investments Held by Consolidated Funds From time to time, either directly or indirectly through its investments in the Consolidated Funds, the Company may maintain exposure to a particular issue or issuer (both long and/or short) which may account for 5% or more of the Company's equity. Based on information that is available to the Company as of June 30, 2019 and December 31, 2018, the Company assessed whether or not its interests in an issuer for which the Company's pro-rata share exceeds 5% of the Company's equity. There was one indirect concentration that exceeded 5% of the Company's equity as of June 30, 2019 and one at December 31, 2018. Through its investments in a Consolidated Fund and combined with direct Company investments, the Company maintained exposure to a particular investment which accounted for 5% or more of the Company's equity.
Underlying Investments of Unconsolidated Funds Held by Consolidated Funds Enterprise Master and Merger Master At December 31, 2018, Enterprise LP's investment in Enterprise Master represented Enterprise LP's proportionate share of Enterprise Master's net assets; as a result, the investment balances of Enterprise Master reflected below may exceed the net investment which Enterprise LP has recorded. Merger Fund's investment in Merger Master represents Merger Fund's proportionate share of Merger Master's net assets; as a result, the investment balances of Merger Master reflected below may exceed the net investment which Merger Fund has recorded. The following tables present summarized investment information for the underlying investments and derivatives held by Enterprise Master and Merger Master as of June 30, 2019 and December 31, 2018: Securities owned by Enterprise Master, at fair value
Portfolio Funds, owned by Enterprise Master, at fair value
Merger Master
Receivable on derivative contracts, at fair value, owned by Merger Master
Payable for derivative contracts, at fair value, owned by Merger Master
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Fair Value Measurements for Operating Entities and Consolidated Funds |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements for Operating Entities and Consolidated Funds | Fair Value Measurements for Operating Entities and Consolidated Funds The following table presents the assets and liabilities that are measured at fair value on a recurring basis on the accompanying condensed consolidated statements of financial condition by caption and by level within the valuation hierarchy as of June 30, 2019 and December 31, 2018:
(a) In accordance with US GAAP, certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated statement of financial condition. (b) In accordance with the terms of the purchase agreements for acquisitions that closed during the second quarter of 2016 and the first quarter of 2019, the Company is required to pay to the sellers a portion of future net income and/or revenues of the acquired businesses, if certain targets are achieved through the periods ended December 2019 and December 2023, respectively. For the acquisition closed during 2016, the Company estimated the contingent consideration liability using the income approach (discounted cash flow method) which requires the Company to make estimates and assumptions regarding the future cash flows and profits. For the acquisition that closed during 2019, the Company estimated the contingent consideration liability using the present value of the monte carlo simulated revenue. Changes in these estimates and assumptions could have a significant impact on the amounts recognized. The undiscounted amounts as of June 30, 2019 can range from $1.6 million to $40.0 million.
(a) In accordance with US GAAP, certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated statement of financial condition. (b) In accordance with the terms of the purchase agreements for the acquisition that closed during the second quarter of 2016, the Company is required to pay to the sellers a portion of future net income and/or revenues of the acquired business, if certain targets are achieved through the periods ended December 2020. The Company estimated the contingent consideration liability using the income approach (discounted cash flow method) which requires the Company to make estimates and assumptions regarding the future cash flows and profits. Changes in these estimates and assumptions could have a significant impact on the amounts recognized. The undiscounted amounts as of December 31, 2018 can range from $2.8 million to $3.4 million. The following table includes a roll forward of the amounts for the three and six months ended June 30, 2019 and 2018 for financial instruments classified within level 3. The classification of a financial instrument within level 3 is based upon the significance of the unobservable inputs to the overall fair value measurement.
(1) Unrealized gains/losses are reported in other income (loss) in the accompanying condensed consolidated statements of operations. (a) The Company deconsolidated an investment fund. (b) The investments were converted to common stock. (c) On June 26, 2018, the Company received shareholder approval which allows the Company to settle its convertible note (see Note 18) entirely in class A common shares. Upon receiving shareholder approval, the Company reclassified the embedded conversion option, associated with the convertible debt, to equity. (see Note 19). All realized and unrealized gains (losses) in the table above are reflected in other income (loss) in the accompanying condensed consolidated statements of operations. Certain assets and liabilities are measured at fair value on a nonrecurring basis and therefore are not included in the tables above. The Company recognizes all transfers and the related unrealized gain (loss) at the beginning of the reporting period. Transfers between level 1 and 2 generally relate to whether the principal market for the security becomes active or inactive. Transfers between level 2 and 3 generally relate to whether significant relevant observable inputs are available for the fair value measurements or due to change in liquidity restrictions for the investments. During the six months ended June 30, 2019 and 2018, there were no transfers between level 1 and level 2 assets and liabilities. The following table includes quantitative information as of June 30, 2019 and December 31, 2018 for financial instruments classified within level 3. The table below quantifies information about the significant unobservable inputs used in the fair value measurement of the Company's level 3 financial instruments.
The Company has established valuation policies and procedures and an internal control infrastructure over its fair value measurement of financial instruments which includes ongoing oversight by the valuation committee as well as periodic audits performed by the Company's internal audit group. The valuation committee is comprised of senior management, including non-investment professionals, who are responsible for overseeing and monitoring the pricing of the Company's investments, including the review of the results of the independent price verification process, approval of new trading asset classes and use of applicable pricing models and approaches. The US GAAP fair value leveling hierarchy is designated and monitored on an ongoing basis. In determining the designation, the Company takes into consideration a number of factors including the observability of inputs, liquidity of the investment and the significance of a particular input to the fair value measurement. Designations, models, pricing vendors, third party valuation providers and inputs used to derive fair market value are subject to review by the valuation committee and the internal audit group. The Company reviews its valuation policy guidelines on an ongoing basis and may adjust them in light of, improved valuation metrics and models, the availability of reliable inputs and information, and prevailing market conditions. The Company reviews a daily profit and loss report, as well as other periodic reports, and analyzes material changes from period-to-period in the valuation of its investments as part of its control procedures. The Company also performs back testing on a regular basis by comparing prices observed in executed transactions to previous valuations. The fair market value for level 3 securities may be highly sensitive to the use of industry standard models, unobservable inputs and subjective assumptions. The degree of fair market value sensitivity is also contingent upon the subjective weight given to specific inputs and valuation metrics. The Company holds various equity and debt instruments where different weight may be applied to industry standard models representing standard valuation metrics such as: discounted cash flows, market multiples, comparative transactions, capital rates, recovery rates and timing, and bid levels. Generally, changes in the weights ascribed to the various valuation metrics and the significant unobservable inputs in isolation may result in significantly lower or higher fair value measurements. Volatility levels for warrants and options are not readily observable and subject to interpretation. Changes in capital rates, discount rates and replacement costs could significantly increase or decrease the valuation of the real estate investments. The interrelationship between unobservable inputs may vary significantly amongst level 3 securities as they are generally highly idiosyncratic. Significant increases (decreases) in any of those inputs in isolation can result in a significantly lower (higher) fair value measurement. Other financial assets and liabilities The following table presents the carrying values and fair values, at June 30, 2019 and December 31, 2018, of financial assets and liabilities and information on their classification within the fair value hierarchy which are not measured at fair value on a recurring basis. For additional information regarding the financial instruments within the scope of this disclosure, and the methods and significant assumptions used to estimate their fair value see Note 2.
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Deposits with Clearing Organizations, Brokers and Banks |
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Jun. 30, 2019 | |
Deposits with Clearing Organizations, Brokers and Banks [Abstract] | |
Deposits with Clearing Organizations, Brokers and Banks | Deposits with Clearing Organizations, Brokers and Banks Under the terms of agreements between the Company and some of its clearing organizations, brokers and banks, balances owed are collateralized by certain of the Company’s cash and securities balances. As of June 30, 2019 and December 31, 2018, the Company had a total of $97.7 million and $89.4 million, respectively, in deposit accounts with clearing organizations, brokers and banks that could be used as collateral to offset losses incurred by the clearing organizations, brokers and banks, on behalf of the Company’s activities, if such losses were to occur. |
Receivables from and payables to brokers, dealers and clearing organizations |
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Receivables From and Payables to Brokers, Dealers and Clearing Organizations | Receivable From and Payable to Brokers, Dealers and Clearing Organizations Receivable from and payable to brokers, dealers and clearing organizations includes cash held at the clearing brokers, amounts receivable or payable for unsettled transactions, monies borrowed and proceeds from short sales equal to the fair value of securities sold, not yet purchased, at fair value, which are restricted until the Company purchases the securities sold short. Pursuant to the master netting agreements the Company entered into with its brokers, dealers and clearing organizations, these balances are presented net (assets less liabilities) across balances with the same counterparty. The Company's receivable from and payable to brokers, dealers and clearing organizations balances are held at multiple financial institutions. As of June 30, 2019 and December 31, 2018, amounts receivable from brokers, dealers and clearing organizations include:
As of June 30, 2019 and December 31, 2018, amounts payable to brokers, dealers and clearing organizations include:
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Receivable from and Payable to Customers |
6 Months Ended |
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Jun. 30, 2019 | |
Receivables and Payable to Customers [Abstract] | |
Receivable from and Payables to Customers [Text Block] | Receivable From and Payable To Customers As of June 30, 2019 and December 31, 2018, receivable from customers of $87.5 million and $37.9 million, respectively, consist of amounts owed by customers relating to securities transactions not completed on settlement date and receivables arising from the prepayment of Commission Sharing Agreements (“CSA”), net of an allowance for credit losses. A prepaid CSA is established for research-related disbursements in advance of anticipated customer commission volumes. As of June 30, 2019 and December 31, 2018, payable to customers of $428.1 million and $525.2 million, respectively, include amounts due on cash and margin transactions to the Company's clients, some of which have their assets held by a Company omnibus account, which are included within receivables from brokers, dealers and clearing organizations in the accompanying condensed consolidated statements of financial condition. In the omnibus structure, positions that are owned by Cowen International Ltd are fully cross collateralized by client funds, meaning that the Company, for all intents and purposes, has no market risk. Additionally, Cowen International Ltd has no obligation to settle any trade that it deems inappropriate from a risk perspective, adding an important market and counterparty risk mitigating factor. |
Goodwill and Intangibles |
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Goodwill and Intangibles [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and intangible assets Goodwill Goodwill represents the excess of the purchase price consideration of acquired companies over the estimated fair value assigned to the individual assets acquired and liabilities assumed. Goodwill is allocated to the Company's reporting units at the date the goodwill is initially recorded. Once goodwill has been allocated to the reporting units, it generally no longer retains its identification with a particular acquisition but instead becomes identifiable with the reporting unit. As a result, all of the fair value of each reporting unit is available to support the value of goodwill allocated to the unit. In January 2017, the FASB issued guidance that simplifies the subsequent measurement of goodwill. The new guidance eliminated Step 2 from the goodwill impairment test which was required in computing the implied fair value of goodwill. Instead, under the new amendments, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company early adopted these amendments during the second quarter of 2019 in conjunction with a quantitative goodwill test performed due to the Company’s change in operating segments and restructuring of reporting units. See Note 11 for the impact of the goodwill impairment test. In accordance with US GAAP, inclusive of the newly adopted amendments, the Company tests goodwill for impairment on an annual basis or at an interim period if events or changed circumstances would more likely than not reduce the fair value of a reporting unit below its carrying amount. In testing for goodwill impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company concludes that fair value exceeds its carrying amount, then performing a quantitative impairment test is not necessary. If the Company concludes otherwise, the Company is required to perform a quantitative impairment test that requires a comparison of the fair value of the reporting unit to its carrying value, including goodwill. If the fair value of the reporting unit exceeds its carrying value, the related goodwill is not considered impaired and no further analysis is required. If the carrying value of the reporting unit exceeds its fair value, then the Company recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. See Note 11 for further discussion. Intangible assets Intangible assets with finite lives are amortized over their estimated average useful lives. The Company does not have any intangible assets deemed to have indefinite lives. Intangible assets are tested for potential impairment whenever events or changes in circumstances suggest that an asset or asset group's carrying value may not be fully recoverable. An impairment loss, calculated as the difference between the estimated fair value and the carrying value of an asset or asset group, is recognized in the accompanying consolidated statements of operations if the sum of the estimated undiscounted cash flows relating to the asset or asset group is less than the corresponding carrying value. Goodwill and Intangible Assets In accordance with US GAAP, the Company tests goodwill for impairment on an annual basis or at an interim period if events or changed circumstances would more likely than not reduce the fair value of a reporting unit below its carrying amount. Under US GAAP, the Company first assesses the qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amounts as a basis for determining if it is necessary to perform a quantitative impairment test. Periodically estimating the fair value of a reporting unit requires significant judgment and often involves the use of significant estimates and assumptions. These estimates and assumptions could have a significant effect on whether or not an impairment charge is recorded and the magnitude of such a charge. During the second quarter of 2019, the Company realigned its business segments to Op Co and Asset Co (See Note 1). Prior to the reorganization, our Investment Management segment was also a reporting unit for purposes of measuring and reporting goodwill. The goodwill that was previously attributable to the Investment Management reporting unit was reallocated to the CIM reporting unit within the Op Co segment and the Asset Co reporting unit based on the relative fair value of the respective portions that became attributable to those reporting units. The Asset Co segment is also a reporting unit for purposes of measuring and reporting goodwill. Based on the change in segments and restructuring of reporting units, the Company determined that it was necessary to perform a quantitative impairment test which involves estimates of future cash flows, discount rates, economic forecast and other assumptions which are then used in the market approach (earnings and / or transactions multiples) and / or income approach (discounted cash flow method). Based on the results of the impairment analysis as of June 30, 2019, the Company recognized a goodwill impairment in the amount of $4.1 million within the Asset Co reporting unit. No impairment charges for goodwill were recognized during the year ended December 31, 2018. The following table presents the changes in the Company's goodwill balance, by reporting unit for the periods ended June 30, 2019 and December 31, 2018:
In connection with the Quarton transaction (see Note 3), in January 2019, the Company recognized goodwill of $81.2 million and intangible assets (including customer relationships, trade name, backlog and proprietary software) with an estimated fair value of $22.2 million which are included within intangible assets, net in the condensed consolidated statements of financial condition with the expected useful lives ranging from 2 to 4 years with a weighted average useful life of 2.8 years. Amortization expense related to intangibles from the Quarton acquisition for the three and six months ended June 30, 2019 is $2.2 million and $4.5 million, respectively. Goodwill, the excess of the purchase price over the fair value of net assets, primarily relates to expected synergies from combining operations and has been assigned to the Op Co segment of the Company. Tax deductible goodwill will differ from goodwill recognized by the Company in an amount equal to the difference between actual contingent consideration and estimated contingent consideration (see Note 3). |
Commission Management Payable |
6 Months Ended |
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Jun. 30, 2019 | |
Commission Management Payable [Abstract] | |
Commission Management Payable | Commission Management Payable The Company receives a gross commission from various clearing brokers, which is then used to fund commission sharing and recapture arrangements, less the portion retained as income to the Company. Accrued commission sharing and commission recapture payable of $96.7 million and $95.3 million, as of June 30, 2019 and December 31, 2018, respectively, are classified as commission management payable in the accompanying condensed consolidated statements of financial condition. |
Redeemable Non-Controlling Interests in Consolidated Subsidiaries and Funds |
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Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Non-Controlling Interests in Consolidated Subsidiaries and Funds | Redeemable Non-Controlling Interests in Consolidated Subsidiaries and Investment Funds Redeemable non-controlling interests in consolidated subsidiaries and investment funds and the related net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds are comprised as follows:
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Reinsurance |
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Reinsurance | Reinsurance The Company’s wholly-owned Luxembourg subsidiary, Hollenfels Re SA (“Hollenfels”) provides reinsurance to third party insurance and reinsurance companies. Hollenfels’s share of incurred and paid claims, as well as claims incurred but not reported plus expected development on reported claims (“Claims IBNR”) were as follows:
Hollenfels utilizes several methods to determine its Claims IBNR. It generally employs an estimation methodology whereby historical average claims ratios over a period of up to 10 years are utilized, based on availability of data. In cases where current claims development contradicts historical results, Hollenfels employs a method to average claims ratios derived through different actuarial calculation methods. Also, if an event occurs that may give rise to significant future claims in excess of the amount calculated using the above-mentioned methodologies, the impact of such an event is calculated using existing claims data and actuarial estimation methods to adjust Hollenfels’s Claims IBNR. During the three and six months ended June 30, 2019, Hollenfels calculated its claim liability or claim adjustment expenses using the above-mentioned methods consistent with prior years. While Hollenfels typically settles its premiums and claim payments on a quarterly basis, the frequency of claims in the underlying policies is impractical for Hollenfels to obtain. Certain contracts Hollenfels has written are on a quota-share basis while the rest of the policies provide aggregate loss protection, rendering the collection of information for all underlying contracts impracticable. Hollenfels did not discount any of its reserves and did not cede any portion of its exposures during the three and six months ended June 30, 2019 and June 30, 2018. |
Share-Based Compensation and Employee Ownership Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation and Employee Ownership Plans | Share-Based and Deferred Compensation and Employee Ownership Plans The Company issues share-based compensation under the 2006 Equity and Incentive Plan, the 2007 Equity and Incentive Plan (both established prior to the November 2009 transaction between Ramius Capital Group LLC and Cowen) and the 2010 Equity and Incentive Plan (collectively, the “Equity Plans”). The Equity Plans permit the grant of options, restricted shares, restricted stock units, stock appreciation rights ("SARs") and other equity-based awards to the Company's employees and directors. Stock options granted generally vest over two-to-five-year periods and expire seven years from the date of grant. Restricted shares and restricted share units issued may be immediately vested or may generally vest over a two-to-five-year period. SARs vest and expire after five years from grant date. Awards are subject to the risk of forfeiture. As of June 30, 2019, there were 0.5 million shares available for future issuance under the Equity Plans. Under the 2010 Equity and Incentive Plan, the Company awarded $41.8 million of deferred cash awards to its employees during the three and six months ended June 30, 2019. These awards vest over a four-year period and accrue interest at 0.70% per year. As of June 30, 2019, the Company had unrecognized compensation expense related to the 2010 Equity and Incentive Plan deferred cash awards of $74.3 million. The Company measures compensation cost for share based awards according to the equity method. In accordance with the expense recognition provisions of those standards, the Company amortizes unearned compensation associated with share-based awards on a straight-line basis over the vesting period of the option or award, net of estimated forfeitures. In relation to awards under the Equity Plans, the Company recognized compensation expense of $9.4 million and $8.8 million for the three months ended June 30, 2019 and 2018, and $17.2 million and $19.1 million for the six months ended June 30, 2019 and 2018, respectively. The income tax effect recognized for the Equity Plans was a benefit of $2.0 million and $2.4 million for the three months ended June 30, 2019 and 2018, and $4.2 million and $4.7 million for the six months ended June 30, 2019 and 2018, respectively. Restricted Stock Units Granted to Employees Restricted shares and restricted stock units are referred to collectively as restricted stock. The following table summarizes the Company's restricted share and restricted stock unit activity for the six months ended June 30, 2019 and 2018:
Included in the restricted share and restricted stock unit activity are performance linked restricted stock units of 481,438 which were awarded to employees of the Company in December 2013 and January 2014. An additional 700,000 performance linked restricted stock units were awarded in March 2016 and 333,333 in April of 2019. Of the awards granted, 130,438 have been forfeited and 233,333 have been canceled, as they did not meet the performance criteria, through June 30, 2019. The remaining awards, included in the outstanding balance as of June 30, 2019, will vest between May 2019 and December 2021 and will be earned only to the extent that the Company attains specified market conditions relating to its volume-weighted average share price and total shareholder return in relation to certain benchmark indices and performance goals relating to aggregate net income and average return on shareholder equity. The actual number of RSUs ultimately earned could vary from zero, if performance goals are not met, to as much as 200% of the targeted award. Each RSU is equal to the one share of the Company’s Class A common stock. Compensation expense is recognized to the extent that it is probable that the Company will attain the performance goals. The fair value of restricted stock (excluding certain performance linked units which are valued using the Monte Carlo valuation model) is determined based on the number of shares granted and the quoted price of the Company's common stock on the date of grant. As of June 30, 2019, there was $77.1 million of unrecognized compensation expense related to the Company's grant of nonvested restricted shares and restricted stock units to employees. Unrecognized compensation expense related to nonvested restricted shares and restricted stock units granted to employees is expected to be recognized over a weighted-average period of 2.38 years. Restricted Shares and Restricted Stock Units Granted to Non-employee Board Members There were no restricted stock units awarded during the three and six months ended June 30, 2019 and 79,487 were delivered. As of June 30, 2019 there were 174,285 restricted stock units outstanding. There were no restricted stock units awarded during the three and six months ended June 30, 2018. As of December 31, 2018 there were 253,772 restricted stock units outstanding. |
Income Taxes |
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Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The taxable results of the Company’s U.S. operations are included in the consolidated income tax returns of Cowen, Inc. as well as stand-alone state and local tax returns. The Company has subsidiaries that are resident in foreign countries where tax filings have to be submitted on a stand‑alone basis. These subsidiaries are subject to tax in their respective countries and the Company is responsible for and, thus, reports all taxes incurred by these subsidiaries. The countries where the Company owns subsidiaries that file tax returns are United Kingdom, Luxembourg, Gibraltar, Germany, Switzerland, Canada and Hong Kong. The Company calculates its U.S. tax provision using the estimated annual effective tax rate methodology. The tax expense or benefit caused by an unusual or infrequent item is recorded in the quarter in which it occurs. To the extent that information is not available for the Company to fully determine the full year estimated impact of an item of income or tax adjustment, the Company calculates the tax impact of such item discretely. Accordingly, the Company uses the discrete methodology to calculate the income tax provision for its foreign subsidiaries and the tax impact of income attributable to redeemable non-controlling interests in consolidated subsidiaries and funds. Based on these methodologies, the Company’s effective income tax rate was 27.15% and 15.83% for the six months ended June 30, 2019 and 2018, respectively. During the six months ended June 30, 2019 and 2018, the unusual or infrequent items whose tax impact were recorded discretely related primarily to foreign taxes, base-erosion anti-abuse tax and stock compensation. For the six months ended June 30, 2019, the effective tax rate differs from the statutory rate of 21% primarily due to income attributable to redeemable non-controlling interests in consolidated subsidiaries and funds, foreign taxes, base-erosion anti-abuse tax, goodwill impairment as well as other nondeductible expenses. For the six months ended June 30, 2018, the effective tax rate differs from the statutory rate of 21% primarily due to income attributable to redeemable non-controlling interests in consolidated subsidiaries and funds, stock compensation, foreign taxes, as well as other nondeductible expenses. The Company recorded an uncertain tax position liability of $0.3 million as of June 30, 2019 and December 31, 2018 related to New York State tax matters. The Company records deferred tax assets and liabilities for the future tax benefit or expense that will result from differences between the carrying value of its assets for income tax purposes and for financial reporting purposes, as well as for operating or capital loss and tax credit carryovers. A valuation allowance is recorded to bring the net deferred tax assets to a level that, in management's view, is more likely than not to be realized in the foreseeable future. This level will be estimated based on a number of factors, especially the amount of net deferred tax assets of the Company that are actually expected to be realized, for tax purposes, in the foreseeable future. As of June 30, 2019, the Company recorded a valuation allowance against deferred tax assets related to its foreign tax credits and foreign net operating losses. The Company is subject to examination by the United States Internal Revenue Service as well as state, local and foreign tax authorities in jurisdictions where the Company has significant business operations, such as New York, United Kingdom, Luxembourg, Germany and Switzerland. Currently, the Company is under audit by New York State for the 2013 to 2017 tax years. Management is not expecting a material tax liability from these audits. The Company continues to permanently reinvest the capital and accumulated earnings of its subsidiaries in the United Kingdom, Germany, Switzerland, Canada and Hong Kong. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Operating Lease Obligations The Company has entered into leases for real estate and other facilities. These leases contain rent escalation clauses and options to extend the lease term. The Company does not include renewal options in the lease term for calculating the Company’s lease liability as the renewal options allow the Company operational flexibility and the Company is not reasonably certain to exercise these renewal options at this time as such the company has not incorporated the effect of the renewal options into the determination of the lease term. The Company records the expenses related to occupancy and equipment on a straight-line basis over the lease term and are included in occupancy and equipment expense and client services and business development expense in the accompanying condensed consolidated statements of operations. For the three and six months ended June 30, 2019, quantitative information regarding the Company's operating lease obligations reflected in the accompanying condensed consolidated statement of operations were as follows:
The following table summarizes the supplemental cash flow information and certain other information related to operating leases for the six months ended June 30, 2019:
As of June 30, 2019, maturities of the outstanding operating lease liabilities for the Company were as follows:
See Note 18 for further information on the finance lease minimum payments. Prior to the adoption of the new lease accounting guidance, the minimum rental commitments under non-cancelable operating leases at December 31, 2018, were as follows:
Other Commitments As of June 30, 2019, future minimum annual service payments for the Company were as follows:
Clawback Obligations For financial reporting purposes, the general partners of a real estate fund have recorded a liability for potential clawback obligations to the limited partners, due to changes in the unrealized value of the real estate fund's remaining investments and where the real estate fund's general partner has previously received carried interest distributions. The clawback liability, however, is not realized until the end of the real estate fund's life. The real estate fund is currently in a winding-up phase whereby the remaining assets of the real estate fund are being liquidated as promptly as possible so as to maximize value. However a final date for liquidation has not been set. The clawback obligations for the real estate fund were $6.5 million at June 30, 2019 and December 31, 2018, which is included in accounts payable, accrued expenses and other liabilities in the accompanying condensed consolidated statements of financial condition. The Company serves as the general partner/managing member and/or investment manager to various affiliated and sponsored investment funds. As such, the Company is contingently liable for obligations for those entities. These amounts are not included above as the Company believes that the assets in these investment funds are sufficient to discharge any liabilities. Unfunded Commitments The following table summarizes unfunded commitments as of June 30, 2019:
(a) The Company had unfunded commitments pertaining to capital commitments in five real estate investments held by the Company, all of which pertain to related party investments. Such commitments can be called at any time between two to four years, subject to advance notice. (b) The Company is a limited partner of the HealthCare Royalty Partners funds (which are managed by Healthcare Royalty Management) and is a member of HealthCare Royalty Partners General Partners. The Company will make its pro-rata investment in the HealthCare Royalty Partners funds along with the other limited partners. Litigation In the ordinary course of business, the Company and its affiliates, subsidiaries and current and former officers, directors and employees (the "Company and Related Parties") are named as defendants in, or as parties to, various legal actions and proceedings. Certain of these actions and proceedings assert claims or seek relief in connection with alleged violations of securities, banking, anti-fraud, anti-money laundering, employment and other statutory and common laws. Certain of these actual or threatened legal actions and proceedings include claims for substantial or indeterminate compensatory or punitive damages, or for injunctive relief. In the ordinary course of business, the Company and Related Parties are also subject to governmental and regulatory examinations, information gathering requests (both formal and informal), certain of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief. Certain of the Company's affiliates and subsidiaries are registered broker-dealers, futures commission merchants, investment advisers or other regulated entities and, in those capacities, are subject to regulation by various U.S., state and foreign securities, commodity futures and other regulators. In connection with formal and informal inquiries by these regulators, we receive requests, and orders seeking documents and other information in connection with various aspects of the Company's regulated activities. Due to the global scope of the Company's operations, and its presence in countries around the world, the Company and Related Parties may be subject to litigation, governmental and regulatory examinations, information gathering requests, investigations and proceedings (both formal and informal), in multiple jurisdictions with legal and regulatory regimes that may differ substantially, and present substantially different risks, from those to which the Company and Related Parties are subject in the United States. The Company seeks to resolve all litigation and regulatory matters in the manner management believes is in the best interests of the Company and its shareholders, and contests liability, allegations of wrongdoing and, where applicable, the amount of damages or scope of any penalties or other relief sought as appropriate in each pending matter. In accordance with US GAAP, the Company establishes reserves for contingencies when the Company believes that it is probable that a loss has been incurred and the amount of loss can be reasonably estimated. The Company discloses a contingency if there is at least a reasonable possibility that a loss may have been incurred and there is no reserve for the loss because the conditions above are not met. The Company's disclosure includes an estimate of the reasonably possible loss or range of loss for those matters, for which an estimate can be made. Neither a reserve nor disclosure is required for losses that are deemed remote. The Company appropriately reserves for certain matters where, in the opinion of management, the likelihood of liability is probable and the extent of such liability is reasonably estimable. Such amounts are included within accounts payable, accrued expenses and other liabilities in the accompanying condensed consolidated statements of financial condition. Estimates, by their nature, are based on judgment and currently available information and involve a variety of factors, including, but not limited to, the type and nature of the litigation, claim or proceeding, the progress of the matter, the advice of legal counsel, the Company's defenses and its experience in similar cases or proceedings as well as its assessment of matters, including settlements, involving other defendants in similar or related cases or proceedings. The Company may increase or decrease its legal reserves in the future, on a matter-by-matter basis, to account for developments in such matters. The Company accrues legal fees as incurred. The following information reflects developments with respect to the Company’s legal proceedings that occurred during the quarter ended June 30, 2019. On December 27, 2013, Landol Fletcher filed a putative class action lawsuit against Convergex Holdings, LLC, Convergex Group, LLC, Cowen Execution, Convergex Global Markets Limited and G-Trade Services LLC (collectively, “Convergex”) in the United States District Court for the Southern District of New York (Landol Fletcher and all others similarly situated v. Convergex Group LLC, Cowen Execution, Convergex Global Markets Ltd., Convergex Holdings LLC, G-Trade Services LLC, & Does 1-10, No. 1:13-CV-09150-LLS). The suit alleges breaches of fiduciary duty and prohibited transactions under ERISA and seeks to maintain a class action on behalf of all ERISA plan participants, beneficiaries and named fiduciaries whose plans were impacted by net trading by Convergex Global Markets Limited from October 2006 to December 2011. On April 11, 2014, Landol Fletcher and Frederick P. Potter Jr., filed an amended complaint raising materially similar allegations. This matter was assumed by the Company as a result of the Company’s previously announced acquisition of Convergex Group, which was completed on June 1, 2017. On February 17, 2016, the District Court granted Convergex’s motion to dismiss the amended complaint. Plaintiffs filed an appeal to the Second Circuit, and the AARP and Department of Labor filed amicus briefs on plaintiffs' behalf. The appeal was argued on December 12, 2016. On February 10, 2017, the Second Circuit Court of Appeals (1) reversed the District Court, finding that plaintiff has constitutional standing in a “representative” capacity to sue for damages to the ERISA defined benefit plan in which he is a participant, and (2) remanded to the District Court to reconsider, in light of the Circuit Court’s decision, the issue whether plaintiff has standing to pursue claims on behalf of ERISA plans in which plaintiff is not a participant. Convergex filed a petition for rehearing, and the Court of Appeals denied the petition. On June 30, 2017, the Company filed a notice of motion and memorandum of law in support of a motion to stay the proceedings in the District Court pending resolution of its petition for writ of certiorari, which the Company intended to file with the U.S. Supreme Court. On August 16, 2017, the District Court granted the Company’s motion to stay the proceedings in the District Court pending resolution of the Company’s petition for writ of certiorari. On September 1, 2017, the Company filed a petition with the United States Supreme Court for a writ of certiorari requesting review of the decision of the Court of Appeals. On January 8, 2018, the U.S. Supreme Court denied the Company’s petition for a writ of certiorari. The previously granted stay of the proceedings in the District Court was lifted, and the case proceeded in the District Court. Status conferences were held on April 6, 2018, October 12, 2018, and December 4, 2018. On March 15, 2019, the Company filed a motion to dismiss the plaintiff’s amended complaint. The District Court granted the Company’s motion on July 2, 2019. The status of the case going forward will depend on whether the plaintiffs appeal the District Court’s decision. We are indemnified against losses arising from this matter pursuant to, and subject to, the provisions of the purchase agreement relating to the acquisition of Convergex Group. While it is not possible to determine the ultimate outcome or duration of such litigation, based on current knowledge, the Company does not currently expect this case to have a material effect on its financial position or its results of operations. |
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Convertible Debt and Notes Payable | Convertible Debt and Notes Payable As of June 30, 2019 and December 31, 2018, the Company's outstanding debt was as follows:
Convertible Debt December 2022 Convertible Notes The Company, on December 14, 2017, issued $135.0 million aggregate principal amount of 3.00% convertible senior notes due December 2022 (the “December 2022 Convertible Notes”). The December 2022 Convertible Notes are due on December 15, 2022 unless earlier repurchased by the Company or converted by the holder in accordance with their terms prior to such date. The interest on the December 2022 Convertible Notes is payable semi-annually on December 15 and June 15 of each year. The December 2022 Convertible Notes are senior unsecured obligations of Cowen. The December 2022 Convertible Notes may be converted into cash or shares of Class A common stock at the Company's election based on the current conversion price. The December 2022 Convertible Notes were issued with an initial conversion price of $17.375 per share of Cowen’s Class A common stock. The Company used the net proceeds, together with cash on hand, from the offering for general corporate purposes, including the repurchase or repayment of $115.1 million of the Company’s outstanding 3.0% cash convertible senior notes due March 2019 (the "March 2019 Convertible Notes") and the repurchase of approximately $19.5 million of the Company’s shares of its Class A common stock, which were consummated substantially concurrently with the closing of the offering. As of June 30, 2019, the outstanding principal amount of the December 2022 Convertible Notes was $135.0 million. On June 26, 2018, the Company received shareholder approval for the Company to settle the December 2022 Convertible Notes entirely in Class A common stock. Upon receiving shareholder approval, the Company reclassified the separately recognized conversion option from a derivative liability to equity. The Company recorded interest expense of $1.0 million and $1.0 million for the three months ended June 30, 2019 and 2018, and $2.0 million and $2.0 million for the six months ended June 30, 2019 and 2018, respectively. The Company recognized the embedded cash conversion option at issuance date fair value, which also represents the initial unamortized discount on the December 2022 Convertible Notes of $23.4 million and is shown net in convertible debt in the accompanying condensed consolidated statements of financial condition. Amortization on the discount, included within interest and dividends expense in the accompanying condensed consolidated statements of operations is $1.1 million and $1.0 million for the three months ended June 30, 2019 and 2018, and $2.1 million and $2.0 million for the six months ended June 30, 2019 and 2018, respectively, based on an effective interest rate of 7.13%. The Company capitalized the debt issuance costs in the amount of $2.2 million, which is a direct deduction from the carrying value of the debt and will be amortized over the life of the December 2022 Convertible Notes. March 2019 Convertible Notes On March 10, 2014, the Company issued $149.5 million of 3.0% cash convertible senior notes (the "March 2019 Convertible Notes"). The March 2019 Convertible Notes matured on March 15, 2019 and were fully repaid by the Company. The Company recorded interest expense of $0.2 million for the three months ended June 30, 2018, and $0.1 million and $0.7 million for the six months ended June 30, 2019 and 2018, respectively. Amortization on the discount, included within interest and dividends expense in the accompanying condensed consolidated statements of operations was $0.4 million for the three months ended June 30, 2018, and $0.3 million and $0.9 million for the six months ended June 30, 2019 and 2018, respectively, based on an effective interest rate of 8.89%. Notes Payable May 2024 Notes On May 7, 2019, the Company completed its private placement of $53.0 million aggregate principal amount of 7.25% senior notes due May 2024 (the "May 2024 Notes") with certain institutional investors. To date the May 2024 Notes have maintained their initial private rating, and the interest rate has remained unchanged. Interest on the May 2024 Notes is payable semi-annually in arrears on May 6 and November 6. The Company recorded interest expense of $0.6 million for the three and six months ended June 30, 2019, respectively. The Company capitalized debt issuance costs of approximately $1.5 million which is a direct deduction from the carrying value of the debt and will be amortized over the life of the May 2024 Notes. June 2033 Notes On June 11, 2018, the Company completed its public offering of $90.0 million of 7.75% senior notes due June 2033 (the “June 2033 Notes”) and subsequently the underwriters exercised in full their option to purchase an additional $10.0 million principal amount of the June 2033 Notes. Interest on the June 2033 Notes is payable quarterly in arrears on March 15, June 15, September 15 and December 15. The Company recorded interest expense of $2.0 million and $0.4 million for the three months ended June 30, 2019 and 2018, and $3.9 million and $0.4 million for the six months ended June 30, 2019 and 2018, respectively. The Company capitalized debt issuance costs of approximately $3.6 million which is a direct deduction from the carrying value of the debt and will be amortized over the life of the June 2033 Notes. December 2027 Notes On December 8, 2017, the Company completed its public offering of $120.0 million of 7.35% senior notes due December 2027 (the “December 2027 Notes”) and subsequently the underwriters exercised in full their option to purchase an additional $18.0 million principal amount of the December 2027 Notes. Interest on the December 2027 Notes is payable quarterly in arrears on March 15, June 15, September 15 and December 15. The Company recorded interest expense of $2.5 million and $2.5 million for the three months ended June 30, 2019 and 2018, and $5.1 million and $5.1 million for the six months ended June 30, 2019 and 2018, respectively. The Company capitalized debt issuance costs of approximately $5.0 million which is a direct deduction from the carrying value of the debt and will be amortized over the life of the December 2027 Notes. The net proceeds of the offering, after deducting the underwriting discount and estimated offering expenses payable by the Company were used to redeem all of its 8.25% senior notes due October 2021 and for general corporate purposes. Term Loan On June 30, 2017, the Company borrowed $28.2 million to fund general corporate purposes. This term loan has an effective interest rate of LIBOR plus 3.75% with a lump sum payment of the entire principal amount due (as amended) on June 26, 2020. The loan is secured by the value of the Company's limited partnership interests in two affiliated investment funds. The Company has provided a guarantee for this loan. The Company recorded interest expense of $0.4 million and $0.4 million for the three months ended June 30, 2019 and 2018, and $0.9 million and $0.8 million for the six months ended June 30, 2019 and 2018, respectively. Other Notes Payable During January 2019, the Company borrowed $2.2 million to fund insurance premium payments. This note had an effective interest rate of 2.51% and was due on December 31, 2019, with monthly payment requirements of $0.2 million. As of June 30, 2019, the outstanding balance on this note was $1.2 million. Interest expense for the three and six months ended June 30, 2019 was insignificant. Finance Lease Obligations The Company has entered into various finance leases for computer equipment. The Company's finance lease right-of-use asset amounted to $6.0 million and is recorded in fixed assets in the accompanying condensed consolidated statements of financial condition. These finance lease obligations are included in notes payable and other debt in the accompanying condensed consolidated statements of financial condition, and have a weighted average lease term of 3.7 years and weighted average interest rate of 4.93% as of June 30, 2019. As of June 30, 2019 and December 31, 2018, the remaining balance on these finance leases was $4.4 million and $5.0 million, respectively. For the three and six months ended June 30, 2019 and 2018, quantitative information regarding the Company's finance lease obligations reflected in the accompanying condensed consolidated statement of operations, the supplemental cash flow information and certain other information related to finance leases were as follows:
Annual scheduled maturities of debt and minimum payments (of principal and interest) for all debt outstanding as of June 30, 2019, are as follows:
Letters of Credit As of June 30, 2019, the Company has the following seven irrevocable letters of credit, related to leased office space, for which there is cash collateral pledged, which the Company pays a fee on the stated amount of the letter of credit. The Company also has pledged collateral for reinsurance agreements which amounted to $1.9 million, as of June 30, 2019, and $1.0 million, as of December 31, 2018, which is released annually between March 2020 and March 2023 based on the policy periods covered by the reinsurance agreements.
To the extent any letter of credit is drawn upon, interest will be assessed at the prime commercial lending rate. As of June 30, 2019 and December 31, 2018, there were no amounts due related to these letters of credit. |
Stockholder's Equity |
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Stockholder's Equity | Stockholder's Equity Preferred Stock and Purchase of Capped Call Option On May 19, 2015, the Company completed its offering of 120,750 shares of the Company's 5.625% Series A cumulative perpetual convertible preferred stock ("Series A Convertible Preferred Stock") that provided $117.2 million of proceeds, net of underwriting fees and issuance costs of $3.6 million. Each share of the Series A Convertible Preferred Stock is entitled to dividends at a rate of 5.625% per annum which will be payable, when and if declared by the board of directors of the Company, quarterly, in arrears, on February 15, May 15, August 15 and November 15 of each year. The Company may, at its option, pay dividends in cash, common stock or a combination thereof. The Company declared and accrued a cash dividend of $1.7 million and $1.7 million for the three months ended June 30, 2019 and 2018, and $3.4 million and $3.4 million for the six months ended June 30, 2019 and 2018, respectively. Each share of Series A Convertible Preferred Stock is non-voting and has a liquidity preference over the Company's Class A common stock and ranks senior to all classes or series of the Company's Class A common stock, but junior to all of the Company's existing and future indebtedness with respect to divided rights and rights upon the Company's involuntary liquidation, dissolution or winding down. Each share of Series A Convertible Preferred Stock is convertible, at the option of the holder, into a number of shares of the Company's Class A common stock equal to the liquidation preference of $1,000 divided by the conversion rate. The initial conversion rate (subsequent to the December 5, 2016 reverse stock split) is 38.0619 shares (which equates to $26.27 per share) of the Company's Class A common stock for each share of the Series A Convertible Preferred Stock. At any time on or after May 20, 2020, the Company may elect to convert all outstanding shares of the Series A Convertible Preferred Stock into shares of the Company’s Class A common stock, cash or a combination thereof, at the Company’s election, in each case, based on the then-applicable conversion rate, if the last reported sale price of the Company’s Class A common stock equals or exceeds 150% of the then-current conversion price on at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days (including on the last trading day of such period) immediately prior to such election. At the time of conversion, the conversion rate may be adjusted based on certain events including but not limited to the issuance of cash dividends or Class A common stock as dividends to the Company's Class A common shareholders or a share split or combination. In connection with the issuance and sale of the Series A Convertible Preferred Stock, the Company entered into a capped call option transaction (the “Capped Call Option Transaction”) with Nomura Global Financial Products Inc. (the “option counterparty”) for $15.9 million. The Capped Call Option Transaction is expected generally to reduce the potential dilution to the Company’s Class A common stock (if the Company elects to convert to common shares) and/or offset any cash payments that the Company is required to make upon conversion of any Series A Convertible Preferred Stock. The Capped Call Option Transaction has an initial effective strike price of $26.27 per share, which matches the initial conversion price of the Series A Convertible Preferred Stock, and a cap price of $33.54 per share. However, to the extent that the market price of Class A common stock, as measured under the terms of the Capped Call Option Transaction, exceeds the cap price thereof, there would nevertheless be dilution and/or such cash payments would not be offset. As the Capped Call Option Transaction is a free standing derivative that is indexed to the Company's own stock price and the Company controls if it is settled in cash or stock it qualifies for equity classification as a reduction to additional paid in capital. Embedded Cash Conversion Option on the December 2022 Convertible Notes Upon issuance of the December 2022 Convertible Notes (see Note 18), the Company recognized the embedded cash conversion option at fair value of $23.4 million which was valued as of June 26, 2018 at $29.0 million. On June 26, 2018, the Company received shareholder approval for the Company to settle the December 2022 Convertible Notes entirely in Class A common stock. Upon receiving shareholder approval, the Company reclassified the separately recognized conversion option from a derivative liability to equity. Treasury Stock Treasury stock of $254.4 million as of June 30, 2019, compared to $234.1 million as of December 31, 2018, resulted from $8.1 million acquired through repurchases of shares to cover employee minimum tax withholding obligations related to stock compensation vesting events under the Company's Equity Plans or other similar transactions, $0.1 million received from an escrow account established to satisfy the Company’s indemnification claims arising under the terms of the purchase agreement entered into in connection with the Company’s acquisition of Convergex Group, LLC and $12.0 million purchased in connection with a share repurchase program. The following represents the activity relating to the treasury stock held by the Company during the six months ended June 30, 2019:
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Accumulated other comprehensive income (loss) | Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income includes the after tax change in unrealized gains and losses on foreign currency translation adjustments. During the periods presented, the Company did not have material reclassifications out of other comprehensive income.
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The Company calculates its basic and diluted earnings per share in accordance with US GAAP. Basic earnings per share is calculated by dividing net income attributable to the Company's common stockholders by the weighted average number of common shares outstanding for the period. As of June 30, 2019, there were 29,480,287 shares of Class A common stock outstanding. As of June 30, 2019, the Company has included 174,285 fully vested, unissued restricted stock units in its calculation of basic earnings per share. As of December 31, 2018, there were 28,437,860 shares of Class A common stock outstanding. As of December 31, 2018, the Company has included 253,772 fully vested, unissued restricted stock units in its calculation of basic earnings per share. Diluted earnings per common share are calculated by adjusting the weighted average outstanding shares to assume conversion of all potentially dilutive items. The Company uses the treasury stock method to reflect the potential dilutive effect of the warrants (see Note 6(a)), unvested restricted shares, restricted stock units, and SAR's. In calculating the number of dilutive shares outstanding, the shares of common stock underlying unvested restricted shares and restricted stock units are assumed to have been delivered, and options and warrants are assumed to have been exercised, for the entire period being presented. The number of performance-linked unvested restricted stock units that are included in the calculation are at the amount that could be earned using current payout rates. The assumed proceeds from the assumed vesting, delivery and exercising were calculated as the amount of compensation cost attributed to future services and not yet recognized. The Company can elect to settle the Series A Convertible Preferred Stock in shares, cash, or a combination of both. The Company's intent is to settle in cash and, based on current and projected liquidity needs, the Company has the ability to do so. The computation of earnings per share is as follows:
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Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting Change in Segments During the second quarter of 2019 the Company realigned the information that the Chief Operating Decision Maker regularly reviews to evaluate performance for operating decision-making purposes, including evaluation and allocation of resources. As a result of this change in segment reporting, the Company retrospectively revised prior period results, by segment, to conform to the current period presentation (see Note 1). This structure includes two business segments: Op Co and Asset Co. The structure is based on the Company's domain expertise as a driver of balance sheet harmonization and repeatable revenues for its operating business versus the Company’s long-term monetization strategies. The Op Co segment consists of Cowen Investment Management (“CIM”), Investment Banking, Markets and Research. The Asset Co segment consists of the Company’s private investments, private real estate business and other legacy multi-sector long/short equity strategies. Performance Measures The performance measure for these segments is Economic Income (Loss), which management uses to evaluate the financial performance of and make operating decisions for the segments including determining appropriate compensation levels. Expenses not directly associated with specific segments are allocated based on the most relevant measures applicable, including headcount, square footage and other factors. In general, Economic Income (Loss) is a pre-tax measure that (i) eliminates the impact of consolidation for Consolidated Funds and excludes (ii) goodwill and intangible impairment (iii) certain other transaction-related adjustments and/or reorganization expenses and (iv) certain costs associated with debt. Economic Operating Income (Loss) represents Economic Income (Loss) before depreciation and amortization expenses. In addition, Economic Income (Loss) revenues include investment income that represents the income the Company has earned in investing its own capital, including realized and unrealized gains and losses, interest and dividends, net of associated investment related expenses. For US GAAP purposes, these items are included in each of their respective line items. Economic Income (Loss) revenues also include management fees, incentive income and investment income earned through the Company's investment as a general partner in certain real estate entities and the Company's investment in the activist business and certain investment funds. For US GAAP purposes, all of these items, are recorded in other income (loss). Economic Income (Loss) recognizes (a) incentive fees during periods when the fees are not yet crystallized for US GAAP reporting and (b) retainer fees, relating to investment banking activities, earned during the period that would otherwise be deferred until closing for US GAAP reporting. In addition, Economic Income (Loss) expenses are reduced by reimbursement from affiliates, which for US GAAP purposes is presented gross as part of revenue. As further stated below, one major difference between Economic Income (Loss) and US GAAP net income (loss) is that Economic Income (Loss) presents the segments' results of operations without the impact resulting from the full consolidation of any of the Consolidated Funds. The consolidation of these investment funds' results include the pro rata share of the income or loss attributable to other owners of such entities which is reflected in net income (loss) attributable to redeemable non-controlling interest in consolidated subsidiaries in the accompanying condensed consolidated statements of operations. This pro rata share has no effect on the overall financial performance for the segments, as ultimately, this income or loss is not income or loss for the segments themselves. Included in Economic Income (Loss) is the actual pro rata share of the income or loss attributable to the Company as an investor in such entities, which is relevant in management making operating decisions and evaluating financial performance. The Company does not disclose total asset information for its business segments as the information is not reviewed by the CODM. The following tables set forth operating results for the Company's Op Co and Asset Co segments and related adjustments necessary to reconcile the Company's Economic Income (Loss) measure to arrive at the Company's consolidated US GAAP net income (loss):
The following is a summary of the adjustments made to US GAAP net income (loss) to arrive at Economic Income (Loss): Funds Consolidation: The impacts of consolidation and the related elimination entries of the Consolidated Funds are not included in Economic Income (Loss). Adjustments to reconcile to US GAAP net income (loss) included elimination of incentive income and management fees earned from the Consolidated Funds and addition of investment fund expenses excluding management fees paid, investment fund revenues and investment income (loss). Other Adjustments: (a) Economic Income (Loss) presents underwriting expenses net of investment banking revenues, expenses reimbursed from clients within their respective expense category. Economic Income (Loss) also records retainer fees, relating to investment banking activities, collectible during the period that would otherwise be deferred until closing for US GAAP reporting. (b) Economic Income (Loss) brokerage revenues included net securities borrowed and securities loaned activities which are shown gross in interest income and interest expense for US GAAP. (c) Economic Income (Loss) recognizes revenues (i) net of distribution fees paid to agents, (ii) records income from uncrystallized incentive fees and (iii) the Company's proportionate share of management and incentive fees of certain real estate operating entities, the healthcare royalty business and the activist business. (d) Economic Income (Loss) recognizes Company income from proprietary trading (including interest and dividends). (e) Reimbursement from affiliates is shown as a reduction of Economic Income expenses, but is included as a part of revenues under US GAAP. (f) Economic Income (Loss) recognizes underwriting income from the Company's insurance related activities, net of expenses, within other revenue. (g) Aircraft lease revenue is shown net of expenses in investment income for Economic Income (Loss). (h) Economic Income (Loss) excludes income taxes and acquisition related adjustments as management does not consider these items when evaluating the performance of the segment. (i) Economic Income (Loss) recognizes the Company's proportionate share of expenses, for certain real estate operating entities and the activist business, for which the investments are recorded under the equity method of accounting for investments. (j) Economic Income (Loss) excludes gain/(loss) on debt extinguishment. For the three and six months ended June 30, 2019 and 2018, there was no one investment fund or other customer which represented more than 10% of the Company's total revenues. |
Regulatory Requirements |
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Brokers and Dealers [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Requirements | Regulatory Requirements As registered broker-dealers, Cowen and Company, Cowen Execution, ATM Execution, Cowen Prime and Westminster are subject to the SEC's Uniform Net Capital Rule 15c3-1 (“SEC Rule 15c3-1”), which requires the maintenance of minimum net capital. Each registered broker-dealer has elected to compute net capital under the alternative method permitted by the Rule. Under the alternative method, Cowen and Company's minimum net capital requirement, as defined in (a)(4) of the Rule, is $1.0 million. Cowen Execution, ATM Execution, Cowen Prime and Westminster are required to maintain minimum net capital, as defined in (a)(1)(ii) of the Rule, equal to the greater of $250,000 or 2% of aggregate debits arising from customer transactions. Advances to affiliates, repayment of borrowings, distributions, dividend payments and other equity withdrawals are subject to certain notification and other requirements of the Rule and other regulatory bodies. On February 7, 2019, FINRA approved the transfer of all of Cowen Securities’ business and personnel to Cowen and Company. Cowen Securities subsequently filed a Form BDW, pursuant to Section 15(b) of the Securities Exchange Act of 1934, with FINRA to withdraw its status as a broker-dealer given that it will no longer conduct a securities business. On May 21, 2019, Cowen Securities Form BDW was approved and officially deregistered with the SEC. Cowen Prime is also subject to Commodity Futures Trading Commission Regulation 1.17 (“Regulation 1.17”). Regulation 1.17 requires net capital equal to or in excess of $45,000 or the amount of net capital required by SEC Rule 15c3-1, whichever is greater. Cowen Execution is also subject to Options Clearing Corporation ("OCC") Rule 302. OCC Rule 302 requires maintenance of net capital equal to the greater of $2.0 million or 2% of aggregate debit items. At June 30, 2019, Cowen Execution had $114.4 million of net capital in excess of this minimum requirement. Cowen International Ltd and Cowen Execution Ltd are subject to the capital requirements of the FCA, as defined, must exceed the minimum capital requirement set forth by the FCA. Effective June 1, 2018, the FCA approved Ramius UK’s application to cancel all of its FCA authorization permissions. Accordingly, Ramius UK is no longer an FCA regulated and authorized firm. Ramius UK sought the cancellation. Cowen Execution Ltd was formally approved to trade in a principal capacity conditional upon the completion, and communication to the Wholesale Supervision, of the implementation of its order management system. Cowen and Company (Asia) Limited (“Cowen Asia”), a previously established entity, was re-registered with regulatory approval on May 17, 2019. Cowen Asia is subject to the financial resources requirements of the Securities and Futures Commission (“SFC”) of Hong Kong. Financial Resources must exceed the Total Financial Resources requirement of the SFC. As of June 30, 2019, these regulated broker-dealers had regulatory net capital or financial resources, regulatory net capital requirements or minimum FCA requirement and excess as follows:
The Company’s U.S. broker-dealers must also comply with SEC Rule 15c3-3 or claim an exemption pursuant to subparagraphs (k)(2)(i) or (k)(2)(ii) of that rule. Firms can rely on more than one exemption. Cowen and Company, Cowen Prime and ATM Execution claim the (k)(2)(ii) exemption with regards to some or all of their customer accounts and transactions that are introduced on a fully-disclosed basis to their clearing agents for clearing, settlement and custody. Cowen and Company, Cowen Prime and Westminster claim the (k)(2)(i) exemption with regards to customer transactions and balances that are cleared, settled and custodied in Special Bank Accounts. In accordance with the requirements of SEC Rule 15c3-3, Cowen Execution may be required to deposit in a Special Reserve Account cash or acceptable qualified securities for the exclusive benefit of customers. As of June 30, 2019, Cowen Execution had no required deposit in accordance with the SEC Rule 15c3-3. However, Cowen Execution had approximately $15.6 million of cash segregated. As a clearing broker-dealer, Cowen Execution is required to compute a reserve requirement for proprietary accounts of broker-dealers (“PAB accounts”), as defined in SEC Rule 15c3-3. Cowen Execution conducts PAB reserve computations in order to determine the amount it is required to deposit in its PAB Reserve Bank Accounts pursuant to SEC Rule 15c3-3. This allows each correspondent firm that uses Cowen Execution as its clearing broker-dealer to classify its PAB account assets held at Cowen Execution as allowable assets in the correspondent's net capital calculation. At June 30, 2019, Cowen Execution had $27.7 million of cash on deposit in PAB Reserve Bank Accounts, which was more than its required deposit of $21.9 million. Cowen and Company, ATM Execution, Cowen Prime and Cowen Execution also maintain certain assets in PAB accounts held at their respective clearing brokers. Each treats its assets held in those PAB accounts at the respective clearing brokers as allowable assets for net capital purposes. Cowen’s Luxembourg reinsurance companies, Vianden RCG Re SCA and Hollenfels, individually and their Luxembourg parent holding company, Ramius Enterprise Luxembourg Holdco S.à r.l., on a combined basis with the reinsurance companies, are required to maintain a solvency capital ratio as calculated by relevant European Commission directives and local regulatory rules in Luxembourg. Each reinsurance company’s individual solvency capital ratio as well as the combined solvency capital ratio of the holding and reinsurance companies calculated as of December 31 of each year must exceed a minimum requirement. As of the last testing date, December 31, 2018, all of these entities were in excess of this minimum requirement. The companies are currently, and Management expects they will be at the next testing date of December 31, 2019, in compliance with these requirements. Based on minimum capital and surplus requirements pursuant to the laws of the state of New York that apply to captive insurance companies, RCG Insurance Company, Cowen’s captive insurance company incorporated and licensed in the state of New York, was required to maintain capital and surplus of approximately $0.3 million as of June 30, 2019. RCG Insurance Company’s capital and surplus as of June 30, 2019 totaled approximately $32.5 million. |
Related Party Transactions |
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Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company and its affiliated entities are the managing member, general partner and/or investment manager to the Company's investment funds and certain managed accounts. Management fees and incentive income are primarily earned from affiliated entities. As of June 30, 2019 and December 31, 2018, $19.4 million and $19.4 million, respectively, included in fees receivable, are earned from related parties. The Company may, at its discretion, reimburse certain fees charged to the investment funds that it manages to avoid duplication of fees when such funds have an underlying investment in another affiliated investment fund. For the three and six months ended June 30, 2019 and 2018, the amounts which the Company reimbursed the investment funds it manages were immaterial. Fees receivable and fees payable are recorded at carrying value, which approximates fair value. The Company may also make loans to employees or other affiliates, excluding executive officers of the Company. These loans are interest bearing and settle pursuant to the agreed-upon terms with such employees or affiliates, and are included in due from related parties in the accompanying condensed consolidated statements of financial condition. As of June 30, 2019 and December 31, 2018, loans to employees of $14.6 million and $17.0 million, respectively, were included in due from related parties on the accompanying condensed consolidated statements of financial condition. Of these amounts $7.3 million and $8.8 million, respectively, are related to forgivable loans. These forgivable loans provide for a cash payment up-front to employees, with the amount due back to the Company forgiven over a vesting period. An employee that voluntarily ceases employment, or is terminated with cause, is generally required to pay back to the Company any unvested forgivable loans granted to them. The forgivable loans are recorded as an asset to the Company on the date of grant and payment, and then amortized to compensation expense on a straight-line basis over the vesting period. The vesting period on forgivable loans is generally one to three years. The Company recorded compensation expense of $0.9 million and $0.8 million for the three months ended June 30, 2019 and 2018, and $1.8 million and $1.4 million for the six months ended June 30, 2019, and 2018, respectively. This expense is included in employee compensation and benefits in the accompanying condensed consolidated statement of operations. For the three and six months ended June 30, 2019, the interest income was $0.1 million for these related party loans and advances, respectively, and are included in interest and dividends in the accompanying condensed consolidated statement of operations. For the three and six months ended June 30, 2018, the interest income was immaterial for these related party loans and advances, respectively, and are included in interest and dividends in the accompanying condensed consolidated statement of operations. As of June 30, 2019 and December 31, 2018, included in due from related parties is $6.9 million and $7.7 million, respectively, related to the sales of portions of the Company's ownership interest in the activist business of Starboard Value to the Starboard principals. It is being financed through the profits of the relevant Starboard entities over a 5 year period and earns interest at 5% per annum. The interest income for the three months ended June 30, 2019 and 2018 was $0.1 million and $0.1 million, and for the six months ended June 30, 2019 and 2018, was $0.2 million and $0.2 million, respectively. The remaining balance included in due from related parties of $7.6 million and $8.9 million as of June 30, 2019 and December 31, 2018, respectively, relates to amounts due to the Company from affiliated investment funds and real estate entities due to expenses paid on their behalf. Included in due to related parties is approximately $0.6 million and $0.6 million June 30, 2019 and December 31, 2018, respectively, related to a subordination agreement with an investor in certain real estate funds. This total is based on a hypothetical liquidation of the real estate funds as of the balance sheet date. Employees and certain other related parties invest on a discretionary basis within consolidated entities. These investments generally are subject to preferential management fee and performance fee arrangements. As of June 30, 2019 and December 31, 2018, such investments aggregated $35.4 million and $25.1 million, respectively, were included in redeemable non-controlling interests on the accompanying condensed consolidated statements of financial condition. Their share of the net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds aggregated $0.8 million and $1.5 million for the three months ended June 30, 2019 and 2018, and $2.3 million and $4.3 million, for the six months ended June 30, 2019 and 2018, respectively. The Company may, at times, have unfunded commitment amounts pertaining to related parties. See Note 17 "Commitments and Contingencies" for amounts committed as of June 30, 2019 and December 31, 2018. |
Guarantees and Off-Balance Sheet Arrangements |
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Guarantees and Off Balance Sheet Arrangements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantees and Off-Balance Sheet Arrangements | Guarantees and Off-Balance Sheet Arrangements Guarantees US GAAP requires the Company to disclose information about its obligations under certain guarantee arrangements. Those standards define guarantees as contracts and indemnification agreements that contingently require a guarantor to make payments to the guaranteed party based on changes in an underlying security (such as an interest or foreign exchange rate, security or commodity price, an index or the occurrence or nonoccurrence of a specified event) related to an asset, liability or equity security of a guaranteed party. Those standards also define guarantees as contracts that contingently require the guarantor to make payments to the guaranteed party based on another entity's failure to perform under an agreement as well as indirect guarantees of the indebtedness of others. In the normal course of its operations, the Company enters into contracts that contain a variety of representations and warranties which provide general indemnifications. The Company's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Company that have not yet occurred. However, based on experience, the Company expects the risk of loss to be remote. The Company indemnifies and guarantees certain service providers, such as clearing and custody agents, trustees and administrators, against specified potential losses in connection with their acting as an agent of, or providing services to, the Company or its affiliates. The Company also indemnifies some clients against potential losses incurred in the event specified third-party service providers, including sub-custodians and third-party brokers, improperly execute transactions. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make significant payments under these arrangements and has not recorded any contingent liability in the condensed consolidated financial statements for these indemnifications. The Company also provides representations and warranties to counterparties in connection with a variety of commercial transactions and occasionally indemnifies them against potential losses caused by the breach of those representations and warranties. The Company may also provide standard indemnifications to some counterparties to protect them in the event additional taxes are owed or payments are withheld, due either to a change in or adverse application of certain tax laws. These indemnifications generally are standard contractual terms and are entered into in the normal course of business. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the accompanying condensed consolidated financial statements for these indemnifications. The Company may maintain cash and cash equivalents at financial institutions in excess of federally insured limits. The Company has not experienced any material losses in such accounts and does not believe it is exposed to significant credit risks in relation to such accounts. Off-Balance Sheet Arrangements The Company has no material off-balance sheet arrangements, which have not been disclosed, as of June 30, 2019 and December 31, 2018. Through indemnification provisions in clearing agreements with clients, customer activities may expose the Company to off-balance-sheet credit risk. Pursuant to the clearing agreement, the Company is required to reimburse the Company's clearing broker, without limit, for any losses incurred due to a counterparty's failure to satisfy its contractual obligations. However, these transactions are collateralized by the underlying security, thereby reducing the associated risk to changes in the market value of the security through the settlement date. The Company’s customer securities activities are transacted on a delivery versus payment, cash or margin basis. In delivery versus payment transactions, the Company is exposed to risk of loss in the event of the customers’ or brokers’ inability to meet the terms of their contracts. In margin transactions, the Company extends credit to clients collateralized by cash and securities in their account. In the event the customers or brokers fail to satisfy their obligations, the Company may be required to purchase or sell securities at prevailing market prices in order to fulfill the obligations. The Company’s exposure to credit risk can be directly impacted by volatile securities markets, which may impair the ability of counterparties to satisfy their contractual obligations. The Company seeks to control its credit risk through a variety of reporting and control procedures, including establishing credit limits based upon a review of the customers’ financial condition and credit ratings. The Company seeks to control the risk associated with its customer margin transactions by requiring customers to maintain margin collateral in compliance with various regulatory and internal guidelines. The Company also monitors required margin levels daily and, pursuant to its guidelines, requires customers to deposit additional collateral, or reduce positions, when necessary. In addition, during the normal course of business, the Company has exposure to a number of risks including market risk, currency risk, credit risk, operational risk, liquidity risk and legal risk. As part of the Company's risk management process, these risks are monitored on a regular basis throughout the course of the year. The Company enters into secured and unsecured borrowing agreements to obtain funding necessary to cover daily securities settlements with clearing corporations. At times, funding is required for unsettled customer delivery versus payment and riskless principal transactions, as well as to meet deposit requirements with clearing organizations. Secured arrangements are collateralized by the securities. The Company maintains uncommitted financing arrangements with large financial institutions, the details of which are summarized below as of June 30, 2019.
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Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated events that have occurred after the balance sheet date but before the financial statements are issued and has determined that there were no subsequent events requiring adjustment or disclosure in the condensed consolidated financial statements. |
Significant Accounting Policies - Quarterly (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share, Policy [Policy Text Block] | Diluted earnings per common share are calculated by adjusting the weighted average outstanding shares to assume conversion of all potentially dilutive items. The Company uses the treasury stock method to reflect the potential dilutive effect of the warrants (see Note 6(a)), unvested restricted shares, restricted stock units, and SAR's. In calculating the number of dilutive shares outstanding, the shares of common stock underlying unvested restricted shares and restricted stock units are assumed to have been delivered, and options and warrants are assumed to have been exercised, for the entire period being presented. The number of performance-linked unvested restricted stock units that are included in the calculation are at the amount that could be earned using current payout rates. The assumed proceeds from the assumed vesting, delivery and exercising were calculated as the amount of compensation cost attributed to future services and not yet recognized. |
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Significant Accounting Policies | Significant Accounting Policies a. Basis of Presentation These unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") as promulgated by the Financial Accounting Standards Board ("FASB") through Accounting Standards Codification (the "Accounting Standards") as the source of authoritative accounting principles in the preparation of financial statements, and include the accounts of the Company, its operating and other subsidiaries, and entities in which the Company has a controlling financial interest or a general partner interest. All material intercompany transactions and balances have been eliminated in consolidation. Certain fund entities that are consolidated in these accompanying condensed consolidated financial statements, as further discussed below, are not subject to the consolidation provisions with respect to their own controlled investments pursuant to their specialized accounting. The Company serves as the managing member/general partner and/or investment manager to affiliated fund entities which it sponsors and manages. Funds in which the Company has a controlling financial interest are consolidated with the Company pursuant to US GAAP as described below. Consequently, the Company's condensed consolidated financial statements reflect the assets, liabilities, income and expenses of these funds on a gross basis. The ownership interests in these funds that are not owned by the Company are reflected as redeemable non-controlling interests in consolidated subsidiaries in the accompanying condensed consolidated financial statements. The management fees and incentive income earned by the Company from these funds are eliminated in consolidation. The year-end condensed balance sheet data was derived from the audited financial statements, but does not include all disclosures included in the audited financial statements.
The Company consolidates all entities that it controls through a majority voting interest or otherwise, including those investment funds in which the Company either directly or indirectly has a controlling financial interest. In addition, the Company consolidates all variable interest entities for which it is the primary beneficiary. In accordance with these standards, the Company consolidates four investment funds for which it acts as the general partner and investment manager. As of June 30, 2019, the Company consolidated the following investment funds: Ramius Enterprise LP (“Enterprise LP”), Ramius Merger Fund LLC (the "Merger Fund"), Cowen Private Investments LP ("Cowen Private"), and Ramius Merger Arbitrage UCITS Fund ("UCITS Fund") (each a "Consolidated Fund" and collectively the "Consolidated Funds"). The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting operating entity ("VOE") or a variable interest entity ("VIE") under US GAAP. Voting Operating Entities—VOEs are entities in which (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently, (ii) the equity holders at risk have the obligation to absorb losses, the right to receive residual returns and the right to direct the activities of the entity that most significantly impact the entity's economic performance and (iii) voting rights of equity holders are proportionate to their obligation to absorb losses or the right to receive returns. Under US GAAP, the usual condition for a controlling financial interest in a VOE is ownership of a majority voting interest. Accordingly, the Company consolidates all VOEs in which it owns a majority of the entity's voting shares or units. Variable Interest Entities—VIEs are entities that lack one or more of the characteristics of a VOE. In accordance with US GAAP, an enterprise must consolidate all VIEs of which it is the primary beneficiary. Under the US GAAP consolidation model for VIEs, an enterprise that (1) has the power to direct the activities of a VIE that most significantly impacts the VIE's economic performance, and (2) has an obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE, is considered to be the primary beneficiary of the VIE and thus is required to consolidate it. The Company reconsiders whether it is the primary beneficiary of a VIE by performing a periodic qualitative and/or quantitative analysis of the VIE that includes a review of, among other things, its capital structure, contractual agreements between the Company and the VIE, the economic interests that create or absorb variability, related party relationships and the design of the VIE. As of June 30, 2019, the total assets and total liabilities of the consolidated VIEs were $606.2 million and $11.2 million, respectively. As of December 31, 2018, the total assets and total liabilities of the consolidated VIEs were $468.0 million and $40.5 million, respectively. The increase is primarily related to other investors' subscriptions which increased overall VIEs net assets. The VIEs act as investment managers and/or investment companies that may be managed by the Company or the Company may have equity interest in those investment companies. The VIEs are financed through their operations and/or loan agreements with the Company. As of June 30, 2019, the Company held a variable interest in Ramius Merger Master Fund Ltd ("Merger Master") (the “Unconsolidated Master Fund”) through the Consolidated Funds. As of December 31, 2018, the Company held variable interests in Ramius Enterprise Master Fund Ltd (“Enterprise Master”) and Ramius Merger Master Fund Ltd ("Merger Master") (collectively the “Unconsolidated Master Funds”) through the Consolidated Funds. Investment companies, which account for their investments under the specialized industry accounting guidance for investment companies prescribed under US GAAP, are not subject to the consolidation provisions for their investments. Therefore, the Company has not consolidated the Unconsolidated Master Funds. In the ordinary course of business, the Company also sponsors various other entities that it has determined to be VIEs. These VIEs are primarily investment funds for which the Company serves as the general partner, managing member and/or investment manager with decision-making rights. The reason that the Company does not consolidate the Unconsolidated Master Fund or real estate funds that are VIEs is due to the Company's conclusion that it is not the primary beneficiary in each instance. Investment fund investors are entitled to all of the economics of these VIEs with the exception of the management fee and incentive income, if any, earned by the Company. The company has equity interests in the funds as both GP and Limited partner. In these instances the Company has concluded that the variable interests are not potentially significant to the VIE. Although the Company may advance amounts and pay certain expenses on behalf of the investment funds that it considers to be VIEs, it does not provide, nor is it required to provide, any type of substantive financial support to these entities outside of regular investment management services (see Note 6 for additional disclosures on VIEs). Equity Method Investments—For operating entities over which the Company exercises significant influence but which do not meet the requirements for consolidation as outlined above, the Company uses the equity method of accounting. The Company's investments in equity method investees are recorded in other investments in the accompanying condensed consolidated statements of financial condition. The Company's share of earnings or losses from equity method investees is included in net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. The difference between the carrying value of the equity method investment and its estimated fair value is recognized as an impairment charge when the loss in value is deemed other than temporary. Other—If the Company does not consolidate an entity or apply the equity method of accounting, the Company accounts for such entities (primarily, all securities of such entity which are bought and held principally for the purpose of selling them in the near term as trading securities) in accordance with US GAAP, at fair value with unrealized gains (losses) resulting from changes in fair value reflected within net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Retention of Specialized Accounting—The Consolidated Funds and certain other consolidated companies are investment companies and apply specialized industry accounting for investment companies. The Company has retained this specialized accounting for these investment funds pursuant to US GAAP. The Company reports its investments on the condensed consolidated statements of financial condition at their estimated fair value, with unrealized gains (losses) resulting from changes in fair value reflected within net realized and unrealized gains (losses) on investments and other transactions. Accordingly, the accompanying condensed consolidated financial statements reflect different accounting policies for investments depending on whether or not they are held through a consolidated investment company. In addition, the Company's broker-dealer subsidiaries, Cowen and Company, LLC ("Cowen and Company"), Cowen Execution Services LLC ("Cowen Execution"), Westminster Research Associates LLC ("Westminster"), Cowen Execution Services Limited ("Cowen Execution Ltd"), ATM Execution LLC ("ATM Execution"), Cowen International Limited ("Cowen International Ltd"), and Cowen Prime Services LLC ("Cowen Prime") apply the specialized industry accounting for brokers and dealers in securities also prescribed under US GAAP. The Company also retains specialized accounting upon consolidation.
The preparation of the accompanying condensed consolidated financial statements in conformity with US GAAP requires the management of the Company to make estimates and assumptions that affect the fair value of securities and other investments, the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the accompanying condensed consolidated financial statements, the accounting for goodwill and identifiable intangible assets and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.
The allowance for credit losses is based on the Company’s assessment of the collectability of receivables related to securities transactions, prepaid research and other receivables. The Company considers factors such as historical experience, credit quality, age of balances and current economic conditions that may affect collectability in determining the allowance for credit losses. Specifically, for prepaid research, the Company reviews clients' historical, current and forecasted trading activity in determining the allowance for credit losses. The credit loss expense related to the allowance for credit losses as well as any recoveries of amounts previously charged is reflected in other expenses in the accompanying condensed consolidated statements of operations.
US GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and Level 3 Fair value is determined based on pricing inputs that are unobservable and includes situations where there is little, if any, market activity for the asset or liability. The determination of fair value for assets and liabilities in this category requires significant management judgment or estimation. Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company. The Company considers observable data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Company's perceived risk of that instrument. The Company and its operating subsidiaries act as the manager for the Consolidated Funds. Both the Company and the Consolidated Funds hold certain investments which are valued by the Company, acting as the investment manager. The fair value of these investments is generally estimated based on proprietary models developed by the Company, which include discounted cash flow analysis, public market comparables, and other techniques and may be based, at least in part, on independently sourced market information. The material estimates and assumptions used in these models include the timing and expected amount of cash flows, the appropriateness of discount rates used, and, in some cases, the ability to execute, timing of, and estimated proceeds from expected financings. Significant judgment and estimation impact the selection of an appropriate valuation methodology as well as the assumptions used in these models, and the timing and actual values realized with respect to investments could be materially different from values derived based on the use of those estimates. The valuation methodologies applied impact the reported value of the Company's investments and the investments held by the Consolidated Funds in the condensed consolidated financial statements. Certain of the Company's investments are relatively illiquid or thinly traded and may not be immediately liquidated on demand if needed. Fair values assigned to these investments may differ significantly from the fair values that would have been used had a ready market for the investments existed and such differences could be material. The Company primarily uses the “market approach” to value its financial instruments measured at fair value. In determining an instrument's level within the hierarchy, the Company categorizes the Company's financial instruments into three categories: securities, derivative contracts and other investments. To the extent applicable, each of these categories can further be divided between those held long or sold short. The Company has the option to measure certain financial assets and financial liabilities at fair value with changes in fair value recognized in earnings each period. The election is made on an instrument by instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instrument. The Company has elected the fair value option for certain of its investments held by its operating companies. This option has been elected because the Company believes that it is consistent with the manner in which the business is managed, as well as the way that financial instruments in other parts of the business are recorded. Securities—Securities with values based on quoted market prices in active markets for identical assets are classified within level 1 of the fair value hierarchy. These securities primarily include active listed equities, certain U.S. government and sovereign obligations, Exchange Traded Funds ("ETFs"), mutual funds and certain money market securities. The Company does not adjust the quoted price for such instruments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price. Certain positions for which trading activity may not be readily visible, consisting primarily of convertible debt, corporate debt and loans and restricted equities, are stated at fair value and classified within level 2 of the fair value hierarchy. The estimated fair values assigned by management are determined in good faith and are based on available information considering, trading activity, broker quotes, quotations provided by published pricing services, counterparties and other market participants, and pricing models using quoted inputs, and do not necessarily represent the amounts which might ultimately be realized. As level 2 investments include positions that are not always traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability. Derivative contracts—Derivative contracts can be exchange-traded or privately negotiated over-the-counter (“OTC”). Exchange-traded derivatives, such as futures contracts and exchange-traded option contracts, are typically classified within level 1 or level 2 of the fair value hierarchy depending on whether or not they are deemed to be actively traded. OTC derivatives, such as generic forwards, swaps and options, have inputs which can generally be corroborated by market data and are therefore classified within level 2. OTC derivatives, such as swaps and options where market data is not readily available or observable are classified as level 3. Other investments—Other investments consist primarily of investment funds, real estate investments and equity method investments, which are valued as follows:
Real estate and capital markets are cyclical in nature. Property and investment values are affected by, among other things, the availability of capital, occupancy rates, rental rates and interest and inflation rates. In addition, the Company invests in real estate and real estate related investments for which no liquid market exists. The market prices for such investments may be volatile and may not be readily ascertainable. Amounts ultimately realized by the Company from investments sold may differ from the fair values presented, and the differences could be material. The Company's real estate investments are typically categorized as level 3 investments within the fair value hierarchy as management uses significant unobservable inputs in determining their estimated fair value. See Notes 6 and 7 for further information regarding the Company's investments, including equity method investments and fair value measurements.
Fees related to security transactions are reported net of an allowance for credit losses. An allowance for credit losses is assessed on any commission receivables aged over 180 days. Corporate finance and syndicate receivables, include receivables relating to the Company’s investment banking and advisory engagements net of allowance for credit losses. The Company records this allowance for credit losses on these receivables on a specific identification basis. The future collectability of the receivables is reviewed on a monthly basis based on the following factors: aging (usually if outstanding greater than 90 days), known financial stability of the paying company, as well as any other factors that might impact the collection of the outstanding fees. Management and incentive fees are earned as the managing member, general partner and/or investment manager to the Company's investment funds and are recognized in accordance with appropriate revenue recognition guidance (see Note 2(l)).
Securities borrowed and securities loaned are carried at the amounts of cash collateral advanced or received on a gross basis. The related rebates are recorded in the accompanying condensed consolidated statements of operations as interest and dividends income and interest and dividends expense. Securities borrowed transactions require the Company to deposit cash collateral with the lender. With respect to securities loaned, the Company receives cash or securities as collateral from the borrower. When the Company receives securities as collateral, and has concluded it (i) is the transferor and (ii) can pledge the securities to third parties, the Company recognizes the securities received as collateral at fair value in Securities owned, at fair value with the corresponding obligation to return the securities received as collateral at fair value in Securities sold, not yet purchased, at fair value. Securities received as collateral are not recognized when the Company either (i) is not the transferor or (ii) cannot pledge the securities to third parties. The initial collateral advanced or received approximates or is greater than the market value of securities borrowed or loaned. The Company monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or returned, as necessary. Securities borrowed and loaned may also result in credit exposures for the Company in an event that the counterparties are unable to fulfill their contractual obligations. The Company minimizes its credit risk by continuously monitoring its credit exposure and collateral values by demanding additional or returning excess collateral in accordance with the netting provisions available in the master securities lending contracts in place with the counterparties. Fees and interest received or paid are recorded in interest and dividends income and interest and dividends expense, respectively, on an accrual basis in the accompanying condensed consolidated statements of operations. In cases where the fair value basis of accounting is elected, any resulting change in fair value would be reported in net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Accrued interest income and expense are recorded in receivable from brokers, dealers and clearing organizations and payable to brokers, dealers and clearing organizations, respectively, on an accrual basis in the accompanying condensed consolidated statements of financial condition. At June 30, 2019 and December 31, 2018, the Company did not have any securities lending transactions for which fair value basis of accounting was elected.
Fixed assets are stated at cost less accumulated depreciation or amortization. Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life or lease term. When the Company commits to a plan to abandon fixed assets or leasehold improvements before the end of its original useful life, the estimated depreciation or amortization period is revised to reflect the shortened useful life of the asset. Other fixed assets are depreciated on a straight-line basis over their estimated useful lives.
Goodwill Goodwill represents the excess of the purchase price consideration of acquired companies over the estimated fair value assigned to the individual assets acquired and liabilities assumed. Goodwill is allocated to the Company's reporting units at the date the goodwill is initially recorded. Once goodwill has been allocated to the reporting units, it generally no longer retains its identification with a particular acquisition but instead becomes identifiable with the reporting unit. As a result, all of the fair value of each reporting unit is available to support the value of goodwill allocated to the unit. In January 2017, the FASB issued guidance that simplifies the subsequent measurement of goodwill. The new guidance eliminated Step 2 from the goodwill impairment test which was required in computing the implied fair value of goodwill. Instead, under the new amendments, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company early adopted these amendments during the second quarter of 2019 in conjunction with a quantitative goodwill test performed due to the Company’s change in operating segments and restructuring of reporting units. See Note 11 for the impact of the goodwill impairment test. In accordance with US GAAP, inclusive of the newly adopted amendments, the Company tests goodwill for impairment on an annual basis or at an interim period if events or changed circumstances would more likely than not reduce the fair value of a reporting unit below its carrying amount. In testing for goodwill impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company concludes that fair value exceeds its carrying amount, then performing a quantitative impairment test is not necessary. If the Company concludes otherwise, the Company is required to perform a quantitative impairment test that requires a comparison of the fair value of the reporting unit to its carrying value, including goodwill. If the fair value of the reporting unit exceeds its carrying value, the related goodwill is not considered impaired and no further analysis is required. If the carrying value of the reporting unit exceeds its fair value, then the Company recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. See Note 11 for further discussion. Intangible assets Intangible assets with finite lives are amortized over their estimated average useful lives. The Company does not have any intangible assets deemed to have indefinite lives. Intangible assets are tested for potential impairment whenever events or changes in circumstances suggest that an asset or asset group's carrying value may not be fully recoverable. An impairment loss, calculated as the difference between the estimated fair value and the carrying value of an asset or asset group, is recognized in the accompanying consolidated statements of operations if the sum of the estimated undiscounted cash flows relating to the asset or asset group is less than the corresponding carrying value.
Long-term debt is carried at the principal amount borrowed net of any unamortized discount/premium. The discount is accreted to interest expense using the effective interest method over the remaining life of the underlying debt obligations. Accrued but unpaid coupon interest is included in accounts payable, accrued expenses and other liabilities in the accompanying condensed consolidated statements of financial condition.
Effective January 1, 2019, the Company adopted ASC Topic 842, Leases ("ASC 842"). The new guidance increases transparency and comparability by requiring the recognition of right-of-use assets and lease liabilities on the condensed consolidated statements of financial condition. The recognition of these lease assets and lease liabilities represents a change from previous US GAAP requirements, which did not require lease assets and lease liabilities to be recognized for most leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee, have not significantly changed from previous US GAAP requirements. Under the effective date transition method selected by the Company, leases existing at, or entered into after January 1, 2019 were required to be recognized and measured. Prior period amounts have not been adjusted and continue to be reflected in accordance with the Company’s historical Accounting Standards. In applying ASC 842, the Company made an accounting policy election not to recognize the right-of-use assets and lease liabilities relating to short term leases. Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2018 for discussions related to the Company's previous lease recognition policies. Implementation of ASC 842 included an analysis of contracts, including real estate leases and service contracts to identify embedded leases, to determine the initial recognition of right-of-use assets and lease liabilities, which required subjective assessment over the determination of the associated discount rates. ASC 842 also provided various practical expedients which were assessed to determine the ultimate impact of ASC 842 upon adoption. The standard includes a package of three practical expedients which permit the Company to not reassess (1) whether any expired or existing contracts are or contain a lease, (2) the lease classification for any expired or existing leases and (3) any initial direct costs for any existing leases as of the effective date. The Company has elected to apply the package of practical expedients, hindsight practical expedient, and land easement practical expedient. The adoption of ASC 842 resulted in the recording of operating lease right-of-use assets of $103.7 million and operating lease liabilities of $110.5 million at January 1, 2019. The Company determines if an arrangement is or contains a lease at inception. The Company’s operating lease arrangements are primarily for real estate and facility leases as well as office equipment. The Company has applied an accounting policy election to combine its lease and nonlease components for its real estate and facility leases. ROU assets represent the Company’s right to use the underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company's variable lease payments consist of nonlease services related to the lease. Variable lease payments are excluded from the right-of-use asset and lease liabilities to the extent they are not based on consumer priced index or a market index and are recognized in the period in which the obligation for those payments is incurred. As most of the Company's leases do not provide an implicit rate and the implicit rate is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Right-of-use assets also include any lease payments made and exclude lease incentives. Many of the Company's operating lease agreements include options to extend the lease, which the Company does not include in the determination of the minimum lease term unless the options are reasonably certain to be exercised. Expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term. The Company reconciles the operating lease expense with operating lease payments by presenting the amortization of the operating ROU asset and change in the operating lease liability in a single line item within the adjustments to reconcile net income (loss) to net cash provided by / (used in) operating activities in the accompanying Condensed Consolidated Statements of Cash Flows. Please refer to Note 18 for information on the Company’s finance leases (formerly capital leases). l. Revenue recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"), which requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company follows a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, the Company includes variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. Significant judgments are required in the application of the five-step model including; when determining whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company’s progress under the contract; and whether constraints on variable consideration should be applied due to uncertain future events. The Company's principle sources of revenue are generated within two segments: Op Co and Asset Co as more fully described below. Revenue from contracts with customers includes management fees, incentive income, investment banking revenue and brokerage services revenue excluding principal transactions. ASC Topic 606 does not apply to revenue associated with financial instruments, interest income and expense, leasing and insurance contracts. The following is a description of principal activities, separated by business segments, from which the Company generates its revenue. For more detailed information about reportable segments, see Note 22. Operating Company The Op Co segment generates revenue through five principle sources: investment banking revenue, brokerage revenue, management fees, incentive income and investment income from the Company's own capital. Investment income is excluded from ASC Topic 606. Investment Banking The Company earns investment banking revenue primarily from fees associated with public and private capital raising transactions and providing strategic advisory services. Investment banking revenues are derived primarily from public and private small- and mid-capitalization companies within the Company's Target Sectors. Investment banking revenue consists of underwriting fees, strategic/financial advisory fees, expenses reimbursed from clients and placement and sales agent fees.
Underwriting fees are recognized gross of transaction-related expenses, and such amounts are adjusted to reflect actual expenses in the period in which the Company receives the final settlement, typically within 90 days following the closing of the transaction.
Brokerage Brokerage revenue consists of commissions, principal transactions, equity and credit research fees and trade conversion revenue.
Management fees The Company earns management fees from investment funds and certain managed accounts for which it serves as the investment manager; such fees earned are typically based on committed and invested capital. The Company has determined that the primary drivers of management fees are committed and invested capital relating to private equity funds. The management fees are earned as the investment management services are provided and are not subject to reversals. The performance obligation related to the transfer of these services is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. Several investment managers and/or general partners of the investment funds are owned jointly by the Company and third parties. Accordingly, the management fees generated by these funds are split between the Company and these third parties based on the proportionate ownership of the management company. Pursuant to US GAAP, these fees received by the management companies are accounted for under the equity method of accounting and are reflected under net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Management fees are generally paid on a quarterly basis and are prorated for capital inflows (or commitments) and redemptions (or distributions) and are recognized as revenue at that time as they relate specifically to the services provided in that period, which are distinct from the services provided in other periods. While some investors may have separately negotiated fees, in general the management fees are as follows:
Incentive income The Company earns incentive income based on net profits (as defined in the respective investment management or partnership agreements) with respect to certain of the Company's investment funds and managed accounts. The incentive income is either allocated to the Company or is charged to the investment funds in accordance with their respective investment management or partnership agreements. For the hedge funds the Company offers, incentive income earned is typically up to 20% (in certain cases on performance in excess of a benchmark) of the net profits earned for the full year that are attributable to each fee-paying investor. For the private equity and debt fund products the Company offers, the carried interest earned is typically up to 20% of the distributions made to investors after return of their contributed capital and generally a preferred return. In relation to ASC Topic 606, the Company applies an accounting policy election to recognize incentive income allocated to the Company under an equity ownership model as net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. The Company previously recognized these amounts as incentive income. Under the equity method of accounting the Company recognizes its allocations of incentive income or carried interest within net gains (losses) along with the allocations proportionate to the Company’s ownership interests in the investment funds. The Company recognizes incentive income charged to the Company's hedge funds based on the net profits of the hedge funds. The Company recognizes such incentive income when the fees are no longer subject to reversal or are crystalized. For a majority of the hedge funds, the incentive fee crystallizes annually when the high-water mark for such hedge funds is reset, which delays recognition of the incentive fee until year end. In periods following a period of a net loss attributable to an investor, the Company generally does not earn incentive income on any future profits attributable to such investor until the accumulated net loss from prior periods is recovered, an arrangement commonly referred to as a “high-water mark.” Generally, incentive income or carried interest is earned after the investor has received a full return of their invested capital, plus a preferred return. Several investment managers and/or general partners of the Company's investment funds are jointly owned by the Company and third parties. Accordingly, the incentive fees generated by these investment funds are split between the Company and these third parties. Pursuant to US GAAP, incentive income received by the general partners that are accounted for under the equity method of accounting are reflected under net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Investment Income Investment income earned by the Op Co segment is earned from investing the Company's capital in various strategies which align to existing businesses within Op Co and from investments in private capital raising transactions of its investment banking clients. Asset Company The Asset Co segment generates revenue through three principle sources: management fees, incentive income and investment income from the Company's own capital. Investment income is excluded from ASC Topic 606. Management fees The Company earns management fees from investment funds and certain managed accounts for which it serves as the investment manager; such fees earned are typically based on committed and invested capital. The management fees are earned as the investment management services are provided and are not subject to reversals. The performance obligation related to the transfer of these services is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. Several investment managers and/or general partners of the investment funds are owned jointly by the Company and third parties. Accordingly, the management fees generated by these funds are split between the Company and these third parties based on the proportionate ownership of the management company. Pursuant to US GAAP, these fees received by the management companies are accounted for under the equity method of accounting and are reflected under net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Management fees are generally paid on a quarterly basis and are prorated for capital inflows (or commitments) and redemptions (or distributions) and are recognized as revenue at that time as they relate specifically to the services provided in that period, which are distinct from the services provided in other periods. While some investors may have separately negotiated fees, in general, the management fees are as follows:
Incentive income The Company earns incentive income based on net profits (as defined in the respective investment management or partnership agreement) related to certain of the Company's investment funds and managed accounts. The incentive income is either allocated to the Company or is charged to the investment funds in accordance with their corresponding investment management or partnership agreement. For the hedge funds the Company offers, incentive income earned is typically up to 20% (in certain cases on performance in excess of a benchmark) of the net profits earned for the full year that are attributable to each fee-paying investor. For the private equity and debt fund products the Company offers, the carried interest earned is typically up to 20% of the distributions made to investors after return of their contributed capital and generally a preferred return. In relation to ASC Topic 606, the Company applies an accounting policy election to recognize incentive income allocated to the Company under an equity ownership model as net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. The Company previously recognized these amounts as incentive income. Under the equity method of accounting the Company recognizes its allocations of incentive income or carried interest within net gains (losses) along with the allocations proportionate to the Company’s ownership interests in the investment funds. The Company recognizes incentive income charged to the Company's hedge funds based on the net profits of the hedge funds. The Company recognizes such incentive income when the fees are no longer subject to reversal or are crystalized. For certain hedge funds, the incentive fee crystallizes annually when the high-water mark for such hedge funds is reset, which delays recognition of the incentive fee until year end. In periods following a period of a net loss attributable to an investor, the Company generally does not earn incentive income on any future profits attributable to such investor until the accumulated net loss from prior periods is recovered, an arrangement commonly referred to as a “high-water mark.” Generally, incentive income or carried interest is earned after the investor has received a full return of their invested capital, plus a preferred return. However, for certain private equity structures, the Company is entitled to receive incentive fees earlier, provided that the investors have received their preferred return on a current basis or on an investor by investor basis. These private equity structures are generally subject to a potential clawback of these incentive fees upon the liquidation of the private equity structure if the investor has not received a full return of its invested capital plus the preferred return thereon. Several investment managers and/or general partners of the Company's investment funds are jointly owned by the Company and third parties. Accordingly, the incentive fees generated by these investment funds are split between the Company and these third parties. Pursuant to US GAAP, incentive income received by the general partners that are accounted for under the equity method of accounting are reflected under net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Investment Income Investment income earned by the Asset Co segment is earned from investing the Company's capital in various strategies. Revenue from contracts with customers For the three and six months ended June 30, 2019 and 2018, the following tables presents revenues from contracts with customers disaggregated by fee type and segment.
Interest and dividends Interest and dividends are earned by the Company from various sources. The Company receives interest and dividends primarily from securities finance activities and securities held by the Company for purposes of investing capital, investments held by its Consolidated Funds and its brokerage balances. Interest is recognized on an accrual basis and interest income is recognized on the debt of those issuers that is deemed collectible. Interest income and expense includes premiums and discounts amortized and accreted on debt investments based on criteria determined by the Company using the effective yield method, which assumes the reinvestment of all interest payments. Dividends are recognized on the ex-dividend date. Reimbursement from affiliates The Company allocates, at its discretion, certain expenses incurred on behalf of its investment management businesses. These expenses relate to the administration of such subsidiaries and assets that the Company manages for its investment funds. In addition, pursuant to the investment funds' offering documents, the Company charges certain allowable expenses to the investment funds, including charges and personnel costs for legal, compliance, accounting, tax compliance, risk and technology expenses that directly relate to administering the assets of the investment funds. Such expenses that have been reimbursed at their actual costs are included in the accompanying condensed consolidated statements of operations as employee compensation and benefits, professional, advisory and other fees, communications, occupancy and equipment, client services and business development and other expenses. Reinsurance-related contracts Premiums for reinsurance-related contracts are earned over the coverage period. In most cases, premiums are recognized as revenues ratably over the term of the contract with unearned premiums computed on a monthly basis. For each of its contracts, the Company determines if the contract provides indemnification against loss or liability relating to insurance risk, in accordance with US GAAP. If the Company determines that a contract does not expose it to a reasonable possibility of a significant loss from insurance risk, the Company records the contract under the deposit method of accounting with any net amount receivable reflected as an asset in other assets, and any net amount payable reflected as a liability within accounts payable, accrued expenses and other liabilities on the condensed consolidated statements of financial condition. The liabilities for losses and loss adjustment expenses are recorded at the estimated ultimate payment amounts, including reported losses. Estimated ultimate payment amounts are based upon (1) reports of losses from policyholders, (2) individual case estimates and (3) estimates of incurred but unreported losses. Provisions for losses and loss adjustment expenses are charged to earnings after deducting amounts recovered and estimates of recoverable amounts and are included in other expenses on the condensed consolidated statements of operations. Costs of acquiring new policies, which vary with and are directly related to the production of new policies, have been deferred to the extent that such costs are deemed recoverable from future premiums or gross profits. Such costs include commissions and allowances as well as certain costs of policy issuance and underwriting and are included within other assets in the condensed consolidated statements of financial condition. Interest and dividends expense Interest and dividends expense relates primarily to securities finance activities, trading activity with respect to the Company's investments and interest expense on debt. m. Recent pronouncements Recently adopted In 2018, the FASB issued guidance related to the Tax Cuts and Jobs Act of 2017 (“TCJ Act”) for the optional reclassification of the residual tax effects, arising from the change in corporate tax rate, in accumulated other comprehensive loss to retained earnings. The reclassification is the difference between the amount previously recorded in other comprehensive income at the historical U.S. federal tax rate that remains in accumulated other comprehensive loss at the time the TCJ Act was effective and the amount that would have been recorded using the newly enacted rate. This guidance became effective during the first quarter of 2019; however, we did not elect to make the optional reclassification. In 2018, the FASB issued final guidance aligning the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees, with certain exceptions. Under the guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date, which may lower their cost and reduce volatility in the income statement. The guidance became effective during the first quarter of 2019 and impacted the Company’s recognition and measurement of the retention bonus pool established in connection with the Company’s acquisition of Quarton International AG, which include share based payment to employees and nonemployees. Please refer to Note 3 for more information. In 2017, the FASB issued guidance to amend the amortization period for certain purchased callable debt securities held at a premium. Under prior guidance, entities generally amortized the premium as an adjustment of yield over the contractual life of the instrument. The new guidance shortened the amortization period for the premium to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This guidance became effective during the first quarter of 2019; however, the guidance did not have an impact on the Company's financials as it does not have investments in callable debt securities measured on an amortized cost basis. In 2017, the FASB issued guidance that simplifies the subsequent measurement of goodwill. The new guidance eliminated Step 2 from the goodwill impairment test which was required in computing the implied fair value of goodwill. Instead, under the new amendments, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company early adopted these amendments during the second quarter of 2019. Please refer to Note 2i for more information. In 2016, the FASB issued guidance that amends and supersedes its previous guidance regarding leases. The new guidance requires the lessee to recognize the right to use lease assets and lease liabilities that arise from leases greater than one year, and present them in its statement of financial condition. The guidance became effective during the first quarter of 2019. Please refer to Note 2k for more information. Recently issued In October 2018, the FASB issued guidance that made targeted changes to the related party consolidation guidance. The new guidance changes how entities evaluate decision-making fees under the variable interest entity guidance. To determine whether decision-making fees represent a variable interest, an entity will consider indirect interests held through related parties under common control on a proportionate basis under the new guidance, rather than in their entirety, as has been the case under current guidance. The guidance is effective in annual periods beginning after December 15, 2019 and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact of the new guidance and does not expect this guidance to have a material impact on its consolidated statements of financial condition or its consolidated statements of operations. In August 2018, the FASB issued guidance for accounting for upfront costs and fees paid by a customer in a cloud computing arrangement. The guidance requires capitalization of implementation costs incurred in connection with a hosting arrangement or the development or obtainment of internal use software. The guidance is effective for public business entities for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years for any implementation costs incurred after adoption. The Company is currently evaluating the impact of this guidance on the Company’s consolidated financial statements and does not expect this guidance to have a material impact on its consolidated statements of financial condition or its consolidated statements of operations. In August 2018, as part of its disclosure framework project, the FASB amended the disclosure requirements for fair value measurement. The amendments update and eliminate various disclosure requirements that improve the overall usefulness of the disclosure requirement for financial statement users and reduce costs by eliminating disclosures that may not be useful. The guidance is effective for public business entities for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Since the guidance only relates to disclosure requirements, the Company does not expect this guidance to have a material impact on its consolidated statements of financial condition or its consolidated statements of operations. In June 2016, the FASB issued guidance that impacts the impairment model for certain financial assets measured at amortized cost by requiring a current expected credit loss (“CECL”) methodology to estimate expected credit losses over the entire life of the financial asset, recorded at inception or purchase. CECL will replace the loss model currently applicable to loans, held to maturity securities and other receivables carried at amortized cost. The guidance also eliminates the concept of other-than-temporary impairment for available-for-sale securities. Impairments on available-for-sale securities will be required to be recognized in earnings through an allowance, when the fair value is less than amortized cost and a credit loss exists or the securities are expected to be sold before recovery of amortized cost. Under the accounting update, there may be an ability to determine there are no expected credit losses in certain circumstances, e.g., based on collateral arrangements for lending and financing transactions or based on the credit quality of the borrower or issuer. For public companies, the guidance is effective for reporting periods beginning after December 15, 2019 and interim periods within those fiscal years. The Company is currently evaluating the impact of this guidance on the Company’s consolidated financial statements and does not expect this guidance to have a material impact. |
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Basis of presentation | Basis of Presentation These unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") as promulgated by the Financial Accounting Standards Board ("FASB") through Accounting Standards Codification (the "Accounting Standards") as the source of authoritative accounting principles in the preparation of financial statements, and include the accounts of the Company, its operating and other subsidiaries, and entities in which the Company has a controlling financial interest or a general partner interest. All material intercompany transactions and balances have been eliminated in consolidation. Certain fund entities that are consolidated in these accompanying condensed consolidated financial statements, as further discussed below, are not subject to the consolidation provisions with respect to their own controlled investments pursuant to their specialized accounting. The Company serves as the managing member/general partner and/or investment manager to affiliated fund entities which it sponsors and manages. Funds in which the Company has a controlling financial interest are consolidated with the Company pursuant to US GAAP as described below. Consequently, the Company's condensed consolidated financial statements reflect the assets, liabilities, income and expenses of these funds on a gross basis. The ownership interests in these funds that are not owned by the Company are reflected as redeemable non-controlling interests in consolidated subsidiaries in the accompanying condensed consolidated financial statements. The management fees and incentive income earned by the Company from these funds are eliminated in consolidation. The year-end condensed balance sheet data was derived from the audited financial statements, but does not include all disclosures included in the audited financial statements. |
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Principles of consolidation | Principles of consolidation The Company consolidates all entities that it controls through a majority voting interest or otherwise, including those investment funds in which the Company either directly or indirectly has a controlling financial interest. In addition, the Company consolidates all variable interest entities for which it is the primary beneficiary. In accordance with these standards, the Company consolidates four investment funds for which it acts as the general partner and investment manager. As of June 30, 2019, the Company consolidated the following investment funds: Ramius Enterprise LP (“Enterprise LP”), Ramius Merger Fund LLC (the "Merger Fund"), Cowen Private Investments LP ("Cowen Private"), and Ramius Merger Arbitrage UCITS Fund ("UCITS Fund") (each a "Consolidated Fund" and collectively the "Consolidated Funds"). The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting operating entity ("VOE") or a variable interest entity ("VIE") under US GAAP. Voting Operating Entities—VOEs are entities in which (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently, (ii) the equity holders at risk have the obligation to absorb losses, the right to receive residual returns and the right to direct the activities of the entity that most significantly impact the entity's economic performance and (iii) voting rights of equity holders are proportionate to their obligation to absorb losses or the right to receive returns. Under US GAAP, the usual condition for a controlling financial interest in a VOE is ownership of a majority voting interest. Accordingly, the Company consolidates all VOEs in which it owns a majority of the entity's voting shares or units. Variable Interest Entities—VIEs are entities that lack one or more of the characteristics of a VOE. In accordance with US GAAP, an enterprise must consolidate all VIEs of which it is the primary beneficiary. Under the US GAAP consolidation model for VIEs, an enterprise that (1) has the power to direct the activities of a VIE that most significantly impacts the VIE's economic performance, and (2) has an obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE, is considered to be the primary beneficiary of the VIE and thus is required to consolidate it. The Company reconsiders whether it is the primary beneficiary of a VIE by performing a periodic qualitative and/or quantitative analysis of the VIE that includes a review of, among other things, its capital structure, contractual agreements between the Company and the VIE, the economic interests that create or absorb variability, related party relationships and the design of the VIE. As of June 30, 2019, the total assets and total liabilities of the consolidated VIEs were $606.2 million and $11.2 million, respectively. As of December 31, 2018, the total assets and total liabilities of the consolidated VIEs were $468.0 million and $40.5 million, respectively. The increase is primarily related to other investors' subscriptions which increased overall VIEs net assets. The VIEs act as investment managers and/or investment companies that may be managed by the Company or the Company may have equity interest in those investment companies. The VIEs are financed through their operations and/or loan agreements with the Company. As of June 30, 2019, the Company held a variable interest in Ramius Merger Master Fund Ltd ("Merger Master") (the “Unconsolidated Master Fund”) through the Consolidated Funds. As of December 31, 2018, the Company held variable interests in Ramius Enterprise Master Fund Ltd (“Enterprise Master”) and Ramius Merger Master Fund Ltd ("Merger Master") (collectively the “Unconsolidated Master Funds”) through the Consolidated Funds. Investment companies, which account for their investments under the specialized industry accounting guidance for investment companies prescribed under US GAAP, are not subject to the consolidation provisions for their investments. Therefore, the Company has not consolidated the Unconsolidated Master Funds. In the ordinary course of business, the Company also sponsors various other entities that it has determined to be VIEs. These VIEs are primarily investment funds for which the Company serves as the general partner, managing member and/or investment manager with decision-making rights. The reason that the Company does not consolidate the Unconsolidated Master Fund or real estate funds that are VIEs is due to the Company's conclusion that it is not the primary beneficiary in each instance. Investment fund investors are entitled to all of the economics of these VIEs with the exception of the management fee and incentive income, if any, earned by the Company. The company has equity interests in the funds as both GP and Limited partner. In these instances the Company has concluded that the variable interests are not potentially significant to the VIE. Although the Company may advance amounts and pay certain expenses on behalf of the investment funds that it considers to be VIEs, it does not provide, nor is it required to provide, any type of substantive financial support to these entities outside of regular investment management services (see Note 6 for additional disclosures on VIEs). Equity Method Investments—For operating entities over which the Company exercises significant influence but which do not meet the requirements for consolidation as outlined above, the Company uses the equity method of accounting. The Company's investments in equity method investees are recorded in other investments in the accompanying condensed consolidated statements of financial condition. The Company's share of earnings or losses from equity method investees is included in net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. The difference between the carrying value of the equity method investment and its estimated fair value is recognized as an impairment charge when the loss in value is deemed other than temporary. Other—If the Company does not consolidate an entity or apply the equity method of accounting, the Company accounts for such entities (primarily, all securities of such entity which are bought and held principally for the purpose of selling them in the near term as trading securities) in accordance with US GAAP, at fair value with unrealized gains (losses) resulting from changes in fair value reflected within net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Retention of Specialized Accounting—The Consolidated Funds and certain other consolidated companies are investment companies and apply specialized industry accounting for investment companies. The Company has retained this specialized accounting for these investment funds pursuant to US GAAP. The Company reports its investments on the condensed consolidated statements of financial condition at their estimated fair value, with unrealized gains (losses) resulting from changes in fair value reflected within net realized and unrealized gains (losses) on investments and other transactions. Accordingly, the accompanying condensed consolidated financial statements reflect different accounting policies for investments depending on whether or not they are held through a consolidated investment company. In addition, the Company's broker-dealer subsidiaries, Cowen and Company, LLC ("Cowen and Company"), Cowen Execution Services LLC ("Cowen Execution"), Westminster Research Associates LLC ("Westminster"), Cowen Execution Services Limited ("Cowen Execution Ltd"), ATM Execution LLC ("ATM Execution"), Cowen International Limited ("Cowen International Ltd"), and Cowen Prime Services LLC ("Cowen Prime") apply the specialized industry accounting for brokers and dealers in securities also prescribed under US GAAP. The Company also retains specialized accounting upon consolidation. |
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Use of estimates | Use of estimates The preparation of the accompanying condensed consolidated financial statements in conformity with US GAAP requires the management of the Company to make estimates and assumptions that affect the fair value of securities and other investments, the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the accompanying condensed consolidated financial statements, the accounting for goodwill and identifiable intangible assets and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. |
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Allowance for doubtful accounts | Allowance for credit losses The allowance for credit losses is based on the Company’s assessment of the collectability of receivables related to securities transactions, prepaid research and other receivables. The Company considers factors such as historical experience, credit quality, age of balances and current economic conditions that may affect collectability in determining the allowance for credit losses. Specifically, for prepaid research, the Company reviews clients' historical, current and forecasted trading activity in determining the allowance for credit losses. The credit loss expense related to the allowance for credit losses as well as any recoveries of amounts previously charged is reflected in other expenses in the accompanying condensed consolidated statements of operations. |
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Valuation of investments and derivative contracts | Valuation of investments and derivative contracts US GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and Level 3 Fair value is determined based on pricing inputs that are unobservable and includes situations where there is little, if any, market activity for the asset or liability. The determination of fair value for assets and liabilities in this category requires significant management judgment or estimation. Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company. The Company considers observable data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Company's perceived risk of that instrument. The Company and its operating subsidiaries act as the manager for the Consolidated Funds. Both the Company and the Consolidated Funds hold certain investments which are valued by the Company, acting as the investment manager. The fair value of these investments is generally estimated based on proprietary models developed by the Company, which include discounted cash flow analysis, public market comparables, and other techniques and may be based, at least in part, on independently sourced market information. The material estimates and assumptions used in these models include the timing and expected amount of cash flows, the appropriateness of discount rates used, and, in some cases, the ability to execute, timing of, and estimated proceeds from expected financings. Significant judgment and estimation impact the selection of an appropriate valuation methodology as well as the assumptions used in these models, and the timing and actual values realized with respect to investments could be materially different from values derived based on the use of those estimates. The valuation methodologies applied impact the reported value of the Company's investments and the investments held by the Consolidated Funds in the condensed consolidated financial statements. Certain of the Company's investments are relatively illiquid or thinly traded and may not be immediately liquidated on demand if needed. Fair values assigned to these investments may differ significantly from the fair values that would have been used had a ready market for the investments existed and such differences could be material. The Company primarily uses the “market approach” to value its financial instruments measured at fair value. In determining an instrument's level within the hierarchy, the Company categorizes the Company's financial instruments into three categories: securities, derivative contracts and other investments. To the extent applicable, each of these categories can further be divided between those held long or sold short. The Company has the option to measure certain financial assets and financial liabilities at fair value with changes in fair value recognized in earnings each period. The election is made on an instrument by instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instrument. The Company has elected the fair value option for certain of its investments held by its operating companies. This option has been elected because the Company believes that it is consistent with the manner in which the business is managed, as well as the way that financial instruments in other parts of the business are recorded. Securities—Securities with values based on quoted market prices in active markets for identical assets are classified within level 1 of the fair value hierarchy. These securities primarily include active listed equities, certain U.S. government and sovereign obligations, Exchange Traded Funds ("ETFs"), mutual funds and certain money market securities. The Company does not adjust the quoted price for such instruments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price. Certain positions for which trading activity may not be readily visible, consisting primarily of convertible debt, corporate debt and loans and restricted equities, are stated at fair value and classified within level 2 of the fair value hierarchy. The estimated fair values assigned by management are determined in good faith and are based on available information considering, trading activity, broker quotes, quotations provided by published pricing services, counterparties and other market participants, and pricing models using quoted inputs, and do not necessarily represent the amounts which might ultimately be realized. As level 2 investments include positions that are not always traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability. Derivative contracts—Derivative contracts can be exchange-traded or privately negotiated over-the-counter (“OTC”). Exchange-traded derivatives, such as futures contracts and exchange-traded option contracts, are typically classified within level 1 or level 2 of the fair value hierarchy depending on whether or not they are deemed to be actively traded. OTC derivatives, such as generic forwards, swaps and options, have inputs which can generally be corroborated by market data and are therefore classified within level 2. OTC derivatives, such as swaps and options where market data is not readily available or observable are classified as level 3. Other investments—Other investments consist primarily of investment funds, real estate investments and equity method investments, which are valued as follows:
Real estate and capital markets are cyclical in nature. Property and investment values are affected by, among other things, the availability of capital, occupancy rates, rental rates and interest and inflation rates. In addition, the Company invests in real estate and real estate related investments for which no liquid market exists. The market prices for such investments may be volatile and may not be readily ascertainable. Amounts ultimately realized by the Company from investments sold may differ from the fair values presented, and the differences could be material. The Company's real estate investments are typically categorized as level 3 investments within the fair value hierarchy as management uses significant unobservable inputs in determining their estimated fair value. See Notes 6 and 7 for further information regarding the Company's investments, including equity method investments and fair value measurements. |
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Fees receivable | Fees receivable Fees related to security transactions are reported net of an allowance for credit losses. An allowance for credit losses is assessed on any commission receivables aged over 180 days. Corporate finance and syndicate receivables, include receivables relating to the Company’s investment banking and advisory engagements net of allowance for credit losses. The Company records this allowance for credit losses on these receivables on a specific identification basis. The future collectability of the receivables is reviewed on a monthly basis based on the following factors: aging (usually if outstanding greater than 90 days), known financial stability of the paying company, as well as any other factors that might impact the collection of the outstanding fees. Management and incentive fees are earned as the managing member, general partner and/or investment manager to the Company's investment funds and are recognized in accordance with appropriate revenue recognition guidance (see Note 2(l)). |
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Securities borrowed and securities loaned | Securities financing arrangements Securities borrowed and securities loaned are carried at the amounts of cash collateral advanced or received on a gross basis. The related rebates are recorded in the accompanying condensed consolidated statements of operations as interest and dividends income and interest and dividends expense. Securities borrowed transactions require the Company to deposit cash collateral with the lender. With respect to securities loaned, the Company receives cash or securities as collateral from the borrower. When the Company receives securities as collateral, and has concluded it (i) is the transferor and (ii) can pledge the securities to third parties, the Company recognizes the securities received as collateral at fair value in Securities owned, at fair value with the corresponding obligation to return the securities received as collateral at fair value in Securities sold, not yet purchased, at fair value. Securities received as collateral are not recognized when the Company either (i) is not the transferor or (ii) cannot pledge the securities to third parties. The initial collateral advanced or received approximates or is greater than the market value of securities borrowed or loaned. The Company monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or returned, as necessary. Securities borrowed and loaned may also result in credit exposures for the Company in an event that the counterparties are unable to fulfill their contractual obligations. The Company minimizes its credit risk by continuously monitoring its credit exposure and collateral values by demanding additional or returning excess collateral in accordance with the netting provisions available in the master securities lending contracts in place with the counterparties. Fees and interest received or paid are recorded in interest and dividends income and interest and dividends expense, respectively, on an accrual basis in the accompanying condensed consolidated statements of operations. In cases where the fair value basis of accounting is elected, any resulting change in fair value would be reported in net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Accrued interest income and expense are recorded in receivable from brokers, dealers and clearing organizations and payable to brokers, dealers and clearing organizations, respectively, on an accrual basis in the accompanying condensed consolidated statements of financial condition. At June 30, 2019 and December 31, 2018, the Company did not have any securities lending transactions for which fair value basis of accounting was elected. |
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Fixed Assets | Fixed assets Fixed assets are stated at cost less accumulated depreciation or amortization. Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life or lease term. When the Company commits to a plan to abandon fixed assets or leasehold improvements before the end of its original useful life, the estimated depreciation or amortization period is revised to reflect the shortened useful life of the asset. Other fixed assets are depreciated on a straight-line basis over their estimated useful lives.
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Goodwill and Intangible Assets | Goodwill and intangible assets Goodwill Goodwill represents the excess of the purchase price consideration of acquired companies over the estimated fair value assigned to the individual assets acquired and liabilities assumed. Goodwill is allocated to the Company's reporting units at the date the goodwill is initially recorded. Once goodwill has been allocated to the reporting units, it generally no longer retains its identification with a particular acquisition but instead becomes identifiable with the reporting unit. As a result, all of the fair value of each reporting unit is available to support the value of goodwill allocated to the unit. In January 2017, the FASB issued guidance that simplifies the subsequent measurement of goodwill. The new guidance eliminated Step 2 from the goodwill impairment test which was required in computing the implied fair value of goodwill. Instead, under the new amendments, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company early adopted these amendments during the second quarter of 2019 in conjunction with a quantitative goodwill test performed due to the Company’s change in operating segments and restructuring of reporting units. See Note 11 for the impact of the goodwill impairment test. In accordance with US GAAP, inclusive of the newly adopted amendments, the Company tests goodwill for impairment on an annual basis or at an interim period if events or changed circumstances would more likely than not reduce the fair value of a reporting unit below its carrying amount. In testing for goodwill impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company concludes that fair value exceeds its carrying amount, then performing a quantitative impairment test is not necessary. If the Company concludes otherwise, the Company is required to perform a quantitative impairment test that requires a comparison of the fair value of the reporting unit to its carrying value, including goodwill. If the fair value of the reporting unit exceeds its carrying value, the related goodwill is not considered impaired and no further analysis is required. If the carrying value of the reporting unit exceeds its fair value, then the Company recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. See Note 11 for further discussion. Intangible assets Intangible assets with finite lives are amortized over their estimated average useful lives. The Company does not have any intangible assets deemed to have indefinite lives. Intangible assets are tested for potential impairment whenever events or changes in circumstances suggest that an asset or asset group's carrying value may not be fully recoverable. An impairment loss, calculated as the difference between the estimated fair value and the carrying value of an asset or asset group, is recognized in the accompanying consolidated statements of operations if the sum of the estimated undiscounted cash flows relating to the asset or asset group is less than the corresponding carrying value. Goodwill and Intangible Assets In accordance with US GAAP, the Company tests goodwill for impairment on an annual basis or at an interim period if events or changed circumstances would more likely than not reduce the fair value of a reporting unit below its carrying amount. Under US GAAP, the Company first assesses the qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amounts as a basis for determining if it is necessary to perform a quantitative impairment test. Periodically estimating the fair value of a reporting unit requires significant judgment and often involves the use of significant estimates and assumptions. These estimates and assumptions could have a significant effect on whether or not an impairment charge is recorded and the magnitude of such a charge. During the second quarter of 2019, the Company realigned its business segments to Op Co and Asset Co (See Note 1). Prior to the reorganization, our Investment Management segment was also a reporting unit for purposes of measuring and reporting goodwill. The goodwill that was previously attributable to the Investment Management reporting unit was reallocated to the CIM reporting unit within the Op Co segment and the Asset Co reporting unit based on the relative fair value of the respective portions that became attributable to those reporting units. The Asset Co segment is also a reporting unit for purposes of measuring and reporting goodwill. Based on the change in segments and restructuring of reporting units, the Company determined that it was necessary to perform a quantitative impairment test which involves estimates of future cash flows, discount rates, economic forecast and other assumptions which are then used in the market approach (earnings and / or transactions multiples) and / or income approach (discounted cash flow method). Based on the results of the impairment analysis as of June 30, 2019, the Company recognized a goodwill impairment in the amount of $4.1 million within the Asset Co reporting unit. No impairment charges for goodwill were recognized during the year ended December 31, 2018. The following table presents the changes in the Company's goodwill balance, by reporting unit for the periods ended June 30, 2019 and December 31, 2018:
In connection with the Quarton transaction (see Note 3), in January 2019, the Company recognized goodwill of $81.2 million and intangible assets (including customer relationships, trade name, backlog and proprietary software) with an estimated fair value of $22.2 million which are included within intangible assets, net in the condensed consolidated statements of financial condition with the expected useful lives ranging from 2 to 4 years with a weighted average useful life of 2.8 years. Amortization expense related to intangibles from the Quarton acquisition for the three and six months ended June 30, 2019 is $2.2 million and $4.5 million, respectively. Goodwill, the excess of the purchase price over the fair value of net assets, primarily relates to expected synergies from combining operations and has been assigned to the Op Co segment of the Company. Tax deductible goodwill will differ from goodwill recognized by the Company in an amount equal to the difference between actual contingent consideration and estimated contingent consideration (see Note 3). |
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Debt | Debt Long-term debt is carried at the principal amount borrowed net of any unamortized discount/premium. The discount is accreted to interest expense using the effective interest method over the remaining life of the underlying debt obligations. Accrued but unpaid coupon interest is included in accounts payable, accrued expenses and other liabilities in the accompanying condensed consolidated statements of financial condition. |
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Revenue recognition | Revenue recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"), which requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company follows a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, the Company includes variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. Significant judgments are required in the application of the five-step model including; when determining whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company’s progress under the contract; and whether constraints on variable consideration should be applied due to uncertain future events. The Company's principle sources of revenue are generated within two segments: Op Co and Asset Co as more fully described below. Revenue from contracts with customers includes management fees, incentive income, investment banking revenue and brokerage services revenue excluding principal transactions. ASC Topic 606 does not apply to revenue associated with financial instruments, interest income and expense, leasing and insurance contracts. The following is a description of principal activities, separated by business segments, from which the Company generates its revenue. For more detailed information about reportable segments, see Note 22. Operating Company The Op Co segment generates revenue through five principle sources: investment banking revenue, brokerage revenue, management fees, incentive income and investment income from the Company's own capital. Investment income is excluded from ASC Topic 606. Investment Banking The Company earns investment banking revenue primarily from fees associated with public and private capital raising transactions and providing strategic advisory services. Investment banking revenues are derived primarily from public and private small- and mid-capitalization companies within the Company's Target Sectors. Investment banking revenue consists of underwriting fees, strategic/financial advisory fees, expenses reimbursed from clients and placement and sales agent fees.
Underwriting fees are recognized gross of transaction-related expenses, and such amounts are adjusted to reflect actual expenses in the period in which the Company receives the final settlement, typically within 90 days following the closing of the transaction.
Brokerage Brokerage revenue consists of commissions, principal transactions, equity and credit research fees and trade conversion revenue.
Management fees The Company earns management fees from investment funds and certain managed accounts for which it serves as the investment manager; such fees earned are typically based on committed and invested capital. The Company has determined that the primary drivers of management fees are committed and invested capital relating to private equity funds. The management fees are earned as the investment management services are provided and are not subject to reversals. The performance obligation related to the transfer of these services is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. Several investment managers and/or general partners of the investment funds are owned jointly by the Company and third parties. Accordingly, the management fees generated by these funds are split between the Company and these third parties based on the proportionate ownership of the management company. Pursuant to US GAAP, these fees received by the management companies are accounted for under the equity method of accounting and are reflected under net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Management fees are generally paid on a quarterly basis and are prorated for capital inflows (or commitments) and redemptions (or distributions) and are recognized as revenue at that time as they relate specifically to the services provided in that period, which are distinct from the services provided in other periods. While some investors may have separately negotiated fees, in general the management fees are as follows:
Incentive income The Company earns incentive income based on net profits (as defined in the respective investment management or partnership agreements) with respect to certain of the Company's investment funds and managed accounts. The incentive income is either allocated to the Company or is charged to the investment funds in accordance with their respective investment management or partnership agreements. For the hedge funds the Company offers, incentive income earned is typically up to 20% (in certain cases on performance in excess of a benchmark) of the net profits earned for the full year that are attributable to each fee-paying investor. For the private equity and debt fund products the Company offers, the carried interest earned is typically up to 20% of the distributions made to investors after return of their contributed capital and generally a preferred return. In relation to ASC Topic 606, the Company applies an accounting policy election to recognize incentive income allocated to the Company under an equity ownership model as net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. The Company previously recognized these amounts as incentive income. Under the equity method of accounting the Company recognizes its allocations of incentive income or carried interest within net gains (losses) along with the allocations proportionate to the Company’s ownership interests in the investment funds. The Company recognizes incentive income charged to the Company's hedge funds based on the net profits of the hedge funds. The Company recognizes such incentive income when the fees are no longer subject to reversal or are crystalized. For a majority of the hedge funds, the incentive fee crystallizes annually when the high-water mark for such hedge funds is reset, which delays recognition of the incentive fee until year end. In periods following a period of a net loss attributable to an investor, the Company generally does not earn incentive income on any future profits attributable to such investor until the accumulated net loss from prior periods is recovered, an arrangement commonly referred to as a “high-water mark.” Generally, incentive income or carried interest is earned after the investor has received a full return of their invested capital, plus a preferred return. Several investment managers and/or general partners of the Company's investment funds are jointly owned by the Company and third parties. Accordingly, the incentive fees generated by these investment funds are split between the Company and these third parties. Pursuant to US GAAP, incentive income received by the general partners that are accounted for under the equity method of accounting are reflected under net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Investment Income Investment income earned by the Op Co segment is earned from investing the Company's capital in various strategies which align to existing businesses within Op Co and from investments in private capital raising transactions of its investment banking clients. Asset Company The Asset Co segment generates revenue through three principle sources: management fees, incentive income and investment income from the Company's own capital. Investment income is excluded from ASC Topic 606. Management fees The Company earns management fees from investment funds and certain managed accounts for which it serves as the investment manager; such fees earned are typically based on committed and invested capital. The management fees are earned as the investment management services are provided and are not subject to reversals. The performance obligation related to the transfer of these services is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. Several investment managers and/or general partners of the investment funds are owned jointly by the Company and third parties. Accordingly, the management fees generated by these funds are split between the Company and these third parties based on the proportionate ownership of the management company. Pursuant to US GAAP, these fees received by the management companies are accounted for under the equity method of accounting and are reflected under net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Management fees are generally paid on a quarterly basis and are prorated for capital inflows (or commitments) and redemptions (or distributions) and are recognized as revenue at that time as they relate specifically to the services provided in that period, which are distinct from the services provided in other periods. While some investors may have separately negotiated fees, in general, the management fees are as follows:
Incentive income The Company earns incentive income based on net profits (as defined in the respective investment management or partnership agreement) related to certain of the Company's investment funds and managed accounts. The incentive income is either allocated to the Company or is charged to the investment funds in accordance with their corresponding investment management or partnership agreement. For the hedge funds the Company offers, incentive income earned is typically up to 20% (in certain cases on performance in excess of a benchmark) of the net profits earned for the full year that are attributable to each fee-paying investor. For the private equity and debt fund products the Company offers, the carried interest earned is typically up to 20% of the distributions made to investors after return of their contributed capital and generally a preferred return. In relation to ASC Topic 606, the Company applies an accounting policy election to recognize incentive income allocated to the Company under an equity ownership model as net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. The Company previously recognized these amounts as incentive income. Under the equity method of accounting the Company recognizes its allocations of incentive income or carried interest within net gains (losses) along with the allocations proportionate to the Company’s ownership interests in the investment funds. The Company recognizes incentive income charged to the Company's hedge funds based on the net profits of the hedge funds. The Company recognizes such incentive income when the fees are no longer subject to reversal or are crystalized. For certain hedge funds, the incentive fee crystallizes annually when the high-water mark for such hedge funds is reset, which delays recognition of the incentive fee until year end. In periods following a period of a net loss attributable to an investor, the Company generally does not earn incentive income on any future profits attributable to such investor until the accumulated net loss from prior periods is recovered, an arrangement commonly referred to as a “high-water mark.” Generally, incentive income or carried interest is earned after the investor has received a full return of their invested capital, plus a preferred return. However, for certain private equity structures, the Company is entitled to receive incentive fees earlier, provided that the investors have received their preferred return on a current basis or on an investor by investor basis. These private equity structures are generally subject to a potential clawback of these incentive fees upon the liquidation of the private equity structure if the investor has not received a full return of its invested capital plus the preferred return thereon. Several investment managers and/or general partners of the Company's investment funds are jointly owned by the Company and third parties. Accordingly, the incentive fees generated by these investment funds are split between the Company and these third parties. Pursuant to US GAAP, incentive income received by the general partners that are accounted for under the equity method of accounting are reflected under net gains (losses) on securities, derivatives and other investments in the accompanying condensed consolidated statements of operations. Investment Income Investment income earned by the Asset Co segment is earned from investing the Company's capital in various strategies. Revenue from contracts with customers For the three and six months ended June 30, 2019 and 2018, the following tables presents revenues from contracts with customers disaggregated by fee type and segment.
Interest and dividends Interest and dividends are earned by the Company from various sources. The Company receives interest and dividends primarily from securities finance activities and securities held by the Company for purposes of investing capital, investments held by its Consolidated Funds and its brokerage balances. Interest is recognized on an accrual basis and interest income is recognized on the debt of those issuers that is deemed collectible. Interest income and expense includes premiums and discounts amortized and accreted on debt investments based on criteria determined by the Company using the effective yield method, which assumes the reinvestment of all interest payments. Dividends are recognized on the ex-dividend date. Reimbursement from affiliates The Company allocates, at its discretion, certain expenses incurred on behalf of its investment management businesses. These expenses relate to the administration of such subsidiaries and assets that the Company manages for its investment funds. In addition, pursuant to the investment funds' offering documents, the Company charges certain allowable expenses to the investment funds, including charges and personnel costs for legal, compliance, accounting, tax compliance, risk and technology expenses that directly relate to administering the assets of the investment funds. Such expenses that have been reimbursed at their actual costs are included in the accompanying condensed consolidated statements of operations as employee compensation and benefits, professional, advisory and other fees, communications, occupancy and equipment, client services and business development and other expenses. Reinsurance-related contracts Premiums for reinsurance-related contracts are earned over the coverage period. In most cases, premiums are recognized as revenues ratably over the term of the contract with unearned premiums computed on a monthly basis. For each of its contracts, the Company determines if the contract provides indemnification against loss or liability relating to insurance risk, in accordance with US GAAP. If the Company determines that a contract does not expose it to a reasonable possibility of a significant loss from insurance risk, the Company records the contract under the deposit method of accounting with any net amount receivable reflected as an asset in other assets, and any net amount payable reflected as a liability within accounts payable, accrued expenses and other liabilities on the condensed consolidated statements of financial condition. The liabilities for losses and loss adjustment expenses are recorded at the estimated ultimate payment amounts, including reported losses. Estimated ultimate payment amounts are based upon (1) reports of losses from policyholders, (2) individual case estimates and (3) estimates of incurred but unreported losses. Provisions for losses and loss adjustment expenses are charged to earnings after deducting amounts recovered and estimates of recoverable amounts and are included in other expenses on the condensed consolidated statements of operations. Costs of acquiring new policies, which vary with and are directly related to the production of new policies, have been deferred to the extent that such costs are deemed recoverable from future premiums or gross profits. Such costs include commissions and allowances as well as certain costs of policy issuance and underwriting and are included within other assets in the condensed consolidated statements of financial condition. Interest and dividends expense Interest and dividends expense relates primarily to securities finance activities, trading activity with respect to the Company's investments and interest expense on debt. |
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Recently issued accounting pronouncements | Recent pronouncements Recently adopted In 2018, the FASB issued guidance related to the Tax Cuts and Jobs Act of 2017 (“TCJ Act”) for the optional reclassification of the residual tax effects, arising from the change in corporate tax rate, in accumulated other comprehensive loss to retained earnings. The reclassification is the difference between the amount previously recorded in other comprehensive income at the historical U.S. federal tax rate that remains in accumulated other comprehensive loss at the time the TCJ Act was effective and the amount that would have been recorded using the newly enacted rate. This guidance became effective during the first quarter of 2019; however, we did not elect to make the optional reclassification. In 2018, the FASB issued final guidance aligning the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees, with certain exceptions. Under the guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date, which may lower their cost and reduce volatility in the income statement. The guidance became effective during the first quarter of 2019 and impacted the Company’s recognition and measurement of the retention bonus pool established in connection with the Company’s acquisition of Quarton International AG, which include share based payment to employees and nonemployees. Please refer to Note 3 for more information. In 2017, the FASB issued guidance to amend the amortization period for certain purchased callable debt securities held at a premium. Under prior guidance, entities generally amortized the premium as an adjustment of yield over the contractual life of the instrument. The new guidance shortened the amortization period for the premium to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This guidance became effective during the first quarter of 2019; however, the guidance did not have an impact on the Company's financials as it does not have investments in callable debt securities measured on an amortized cost basis. In 2017, the FASB issued guidance that simplifies the subsequent measurement of goodwill. The new guidance eliminated Step 2 from the goodwill impairment test which was required in computing the implied fair value of goodwill. Instead, under the new amendments, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company early adopted these amendments during the second quarter of 2019. Please refer to Note 2i for more information. In 2016, the FASB issued guidance that amends and supersedes its previous guidance regarding leases. The new guidance requires the lessee to recognize the right to use lease assets and lease liabilities that arise from leases greater than one year, and present them in its statement of financial condition. The guidance became effective during the first quarter of 2019. Please refer to Note 2k for more information. Recently issued In October 2018, the FASB issued guidance that made targeted changes to the related party consolidation guidance. The new guidance changes how entities evaluate decision-making fees under the variable interest entity guidance. To determine whether decision-making fees represent a variable interest, an entity will consider indirect interests held through related parties under common control on a proportionate basis under the new guidance, rather than in their entirety, as has been the case under current guidance. The guidance is effective in annual periods beginning after December 15, 2019 and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact of the new guidance and does not expect this guidance to have a material impact on its consolidated statements of financial condition or its consolidated statements of operations. In August 2018, the FASB issued guidance for accounting for upfront costs and fees paid by a customer in a cloud computing arrangement. The guidance requires capitalization of implementation costs incurred in connection with a hosting arrangement or the development or obtainment of internal use software. The guidance is effective for public business entities for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years for any implementation costs incurred after adoption. The Company is currently evaluating the impact of this guidance on the Company’s consolidated financial statements and does not expect this guidance to have a material impact on its consolidated statements of financial condition or its consolidated statements of operations. In August 2018, as part of its disclosure framework project, the FASB amended the disclosure requirements for fair value measurement. The amendments update and eliminate various disclosure requirements that improve the overall usefulness of the disclosure requirement for financial statement users and reduce costs by eliminating disclosures that may not be useful. The guidance is effective for public business entities for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Since the guidance only relates to disclosure requirements, the Company does not expect this guidance to have a material impact on its consolidated statements of financial condition or its consolidated statements of operations. In June 2016, the FASB issued guidance that impacts the impairment model for certain financial assets measured at amortized cost by requiring a current expected credit loss (“CECL”) methodology to estimate expected credit losses over the entire life of the financial asset, recorded at inception or purchase. CECL will replace the loss model currently applicable to loans, held to maturity securities and other receivables carried at amortized cost. The guidance also eliminates the concept of other-than-temporary impairment for available-for-sale securities. Impairments on available-for-sale securities will be required to be recognized in earnings through an allowance, when the fair value is less than amortized cost and a credit loss exists or the securities are expected to be sold before recovery of amortized cost. Under the accounting update, there may be an ability to determine there are no expected credit losses in certain circumstances, e.g., based on collateral arrangements for lending and financing transactions or based on the credit quality of the borrower or issuer. For public companies, the guidance is effective for reporting periods beginning after December 15, 2019 and interim periods within those fiscal years. The Company is currently evaluating the impact of this guidance on the Company’s consolidated financial statements and does not expect this guidance to have a material impact. |
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Segment Reporting | Segment Reporting Change in Segments During the second quarter of 2019 the Company realigned the information that the Chief Operating Decision Maker regularly reviews to evaluate performance for operating decision-making purposes, including evaluation and allocation of resources. As a result of this change in segment reporting, the Company retrospectively revised prior period results, by segment, to conform to the current period presentation (see Note 1). This structure includes two business segments: Op Co and Asset Co. The structure is based on the Company's domain expertise as a driver of balance sheet harmonization and repeatable revenues for its operating business versus the Company’s long-term monetization strategies. The Op Co segment consists of Cowen Investment Management (“CIM”), Investment Banking, Markets and Research. The Asset Co segment consists of the Company’s private investments, private real estate business and other legacy multi-sector long/short equity strategies. Performance Measures The performance measure for these segments is Economic Income (Loss), which management uses to evaluate the financial performance of and make operating decisions for the segments including determining appropriate compensation levels. Expenses not directly associated with specific segments are allocated based on the most relevant measures applicable, including headcount, square footage and other factors. In general, Economic Income (Loss) is a pre-tax measure that (i) eliminates the impact of consolidation for Consolidated Funds and excludes (ii) goodwill and intangible impairment (iii) certain other transaction-related adjustments and/or reorganization expenses and (iv) certain costs associated with debt. Economic Operating Income (Loss) represents Economic Income (Loss) before depreciation and amortization expenses. In addition, Economic Income (Loss) revenues include investment income that represents the income the Company has earned in investing its own capital, including realized and unrealized gains and losses, interest and dividends, net of associated investment related expenses. For US GAAP purposes, these items are included in each of their respective line items. Economic Income (Loss) revenues also include management fees, incentive income and investment income earned through the Company's investment as a general partner in certain real estate entities and the Company's investment in the activist business and certain investment funds. For US GAAP purposes, all of these items, are recorded in other income (loss). Economic Income (Loss) recognizes (a) incentive fees during periods when the fees are not yet crystallized for US GAAP reporting and (b) retainer fees, relating to investment banking activities, earned during the period that would otherwise be deferred until closing for US GAAP reporting. In addition, Economic Income (Loss) expenses are reduced by reimbursement from affiliates, which for US GAAP purposes is presented gross as part of revenue. As further stated below, one major difference between Economic Income (Loss) and US GAAP net income (loss) is that Economic Income (Loss) presents the segments' results of operations without the impact resulting from the full consolidation of any of the Consolidated Funds. The consolidation of these investment funds' results include the pro rata share of the income or loss attributable to other owners of such entities which is reflected in net income (loss) attributable to redeemable non-controlling interest in consolidated subsidiaries in the accompanying condensed consolidated statements of operations. This pro rata share has no effect on the overall financial performance for the segments, as ultimately, this income or loss is not income or loss for the segments themselves. Included in Economic Income (Loss) is the actual pro rata share of the income or loss attributable to the Company as an investor in such entities, which is relevant in management making operating decisions and evaluating financial performance. The Company does not disclose total asset information for its business segments as the information is not reviewed by the CODM. The following tables set forth operating results for the Company's Op Co and Asset Co segments and related adjustments necessary to reconcile the Company's Economic Income (Loss) measure to arrive at the Company's consolidated US GAAP net income (loss): |
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Leases of Lessee Disclosure [Text Block] | Right-of-use assets and lease liabilities Effective January 1, 2019, the Company adopted ASC Topic 842, Leases ("ASC 842"). The new guidance increases transparency and comparability by requiring the recognition of right-of-use assets and lease liabilities on the condensed consolidated statements of financial condition. The recognition of these lease assets and lease liabilities represents a change from previous US GAAP requirements, which did not require lease assets and lease liabilities to be recognized for most leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee, have not significantly changed from previous US GAAP requirements. Under the effective date transition method selected by the Company, leases existing at, or entered into after January 1, 2019 were required to be recognized and measured. Prior period amounts have not been adjusted and continue to be reflected in accordance with the Company’s historical Accounting Standards. In applying ASC 842, the Company made an accounting policy election not to recognize the right-of-use assets and lease liabilities relating to short term leases. Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2018 for discussions related to the Company's previous lease recognition policies. Implementation of ASC 842 included an analysis of contracts, including real estate leases and service contracts to identify embedded leases, to determine the initial recognition of right-of-use assets and lease liabilities, which required subjective assessment over the determination of the associated discount rates. ASC 842 also provided various practical expedients which were assessed to determine the ultimate impact of ASC 842 upon adoption. The standard includes a package of three practical expedients which permit the Company to not reassess (1) whether any expired or existing contracts are or contain a lease, (2) the lease classification for any expired or existing leases and (3) any initial direct costs for any existing leases as of the effective date. The Company has elected to apply the package of practical expedients, hindsight practical expedient, and land easement practical expedient. The adoption of ASC 842 resulted in the recording of operating lease right-of-use assets of $103.7 million and operating lease liabilities of $110.5 million at January 1, 2019. The Company determines if an arrangement is or contains a lease at inception. The Company’s operating lease arrangements are primarily for real estate and facility leases as well as office equipment. The Company has applied an accounting policy election to combine its lease and nonlease components for its real estate and facility leases. ROU assets represent the Company’s right to use the underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company's variable lease payments consist of nonlease services related to the lease. Variable lease payments are excluded from the right-of-use asset and lease liabilities to the extent they are not based on consumer priced index or a market index and are recognized in the period in which the obligation for those payments is incurred. As most of the Company's leases do not provide an implicit rate and the implicit rate is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Right-of-use assets also include any lease payments made and exclude lease incentives. Many of the Company's operating lease agreements include options to extend the lease, which the Company does not include in the determination of the minimum lease term unless the options are reasonably certain to be exercised. Expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term. The Company reconciles the operating lease expense with operating lease payments by presenting the amortization of the operating ROU asset and change in the operating lease liability in a single line item within the adjustments to reconcile net income (loss) to net cash provided by / (used in) operating activities in the accompanying Condensed Consolidated Statements of Cash Flows. Please refer to Note 18 for information on the Company’s finance leases (formerly capital leases). |
Significant Accounting Policies (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment Useful Life |
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Schedule of New Accounting Pronouncements and Changes in Accounting Principles | For the three and six months ended June 30, 2019 and 2018, the following tables presents revenues from contracts with customers disaggregated by fee type and segment.
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Acquisition (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-lived Intangible Assets Amortization Expense [Table Text Block] | The estimated amortization expense related to these intangible assets in future periods is as follows:
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The table below summarizes the purchase price allocation of net tangible and intangible assets acquired and liabilities assumed as of January 2, 2019:
The allocation of the intangible assets is shown within the following table:
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Business Acquisition, Pro Forma Information |
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Investments of Operating Entities and Consolidated Funds - (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | As of June 30, 2019 and December 31, 2018, securities owned, at fair value consisted of the following:
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Schedule of Derivative Instruments | The Company's long and short exposure to derivatives is as follows:
(a) Includes index, equity, commodity future and cash conversion options.
(a) Includes index, equity, commodity future and cash conversion options. The following tables present the gross and net derivative positions and the related offsetting amount, as of June 30, 2019 and December 31, 2018. This table does not include the impact of over-collateralization.
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Schedule of Other Investments | As of June 30, 2019 and December 31, 2018, other investments included the following:
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Schedule of Other Investments, Portfolio Funds | The Portfolio Funds, at fair value as of June 30, 2019 and December 31, 2018, included the following:
* These Portfolio Funds are affiliates of the Company. The Company has no unfunded commitments regarding the Portfolio Funds held by the Company except as noted in Note 17.
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Schedule Equity Method Investments | The following table summarizes equity method investments held by the Company:
For the period ended June 30, 2019, one equity method investment has met the significance criteria as defined under Regulation S-X Rule 4-08(g) of the SEC guidance ("Reg S-X 4-08(g)"). As such, the Company is presenting the following summarized financial information for the significant investee for the periods ended June 30, 2019 and December 31, 2018, and three and six months ended June 30, 2019 and 2018, and such information is as follows:
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Schedule of Securities Sold, Not yet Purchased | As of June 30, 2019 and December 31, 2018, securities sold, not yet purchased, at fair value consisted of the following:
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Schedule of Assets and Associated Liabilities Accounted for as Secured Borrowings | The following tables present the contractual gross and net securities borrowing and lending agreements and the related offsetting amount as of June 30, 2019 and December 31, 2018.
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Investments Classified by Contractual Maturity Date | The following tables present gross obligations for securities loaned transactions by remaining contractual maturity and class of collateral pledged as of June 30, 2019 and December 31, 2018:
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Fair Value, Concentration of Risk |
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Consolidated Funds | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | As of June 30, 2019 and 2018, securities owned, at fair value, held by the Consolidated Funds consisted of the following:
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Schedule of Derivative Instruments | As of June 30, 2019 and December 31, 2018, receivable on derivative contracts, at fair value, held by the Consolidated Funds are comprised of:
Payable for derivative contracts As of June 30, 2019 and December 31, 2018, payable for derivative contracts, at fair value, held by the Consolidated Funds are comprised of:
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Schedule of Other Investments, Portfolio Funds | Investments in Portfolio Funds, at fair value As of June 30, 2019 and December 31, 2018, investments in Portfolio Funds, at fair value, included the following:
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Enterprise Master | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | Securities owned by Enterprise Master, at fair value
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Schedule of Other Investments, Portfolio Funds | Portfolio Funds, owned by Enterprise Master, at fair value
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Merger Master | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | Merger Master
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Schedule of Derivative Instruments | Receivable on derivative contracts, at fair value, owned by Merger Master
Payable for derivative contracts, at fair value, owned by Merger Master
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Fair Value Measurements for Operating Entities and Consolidated Funds (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents the assets and liabilities that are measured at fair value on a recurring basis on the accompanying condensed consolidated statements of financial condition by caption and by level within the valuation hierarchy as of June 30, 2019 and December 31, 2018:
(a) In accordance with US GAAP, certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated statement of financial condition. (b) In accordance with the terms of the purchase agreements for acquisitions that closed during the second quarter of 2016 and the first quarter of 2019, the Company is required to pay to the sellers a portion of future net income and/or revenues of the acquired businesses, if certain targets are achieved through the periods ended December 2019 and December 2023, respectively. For the acquisition closed during 2016, the Company estimated the contingent consideration liability using the income approach (discounted cash flow method) which requires the Company to make estimates and assumptions regarding the future cash flows and profits. For the acquisition that closed during 2019, the Company estimated the contingent consideration liability using the present value of the monte carlo simulated revenue. Changes in these estimates and assumptions could have a significant impact on the amounts recognized. The undiscounted amounts as of June 30, 2019 can range from $1.6 million to $40.0 million.
(a) In accordance with US GAAP, certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated statement of financial condition. (b) In accordance with the terms of the purchase agreements for the acquisition that closed during the second quarter of 2016, the Company is required to pay to the sellers a portion of future net income and/or revenues of the acquired business, if certain targets are achieved through the periods ended December 2020. The Company estimated the contingent consideration liability using the income approach (discounted cash flow method) which requires the Company to make estimates and assumptions regarding the future cash flows and profits. Changes in these estimates and assumptions could have a significant impact on the amounts recognized. The undiscounted amounts as of December 31, 2018 can range from $2.8 million to $3.4 million. |
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table includes a roll forward of the amounts for the three and six months ended June 30, 2019 and 2018 for financial instruments classified within level 3. The classification of a financial instrument within level 3 is based upon the significance of the unobservable inputs to the overall fair value measurement.
(1) Unrealized gains/losses are reported in other income (loss) in the accompanying condensed consolidated statements of operations. (a) The Company deconsolidated an investment fund. (b) The investments were converted to common stock. (c) On June 26, 2018, the Company received shareholder approval which allows the Company to settle its convertible note (see Note 18) entirely in class A common shares. Upon receiving shareholder approval, the Company reclassified the embedded conversion option, associated with the convertible debt, to equity. (see Note 19). |
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Fair Value Inputs, Assets, Quantitative Information | The following table includes quantitative information as of June 30, 2019 and December 31, 2018 for financial instruments classified within level 3. The table below quantifies information about the significant unobservable inputs used in the fair value measurement of the Company's level 3 financial instruments.
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Fair Value Measurements, Nonrecurring | The following table presents the carrying values and fair values, at June 30, 2019 and December 31, 2018, of financial assets and liabilities and information on their classification within the fair value hierarchy which are not measured at fair value on a recurring basis. For additional information regarding the financial instruments within the scope of this disclosure, and the methods and significant assumptions used to estimate their fair value see Note 2.
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Receivables from and payables to brokers, dealers and clearing organizations receivables from brokers, dealers, and clearing organization (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables from Brokers-Dealers and Clearing Organizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Due to (from) Broker-Dealers and Clearing Organizations | As of June 30, 2019 and December 31, 2018, amounts receivable from brokers, dealers and clearing organizations include:
As of June 30, 2019 and December 31, 2018, amounts payable to brokers, dealers and clearing organizations include:
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Goodwill and Intangibles (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangibles [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill Disclosure [Text Block] | The following table presents the changes in the Company's goodwill balance, by reporting unit for the periods ended June 30, 2019 and December 31, 2018:
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Redeemable Non-Controlling Interests in Consolidated Subsidiaries and Funds (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable non-controlling interests in consolidated subsidiaries and funds | Redeemable non-controlling interests in consolidated subsidiaries and investment funds and the related net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds are comprised as follows:
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Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds |
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Share-Based Compensation and Employee Ownership Plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | Restricted shares and restricted stock units are referred to collectively as restricted stock. The following table summarizes the Company's restricted share and restricted stock unit activity for the six months ended June 30, 2019 and 2018:
Included in the restricted share and restricted stock unit activity are performance linked restricted stock units of 481,438 which were awarded to employees of the Company in December 2013 and January 2014. An additional 700,000 performance linked restricted stock units were awarded in March 2016 and 333,333 in April of 2019. Of the awards granted, 130,438 have been forfeited and 233,333 have been canceled, as they did not meet the performance criteria, through June 30, 2019. The remaining awards, included in the outstanding balance as of June 30, 2019, will vest between May 2019 and December 2021 and will be earned only to the extent that the Company attains specified market conditions relating to its volume-weighted average share price and total shareholder return in relation to certain benchmark indices and performance goals relating to aggregate net income and average return on shareholder equity. The actual number of RSUs ultimately earned could vary from zero, if performance goals are not met, to as much as 200% of the targeted award. Each RSU is equal to the one share of the Company’s Class A common stock. Compensation expense is recognized to the extent that it is probable that the Company will attain the performance goals. |
Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease, Lease Income [Table Text Block] | For the three and six months ended June 30, 2019, quantitative information regarding the Company's operating lease obligations reflected in the accompanying condensed consolidated statement of operations were as follows:
The following table summarizes the supplemental cash flow information and certain other information related to operating leases for the six months ended June 30, 2019:
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Future Minimum Annual Lease and Service Payments | As of June 30, 2019, maturities of the outstanding operating lease liabilities for the Company were as follows:
Prior to the adoption of the new lease accounting guidance, the minimum rental commitments under non-cancelable operating leases at December 31, 2018, were as follows:
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Other Commitments | The following table summarizes unfunded commitments as of June 30, 2019:
(a) The Company had unfunded commitments pertaining to capital commitments in five real estate investments held by the Company, all of which pertain to related party investments. Such commitments can be called at any time between two to four years, subject to advance notice. (b) The Company is a limited partner of the HealthCare Royalty Partners funds (which are managed by Healthcare Royalty Management) and is a member of HealthCare Royalty Partners General Partners. The Company will make its pro-rata investment in the HealthCare Royalty Partners funds along with the other limited partners. |
Convertible Debt and Notes Payable (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Direct Financing Lease, Lease Income [Table Text Block] | As of June 30, 2019 and December 31, 2018, the remaining balance on these finance leases was $4.4 million and $5.0 million, respectively. For the three and six months ended June 30, 2019 and 2018, quantitative information regarding the Company's finance lease obligations reflected in the accompanying condensed consolidated statement of operations, the supplemental cash flow information and certain other information related to finance leases were as follows:
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Schedule of Debt and Capital Lease Obligations | As of June 30, 2019 and December 31, 2018, the Company's outstanding debt was as follows:
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Schedule of Maturities of Debt and Future Minimum Lease Payments for Capital Leases | Annual scheduled maturities of debt and minimum payments (of principal and interest) for all debt outstanding as of June 30, 2019, are as follows:
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Schedule of Line of Credit Facilities | As of June 30, 2019, the Company has the following seven irrevocable letters of credit, related to leased office space, for which there is cash collateral pledged, which the Company pays a fee on the stated amount of the letter of credit. The Company also has pledged collateral for reinsurance agreements which amounted to $1.9 million, as of June 30, 2019, and $1.0 million, as of December 31, 2018, which is released annually between March 2020 and March 2023 based on the policy periods covered by the reinsurance agreements.
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Stockholder's Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury Stock Activity | The following represents the activity relating to the treasury stock held by the Company during the six months ended June 30, 2019:
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Accumulated Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income / (Loss) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) |
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Earnings Per Share (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share, Basic and Diluted | The computation of earnings per share is as follows:
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Segment Reporting (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Information, by Segment |
The following is a summary of the adjustments made to US GAAP net income (loss) to arrive at Economic Income (Loss): Funds Consolidation: The impacts of consolidation and the related elimination entries of the Consolidated Funds are not included in Economic Income (Loss). Adjustments to reconcile to US GAAP net income (loss) included elimination of incentive income and management fees earned from the Consolidated Funds and addition of investment fund expenses excluding management fees paid, investment fund revenues and investment income (loss). Other Adjustments: (a) Economic Income (Loss) presents underwriting expenses net of investment banking revenues, expenses reimbursed from clients within their respective expense category. Economic Income (Loss) also records retainer fees, relating to investment banking activities, collectible during the period that would otherwise be deferred until closing for US GAAP reporting. (b) Economic Income (Loss) brokerage revenues included net securities borrowed and securities loaned activities which are shown gross in interest income and interest expense for US GAAP. (c) Economic Income (Loss) recognizes revenues (i) net of distribution fees paid to agents, (ii) records income from uncrystallized incentive fees and (iii) the Company's proportionate share of management and incentive fees of certain real estate operating entities, the healthcare royalty business and the activist business. (d) Economic Income (Loss) recognizes Company income from proprietary trading (including interest and dividends). (e) Reimbursement from affiliates is shown as a reduction of Economic Income expenses, but is included as a part of revenues under US GAAP. (f) Economic Income (Loss) recognizes underwriting income from the Company's insurance related activities, net of expenses, within other revenue. (g) Aircraft lease revenue is shown net of expenses in investment income for Economic Income (Loss). (h) Economic Income (Loss) excludes income taxes and acquisition related adjustments as management does not consider these items when evaluating the performance of the segment. (i) Economic Income (Loss) recognizes the Company's proportionate share of expenses, for certain real estate operating entities and the activist business, for which the investments are recorded under the equity method of accounting for investments. (j) Economic Income (Loss) excludes gain/(loss) on debt extinguishment. |
Regulatory Requirements Regulatory (Tables) |
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Regulatory [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Net Capital under Securities and Exchange Commission Regulation | As of June 30, 2019, these regulated broker-dealers had regulatory net capital or financial resources, regulatory net capital requirements or minimum FCA requirement and excess as follows:
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Guarantees and Off-Balance Sheet Arrangements Details (Tables) |
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Guarantees and Off Balance Sheet Arrangements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Subordinated Borrowing | The Company maintains uncommitted financing arrangements with large financial institutions, the details of which are summarized below as of June 30, 2019.
|
Organization and Business (Details) |
6 Months Ended |
---|---|
Jun. 30, 2019
segment
division
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | segment | 2 |
Number of divisions | division | 4 |
Significant Accounting Policies All Other - Quarterly (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
cowenfund
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
cowenfund
|
Jun. 30, 2018
USD ($)
|
Jan. 01, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Operating right of use assets | $ 101,628 | $ 101,628 | $ 103,694 | $ 0 | ||
Operating Lease, Liability | 106,873 | 106,873 | $ 110,505 | 0 | ||
Variable Interest Entity, Consolidated, Carrying Amount, Assets | 606,200 | 606,200 | 468,000 | |||
Variable Interest Entity, Consolidated, Carrying Amount, Liabilities | 11,200 | 11,200 | 40,500 | |||
Cumulative Effect on Retained Earnings, Net of Tax | $ 559 | |||||
Fees receivable | (126,500) | (126,500) | (111,946) | |||
Other investments | 200,297 | 200,297 | 181,407 | |||
Total Stockholders' Equity | 817,424 | 817,424 | $ 794,407 | |||
Investment banking | 114,705 | $ 84,826 | 194,811 | 182,814 | ||
Revenues | 292,164 | 234,573 | 516,261 | 485,957 | ||
Underwriting expenses | 6,406 | 4,785 | 9,537 | 8,848 | ||
Costs and Expenses | 247,112 | 223,416 | 467,901 | 449,162 | ||
Net gains (losses) on securities, derivatives and other investments | 3,910 | 16,719 | 42,994 | 32,688 | ||
Net Income (Loss) Available to Common Stockholders, Basic | 4,114 | 3,701 | 12,199 | 18,856 | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 10,143 | 30,006 | 22,132 | 58,015 | ||
Gain (Loss) on Investments (excluding broker dealer) | (42,314) | (28,237) | ||||
Fees receivable, net of allowance | (7,285) | (32,917) | ||||
Payments to Acquire Other Investments | (9,513) | (20,227) | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 228,007 | 194,794 | 407,740 | 401,871 | ||
Management Fees | 7,039 | 7,373 | 14,180 | 14,790 | ||
Incentive income | $ 8 | 48 | $ 23 | 64 | ||
Other investment companies | ||||||
Number of funds, Consolidated | cowenfund | 4 | 4 | ||||
Furniture and Fixtures | ||||||
Property, Plant and Equipment, Useful Life | 5 years | |||||
Assets Held under Capital Leases | ||||||
Property, Plant and Equipment, Useful Life | 5 years | |||||
Minimum | ||||||
Redeemable Noncontrolling Interest, Redemption Fee, Percent | 1.00% | |||||
Minimum | Telephone and computer equipment | ||||||
Property, Plant and Equipment, Useful Life | 3 years | |||||
Minimum | Proprietary software | ||||||
Property, Plant and Equipment, Useful Life | 3 years | |||||
Maximum | ||||||
Redeemable Noncontrolling Interest, Redemption Fee, Percent | 5.00% | |||||
Maximum | Telephone and computer equipment | ||||||
Property, Plant and Equipment, Useful Life | 5 years | |||||
Maximum | Proprietary software | ||||||
Property, Plant and Equipment, Useful Life | 8 years | |||||
Hedge Funds | Maximum | ||||||
Asset Management Fees, Percent Fee | 2.00% | |||||
Real Estate Funds | Minimum | ||||||
Asset Management Fees, Percent Fee | 0.25% | |||||
Real Estate Funds | Maximum | ||||||
Asset Management Fees, Percent Fee | 1.50% | |||||
Other Healthcare Royalty Partners | Minimum | ||||||
Asset Management Fees, Percent Fee | 0.20% | |||||
Other Healthcare Royalty Partners | Maximum | ||||||
Asset Management Fees, Percent Fee | 1.00% | |||||
During investment period | Healthcare Royalty Partners | Minimum | ||||||
Asset Management Fees, Percent Fee | 1.00% | |||||
During investment period | Healthcare Royalty Partners | Maximum | ||||||
Asset Management Fees, Percent Fee | 2.00% | |||||
After investment period | Healthcare Royalty Partners | Minimum | ||||||
Asset Management Fees, Percent Fee | 0.50% | |||||
After investment period | Healthcare Royalty Partners | Maximum | ||||||
Asset Management Fees, Percent Fee | 2.00% | |||||
Hedge Funds | ||||||
Incentive Fees, Percent Fee | 20.00% | |||||
Operating Company | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 227,764 | 193,708 | $ 406,984 | 400,041 | ||
Management Fees | 6,796 | 6,287 | 13,439 | 12,960 | ||
Incentive income | 8 | 48 | 8 | 64 | ||
Operating Company | Underwriting fees | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 75,169 | 62,751 | 123,204 | 134,519 | ||
Operating Company | Strategic/financial advisory fees | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 11,131 | 14,498 | 31,676 | 28,858 | ||
Operating Company | Placement and sales agent fees | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 23,515 | 7,577 | 33,013 | 19,437 | ||
Operating Company | Expense reimbursements from clients | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 4,890 | 0 | 6,918 | 0 | ||
Operating Company | Investment Banking Revenue [Member] | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 114,705 | 84,826 | 194,811 | 182,814 | ||
Operating Company | Commissions | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 96,341 | 91,008 | 181,116 | 185,303 | ||
Operating Company | Trade conversion | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 4,559 | 5,815 | 8,665 | 9,337 | ||
Operating Company | Equity and credit research fees | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 5,355 | 5,724 | 8,945 | 9,563 | ||
Operating Company | Brokerage | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 106,255 | 102,547 | 198,726 | 204,203 | ||
Asset Company | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 243 | 1,086 | 756 | 1,830 | ||
Management Fees | 243 | 1,086 | 741 | 1,830 | ||
Incentive income | 0 | 0 | 15 | 0 | ||
Operating Segments | ||||||
Investment banking | 104,216 | 80,042 | 187,212 | 173,966 | ||
Revenues | 244,389 | 234,310 | 477,861 | 475,817 | ||
Costs and Expenses | 218,819 | 205,965 | 426,004 | 415,298 | ||
Net Income (Loss) Available to Common Stockholders, Basic | 15,483 | 20,043 | 30,760 | 42,404 | ||
Management Fees | 10,468 | 12,486 | 20,898 | 25,613 | ||
Incentive income | 4,229 | 9,363 | 20,976 | 14,559 | ||
Operating Segments | Operating Company | ||||||
Investment banking | 104,216 | 80,042 | 187,212 | 173,966 | ||
Revenues | 238,652 | 234,152 | 470,434 | 475,363 | ||
Costs and Expenses | 215,808 | 203,684 | 421,562 | 410,059 | ||
Net Income (Loss) Available to Common Stockholders, Basic | 14,757 | 24,372 | 32,290 | 51,250 | ||
Management Fees | 9,968 | 10,938 | 19,695 | 22,217 | ||
Incentive income | 2,633 | 12,321 | 19,270 | 15,360 | ||
Operating Segments | Asset Company | ||||||
Investment banking | 0 | 0 | 0 | 0 | ||
Revenues | 5,737 | 158 | 7,427 | 454 | ||
Costs and Expenses | 3,011 | 2,281 | 4,442 | 5,239 | ||
Net Income (Loss) Available to Common Stockholders, Basic | 726 | (4,329) | (1,530) | (8,846) | ||
Management Fees | 500 | 1,548 | 1,203 | 3,396 | ||
Incentive income | $ 1,596 | $ (2,958) | $ 1,706 | $ (801) |
Acquisition (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jan. 02, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
|
Business Acquisition [Line Items] | |||||||
Purchase of business | $ 48,581 | $ 0 | |||||
Revenues | $ 292,164 | $ 234,573 | 516,261 | 485,957 | |||
Net income (loss) attributable to Cowen Inc. | 5,812 | $ 5,399 | 15,595 | $ 22,252 | |||
Operating lease right-of-use assets | 101,628 | 101,628 | $ 103,694 | $ 0 | |||
Quarton | |||||||
Business Acquisition [Line Items] | |||||||
Total estimated purchase price | 103,000 | ||||||
Purchase of business | 75,300 | ||||||
Business combination, contingent consideration, liability | $ 40,000 | ||||||
Other payments to acquire businesses | 600 | ||||||
Business combination, contingency liability, retention of employee, bonus pool, maximum | $ 10,000 | ||||||
Business combination, contingency liability, retention of employee, bonus pool, period | 5 years | ||||||
Business combination, contingency liability, retention of employee, bonus pool, annual maximum payout | $ 2,500 | ||||||
Intangible assets | 22,200 | ||||||
Amortization of Intangible Assets | 2,200 | 4,500 | |||||
Business Combination, Separately Recognized Transactions, Additional Disclosures, Acquisition Cost Expensed | 100 | 1,100 | |||||
Revenues | 6,900 | 12,200 | |||||
Net income (loss) attributable to Cowen Inc. | $ 800 | $ 2,400 | |||||
Operating lease right-of-use assets | $ 3,200 | ||||||
Common Stock Class A | Quarton | |||||||
Business Acquisition [Line Items] | |||||||
Business acquisition, equity interest issued or issuable, number of shares | 1,033,350 | ||||||
Business acquisition, share price | $ 14.52 | ||||||
Fair Value, Measurements, Recurring | Level 3 | Quarton | |||||||
Business Acquisition [Line Items] | |||||||
Business combination, contingent consideration, liability | $ 27,700 | ||||||
Minimum | Quarton | |||||||
Business Acquisition [Line Items] | |||||||
Business combination, contingent consideration, liability | 10,000 | ||||||
Maximum | Quarton | |||||||
Business Acquisition [Line Items] | |||||||
Business combination, contingent consideration, liability | $ 40,000 |
Acquisition (Preliminary Purchase Price Allocation) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
Jan. 02, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
|
Business Acquisition [Line Items] | |||||
Operating lease right-of-use assets | $ 101,628 | $ 101,628 | $ 103,694 | $ 0 | |
Operating lease liabilities | (106,873) | (106,873) | $ (110,505) | $ 0 | |
Quarton | |||||
Business Acquisition [Line Items] | |||||
Operating lease right-of-use assets | $ 3,200 | ||||
Intangible assets | 22,200 | ||||
Operating lease liabilities | (3,200) | ||||
Total estimated purchase price | $ 103,000 | ||||
Scenario, Plan | Quarton | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | 12,236 | ||||
Fees receivable | 7,269 | ||||
Fixed assets | 1,085 | ||||
Intangible assets | 22,200 | ||||
Other assets | 667 | ||||
Compensation payable | 637 | ||||
Due to related parties | 4,750 | ||||
Accounts payable, accrued expenses and other liabilities | 16,257 | ||||
Total identifiable net assets acquired and liabilities assumed | $ 21,813 | ||||
Goodwill | 81,150 | ||||
Total estimated purchase price | $ 102,963 |
Acquisition (Intangible Assets) (Details) - Quarton - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jan. 02, 2019 |
|
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 22,200 | |
Trade name | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 900 | |
Finite-Lived Intangible Asset, Useful Life | 3 years | |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 7,100 | |
Finite-Lived Intangible Asset, Useful Life | 4 years | |
Backlog | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 12,600 | |
Finite-Lived Intangible Asset, Useful Life | 2 years | |
Proprietary software | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 1,600 | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Acquisition (Pro Forma) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Business Acquisition [Line Items] | ||||
Revenues | $ 292,164 | $ 234,573 | $ 516,261 | $ 485,957 |
Net income (loss) attributable to Cowen Inc. | 5,812 | 5,399 | 15,595 | 22,252 |
Quarton | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Separately Recognized Transactions, Additional Disclosures, Acquisition Cost Expensed | 100 | 1,100 | ||
Revenues | 218,625 | 454,962 | ||
Net income (loss) | $ 3,057 | $ 19,888 | ||
Basic (usd per share) | $ 0.10 | $ 0.65 | ||
Diluted (usd per share) | $ 0.10 | $ 0.63 | ||
Revenues | 6,900 | 12,200 | ||
Net income (loss) attributable to Cowen Inc. | $ 800 | $ 2,400 |
Acquisition (Amortization Expense) (Details) - Quarton $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
|
Business Acquisition [Line Items] | ||
Amortization of Intangible Assets | $ 2,200 | $ 4,500 |
Scenario, Plan | ||
Business Acquisition [Line Items] | ||
2019 | 4,454 | 4,454 |
2020 | 8,908 | 8,908 |
2023 | 2,608 | 2,608 |
2024 | 1,775 | 1,775 |
2025 | 0 | 0 |
Thereafter | 0 | 0 |
Finite-Lived Intangible Assets, Net | $ 17,745 | $ 17,745 |
Cash Collateral Pledged (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
Jun. 30, 2018 |
---|---|---|---|
Cash collateral pledged | $ 7,097 | $ 6,318 | $ 15,513 |
Facility Leases | |||
Cash collateral pledged | 5,200 | 5,300 | |
Collateral Reinsurance Agreement | |||
Cash collateral pledged | $ 1,900 | $ 1,000 |
Segregated Cash (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
Jun. 30, 2018 |
---|---|---|---|
Segregated Cash [Abstract] | |||
Segregated cash | $ 139,070 | $ 176,647 | $ 95,309 |
Investments of Operating Entities and Consolidated Funds - Securities Owned at Fair Value (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Securities owned, at fair value | $ 900,346 | $ 520,888 | |||||||||||||||
Securities owned, at fair value | 345,292 | 187,633 | |||||||||||||||
Preferred Stock | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Trading Securities, Equity | 9,772 | 5,617 | |||||||||||||||
Securities owned, at fair value | 24,322 | 24,314 | |||||||||||||||
Common Stock | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Trading Securities, Equity | 824,881 | 472,299 | |||||||||||||||
Securities owned, at fair value | 236,066 | 95,565 | |||||||||||||||
Warrants and Rights | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Trading Securities, Equity | 9,874 | 7,990 | |||||||||||||||
Securities owned, at fair value | 6,274 | 5,279 | |||||||||||||||
Government Securities | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Debt Securities, Trading | [1] | $ 12,892 | $ 13,398 | ||||||||||||||
Investment Interest Rate | 0.00% | 0.00% | |||||||||||||||
Securities owned, at fair value | $ 0 | $ 38,377 | [2] | ||||||||||||||
Corporate Bonds | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Debt Securities, Trading | [3] | 24,625 | 13,041 | ||||||||||||||
Securities owned, at fair value | $ 78,630 | [4] | $ 24,098 | ||||||||||||||
Corporate Bonds | Minimum | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Investment Interest Rate | 4.875% | 2.00% | |||||||||||||||
Corporate Bonds | Maximum | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Investment Interest Rate | 10.75% | 15.50% | |||||||||||||||
Convertible Bonds | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Debt Securities, Trading | [5],[6] | $ 6,318 | $ 3,000 | ||||||||||||||
Investment Interest Rate | 8.00% | 8.00% | |||||||||||||||
Convertible Bonds | Estimate of Fair Value Measurement [Member] | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Trading Securities, Equity | [6] | $ 6,300 | $ 3,000 | ||||||||||||||
Trade Claims | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Debt Securities, Trading | [6] | 10,488 | 5,543 | ||||||||||||||
Trade Claims | Estimate of Fair Value Measurement [Member] | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Trading Securities, Equity | [6] | 10,500 | 5,500 | ||||||||||||||
Loans | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Debt Securities, Trading | [6] | 1,496 | $ 0 | ||||||||||||||
Loans | Estimate of Fair Value Measurement [Member] | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Trading Securities, Equity | [6] | $ 1,500 | |||||||||||||||
Consolidated Funds | Government Securities | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Investment Interest Rate | 0.00% | ||||||||||||||||
Consolidated Funds | Corporate Bonds | Minimum | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Investment Interest Rate | 4.87% | 5.88% | |||||||||||||||
Consolidated Funds | Corporate Bonds | Maximum | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Investment Interest Rate | 6.50% | 7.63% | |||||||||||||||
Enterprise Master | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Securities owned, at fair value | $ 469 | ||||||||||||||||
Enterprise Master | Common Stock | |||||||||||||||||
Investment Holdings [Line Items] | |||||||||||||||||
Securities owned, at fair value | $ 469 | ||||||||||||||||
|
Investments of Operating Entities and Consolidated Funds - Derivatives (Details) |
3 Months Ended | 6 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 05, 2016 |
Jun. 30, 2019
USD ($)
contract
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
contract
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
contract
|
||||||||||
Derivative [Line Items] | |||||||||||||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 0.25 | ||||||||||||||
Receivable on derivative contracts, at fair value | $ 32,220,000 | $ 32,220,000 | $ 25,125,000 | ||||||||||||
Payable for derivative contracts, at fair value | 22,445,000 | 22,445,000 | 16,082,000 | ||||||||||||
Receivable on derivative contracts, at fair value | 4,454,000 | 4,454,000 | 4,416,000 | ||||||||||||
Payable for derivative contracts, at fair value, Consolidated Funds | 2,616,000 | 2,616,000 | 1,663,000 | ||||||||||||
Equity Swap | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Receivable on derivative contracts, at fair value | 1,273,000 | 1,273,000 | 2,477,000 | ||||||||||||
Payable for derivative contracts, at fair value, Consolidated Funds | 2,405,000 | 2,405,000 | 713,000 | ||||||||||||
Futures | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Derivative Asset, Notional Amount | 0 | 0 | 42,288,209 | ||||||||||||
Receivable on derivative contracts, at fair value | 0 | 0 | 334,000 | ||||||||||||
Derivative Liability, Notional Amount | 29,986,000 | 29,986,000 | 0 | ||||||||||||
Payable for derivative contracts, at fair value | 434,000 | 434,000 | 0 | ||||||||||||
Currency Forwards | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Derivative Asset, Notional Amount | 105,769,207 | 105,769,207 | 394,875 | ||||||||||||
Receivable on derivative contracts, at fair value | 279,000 | 279,000 | 1,000 | ||||||||||||
Derivative Liability, Notional Amount | 960,000 | 960,000 | 96,406,000 | ||||||||||||
Payable for derivative contracts, at fair value | 1,000 | 1,000 | 709,000 | ||||||||||||
Receivable on derivative contracts, at fair value | 379,000 | 379,000 | 186,000 | ||||||||||||
Payable for derivative contracts, at fair value, Consolidated Funds | 103,000 | 103,000 | 96,000 | ||||||||||||
Swaps | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Derivative Asset, Notional Amount | 121,469,146 | 121,469,146 | 13,702,458 | ||||||||||||
Receivable on derivative contracts, at fair value | 9,440,000 | 9,440,000 | 917,000 | ||||||||||||
Derivative Liability, Notional Amount | 79,407,000 | 79,407,000 | 52,905,000 | ||||||||||||
Payable for derivative contracts, at fair value | $ 2,231,000 | $ 2,231,000 | $ 2,162,000 | ||||||||||||
Options | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Derivative Asset, Number of Instruments Held | contract | [1] | 325,493 | 325,493 | 654,506 | |||||||||||
Receivable on derivative contracts, at fair value | [1] | $ 22,501,000 | $ 22,501,000 | $ 23,130,000 | |||||||||||
Receivable on derivative contracts, at fair value | 2,802,000 | 2,802,000 | 1,753,000 | ||||||||||||
Payable for derivative contracts, at fair value, Consolidated Funds | $ 108,000 | $ 108,000 | $ 854,000 | ||||||||||||
Option | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Derivative Liability, Number of Instruments Held | contract | [2] | 136,420 | 136,420 | 90,730 | |||||||||||
Payable for derivative contracts, at fair value | [2] | $ 19,779,000 | $ 19,779,000 | $ 13,211,000 | |||||||||||
Pay to hold | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Derivative Asset, Number of Instruments Held | contract | 0 | 0 | 0 | ||||||||||||
Receivable on derivative contracts, at fair value | $ 0 | $ 0 | $ 743,000 | ||||||||||||
Receivable on derivatives contracts, at fair value [Member] | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Receivable on derivative contracts, at fair value | 32,220,000 | 32,220,000 | 25,125,000 | ||||||||||||
Derivative Asset, Fair Value, Gross Asset | 32,220,000 | 32,220,000 | 25,125,000 | ||||||||||||
Derivative Asset, Fair Value, Amount Offset Against Collateral | [3] | 0 | 0 | 0 | |||||||||||
Financial Instruments, Owned and Pledged as Collateral, at Fair Value | 0 | 0 | 0 | ||||||||||||
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | [4] | 9,719,000 | 9,719,000 | 1,662,000 | |||||||||||
Derivative asset, net of offset | 22,501,000 | 22,501,000 | 23,463,000 | ||||||||||||
Payable for derivatives contracts, at fair value [Member] | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Payable for derivative contracts, at fair value | 22,445,000 | 22,445,000 | 16,082,000 | ||||||||||||
Financial Instruments, Owned and Pledged as Collateral, at Fair Value | 0 | 0 | 0 | ||||||||||||
Derivative Liability, Fair Value, Gross Liability | 22,445,000 | 22,445,000 | 16,082,000 | ||||||||||||
Derivative Liability, Fair Value, Amount Offset Against Collateral | [3] | 0 | 0 | 0 | |||||||||||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | [4] | 2,232,000 | 2,232,000 | 2,871,000 | |||||||||||
Derivative Liability, net of offset | 20,213,000 | 20,213,000 | 13,211,000 | ||||||||||||
Receivables from Brokers-Dealers and Clearing Organizations | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Collateral posted | 8,600,000 | 8,600,000 | $ 11,200,000 | ||||||||||||
Other Income [Member] | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Realized and unrealized gains/(losses) related to derivatives trading activities | $ (1,800,000) | $ 6,100,000 | $ (4,000,000) | $ 14,000,000 | |||||||||||
|
Investments of Operating Entities and Consolidated Funds - Other Investments (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
||||||
---|---|---|---|---|---|---|---|---|
Investment Holdings [Line Items] | ||||||||
Other investments | $ 200,297 | $ 181,407 | ||||||
Portfolio Funds, Consolidated Funds | 177,828 | 186,395 | ||||||
Portfolio Funds, at fair value | ||||||||
Investment Holdings [Line Items] | ||||||||
Other investments | 146,133 | [1] | 141,236 | [2] | ||||
Equity Method Investments | ||||||||
Investment Holdings [Line Items] | ||||||||
Other investments | 54,164 | 40,171 | ||||||
Enterprise LP [Member] | ||||||||
Investment Holdings [Line Items] | ||||||||
Portfolio Funds, Consolidated Funds | 99,493 | 97,656 | ||||||
Merger Fund [Member] | ||||||||
Investment Holdings [Line Items] | ||||||||
Portfolio Funds, Consolidated Funds | $ 78,335 | $ 88,739 | ||||||
|
Investments of Operating Entities and Consolidated Funds - Portfolio Funds - (Details) $ in Thousands |
6 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018 |
Dec. 31, 2018
USD ($)
|
||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | $ 200,297 | $ 181,407 | ||||||||||||||||||||||||||||||||||||
number of investments | 1 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | $ 146,133 | [1] | $ 141,236 | [2] | ||||||||||||||||||||||||||||||||||
Portfolio Funds | Starboard Value and Opportunity Fund LP | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [3],[4] | $ 36,585 | 32,579 | |||||||||||||||||||||||||||||||||||
Required notice period, withdrawal | 90 days | |||||||||||||||||||||||||||||||||||||
Portfolio Funds | Formation 8 Partners Fund I LP | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [5] | $ 33,613 | 34,099 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | RCGLongview Debt Fund V, L.P. | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [4],[6] | 2,110 | 4,394 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | RCG Longview II, LP | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [4],[6] | 4,461 | 4,400 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | Cowen Healthcare Investments II LP | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | 23,925 | [4],[7] | 21,717 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | Eclipse Ventures Fund I, L.P. | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [8] | 4,580 | 4,412 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | Healthcare Royalty Partners | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [4],[9] | 1,368 | 1,833 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | Lagunita Biosciences, LLC | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [10] | 5,054 | 3,833 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | RCG IO Renergys Sarl | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | 868 | [4],[7] | 6,369 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | Starboard Leaders Fund LP | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [4],[11] | $ 1,454 | 1,230 | |||||||||||||||||||||||||||||||||||
Unfunded Commitment cancellation | 30 days | |||||||||||||||||||||||||||||||||||||
Portfolio Funds | Elipse SPV I,LP | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | $ 1,447 | [4],[12] | 1,447 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | RCG Longview Equity Fund, LP | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | 795 | [4],[6] | 802 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | RCG Longview Debt Fund VI, LP | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [4],[6] | 2,003 | 1,586 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | RCG Park Liberty GP Member LLC | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [4],[6] | 1,102 | 1,023 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | Healthcare Royalty Partners II | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [4],[9] | 1,653 | 1,037 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | RCGL PE MPA LLC | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | 646 | [4],[6] | 618 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | RCG LPP2 PNW5 Co-Invest, L.P. | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [4],[13] | 12 | 296 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | Other Private Investment | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [4],[14] | 19,900 | 15,898 | |||||||||||||||||||||||||||||||||||
Portfolio Funds | Other Funds | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [4],[15] | $ 4,557 | 3,663 | |||||||||||||||||||||||||||||||||||
Enterprise Master | Portfolio Funds | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | 112,394 | |||||||||||||||||||||||||||||||||||||
Multi-strategy | Enterprise Master | Portfolio Funds | RCG Special Opportunities Fund, Ltd | Affiliated Entity | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | [16] | 111,548 | ||||||||||||||||||||||||||||||||||||
Various Strategies | Enterprise Master | Portfolio Funds | Other Private Investment | ||||||||||||||||||||||||||||||||||||||
Investment Holdings [Line Items] | ||||||||||||||||||||||||||||||||||||||
Other investments | $ 846 | |||||||||||||||||||||||||||||||||||||
|
Investments of Operating Entities and Consolidated Funds - Equity Method Investments - (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Schedule of Equity Method Investments [Line Items] | |||||
Equity Method Investment, Summarized Financial Information, Cash | $ 532 | $ 532 | $ 37 | ||
number of investments | 1 | 0 | 0 | ||
Expense, equity method investments | 2,000 | $ 2,100 | $ 4,700 | $ 4,000 | |
Equity method investments | 54,164 | 54,164 | $ 40,171 | ||
Liabilities | 0 | 0 | 0 | ||
Equity | 85,774 | 85,774 | 20,230 | ||
Revenue | 10,144 | 21,356 | 78,723 | 25,926 | |
Expenses | 0 | 0 | 0 | 0 | |
Net realized and unrealized gain (loss) | 102 | 191 | 662 | 242 | |
Net Income | 10,246 | 21,547 | 79,385 | 26,168 | |
Equity Method Investment, Summarized Financial Information, Performance And Management Fee Receivable | 81,031 | 81,031 | 16,594 | ||
Equity Method Investment, Summarized Financial Information, Investments in Portfolio Funds | 4,211 | 4,211 | 3,599 | ||
Surf House Ocean Views Holdings, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 8,493 | 8,493 | 7,589 | ||
Starboard Value LP | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 27,472 | 27,472 | 12,699 | ||
RCG Longview Debt Fund V Partners, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 4,845 | 4,845 | 11,000 | ||
RCG Longview Management, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 4,407 | 4,407 | 1,167 | ||
RCG Longview Debt Fund VI, LP | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 1,431 | 1,431 | 1,254 | ||
Healthcare Royalty GP, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 112 | 112 | 149 | ||
Healthcare Royalty GP II, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 280 | 280 | 176 | ||
RCG Longview Debt Fund IV Management, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 331 | 331 | 331 | ||
Healthcare Royalty GP III, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 2,016 | 2,016 | 1,573 | ||
Triartisan ES Partners, LLC [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 1,026 | 1,026 | 1,500 | ||
Triartisan PFC Partners, LLC [Member] [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 1,000 | 1,000 | 0 | ||
RCG Kennedy House, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 131 | 131 | 131 | ||
RCG Longview Equity Management, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 107 | 107 | 114 | ||
RCG LPP II GP, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 94 | 94 | 272 | ||
RCG Park Liberty GP Member Manager, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 1,248 | 1,248 | 1,248 | ||
Equity Method Investee, Other | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments | 1,171 | 1,171 | 968 | ||
Net Gains (Losses) on Securities, Derivatives and Other Investments | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Income (Loss) from Equity Method Investments | $ 4,000 | $ 8,000 | $ 20,300 | $ 11,900 | |
Minimum | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 1.00% | 1.00% | |||
Maximum | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 56.00% | 56.00% | |||
Clawback Obligation | RCG Longview Partners II, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Contractual obligation | $ 6,500 | $ 6,500 | $ 6,500 |
Investments of Operating Entities and Consolidated Funds - Securities Sold, Not Yet Purchased (Details) - USD ($) |
Jun. 30, 2019 |
Dec. 31, 2018 |
|||||
---|---|---|---|---|---|---|---|
Investments Sold, Not yet Purchased [Line Items] | |||||||
Securities sold, not yet purchased, at fair value | $ 438,584,000 | $ 195,307,000 | |||||
Common Stock | |||||||
Investments Sold, Not yet Purchased [Line Items] | |||||||
Securities sold, not yet purchased, at fair value | 409,034,000 | 194,305,000 | |||||
Corporate Bonds | |||||||
Investments Sold, Not yet Purchased [Line Items] | |||||||
Securities sold, not yet purchased, at fair value | [1] | $ 2,581,000 | $ 750,000 | ||||
Corporate Bonds | Minimum | |||||||
Investments Sold, Not yet Purchased [Line Items] | |||||||
Securities sold, not yet purchased, interest rate | 1.88% | 2.25% | |||||
Corporate Bonds | Maximum | |||||||
Investments Sold, Not yet Purchased [Line Items] | |||||||
Securities sold, not yet purchased, interest rate | 15.50% | 9.38% | |||||
Government Securities | Minimum | |||||||
Investments Sold, Not yet Purchased [Line Items] | |||||||
Securities sold, not yet purchased, interest rate | 7.00% | ||||||
Government Securities | Maximum | |||||||
Investments Sold, Not yet Purchased [Line Items] | |||||||
Securities sold, not yet purchased, interest rate | 8.25% | ||||||
US Government Debt Securities | |||||||
Investments Sold, Not yet Purchased [Line Items] | |||||||
Securities sold, not yet purchased, at fair value | [2] | $ 4,681,000 | $ 0 | ||||
Preferred Stock | |||||||
Investments Sold, Not yet Purchased [Line Items] | |||||||
Securities sold, not yet purchased, at fair value | 2,088,000 | 199,000 | |||||
Warrants and Rights | |||||||
Investments Sold, Not yet Purchased [Line Items] | |||||||
Securities sold, not yet purchased, at fair value | $ 20,200,000 | $ 53,000 | |||||
|
Investments of Operating Entities and Consolidated Funds - Securities borrowed and securities loaned (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|||
---|---|---|---|---|---|
Investments, Debt and Equity Securities [Abstract] | |||||
Securities Borrowed, Gross | $ 1,390,366 | $ 407,795 | |||
Securities borrowed, gross amounts offset on the condensed consolidated statements of financial condition | [1] | 0 | 0 | ||
Securities borrowed, net amounts included on the condensed consolidated statements of financial condition | 1,390,366 | 407,795 | |||
Securities borrowed, additional amounts, asset | 0 | 0 | |||
Securities borrowed, financial instruments | 1,343,751 | 383,593 | |||
Securities borrowed, cash collateral pledged | 0 | 0 | |||
Securities borrowed, net amounts | 46,615 | 24,202 | |||
Securities Loaned, Gross | 1,492,986 | 414,852 | |||
Securities Loaned, Gross amounts offset on the Condensed Consolidated Statements of Financial Condition | [1] | 0 | 0 | ||
Securities Loaned, Gross amounts recognized | 1,492,986 | 414,852 | |||
Securities Loaned, Additional Amounts Available | 0 | 0 | |||
Securities Loaned, Financial instruments | 1,445,362 | 391,310 | |||
Securities Loaned, Net amounts | $ 47,624 | $ 23,542 | |||
|
Investments of Operating Entities and Consolidated Funds - Securities loaned transactions by remaining contractual maturity and class of collateral pledged (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Common stock | $ 1,492,986 | $ 414,852 |
Securities sold, not yet purchased, at fair value | 438,584 | 195,307 |
Common stock | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Common stock | 1,195,846 | 414,852 |
Common stock | Open and Overnight | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Common stock | 1,195,846 | 414,852 |
Common stock | Up to 30 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Common stock | 0 | 0 |
Common stock | 31 - 90 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Common stock | 0 | 0 |
Common stock | Greater than 90 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Common stock | 0 | $ 0 |
Corporate Bonds | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Common stock | 297,140 | |
Corporate Bonds | Open and Overnight | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Common stock | 297,140 | |
Corporate Bonds | Up to 30 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Common stock | 0 | |
Corporate Bonds | 31 - 90 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Common stock | 0 | |
Corporate Bonds | Greater than 90 days | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Common stock | $ 0 |
Investments of Operating Entities and Consolidated Funds - Variable Interest Entities (Details) - Variable Interest Entity, Not Primary Beneficiary - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Total assets of nonconsolidated variable interest entities | $ 6,100.0 | $ 5,100.0 |
Total liabilities of nonconsolidated variable interest entities | 331.8 | 157.6 |
Variable Interest Entity, Nonconsolidated, Comparison of Carrying Amount of Assets and Liabilities to Maximum Loss Exposure | 224.1 | 301.4 |
Maximum exposure regarding nonconsolidated variable interest entities | $ 256.2 | $ 332.4 |
Investments of Operating Entities and Consolidated Funds - Indirect Concentration of the Underlying Investments Held by Consolidated Funds (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
investments
|
Dec. 31, 2018
USD ($)
investments
|
---|---|---|
Investment [Line Items] | ||
Concentration of risk, number of investments | investments | 1 | 1 |
Equity Securities | Linkem | ITALY | 517210 Wireless Telecommunications Carriers (except Satellite) | ||
Investment [Line Items] | ||
Percentage of Equity | 8.82% | 8.36% |
Market Value | $ | $ 72,036 | $ 66,439 |
Investments of Operating Entities and Consolidated Funds - Merger Master Narrative (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
||
---|---|---|---|---|
Investment [Line Items] | ||||
Trading securities | $ 900,346 | $ 520,888 | ||
Securities sold, not yet purchased, at fair value | 438,584 | 195,307 | ||
Merger Master | ||||
Investment [Line Items] | ||||
Trading securities | 394,936 | 279,299 | ||
Securities sold, not yet purchased, at fair value | 111,074 | 9,610 | ||
Common Stock | ||||
Investment [Line Items] | ||||
Securities sold, not yet purchased, at fair value | 409,034 | 194,305 | ||
Common Stock | Merger Master | ||||
Investment [Line Items] | ||||
Trading securities | 324,742 | 162,811 | ||
Securities sold, not yet purchased, at fair value | 111,074 | 9,610 | ||
Corporate Bonds | ||||
Investment [Line Items] | ||||
Securities sold, not yet purchased, at fair value | [1] | 2,581 | 750 | |
Corporate Bonds | Merger Master | ||||
Investment [Line Items] | ||||
Trading securities | $ 70,194 | $ 116,488 | ||
|
Investments of Operating Entities and Consolidated Funds - Merger Master Derivatives (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|||||
---|---|---|---|---|---|---|---|
Derivative [Line Items] | |||||||
Derivative Asset | $ 32,220 | $ 25,125 | |||||
Derivative Liability | 22,445 | 16,082 | |||||
Merger Master | |||||||
Derivative [Line Items] | |||||||
Derivative Asset | 4,393 | 8,770 | |||||
Derivative Liability | 37,850 | 1,728 | |||||
Option | |||||||
Derivative [Line Items] | |||||||
Derivative Liability | [1] | 19,779 | 13,211 | ||||
Option | Merger Master | |||||||
Derivative [Line Items] | |||||||
Derivative Liability | 194 | 1,430 | |||||
Options | |||||||
Derivative [Line Items] | |||||||
Derivative Asset | [2] | 22,501 | 23,130 | ||||
Options | Merger Master | |||||||
Derivative [Line Items] | |||||||
Derivative Asset | 4,291 | 3,450 | |||||
Swaps | |||||||
Derivative [Line Items] | |||||||
Derivative Asset | 9,440 | 917 | |||||
Derivative Liability | 2,231 | 2,162 | |||||
Swaps | Merger Master | |||||||
Derivative [Line Items] | |||||||
Derivative Asset | 102 | 5,320 | |||||
Derivative Liability | 347 | 28 | |||||
Currency Forwards | |||||||
Derivative [Line Items] | |||||||
Derivative Asset | 279 | 1 | |||||
Derivative Liability | 1 | 709 | |||||
Currency Forwards | Merger Master | |||||||
Derivative [Line Items] | |||||||
Derivative Liability | $ 37,309 | $ 270 | |||||
|
Fair Value Measurements for Operating Entities and Consolidated Funds Assets and Liabilities at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | $ 438,584 | $ 195,307 | ||||||||||||
Securities sold, not yet purchased, at fair value | 438,584 | 195,307 | ||||||||||||
Derivative Liability | 22,445 | 16,082 | ||||||||||||
Derivative Asset | 32,220 | 25,125 | ||||||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, Low | 1,600 | 2,800 | ||||||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 40,000 | 3,400 | ||||||||||||
Other investments | 200,297 | 181,407 | ||||||||||||
Other Investments, Consolidated Funds | 177,828 | 186,395 | ||||||||||||
Investments | $ 1,660,437 | $ 1,105,864 | ||||||||||||
Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Percentage of Total Assets at Fair Value | 85.50% | 86.60% | ||||||||||||
Percentage of Total Liabilities at Fair Value | 91.00% | 95.60% | ||||||||||||
Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Percentage of Total Assets at Fair Value | 9.20% | 6.00% | ||||||||||||
Percentage of Total Liabilities at Fair Value | 2.40% | 2.00% | ||||||||||||
Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Percentage of Total Assets at Fair Value | 5.30% | 7.40% | ||||||||||||
Percentage of Total Liabilities at Fair Value | 6.60% | 2.40% | ||||||||||||
Futures | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | $ 434 | $ 0 | ||||||||||||
Derivative Asset | 0 | 334 | ||||||||||||
Swaps | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 2,231 | 2,162 | ||||||||||||
Derivative Asset | 9,440 | 917 | ||||||||||||
Options | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | [1] | 22,501 | 23,130 | |||||||||||
Pay to hold | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | 743 | ||||||||||||
Portfolio Funds, at fair value | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Other investments | 146,133 | [2] | 141,236 | [3] | ||||||||||
Other Investments, Consolidated Funds | 177,828 | [2] | 186,395 | [3] | ||||||||||
Equity Method Investments | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Other investments | 54,164 | 40,171 | ||||||||||||
Fair Value, Measurements, Recurring | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Investment Sold, Not yet Purchased and Derivative Liability, at Fair Value | 493,181 | 216,122 | ||||||||||||
Assets, Fair Value Disclosure, Recurring (Deprecated 2018-01-31) | 1,282,312 | 738,062 | ||||||||||||
Fair Value, Measurements, Recurring | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Investment Sold, Not yet Purchased and Derivative Liability, at Fair Value | 448,864 | 206,526 | ||||||||||||
Assets, Fair Value Disclosure, Recurring (Deprecated 2018-01-31) | 1,095,935 | 638,837 | ||||||||||||
Fair Value, Measurements, Recurring | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Investment Sold, Not yet Purchased and Derivative Liability, at Fair Value | 12,002 | 4,430 | ||||||||||||
Assets, Fair Value Disclosure, Recurring (Deprecated 2018-01-31) | 118,181 | 44,311 | ||||||||||||
Fair Value, Measurements, Recurring | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Investment Sold, Not yet Purchased and Derivative Liability, at Fair Value | 32,315 | 5,166 | ||||||||||||
Assets, Fair Value Disclosure, Recurring (Deprecated 2018-01-31) | 68,196 | 54,914 | ||||||||||||
Fair Value, Measurements, Recurring | Preferred Stock | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 2,088 | 199 | ||||||||||||
Fair Value, Measurements, Recurring | Preferred Stock | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 2,088 | 199 | ||||||||||||
Fair Value, Measurements, Recurring | Preferred Stock | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Preferred Stock | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Common Stock | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 409,034 | 194,305 | ||||||||||||
Fair Value, Measurements, Recurring | Common Stock | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 409,034 | 194,305 | ||||||||||||
Fair Value, Measurements, Recurring | Common Stock | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Common Stock | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Corporate Bonds | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 2,581 | 750 | ||||||||||||
Fair Value, Measurements, Recurring | Corporate Bonds | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Corporate Bonds | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 2,581 | 750 | ||||||||||||
Fair Value, Measurements, Recurring | Corporate Bonds | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Warrants and Rights | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 20,200 | 53 | ||||||||||||
Fair Value, Measurements, Recurring | Warrants and Rights | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 20,200 | 53 | ||||||||||||
Fair Value, Measurements, Recurring | Warrants and Rights | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Warrants and Rights | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Contingent liability payable | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Business Combination, Contingent Consideration, Liability | 29,536 | [4] | 3,070 | |||||||||||
Fair Value, Measurements, Recurring | Contingent liability payable | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Business Combination, Contingent Consideration, Liability | 0 | [4] | 0 | [5] | ||||||||||
Fair Value, Measurements, Recurring | Contingent liability payable | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Business Combination, Contingent Consideration, Liability | 0 | [4] | 0 | [5] | ||||||||||
Fair Value, Measurements, Recurring | Contingent liability payable | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Business Combination, Contingent Consideration, Liability | 29,536 | [4] | 3,070 | [5] | ||||||||||
Fair Value, Measurements, Recurring | Futures | Options | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 434 | |||||||||||||
Fair Value, Measurements, Recurring | Futures | Options | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 434 | |||||||||||||
Fair Value, Measurements, Recurring | Futures | Options | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Futures | Options | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Currency forward | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 279 | 1 | ||||||||||||
Fair Value, Measurements, Recurring | Currency forward | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Currency forward | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 279 | 1 | ||||||||||||
Fair Value, Measurements, Recurring | Currency forward | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Currency forward | Options | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 1 | 709 | ||||||||||||
Fair Value, Measurements, Recurring | Currency forward | Options | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Currency forward | Options | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 1 | 709 | ||||||||||||
Fair Value, Measurements, Recurring | Currency forward | Options | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Swaps | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 9,440 | |||||||||||||
Fair Value, Measurements, Recurring | Swaps | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Swaps | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 9,440 | |||||||||||||
Fair Value, Measurements, Recurring | Swaps | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Swaps | Options | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 2,231 | 2,162 | ||||||||||||
Fair Value, Measurements, Recurring | Swaps | Options | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Swaps | Options | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 2,231 | 2,162 | ||||||||||||
Fair Value, Measurements, Recurring | Swaps | Options | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Options | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 22,501 | |||||||||||||
Fair Value, Measurements, Recurring | Options | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 22,501 | |||||||||||||
Fair Value, Measurements, Recurring | Options | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Options | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Options | Options | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 19,779 | 13,211 | ||||||||||||
Fair Value, Measurements, Recurring | Options | Options | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 17,000 | 11,115 | ||||||||||||
Fair Value, Measurements, Recurring | Options | Options | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Options | Options | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 2,096 | |||||||||||||
Financial Liabilities Fair Value Disclosure | 2,779 | |||||||||||||
Fair Value, Measurements, Recurring | Pay to hold | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 743 | |||||||||||||
Fair Value, Measurements, Recurring | Pay to hold | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Pay to hold | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 743 | |||||||||||||
Fair Value, Measurements, Recurring | Pay to hold | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Government Securities | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 12,892 | 13,398 | ||||||||||||
Fair Value, Measurements, Recurring | Government Securities | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 12,892 | 13,398 | ||||||||||||
Fair Value, Measurements, Recurring | Government Securities | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Government Securities | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Preferred Stock | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 9,772 | 5,617 | ||||||||||||
Fair Value, Measurements, Recurring | Preferred Stock | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 2,371 | 449 | ||||||||||||
Fair Value, Measurements, Recurring | Preferred Stock | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Preferred Stock | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 7,401 | 5,168 | ||||||||||||
Fair Value, Measurements, Recurring | Common Stock | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 824,881 | 472,299 | ||||||||||||
Fair Value, Measurements, Recurring | Common Stock | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 811,041 | 459,601 | ||||||||||||
Fair Value, Measurements, Recurring | Common Stock | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 2,834 | 2,848 | ||||||||||||
Fair Value, Measurements, Recurring | Common Stock | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 11,006 | 9,850 | ||||||||||||
Fair Value, Measurements, Recurring | Corporate Bonds | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 24,625 | 13,041 | ||||||||||||
Fair Value, Measurements, Recurring | Corporate Bonds | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Corporate Bonds | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 23,850 | 13,041 | ||||||||||||
Fair Value, Measurements, Recurring | Corporate Bonds | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 775 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Convertible Bonds | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 6,318 | 3,000 | ||||||||||||
Fair Value, Measurements, Recurring | Convertible Bonds | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Convertible Bonds | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Convertible Bonds | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 6,318 | 3,000 | ||||||||||||
Fair Value, Measurements, Recurring | Trade Claims | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 10,488 | 5,543 | ||||||||||||
Fair Value, Measurements, Recurring | Trade Claims | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Trade Claims | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Trade Claims | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 10,488 | 5,543 | ||||||||||||
Fair Value, Measurements, Recurring | Warrants and Rights | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 9,874 | 7,990 | ||||||||||||
Fair Value, Measurements, Recurring | Warrants and Rights | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 9,279 | 6,324 | ||||||||||||
Fair Value, Measurements, Recurring | Warrants and Rights | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Warrants and Rights | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 595 | 1,666 | ||||||||||||
Fair Value, Measurements, Recurring | Derivative Assets | Futures | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 334 | |||||||||||||
Fair Value, Measurements, Recurring | Derivative Assets | Futures | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 334 | |||||||||||||
Fair Value, Measurements, Recurring | Derivative Assets | Futures | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Derivative Assets | Futures | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Derivative Assets | Swaps | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 917 | |||||||||||||
Fair Value, Measurements, Recurring | Derivative Assets | Swaps | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Derivative Assets | Swaps | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 917 | |||||||||||||
Fair Value, Measurements, Recurring | Derivative Assets | Swaps | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Derivative Assets | Options | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 23,130 | |||||||||||||
Fair Value, Measurements, Recurring | Derivative Assets | Options | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 23,130 | |||||||||||||
Fair Value, Measurements, Recurring | Derivative Assets | Options | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Derivative Assets | Options | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Term loan | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 1,496 | |||||||||||||
Fair Value, Measurements, Recurring | Term loan | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Term loan | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 1,496 | |||||||||||||
Fair Value, Measurements, Recurring | Term loan | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Operating Companies [Member] | US Government Debt Securities | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 4,681 | |||||||||||||
Fair Value, Measurements, Recurring | Operating Companies [Member] | US Government Debt Securities | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Operating Companies [Member] | US Government Debt Securities | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 4,681 | |||||||||||||
Fair Value, Measurements, Recurring | Operating Companies [Member] | US Government Debt Securities | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Securities sold, not yet purchased, at fair value | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Currency forward | Options | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 103 | 96 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Currency forward | Options | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Currency forward | Options | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 103 | 96 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Currency forward | Options | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Equity Swap | Options | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 2,405 | 713 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Equity Swap | Options | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Equity Swap | Options | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 2,405 | 713 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Equity Swap | Options | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Options | Options | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 108 | 854 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Options | Options | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 108 | 854 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Options | Options | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Options | Options | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Liability | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Government Securities | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 38,377 | |||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Government Securities | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 38,377 | |||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Government Securities | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Government Securities | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 0 | |||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Preferred Stock | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 24,322 | 24,314 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Preferred Stock | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Preferred Stock | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Preferred Stock | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 24,322 | 24,314 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Common Stock | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 236,066 | 95,565 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Common Stock | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 235,049 | 95,471 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Common Stock | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Common Stock | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 1,017 | 94 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Corporate Bonds | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 78,630 | 24,098 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Corporate Bonds | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Corporate Bonds | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 78,630 | 24,098 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Corporate Bonds | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Debt Securities, Trading | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Warrants and Rights | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 6,274 | 5,279 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Warrants and Rights | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Warrants and Rights | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Warrants and Rights | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Trading Securities, Equity | 6,274 | 5,279 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Derivative Assets | Currency forward | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 379 | 186 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Derivative Assets | Currency forward | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Derivative Assets | Currency forward | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 379 | 186 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Derivative Assets | Currency forward | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Derivative Assets | Equity Swap | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 1,273 | 2,477 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Derivative Assets | Equity Swap | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Derivative Assets | Equity Swap | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 1,273 | 2,477 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Derivative Assets | Equity Swap | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Derivative Assets | Options | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 2,802 | 1,753 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Derivative Assets | Options | Level 1 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 2,802 | 1,753 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Derivative Assets | Options | Level 2 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | 0 | 0 | ||||||||||||
Fair Value, Measurements, Recurring | Consolidated Funds | Derivative Assets | Options | Level 3 | ||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||
Derivative Asset | $ 0 | $ 0 | ||||||||||||
|
Fair Value Measurements for Operating Entities and Consolidated Funds Unobservable Input Roll Forward (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
||||||||||||||
Preferred Stock | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Balance Asset Value | $ 7,157,000 | $ 8,817,000 | $ 5,168,000 | $ 8,115,000 | |||||||||||||
Asset, Transfers In | 0 | 0 | 0 | 0 | |||||||||||||
Asset, Transfers Out | 0 | 0 | 0 | 0 | |||||||||||||
Purchases/(covers) | 1,243,000 | 0 | 3,243,000 | 1,415,000 | |||||||||||||
(Sales)/short buys | (1,000,000) | (217,000) | (1,000,000) | (695,000) | |||||||||||||
Realized and unrealized gains (losses), asset | 1,000 | (1,178,000) | (10,000) | (1,413,000) | |||||||||||||
Change in Unrealized Gain (Loss), instruments still held, asset | [1] | 1,000 | (1,817,000) | (10,000) | (1,331,000) | ||||||||||||
Balance Asset Value | 7,401,000 | 7,422,000 | 7,401,000 | 7,422,000 | |||||||||||||
Common Stock | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Balance Asset Value | 4,951,000 | 7,400,000 | 9,850,000 | 7,570,000 | |||||||||||||
Asset, Transfers In | 0 | 0 | 0 | 0 | |||||||||||||
Asset, Transfers Out | 0 | 0 | 0 | 0 | |||||||||||||
Purchases/(covers) | 12,896,000 | 221,000 | 14,158,000 | 531,000 | |||||||||||||
(Sales)/short buys | (6,519,000) | (1,200,000) | (12,472,000) | (1,333,000) | |||||||||||||
Realized and unrealized gains (losses), asset | (322,000) | (572,000) | (530,000) | (919,000) | |||||||||||||
Change in Unrealized Gain (Loss), instruments still held, asset | [1] | (325,000) | (547,000) | (332,000) | (959,000) | ||||||||||||
Balance Asset Value | 11,006,000 | 5,849,000 | 11,006,000 | 5,849,000 | |||||||||||||
Corporate Bonds | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Balance Asset Value | 261,000 | 0 | |||||||||||||||
Asset, Transfers In | 0 | 0 | |||||||||||||||
Asset, Transfers Out | 0 | 0 | |||||||||||||||
Purchases/(covers) | 514,000 | 775,000 | |||||||||||||||
(Sales)/short buys | 0 | 0 | |||||||||||||||
Realized and unrealized gains (losses), asset | 0 | 0 | |||||||||||||||
Change in Unrealized Gain (Loss), instruments still held, asset | [1] | 0 | 0 | ||||||||||||||
Balance Asset Value | 775,000 | 775,000 | |||||||||||||||
Convertible Bonds | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Balance Asset Value | 5,000,000 | 3,000,000 | 282,000 | ||||||||||||||
Asset, Transfers In | 0 | 0 | |||||||||||||||
Asset, Transfers Out | (2,025,000) | [2] | (2,025,000) | [2] | 0 | ||||||||||||
Purchases/(covers) | 9,971,000 | 14,971,000 | 0 | ||||||||||||||
(Sales)/short buys | (6,692,000) | (9,692,000) | (307,000) | ||||||||||||||
Realized and unrealized gains (losses), asset | 64,000 | 64,000 | 25,000 | ||||||||||||||
Change in Unrealized Gain (Loss), instruments still held, asset | [1] | 64,000 | 64,000 | 0 | |||||||||||||
Balance Asset Value | 6,318,000 | 0 | 6,318,000 | 0 | |||||||||||||
Options | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Balance Asset Value | 1,455,000 | ||||||||||||||||
Asset, Transfers In | 0 | ||||||||||||||||
Asset, Transfers Out | 0 | ||||||||||||||||
Purchases/(covers) | 0 | ||||||||||||||||
(Sales)/short buys | 1,455,000 | ||||||||||||||||
Realized and unrealized gains (losses), asset | 0 | ||||||||||||||||
Change in Unrealized Gain (Loss), instruments still held, asset | [1] | 0 | |||||||||||||||
Balance Asset Value | 0 | 0 | |||||||||||||||
Warrants and Rights | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Balance Asset Value | 454,000 | 1,702,000 | 1,666,000 | 2,517,000 | |||||||||||||
Asset, Transfers In | 0 | 0 | 0 | 0 | |||||||||||||
Asset, Transfers Out | 0 | (374,000) | [2] | 0 | (374,000) | [2] | |||||||||||
Purchases/(covers) | 0 | 0 | 0 | 0 | |||||||||||||
(Sales)/short buys | 0 | (143,000) | (116,000) | (143,000) | |||||||||||||
Realized and unrealized gains (losses), asset | 141,000 | 71,000 | (955,000) | (744,000) | |||||||||||||
Change in Unrealized Gain (Loss), instruments still held, asset | [1] | 141,000 | (1,176,000) | 32,000 | (666,000) | ||||||||||||
Balance Asset Value | 595,000 | 1,256,000 | 595,000 | 1,256,000 | |||||||||||||
Trade Claims | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Balance Asset Value | 5,487,000 | 5,955,000 | 5,543,000 | 5,950,000 | |||||||||||||
Asset, Transfers In | 0 | 0 | 0 | 0 | |||||||||||||
Asset, Transfers Out | 0 | 0 | 0 | 0 | |||||||||||||
Purchases/(covers) | 5,095,000 | 0 | 5,095,000 | 0 | |||||||||||||
(Sales)/short buys | (96,000) | (334,000) | (152,000) | (334,000) | |||||||||||||
Realized and unrealized gains (losses), asset | 2,000 | 78,000 | 2,000 | 83,000 | |||||||||||||
Change in Unrealized Gain (Loss), instruments still held, asset | [1] | 0 | 14,000 | 0 | 20,000 | ||||||||||||
Balance Asset Value | 10,488,000 | 5,699,000 | 10,488,000 | 5,699,000 | |||||||||||||
Lehman claims, at fair value | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Balance Asset Value | 312,000 | 301,000 | |||||||||||||||
Asset, Transfers In | 0 | 0 | |||||||||||||||
Asset, Transfers Out | 0 | 0 | |||||||||||||||
Purchases/(covers) | 0 | 0 | |||||||||||||||
(Sales)/short buys | 0 | 0 | |||||||||||||||
Realized and unrealized gains (losses), asset | (17,000) | (6,000) | |||||||||||||||
Change in Unrealized Gain (Loss), instruments still held, asset | [1] | (18,000) | (6,000) | ||||||||||||||
Balance Asset Value | 295,000 | 295,000 | |||||||||||||||
Consolidated Funds | Preferred Stock | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Balance Asset Value | 24,322,000 | 11,893,000 | 24,314,000 | 50,445,000 | |||||||||||||
Asset, Transfers In | 0 | 0 | 0 | 0 | |||||||||||||
Asset, Transfers Out | 0 | 0 | 0 | (38,552,000) | [3] | ||||||||||||
Purchases/(covers) | 0 | 3,066,000 | 0 | 3,066,000 | |||||||||||||
(Sales)/short buys | 0 | 0 | 0 | 0 | |||||||||||||
Realized and unrealized gains (losses), asset | 0 | 9,355,000 | 8,000 | 9,355,000 | |||||||||||||
Change in Unrealized Gain (Loss), instruments still held, asset | [1] | 0 | 9,356,000 | 8,000 | 9,356,000 | ||||||||||||
Balance Asset Value | 24,322,000 | 24,314,000 | 24,322,000 | 24,314,000 | |||||||||||||
Consolidated Funds | Common Stock | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Balance Asset Value | 1,017,000 | 50,000 | 94,000 | 50,000 | |||||||||||||
Asset, Transfers In | 0 | 0 | 0 | 0 | |||||||||||||
Asset, Transfers Out | 0 | 0 | 0 | 0 | |||||||||||||
Purchases/(covers) | 0 | 0 | 407,000 | 0 | |||||||||||||
(Sales)/short buys | 0 | 0 | 0 | 0 | |||||||||||||
Realized and unrealized gains (losses), asset | 0 | 44,000 | 516,000 | 44,000 | |||||||||||||
Change in Unrealized Gain (Loss), instruments still held, asset | [1] | 0 | 43,000 | 516,000 | 43,000 | ||||||||||||
Balance Asset Value | 1,017,000 | 94,000 | 1,017,000 | 94,000 | |||||||||||||
Consolidated Funds | Warrants and Rights | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Balance Asset Value | 4,708,000 | 5,254,000 | 5,279,000 | 3,568,000 | |||||||||||||
Asset, Transfers In | 0 | 0 | 0 | 0 | |||||||||||||
Asset, Transfers Out | 0 | 0 | 0 | (20,000) | [3] | ||||||||||||
Purchases/(covers) | 0 | (1,340,000) | 0 | (1,340,000) | |||||||||||||
(Sales)/short buys | 0 | 0 | (1,088,000) | 0 | |||||||||||||
Realized and unrealized gains (losses), asset | 1,566,000 | 824,000 | 2,083,000 | 2,530,000 | |||||||||||||
Change in Unrealized Gain (Loss), instruments still held, asset | [1] | 1,566,000 | (516,000) | 995,000 | 1,190,000 | ||||||||||||
Balance Asset Value | 6,274,000 | 4,738,000 | 6,274,000 | 4,738,000 | |||||||||||||
Options, liability | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Balance Liability Value | 1,733,000 | 21,395,000 | 2,096,000 | 22,401,000 | |||||||||||||
Liability, Transfers In | 0 | 0 | 0 | 0 | |||||||||||||
Liability, Transfers Out | 0 | (28,973,000) | [4] | 0 | (28,973,000) | [4] | |||||||||||
Liability, Purchases | 0 | 0 | 0 | 0 | |||||||||||||
Liability, Sales | 0 | (259,000) | (4,000) | (259,000) | |||||||||||||
Realized and unrealized gains (losses), liability | 1,046,000 | 8,138,000 | 687,000 | 7,132,000 | |||||||||||||
Change in Unrealized Gain (Loss), instruments still held, liabilities | [1] | 1,046,000 | 8,138,000 | 687,000 | 7,132,000 | ||||||||||||
Balance Liability Value | 2,779,000 | 301,000 | 2,779,000 | 301,000 | |||||||||||||
Contingent liability payable | |||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||
Balance Liability Value | 29,536,000 | 3,440,000 | 3,070,000 | 3,440,000 | |||||||||||||
Liability, Transfers In | 0 | 0 | 0 | 0 | |||||||||||||
Liability, Transfers Out | 0 | 0 | 0 | 0 | |||||||||||||
Liability, Purchases | 0 | 0 | 27,700,000 | 0 | |||||||||||||
Liability, Sales | 0 | (570,000) | (1,234,000) | (570,000) | |||||||||||||
Realized and unrealized gains (losses), liability | 0 | 0 | 0 | 0 | |||||||||||||
Change in Unrealized Gain (Loss), instruments still held, liabilities | [1] | 0 | 0 | 0 | 0 | ||||||||||||
Balance Liability Value | $ 29,536,000 | $ 2,870,000 | $ 29,536,000 | $ 2,870,000 | |||||||||||||
|
Fair Value Measurements for Operating Entities and Consolidated Funds Fair Value Inputs, Unobservable Inputs, Quantitative Information (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
Mar. 31, 2019 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
||||
Contingent liability payable | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Balance Liability Value | $ 29,536 | $ 3,070 | $ 29,536 | $ 2,870 | $ 3,440 | $ 3,440 | |||
Corporate Bonds | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Balance Asset Value | 775 | 0 | 261 | ||||||
Trade Claims | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Balance Asset Value | 10,488 | 5,543 | 5,487 | 5,699 | 5,955 | 5,950 | |||
Warrants and Rights [Member] | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Balance Asset Value | 595 | 1,666 | $ 454 | 1,256 | $ 1,702 | 2,517 | |||
Options | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Balance Asset Value | $ 0 | $ 1,455 | |||||||
Level 3 | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Balance Asset Value | 68,196 | 54,914 | |||||||
Balance Liability Value | $ 32,315 | $ 5,166 | |||||||
Level 3 | Contingent liability payable | Monte Carlo [Member] | Minimum | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 14.00% | ||||||||
Level 3 | Contingent liability payable | Monte Carlo [Member] | Maximum | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 23.00% | ||||||||
Level 3 | Contingent liability payable | Income Approach and Market Approach Valuation Techniques | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 23.00% | ||||||||
Level 3 | Contingent liability payable | Income Approach and Market Approach Valuation Techniques | Minimum | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 14.00% | ||||||||
Level 3 | Contingent liability payable | Income Approach and Market Approach Valuation Techniques | Maximum | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 20.00% | ||||||||
Level 3 | Contingent liability payable | Market Approach, Income Approach and Replacement Cost Valuation Techniques [Member] | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Balance Liability Value | $ 3,070 | ||||||||
Level 3 | Corporate Bonds | Income Approach and Market Approach Valuation Techniques | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Balance Asset Value | $ 514 | ||||||||
Level 3 | Common and Preferred Stock | Market Approach, Income Approach and Replacement Cost Valuation Techniques [Member] | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Balance Asset Value | $ 325 | $ 4,323 | |||||||
Level 3 | Common and Preferred Stock | Market Approach, Income Approach and Replacement Cost Valuation Techniques [Member] | Minimum | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 650.00% | ||||||||
Level 3 | Common and Preferred Stock | Market Approach, Income Approach and Replacement Cost Valuation Techniques [Member] | Maximum | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 700.00% | ||||||||
Level 3 | Trade Claims | Market Approach Valuation Technique | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 20.00% | 20.00% | |||||||
Level 3 | Trade Claims | Market Approach, Income Approach and Replacement Cost Valuation Techniques [Member] | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Balance Asset Value | $ 27 | $ 25 | |||||||
Level 3 | Warrants and Rights [Member] | Income Approach and Market Approach Valuation Techniques | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Balance Asset Value | 6,865 | ||||||||
Level 3 | Warrants and Rights [Member] | Market Approach, Income Approach and Replacement Cost Valuation Techniques [Member] | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Balance Asset Value | 1,666 | ||||||||
Level 3 | Other Investments | Income Approach and Market Approach Valuation Techniques | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Balance Asset Value | [1] | 60,465 | |||||||
Level 3 | Other Investments | Market Approach, Income Approach and Replacement Cost Valuation Techniques [Member] | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Balance Asset Value | [1] | $ 48,900 | |||||||
Level 3 | Options | Market Approach Valuation Technique | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | |||||||||
Fair Value, Measurements, Recurring | Level 3 | Options | Options | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Financial Liabilities Fair Value Disclosure | $ 2,779 | ||||||||
Fair Value, Measurements, Recurring | Level 3 | Option | Options | Market Approach, Income Approach and Replacement Cost Valuation Techniques [Member] | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Financial Liabilities Fair Value Disclosure | $ 2,096 | ||||||||
Discount rate | Level 3 | Common and Preferred Stock | Market Approach, Income Approach and Replacement Cost Valuation Techniques [Member] | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 8.00% | ||||||||
Discount rate | Level 3 | Common and Preferred Stock | Market Approach, Income Approach and Replacement Cost Valuation Techniques [Member] | Minimum | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 8.00% | ||||||||
Discount rate | Level 3 | Common and Preferred Stock | Market Approach, Income Approach and Replacement Cost Valuation Techniques [Member] | Maximum | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 14.00% | ||||||||
Discount rate | Level 3 | Warrants and Rights [Member] | Market Approach Valuation Technique | Minimum | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 6.00% | 7.00% | |||||||
Discount rate | Level 3 | Warrants and Rights [Member] | Market Approach Valuation Technique | Maximum | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 7.00% | 9.00% | |||||||
Volatility | Level 3 | Warrants and Rights [Member] | Market Approach Valuation Technique | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | |||||||||
Volatility | Level 3 | Warrants and Rights [Member] | Market Approach Valuation Technique | Minimum | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 30.00% | ||||||||
Volatility | Level 3 | Options | Market Approach Valuation Technique | Minimum | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 35.00% | 35.00% | |||||||
Volatility | Level 3 | Options | Market Approach Valuation Technique | Maximum | |||||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||||||||
Fair value inputs | 40.00% | 40.00% | |||||||
|
Fair Value Measurements for Operating Entities and Consolidated Funds Carrying Value Disclosures (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
Jun. 30, 2018 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Cash and cash equivalents | $ 182,400 | $ 259,148 | $ 207,708 | |||||||||
Cash collateral pledged | 7,097 | 6,318 | 15,513 | |||||||||
Segregated cash | 139,070 | 176,647 | $ 95,309 | |||||||||
Securities Borrowed, Gross | 1,390,366 | 407,795 | ||||||||||
Securities borrowed, financial instruments | 1,343,751 | 383,593 | ||||||||||
Securities borrowed | 1,390,366 | 407,795 | ||||||||||
Loans Receivable, Net | 36,190 | 36,021 | ||||||||||
Cash and cash equivalents, Consolidated Funds | 3,357 | 38,118 | ||||||||||
Securities Loaned, Gross | 1,492,986 | 414,852 | ||||||||||
Securities Loaned, Financial instruments | 1,445,362 | 391,310 | ||||||||||
Convertible debt | [1] | 116,273 | 134,489 | |||||||||
Notes payable and other debt | 315,290 | 262,965 | ||||||||||
Convertible Debt | ||||||||||||
Convertible debt, unamortized discount | 17,100 | 19,500 | ||||||||||
Level 1 | ||||||||||||
Cash and cash equivalents, Fair Value | 182,400 | 259,148 | ||||||||||
Segregated cash fair value disclosures | 139,070 | 176,647 | ||||||||||
Cash and cash equivalents, Consolidated Funds, Fair Value | 3,357 | 38,118 | ||||||||||
Level 2 | ||||||||||||
Cash collateral pledged, Fair Value | 7,097 | 6,318 | ||||||||||
Securities Borrowed, Fair Value Disclosure | 383,593 | |||||||||||
Securities loaned, fair value disclosure | 391,310 | |||||||||||
Convertible debt, Fair Value | [2] | 157,386 | 157,433 | |||||||||
Notes payable and other debt, Fair Value | [3] | 330,848 | 258,546 | |||||||||
Level 3 | ||||||||||||
Loans Receivable, Fair Value Disclosure | [4] | $ 36,190 | $ 36,021 | |||||||||
|
Deposits with Clearing Organizations, Brokers and Banks (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Deposits with Clearing Organizations, Brokers and Banks [Abstract] | ||
Deposits with clearing organizations, brokers and banks | $ 97,723 | $ 89,423 |
Receivables from and payables to brokers, dealers and clearing organizations (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Brokers and Dealers [Abstract] | ||
Receivable from Broker-dealers | $ 547,293 | $ 692,581 |
Securities Failed-to-Deliver | 33,373 | 72,918 |
Receivable from Clearing organizations | 22,683 | 15,319 |
Stock borrow interest receivable | 14,019 | 5,295 |
Receivable from brokers, dealers and clearing organizations | 617,368 | 786,113 |
Payable to Broker-Dealers | 166,728 | 159,443 |
Securities Failed-to-Receive | 52,482 | 28,826 |
Payable to clearing organizations | 9,648 | 36,338 |
Stock loan interest payable | 12,154 | 4,124 |
Payables to brokers, dealers and clearing organizations | $ 241,012 | $ 228,731 |
Receivable from and Payable to Customers (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Receivables and Payable to Customers [Abstract] | ||
Receivable from customers | $ 87,480 | $ 37,858 |
Payable to customers | $ 428,146 | $ 525,153 |
Goodwill and Intangibles Schedule of Goodwill by Segment (Details) (Annual) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
||||||||||
Goodwill [Line Items] | |||||||||||||||
Goodwill, gross | $ 161,513,000 | $ 161,513,000 | $ 80,363,000 | $ 80,363,000 | |||||||||||
Accumulated impairment charges | (23,785,000) | (23,785,000) | (19,685,000) | (19,685,000) | |||||||||||
Goodwill, net | (137,728,000) | (137,728,000) | (60,678,000) | (60,678,000) | |||||||||||
Recognized goodwill | 81,150,000 | 0 | |||||||||||||
Realignment, goodwill | 0 | 0 | |||||||||||||
Realignment goodwill, accumulated impairment charges | 0 | 0 | |||||||||||||
Goodwill impairment charges | (4,100,000) | [1],[2],[3],[4] | $ 0 | (4,100,000) | $ 0 | 0 | |||||||||
Investment Management Reporting Unit | |||||||||||||||
Goodwill [Line Items] | |||||||||||||||
Goodwill, gross | 0 | 0 | 29,026,000 | 29,026,000 | |||||||||||
Accumulated impairment charges | 0 | 0 | (10,200,000) | (10,200,000) | |||||||||||
Goodwill, net | 0 | 0 | (18,826,000) | 18,826,000 | |||||||||||
Recognized goodwill | 0 | 0 | |||||||||||||
Realignment, goodwill | (29,026,000) | (29,026,000) | |||||||||||||
Realignment goodwill, accumulated impairment charges | 10,200,000 | 10,200,000 | |||||||||||||
Goodwill impairment charges | 0 | 0 | |||||||||||||
Investment Bank Reporting Unit | |||||||||||||||
Goodwill [Line Items] | |||||||||||||||
Goodwill, gross | 132,487,000 | 132,487,000 | 51,337,000 | 51,337,000 | |||||||||||
Accumulated impairment charges | (9,485,000) | (9,485,000) | (9,485,000) | (9,485,000) | |||||||||||
Goodwill, net | (123,002,000) | (123,002,000) | (41,852,000) | (41,852,000) | |||||||||||
Recognized goodwill | 81,150,000 | 0 | |||||||||||||
Realignment, goodwill | 0 | 0 | |||||||||||||
Realignment goodwill, accumulated impairment charges | 0 | 0 | |||||||||||||
Goodwill impairment charges | 0 | 0 | |||||||||||||
Cowen Investment Management Reporting Unit | |||||||||||||||
Goodwill [Line Items] | |||||||||||||||
Goodwill, gross | 22,705,000 | 22,705,000 | 0 | 0 | |||||||||||
Accumulated impairment charges | (7,979,000) | (7,979,000) | 0 | 0 | |||||||||||
Goodwill, net | (14,726,000) | (14,726,000) | 0 | 0 | |||||||||||
Recognized goodwill | 0 | ||||||||||||||
Realignment, goodwill | 22,705,000 | 22,705,000 | |||||||||||||
Realignment goodwill, accumulated impairment charges | (7,979,000) | (7,979,000) | |||||||||||||
Goodwill impairment charges | 0 | ||||||||||||||
Asset Company Reporting Unit | |||||||||||||||
Goodwill [Line Items] | |||||||||||||||
Goodwill, gross | 6,321,000 | 6,321,000 | 0 | 0 | |||||||||||
Accumulated impairment charges | (6,321,000) | (6,321,000) | 0 | 0 | |||||||||||
Goodwill, net | 0 | 0 | $ 0 | $ 0 | |||||||||||
Recognized goodwill | 0 | ||||||||||||||
Realignment, goodwill | 6,321,000 | 6,321,000 | |||||||||||||
Realignment goodwill, accumulated impairment charges | $ (2,221,000) | (2,221,000) | |||||||||||||
Goodwill impairment charges | $ (4,100,000) | ||||||||||||||
|
Goodwill and Intangibles Qtlry (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||||||||
Goodwill, Impairment Loss | $ 4,100,000 | [1],[2],[3],[4] | $ 0 | $ 4,100,000 | $ 0 | $ 0 | ||||||||
Goodwill, Acquired During Period | 81,150,000 | $ 0 | ||||||||||||
Quarton | ||||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||||||||
Goodwill, Acquired During Period | 81,200,000 | |||||||||||||
Finite-lived Intangible Assets Acquired | $ 22,200,000 | |||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years 9 months 18 days | |||||||||||||
Amortization of Intangible Assets | $ 2,200,000 | $ 4,500,000 | ||||||||||||
Minimum | Quarton | ||||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||||||||
Finite-Lived Intangible Asset, Useful Life | 2 years | |||||||||||||
Maximum | Quarton | ||||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||||||||
Finite-Lived Intangible Asset, Useful Life | 4 years | |||||||||||||
Asset Company Reporting Unit | ||||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||||||||
Goodwill, Impairment Loss | $ 4,100,000 | |||||||||||||
Goodwill, Acquired During Period | $ 0 | |||||||||||||
|
Commission Management Payable (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Commission Management Payable [Abstract] | ||
Commission management payable | $ 96,731 | $ 95,270 |
Redeemable Non-Controlling Interests in Consolidated Subsidiaries and Funds (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Noncontrolling Interest [Line Items] | |||||
Redeemable non-controlling interests in consolidated subsidiaries and funds | $ 440,312 | $ 440,312 | $ 284,780 | ||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 4,331 | $ 24,607 | 6,537 | $ 35,763 | |
Operating Entities | |||||
Noncontrolling Interest [Line Items] | |||||
Redeemable non-controlling interests in consolidated subsidiaries and funds | 22,857 | 22,857 | 10,434 | ||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 853 | 1,954 | 2,659 | 3,574 | |
Consolidated Funds | |||||
Noncontrolling Interest [Line Items] | |||||
Redeemable non-controlling interests in consolidated subsidiaries and funds | 417,455 | 417,455 | $ 274,346 | ||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | $ 3,478 | $ 22,653 | $ 3,878 | $ 32,189 |
Reinsurance (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | ||||
Share of claims incurred but not reported | $ 4,013.0 | $ 4,112.0 | $ 6,920.0 | $ 7,729.0 |
Historical Average Claims Ratios, Period, Maximum | 10 years | |||
Hollenfels | ||||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | ||||
Share of incurred and paid claims | $ 756.0 | $ 156.0 | $ 10,891.0 | $ 8,411.0 |
Share-Based Compensation and Employee Ownership Plans Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted, shares | 0 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 500,000 | 500,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 253,772 | |||||
Equity Plans | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-compensation expense recognized in connection with compensation plan | $ 9.4 | $ 8.8 | $ 17.2 | $ 19.1 | ||
Tax benefit of stock-compensation expense recognized in connection with compensation plan | 2.0 | $ 2.4 | $ 4.2 | $ 4.7 | ||
Equity Plans | Employee Stock Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options, initial term | 7 years | |||||
Equity Plans | Employee Stock Option | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock compensation award, vesting period | 2 years | |||||
Equity Plans | Employee Stock Option | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock compensation award, vesting period | 5 years | |||||
Equity Plans | Restricted Shares and Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation expense | $ 77.1 | $ 77.1 | ||||
Vested, shares | 1,282,843 | 1,390,392 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 6,486,950 | 6,323,788 | 6,486,950 | 6,323,788 | 5,962,295 | 5,579,293 |
Equity Plans | Restricted Stock | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock compensation award, vesting period | 2 years | |||||
Equity Plans | Restricted Stock | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock compensation award, vesting period | 5 years | |||||
Equity Plans | Restricted Stock Units (RSUs) | Non-employee Director | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted, shares | 0 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 174,285 | 174,285 | ||||
Equity Plans | Stock Appreciation Rights (SARs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
SAR's, initial term | 5 years | |||||
Deferred Cash Award | Cowen Group, Inc. 2010 Equity and Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Deferred cash awards granted | $ 41.8 | $ 41.8 | ||||
Stock compensation award, vesting period | 4 years | |||||
Deferred cash award, interest rate | 0.70% | |||||
Deferred cash awards, unrecognized compensation expense | $ 74.3 | $ 74.3 |
Share-Based Compensation and Employee Ownership Plans Restricted Shares and Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions |
1 Months Ended | 2 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
Apr. 30, 2019 |
Mar. 31, 2016 |
Jan. 31, 2014 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Nonvested Restricted Shares and Restricted Stock Units | |||||
Balance outstanding, beginning of period, shares | 253,772 | ||||
Weighted-Average Grant Date Fair Value | |||||
Granted, shares | 0 | ||||
Equity Plans | Restricted Shares and Restricted Stock Units (RSUs) | |||||
Nonvested Restricted Shares and Restricted Stock Units | |||||
Balance outstanding, beginning of period, shares | 5,962,295 | 5,579,293 | |||
Granted, shares | 2,194,230 | 2,179,443 | |||
Vested, shares | (1,282,843) | (1,390,392) | |||
Canceled, shares | (233,333) | 0 | |||
Forfeited, shares | (153,399) | (44,556) | |||
Balance outstanding, end of period, shares | 6,486,950 | 6,323,788 | |||
Weighted-Average Grant Date Fair Value | |||||
Balance outstanding, beginning of period, in dollars per share | $ 15.73 | $ 16.33 | |||
Granted, in dollars per share | 16.67 | 14.26 | |||
Vested, in dollars per share | 16.21 | 16.11 | |||
Canceled, in dollars per share | 14.12 | 0.00 | |||
Forfeited, in dollars per share | 13.94 | 13.86 | |||
Balance outstanding, end of period, in dollars per share | $ 16.06 | $ 15.68 | |||
Unrecognized compensation expense | $ 77.1 | ||||
Weighted-average recognition period for unrecognized compensation expense | 2 years 4 months 18 days | ||||
Equity Plans | Performance based restricted stock | |||||
Nonvested Restricted Shares and Restricted Stock Units | |||||
Granted, shares | 333,333 | 700,000 | 481,438 | ||
Vested, shares | (233,333) | ||||
Forfeited, shares | (130,438) | ||||
Non-employee Director | Equity Plans | Restricted Stock Units (RSUs) | |||||
Nonvested Restricted Shares and Restricted Stock Units | |||||
Balance outstanding, end of period, shares | 174,285 | ||||
Weighted-Average Grant Date Fair Value | |||||
Granted, shares | 0 | ||||
Stock Issued During Period, Shares, Issued for Services | 79,487 | ||||
Maximum | |||||
Nonvested Restricted Shares and Restricted Stock Units | |||||
Percent of RSU's earned | 200.00% | ||||
Minimum | |||||
Nonvested Restricted Shares and Restricted Stock Units | |||||
Percent of RSU's earned | 0.00% |
Income Taxes - Quarterly (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Income Tax Contingency [Line Items] | ||
Effective income tax rate, percent | 27.15% | 15.83% |
Statutory rate, percent | 21.00% | 21.00% |
Convergex Group | ||
Income Tax Contingency [Line Items] | ||
Taxes payable | $ 0.3 |
Commitments and Contingencies (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Jan. 01, 2019 |
||||||
Contractual Commitments, Commitment [Line Items] | |||||||||||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 3,900,000 | ||||||||||
Operating Lease, Payments | 13,786 | ||||||||||
Lease Cost | $ 6,063,000 | 12,066,000 | |||||||||
Short-term lease cost | 74,000 | 91,000 | |||||||||
Variable lease cost | 147,000 | 446,000 | |||||||||
Sublease income | (240,000) | (507,000) | |||||||||
Total lease costs | $ 6,044,000 | $ 12,096,000 | |||||||||
Weighted average remaining lease term - operating leases (in Years) | 5 years 8 months 19 days | 5 years 8 months 19 days | |||||||||
Weighted average discount rate -operating leases | 4.14% | 4.14% | |||||||||
Future minimum annual lease and service payments | |||||||||||
Total Lease Liability | $ 106,873,000 | $ 106,873,000 | $ 0 | $ 110,505,000 | |||||||
Sublease income related to operating leases | 1,400,000 | $ 1,100,000 | $ 2,200,000 | ||||||||
RCG Longview Partners II, LLC | Clawback Obligation | |||||||||||
Future minimum annual lease and service payments | |||||||||||
Contractual obligation | 6,500,000 | 6,500,000 | 6,500,000 | ||||||||
Equipment Leases | |||||||||||
Contractual Commitments, Commitment [Line Items] | |||||||||||
Contractual Obligation, Due in Next Fiscal Year | 2,434,000 | ||||||||||
Contractual Obligation, Due in Second Year | 1,492,000 | ||||||||||
Contractual Obligation, Due in Third Year | 1,382,000 | ||||||||||
Contractual Obligation, Due in Fourth Year | 1,123,000 | ||||||||||
Contractual Obligation, Due in Fifth Year | 374,000 | ||||||||||
Contractual Obligation, Due after Fifth Year | 0 | ||||||||||
Contractual Obligation | 6,805,000 | ||||||||||
Future minimum annual lease and service payments | |||||||||||
2019 | 307,000 | 307,000 | |||||||||
2020 | 289,000 | 289,000 | |||||||||
2021 | 48,000 | 48,000 | |||||||||
2022 | 5,000 | 5,000 | |||||||||
2023 | 0 | 0 | |||||||||
Thereafter | 0 | 0 | |||||||||
Future minimum annual lease and service payments | 649,000 | 649,000 | |||||||||
Less discount | 16,000 | 16,000 | |||||||||
Total Lease Liability | 633,000 | 633,000 | |||||||||
Service Payments | |||||||||||
Contractual Commitments, Commitment [Line Items] | |||||||||||
Contractual Obligation, Due in Next Fiscal Year | 11,827,000 | 11,827,000 | 21,758,000 | ||||||||
Contractual Obligation, Due in Second Year | 10,319,000 | 10,319,000 | 7,514,000 | ||||||||
Contractual Obligation, Due in Third Year | 5,425,000 | 5,425,000 | 1,877,000 | ||||||||
Contractual Obligation, Due in Fourth Year | 5,198,000 | 5,198,000 | 1,372,000 | ||||||||
Contractual Obligation, Due in Fifth Year | 3,573,000 | 3,573,000 | 735,000 | ||||||||
Contractual Obligation, Due after Fifth Year | 6,331,000 | 6,331,000 | 735,000 | ||||||||
Contractual Obligation | 42,673,000 | 42,673,000 | 33,991,000 | ||||||||
Facility Leases | |||||||||||
Contractual Commitments, Commitment [Line Items] | |||||||||||
Contractual Obligation, Due in Next Fiscal Year | 24,584,000 | ||||||||||
Contractual Obligation, Due in Second Year | 22,608,000 | ||||||||||
Contractual Obligation, Due in Third Year | 22,321,000 | ||||||||||
Contractual Obligation, Due in Fourth Year | 19,166,000 | ||||||||||
Contractual Obligation, Due in Fifth Year | 16,204,000 | ||||||||||
Contractual Obligation, Due after Fifth Year | 21,478,000 | ||||||||||
Contractual Obligation | $ 126,361,000 | ||||||||||
Future minimum annual lease and service payments | |||||||||||
2019 | [1],[2] | 11,893,000 | 11,893,000 | ||||||||
2020 | [1],[2] | 24,020,000 | 24,020,000 | ||||||||
2021 | [1],[2] | 23,486,000 | 23,486,000 | ||||||||
2022 | [1],[2] | 20,249,000 | 20,249,000 | ||||||||
2023 | [1],[2] | 17,179,000 | 17,179,000 | ||||||||
Thereafter | [1],[2] | 25,925,000 | 25,925,000 | ||||||||
Future minimum annual lease and service payments | [1],[2] | 122,752,000 | 122,752,000 | ||||||||
Less discount | 16,421,000 | 16,421,000 | |||||||||
Total Lease Liability | $ 106,240,000 | $ 106,240,000 | |||||||||
|
Commitments and Contingencies Service Payments (Details) - Service Payments - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Other Commitments [Line Items] | ||
Contractual Obligation, Due in Next Fiscal Year | $ 11,827 | $ 21,758 |
Contractual Obligation, Due in Second Year | 10,319 | 7,514 |
Contractual Obligation, Due in Third Year | 5,425 | 1,877 |
Contractual Obligation, Due in Fourth Year | 5,198 | 1,372 |
Contractual Obligation, Due in Fifth Year | 3,573 | 735 |
Thereafter | 6,331 | 735 |
Total Operating Leases | $ 42,673 | $ 33,991 |
Commitments and Contingencies Schedules of Unfunded Commitments (Details) $ in Thousands |
6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
cowenfund
|
Dec. 31, 2018 |
||||||
Unfunded Commitments | |||||||
Other Commitments [Line Items] | |||||||
Number of real estate investments | cowenfund | 5 | ||||||
Real Estate Funds | |||||||
Other Commitments [Line Items] | |||||||
Other commitments, unfunded amount | [1] | $ 23,749 | |||||
Healthcare Royalty Partners | |||||||
Other Commitments [Line Items] | |||||||
Other commitments, unfunded amount | [2] | $ 5,665 | |||||
Healthcare Royalty Partners | Commitment to Invest | |||||||
Other Commitments [Line Items] | |||||||
Term of capital commitment | 2 years | ||||||
Eclipse Ventures Fund I, L.P. | |||||||
Other Commitments [Line Items] | |||||||
Other commitments, unfunded amount | $ 119 | ||||||
Eclipse Ventures Fund I, L.P. | Commitment to Invest | |||||||
Other Commitments [Line Items] | |||||||
Term of capital commitment | 5 years | ||||||
Lagunita Biosciences, LLC | |||||||
Other Commitments [Line Items] | |||||||
Other commitments, unfunded amount | $ 500 | ||||||
Lagunita Biosciences, LLC | Commitment to Invest | |||||||
Other Commitments [Line Items] | |||||||
Term of capital commitment | 3 years | ||||||
Eclipse Fund II, L.P. | |||||||
Other Commitments [Line Items] | |||||||
Other commitments, unfunded amount | $ 225 | ||||||
Eclipse Fund II, L.P. | Commitment to Invest | |||||||
Other Commitments [Line Items] | |||||||
Term of capital commitment | 6 years | ||||||
Eclipse Continuity Fund I, L.P. | |||||||
Other Commitments [Line Items] | |||||||
Other commitments, unfunded amount | $ 210 | ||||||
Eclipse Continuity Fund I, L.P. | Commitment to Invest | |||||||
Other Commitments [Line Items] | |||||||
Term of capital commitment | 7 years | ||||||
Cowen Healthcare Investments II LP | |||||||
Other Commitments [Line Items] | |||||||
Other commitments, unfunded amount | $ 6,891 | ||||||
Cowen Healthcare Investments II LP | Commitment to Invest | |||||||
Other Commitments [Line Items] | |||||||
Term of capital commitment | 2 years | ||||||
Minimum | Real Estate Funds | Commitment to Invest | |||||||
Other Commitments [Line Items] | |||||||
Term of capital commitment | 2 years | ||||||
Maximum | Real Estate Funds | Commitment to Invest | |||||||
Other Commitments [Line Items] | |||||||
Term of capital commitment | 4 years | ||||||
|
Convertible Debt and Notes Payable (Details) |
3 Months Ended | 6 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 05, 2016 |
Jun. 30, 2019
USD ($)
letters_of_credit
$ / shares
shares
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
letters_of_credit
$ / shares
shares
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
$ / shares
shares
|
Dec. 14, 2017
USD ($)
$ / shares
|
Dec. 08, 2017
USD ($)
|
Jun. 30, 2017
USD ($)
|
Mar. 10, 2014
USD ($)
|
||||||
Debt and Capital Lease Obligations [Line Items] | |||||||||||||||
Finance Lease, Right-of-Use Asset, Amortization | $ 299,000 | $ 363,000 | $ 667,000 | $ 715,000 | |||||||||||
Finance Lease, Interest Expense | 56,000 | 52,000 | 118,000 | 97,000 | |||||||||||
Finance Lease, Interest Payment on Liability | 118,000 | 97,000 | |||||||||||||
Finance Lease, Principal Payments | 668,000 | 1,133,000 | |||||||||||||
Preferred stock dividends | (1,698,000) | (1,698,000) | (3,396,000) | (3,396,000) | |||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Convertible debt | [1] | 116,273,000 | 116,273,000 | $ 134,489,000 | |||||||||||
Note payable | 281,544,000 | 281,544,000 | 229,740,000 | ||||||||||||
Loans Payable to Bank | 28,200,000 | 28,200,000 | 28,200,000 | ||||||||||||
Other Notes Payable | 1,189,000 | 1,189,000 | 0 | ||||||||||||
Capital lease obligations | 4,357,000 | 4,357,000 | 5,025,000 | ||||||||||||
Debt, Long-term and Short-term, Combined Amount | 431,563,000 | 431,563,000 | 397,454,000 | ||||||||||||
Purchase of treasury stock, cost | 12,015,000 | ||||||||||||||
Interest on Convertible Debt, Net of Tax | 1,000,000 | 2,000,000 | |||||||||||||
Amortization of debt discount | 2,419,000 | 2,871,000 | |||||||||||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 0.25 | ||||||||||||||
Letter of credit, borrowing capacity | 370,000,000 | 370,000,000 | |||||||||||||
Capital Lease Obligations Incurred | 6,000,000 | ||||||||||||||
Future minimum lease payments for capital lease obligations | |||||||||||||||
2019 | 571,000 | 571,000 | |||||||||||||
2020 | 1,358,000 | 1,358,000 | |||||||||||||
2021 | 1,358,000 | 1,358,000 | |||||||||||||
2022 | 1,127,000 | 1,127,000 | |||||||||||||
2023 | 374,000 | 374,000 | |||||||||||||
Thereafter | 0 | 0 | |||||||||||||
Subtotal | 4,788,000 | 4,788,000 | |||||||||||||
Less: Amount representing interest | [2] | (431,000) | (431,000) | ||||||||||||
Capital lease obligations | $ 4,357,000 | $ 4,357,000 | 5,025,000 | ||||||||||||
Number of letters of credit | letters_of_credit | 7 | 7 | |||||||||||||
Cash collateral pledged | $ 7,097,000 | 15,513,000 | $ 7,097,000 | 15,513,000 | $ 6,318,000 | ||||||||||
Preferred stock, shares authorized | shares | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||
Finance Lease, Weighted Average Remaining Lease Term | 3 years 7 months 28 days | 3 years 7 months 28 days | |||||||||||||
Finance Lease, Weighted Average Discount Rate, Percent | 4.93% | 4.93% | |||||||||||||
Letter of Credit, Boston Office, Expires March 2019 | Letter of Credit | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Letter of credit, borrowing capacity | $ 390,464 | $ 390,464 | |||||||||||||
Letter of Credit, NY Office 1, Expires April 2019 | Letter of Credit | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Letter of credit, borrowing capacity | 356,194 | 356,194 | |||||||||||||
Letter of Credit, NY Office 2, Expires May 2019 | Letter of Credit | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Letter of credit, borrowing capacity | 71,146 | 71,146 | |||||||||||||
Letter of Credit, NY Office 3, Expires October 2019 | Letter of Credit | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Letter of credit, borrowing capacity | 397,541 | 397,541 | |||||||||||||
Letter of Credit, NY Office 4, Expires October 2019 | Letter of Credit | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Letter of credit, borrowing capacity | 1,687,045 | 1,687,045 | |||||||||||||
Letter of Credit, NY Office 5, Expires November 2019 | Letter of Credit | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Letter of credit, borrowing capacity | 1,617,328 | 1,617,328 | |||||||||||||
Letter of Credit, San Francisco Office, Expires January 2020 | Letter of Credit | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Letter of credit, borrowing capacity | 710,643 | 710,643 | |||||||||||||
Convertible Debt | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Convertible debt, unamortized discount | 17,100,000 | 17,100,000 | $ 19,500,000 | ||||||||||||
Repayments on long-term and short-term borrowings | |||||||||||||||
2019 | 2,025,000 | 2,025,000 | |||||||||||||
2020 | 4,050,000 | 4,050,000 | |||||||||||||
2021 | 4,050,000 | 4,050,000 | |||||||||||||
2022 | 139,050,000 | 139,050,000 | |||||||||||||
2023 | 0 | 0 | |||||||||||||
Thereafter | 0 | 0 | |||||||||||||
Subtotal | 149,175,000 | 149,175,000 | |||||||||||||
Less: Amount representing interest | [2] | (32,902,000) | (32,902,000) | ||||||||||||
Senior Notes | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Note payable | 281,544,000 | 281,544,000 | |||||||||||||
Repayments on long-term and short-term borrowings | |||||||||||||||
2019 | 10,868,000 | 10,868,000 | |||||||||||||
2020 | 21,736,000 | 21,736,000 | |||||||||||||
2021 | 21,736,000 | 21,736,000 | |||||||||||||
2022 | 21,736,000 | 21,736,000 | |||||||||||||
2023 | 21,736,000 | 21,736,000 | |||||||||||||
Thereafter | 407,118,000 | 407,118,000 | |||||||||||||
Subtotal | 504,930,000 | 504,930,000 | |||||||||||||
Less: Amount representing interest | [2] | (223,386,000) | (223,386,000) | ||||||||||||
Notes Payable to Banks | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Debt Instrument, Face Amount | $ 28,200,000.0 | ||||||||||||||
Interest Expense, Debt, Excluding Amortization | $ 400,000.0 | 400,000.0 | $ 900,000.0 | 800,000.0 | |||||||||||
Short-term Debt, Percentage Bearing Variable Interest Rate | 3.75% | 3.75% | |||||||||||||
Insurance Note | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Interest rate | 2.51% | 2.51% | |||||||||||||
Short-term Debt, Maximum Amount Outstanding During Period | $ 2,200,000 | ||||||||||||||
Debt Instrument, Periodic Payment, Principal | 200,000 | ||||||||||||||
Loans | |||||||||||||||
Repayments on long-term and short-term borrowings | |||||||||||||||
2019 | $ 863,000 | 863,000 | |||||||||||||
2020 | 29,034,000 | 29,034,000 | |||||||||||||
2021 | 0 | 0 | |||||||||||||
2022 | 0 | 0 | |||||||||||||
2023 | 0 | 0 | |||||||||||||
Thereafter | 0 | 0 | |||||||||||||
Subtotal | 29,897,000 | 29,897,000 | |||||||||||||
Less: Amount representing interest | [2] | (1,697,000) | (1,697,000) | ||||||||||||
Insurance Note and Aircraft [Member] | |||||||||||||||
Repayments on long-term and short-term borrowings | |||||||||||||||
2019 | 1,214,000 | 1,214,000 | |||||||||||||
2020 | 0 | 0 | |||||||||||||
2021 | 0 | 0 | |||||||||||||
2022 | 0 | 0 | |||||||||||||
2023 | 0 | 0 | |||||||||||||
Thereafter | 0 | 0 | |||||||||||||
Subtotal | 1,214,000 | 1,214,000 | |||||||||||||
Less: Amount representing interest | [2] | $ (25,000) | $ (25,000) | ||||||||||||
Common Stock Class A | |||||||||||||||
Debt and Capital Lease Obligations [Line Items] | |||||||||||||||
Common stock, shares authorized | shares | 62,500,000 | 62,500,000 | 62,500,000 | ||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||
2022 convertible note | Convertible Debt | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Convertible debt | $ 135,000,000 | $ 135,000,000 | |||||||||||||
Debt Instrument, Face Amount | $ 135,000,000.0 | ||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 17.375 | ||||||||||||||
Purchase of treasury stock, cost | 19,500,000 | ||||||||||||||
Interest on Convertible Debt, Net of Tax | 1,000,000 | 2,000,000 | |||||||||||||
Convertible debt, unamortized discount | $ 23,400,000 | ||||||||||||||
Amortization of debt discount | 1,100,000 | 1,000,000 | 2,100,000 | 2,000,000 | |||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 7.13% | ||||||||||||||
Debt Issuance Costs, Gross | $ 2,200,000 | ||||||||||||||
2019 convertible note | Convertible Debt | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Debt Instrument, Face Amount | 149,500,000.0 | ||||||||||||||
Debt Instrument, Repurchase Amount | $ 115,100,000 | ||||||||||||||
Interest on Convertible Debt, Net of Tax | 200,000 | 100,000 | 700,000 | ||||||||||||
Amortization of debt discount | 400,000 | 300,000 | 900,000 | ||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 8.89% | ||||||||||||||
Interest rate | 3.00% | ||||||||||||||
2024 Notes | Senior Notes | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Debt Instrument, Face Amount | $ 53,000,000.0 | ||||||||||||||
Debt Issuance Costs, Gross | $ 1,500,000 | ||||||||||||||
Interest rate | 7.25% | ||||||||||||||
Interest Expense, Debt, Excluding Amortization | 600,000 | 600,000 | |||||||||||||
2033 Notes | Senior Notes | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Debt Instrument, Face Amount | $ 10,000,000.0 | $ 90,000,000.0 | |||||||||||||
Debt Issuance Costs, Gross | $ 3,600,000 | ||||||||||||||
Interest rate | 7.75% | ||||||||||||||
Interest Expense, Debt, Excluding Amortization | 2,000,000 | 400,000 | 3,900,000 | 400,000 | |||||||||||
2027 Notes | Senior Notes | |||||||||||||||
Components of short-term borrowings and other debt | |||||||||||||||
Debt Instrument, Face Amount | $ 18,000,000.0 | $ 120,000,000 | |||||||||||||
Debt Issuance Costs, Gross | $ 5,000,000 | ||||||||||||||
Interest rate | 7.35% | ||||||||||||||
Interest Expense, Debt, Excluding Amortization | 2,500,000 | 2,500,000 | 5,100,000 | 5,100,000 | |||||||||||
Collateral Reinsurance Agreement | |||||||||||||||
Future minimum lease payments for capital lease obligations | |||||||||||||||
Cash collateral pledged | 1,900,000 | 1,900,000 | $ 1,000,000 | ||||||||||||
Retained Earnings/(Accumulated deficit) | Convertible Preferred Stock | |||||||||||||||
Debt and Capital Lease Obligations [Line Items] | |||||||||||||||
Preferred stock dividends | $ (1,698,000) | $ (1,698,000) | $ (3,396,000) | $ (3,396,000) | |||||||||||
|
Stockholder's Equity - Quarterly (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
May 19, 2015 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
Mar. 10, 2014 |
|
Equity, Class of Stock [Line Items] | |||||||
Preferred stock dividends declared | $ 1,698,000 | $ 1,698,000 | $ 3,396,000 | $ 3,396,000 | |||
Convertible Preferred Stock, Shares Issued upon Conversion | 38.0619 | ||||||
Convertible Preferred Stock, Threshold Percentage of Stock Price Trigger | 150.00% | ||||||
Treasury Stock, Shares [Roll Forward] | |||||||
Treasury stock, shares, beginning of period | 15,336,871 | ||||||
Purchase of treasury stock, shares | 777,230 | ||||||
Treasury stock, shares, end of period | 16,664,613 | 16,664,613 | |||||
Treasury stock, cost, beginning of period | $ 234,142,000 | ||||||
Shares purchased for minimum tax withholding under the Equity Plan or other similar transactions | 12,015,000 | 8,376,000 | |||||
Purchase of treasury stock, cost | 12,015,000 | ||||||
Treasury stock, cost, end of period | $ 254,357,000 | $ 254,357,000 | |||||
Treasury stock, average cost per share, beginning of period, in dollars per share | $ 15.27 | ||||||
Purchase of treasury stock, average cost per share, in dollars per share | 15.46 | ||||||
Treasury stock, average cost per share, end of period, in dollars per share | $ 15.26 | $ 15.26 | |||||
Embedded Cash Conversion Option | 28,973,000 | 28,973,000 | |||||
Treasury Stock | |||||||
Treasury Stock, Shares [Roll Forward] | |||||||
Shares purchased for minimum tax withholding under the Equity Plan or other similar transactions | 542,444 | ||||||
Treasury stock shares received, other | 8,068 | ||||||
Shares purchased for minimum tax withholding under the Equity Plan or other similar transactions | $ 8,079,000 | ||||||
Treasury stock received, value, other | $ 121,000 | ||||||
Shares purchased for minimum tax withholding under the Equity Plan or other similar transactions, Average Cost Per Share | $ 14.89 | ||||||
Treasury stock received, per share, other | $ 15.04 | ||||||
Call Option | |||||||
Equity, Class of Stock [Line Items] | |||||||
Option indexed to Issuer's Equity, Value | $ 15,900,000 | ||||||
Minimum | |||||||
Equity, Class of Stock [Line Items] | |||||||
Convertible Preferred Stock, Threshold Consecutive Trading Days | 20 days | ||||||
Minimum | Call Option | |||||||
Equity, Class of Stock [Line Items] | |||||||
Option Indexed to Issuer's Equity, Strike Price | $ 26.27 | ||||||
Maximum | |||||||
Equity, Class of Stock [Line Items] | |||||||
Convertible Preferred Stock, Threshold Consecutive Trading Days | 30 days | ||||||
Maximum | Call Option | |||||||
Equity, Class of Stock [Line Items] | |||||||
Option Indexed to Issuer's Equity, Strike Price | $ 33.54 | ||||||
Convertible Preferred Stock | |||||||
Equity, Class of Stock [Line Items] | |||||||
Preferred stock issuance, net of issuance costs, shares | 120,750 | ||||||
Preferred Stock, Dividend Rate, Percentage | 5.625% | ||||||
Proceeds from Issuance of Preferred Stock, net of issuance costs | $ 117,200,000 | ||||||
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | 3,600,000 | ||||||
Preferred Stock, Liquidation Preference Per Share | $ 1,000 | ||||||
Convertible Preferred Stock | Retained Earnings/(Accumulated deficit) | |||||||
Equity, Class of Stock [Line Items] | |||||||
Preferred stock dividends declared | $ 1,698,000 | 1,698,000 | 3,396,000 | $ 3,396,000 | |||
Convertible Debt | |||||||
Treasury Stock, Shares [Roll Forward] | |||||||
Convertible debt, unamortized discount | $ 17,100,000 | 17,100,000 | $ 19,500,000 | ||||
2022 convertible note | Convertible Debt | |||||||
Treasury Stock, Shares [Roll Forward] | |||||||
Purchase of treasury stock, cost | $ 19,500,000 | ||||||
Convertible debt, unamortized discount | $ 23,400,000 | ||||||
Embedded Cash Conversion Option | $ 28,973,000 |
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Accumulated Other Comprehensive Income / (Loss) [Abstract] | ||||
Beginning Balance | $ (5) | $ (7) | $ (5) | $ (8) |
Foreign currency translation | 2 | 0 | 2 | 1 |
Ending Balance | $ (3) | $ (7) | $ (3) | $ (7) |
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Computation of earnings per share: | ||||||||
Net income (loss) | $ 10,143 | $ 30,006 | $ 22,132 | $ 58,015 | ||||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 4,331 | 24,607 | 6,537 | 35,763 | ||||
Net income (loss) attributable to Cowen Inc. | 5,812 | 5,399 | 15,595 | 22,252 | ||||
Preferred stock dividends | 1,698 | 1,698 | 3,396 | 3,396 | ||||
Net income (loss) attributable to Cowen Inc. common stockholders | $ 4,114 | $ 3,701 | $ 12,199 | $ 18,856 | ||||
Shares for basic and diluted calculations: | ||||||||
Weighted average shares used in basic computation, shares | 29,769,000 | 29,769,000 | 29,766,000 | 29,688,000 | ||||
Weighted average shares used in diluted computation, shares | 31,522,000 | 30,720,000 | 31,572,000 | 30,460,000 | ||||
Earnings (loss) per share: | ||||||||
Earnings Per Share, Basic (in dollars per share) | $ 0.14 | $ 0.12 | $ 0.41 | $ 0.64 | ||||
Earnings Per Share, Diluted (in dollars per share) | $ 0.13 | $ 0.12 | $ 0.39 | $ 0.62 | ||||
Restricted Stock | ||||||||
Shares for basic and diluted calculations: | ||||||||
Shares attributable to share-based payment awards, shares | 1,753,000 | 951,000 | 1,806,000 | 772,000 | ||||
Common Stock Class A | ||||||||
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||||
Common stock, shares outstanding, shares | 29,480,287.000 | 29,609,472 | 29,480,287.000 | 29,609,472 | 29,580,687 | 28,437,860 | 29,517,000 | 29,632,020.00 |
Common stock, restricted shares, shares | 174,285 | 174,285 | 253,772 |
Segment Reporting (Details) |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
segment
customer
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
|
||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||||
Number of operating segments | segment | 2 | |||||||||||||||||||||||||||||
Entity-wide revenue, major customer, number | customer | 0 | |||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Investment banking | $ 114,705,000 | $ 84,826,000 | $ 194,811,000 | $ 182,814,000 | ||||||||||||||||||||||||||
Brokerage | 111,382,000 | 103,285,000 | 208,845,000 | 209,018,000 | ||||||||||||||||||||||||||
Management fees | 7,039,000 | 7,373,000 | 14,180,000 | 14,790,000 | ||||||||||||||||||||||||||
Incentive income | 8,000 | 48,000 | 23,000 | 64,000 | ||||||||||||||||||||||||||
Investment Income | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Interest and dividends | 40,047,000 | 25,109,000 | 69,139,000 | 51,063,000 | ||||||||||||||||||||||||||
Reimbursement from affiliates | 254,000 | 336,000 | 542,000 | 713,000 | ||||||||||||||||||||||||||
Aircraft lease revenue | 0 | 419,000 | 0 | 1,134,000 | ||||||||||||||||||||||||||
Reinsurance premiums | 14,331,000 | 9,226,000 | 20,922,000 | 17,873,000 | ||||||||||||||||||||||||||
Other revenues | 930,000 | 876,000 | 1,991,000 | 2,212,000 | ||||||||||||||||||||||||||
Total revenues | 292,164,000 | 234,573,000 | 516,261,000 | 485,957,000 | ||||||||||||||||||||||||||
Interest expense | 39,528,000 | 24,306,000 | 68,612,000 | 48,846,000 | ||||||||||||||||||||||||||
Total net revenues | 252,636,000 | 210,267,000 | 447,649,000 | 437,111,000 | ||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||
Non-interest expense | 240,781,000 | 220,267,000 | 460,088,000 | 443,582,000 | ||||||||||||||||||||||||||
Goodwill, Impairment Loss | 4,100,000 | [1],[2],[3],[4] | 0 | 4,100,000 | 0 | $ 0 | ||||||||||||||||||||||||
Total expenses | 247,112,000 | 223,416,000 | 467,901,000 | 449,162,000 | ||||||||||||||||||||||||||
Other income (loss) | ||||||||||||||||||||||||||||||
Total other income (loss) | 9,692,000 | 47,148,000 | 50,634,000 | 80,982,000 | ||||||||||||||||||||||||||
Income tax expense (benefit) | 5,073,000 | 3,993,000 | 8,250,000 | 10,916,000 | ||||||||||||||||||||||||||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 4,331,000 | 24,607,000 | 6,537,000 | 35,763,000 | ||||||||||||||||||||||||||
Economic Income (Loss) / Net income (loss) attributable to Cowen Group, Inc. | 5,812,000 | 5,399,000 | 15,595,000 | 22,252,000 | ||||||||||||||||||||||||||
Preferred stock dividends | 1,698,000 | 1,698,000 | 3,396,000 | 3,396,000 | ||||||||||||||||||||||||||
Net income (loss) attributable to Cowen Inc. common stockholders | 4,114,000 | 3,701,000 | 12,199,000 | 18,856,000 | ||||||||||||||||||||||||||
Consolidated Funds | ||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Total revenues | 3,468,000 | 3,075,000 | 5,808,000 | 6,276,000 | ||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||
Total expenses | 2,231,000 | 3,149,000 | 3,713,000 | 5,580,000 | ||||||||||||||||||||||||||
Operating Company | ||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Management fees | 6,796,000 | 6,287,000 | 13,439,000 | 12,960,000 | ||||||||||||||||||||||||||
Incentive income | 8,000 | 48,000 | 8,000 | 64,000 | ||||||||||||||||||||||||||
Asset Company | ||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Management fees | 243,000 | 1,086,000 | 741,000 | 1,830,000 | ||||||||||||||||||||||||||
Incentive income | 0 | 0 | 15,000 | 0 | ||||||||||||||||||||||||||
Operating Segments | ||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Investment banking | 104,216,000 | 80,042,000 | 187,212,000 | 173,966,000 | ||||||||||||||||||||||||||
Brokerage | 120,672,000 | 113,186,000 | 225,829,000 | 227,257,000 | ||||||||||||||||||||||||||
Management fees | 10,468,000 | 12,486,000 | 20,898,000 | 25,613,000 | ||||||||||||||||||||||||||
Incentive income | 4,229,000 | 9,363,000 | 20,976,000 | 14,559,000 | ||||||||||||||||||||||||||
Investment Income | 485,000 | 19,954,000 | 17,468,000 | 34,256,000 | ||||||||||||||||||||||||||
Interest and dividends | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Reimbursement from affiliates | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Aircraft lease revenue | 0 | 0 | ||||||||||||||||||||||||||||
Reinsurance premiums | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Other revenues | 4,319,000 | (721,000) | 5,478,000 | 166,000 | ||||||||||||||||||||||||||
Total revenues | 244,389,000 | 234,310,000 | 477,861,000 | 475,817,000 | ||||||||||||||||||||||||||
Interest expense | 6,706,000 | 4,124,000 | 13,270,000 | 10,081,000 | ||||||||||||||||||||||||||
Total net revenues | 237,683,000 | 230,186,000 | 464,591,000 | 465,736,000 | ||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||
Non-interest expense | 218,819,000 | 205,965,000 | 426,004,000 | 415,298,000 | ||||||||||||||||||||||||||
Goodwill, Impairment Loss | 0 | 0 | ||||||||||||||||||||||||||||
Total expenses | 218,819,000 | 205,965,000 | 426,004,000 | 415,298,000 | ||||||||||||||||||||||||||
Other income (loss) | ||||||||||||||||||||||||||||||
Total other income (loss) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 1,683,000 | 2,480,000 | 4,431,000 | 4,638,000 | ||||||||||||||||||||||||||
Economic Income (Loss) / Net income (loss) attributable to Cowen Group, Inc. | 17,181,000 | 21,741,000 | 34,156,000 | 45,800,000 | ||||||||||||||||||||||||||
Preferred stock dividends | 1,698,000 | 1,698,000 | 3,396,000 | 3,396,000 | ||||||||||||||||||||||||||
Net income (loss) attributable to Cowen Inc. common stockholders | 15,483,000 | 20,043,000 | 30,760,000 | 42,404,000 | ||||||||||||||||||||||||||
Other Depreciation and Amortization | 4,952,000 | 2,959,000 | 9,908,000 | 5,945,000 | ||||||||||||||||||||||||||
Economic Operating Income | 20,435,000 | 23,002,000 | 40,668,000 | 48,349,000 | ||||||||||||||||||||||||||
Operating Segments | Consolidated Funds | ||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||
Total expenses | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Operating Segments | Operating Company | ||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Investment banking | 104,216,000 | 80,042,000 | 187,212,000 | 173,966,000 | ||||||||||||||||||||||||||
Brokerage | 120,672,000 | 113,186,000 | 225,829,000 | 227,257,000 | ||||||||||||||||||||||||||
Management fees | 9,968,000 | 10,938,000 | 19,695,000 | 22,217,000 | ||||||||||||||||||||||||||
Incentive income | 2,633,000 | 12,321,000 | 19,270,000 | 15,360,000 | ||||||||||||||||||||||||||
Investment Income | (3,141,000) | 18,476,000 | 13,001,000 | 36,710,000 | ||||||||||||||||||||||||||
Interest and dividends | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Reimbursement from affiliates | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Aircraft lease revenue | 0 | 0 | ||||||||||||||||||||||||||||
Reinsurance premiums | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Other revenues | 4,304,000 | (811,000) | 5,427,000 | (147,000) | ||||||||||||||||||||||||||
Total revenues | 238,652,000 | 234,152,000 | 470,434,000 | 475,363,000 | ||||||||||||||||||||||||||
Interest expense | 5,298,000 | 3,134,000 | 10,615,000 | 7,661,000 | ||||||||||||||||||||||||||
Total net revenues | 233,354,000 | 231,018,000 | 459,819,000 | 467,702,000 | ||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||
Non-interest expense | 215,808,000 | 203,684,000 | 421,562,000 | 410,059,000 | ||||||||||||||||||||||||||
Goodwill, Impairment Loss | 0 | 0 | ||||||||||||||||||||||||||||
Total expenses | 215,808,000 | 203,684,000 | 421,562,000 | 410,059,000 | ||||||||||||||||||||||||||
Other income (loss) | ||||||||||||||||||||||||||||||
Total other income (loss) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 1,448,000 | 1,672,000 | 3,250,000 | 3,812,000 | ||||||||||||||||||||||||||
Economic Income (Loss) / Net income (loss) attributable to Cowen Group, Inc. | 16,098,000 | 25,662,000 | 35,007,000 | 53,831,000 | ||||||||||||||||||||||||||
Preferred stock dividends | 1,341,000 | 1,290,000 | 2,717,000 | 2,581,000 | ||||||||||||||||||||||||||
Net income (loss) attributable to Cowen Inc. common stockholders | 14,757,000 | 24,372,000 | 32,290,000 | 51,250,000 | ||||||||||||||||||||||||||
Other Depreciation and Amortization | 4,945,000 | 2,913,000 | 9,884,000 | 5,842,000 | ||||||||||||||||||||||||||
Economic Operating Income | 19,702,000 | 27,285,000 | 42,174,000 | 57,092,000 | ||||||||||||||||||||||||||
Operating Segments | Operating Company | Consolidated Funds | ||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||
Total expenses | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Operating Segments | Asset Company | ||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Investment banking | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Brokerage | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Management fees | 500,000 | 1,548,000 | 1,203,000 | 3,396,000 | ||||||||||||||||||||||||||
Incentive income | 1,596,000 | (2,958,000) | 1,706,000 | (801,000) | ||||||||||||||||||||||||||
Investment Income | 3,626,000 | 1,478,000 | 4,467,000 | (2,454,000) | ||||||||||||||||||||||||||
Interest and dividends | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Reimbursement from affiliates | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Aircraft lease revenue | 0 | 0 | ||||||||||||||||||||||||||||
Reinsurance premiums | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Other revenues | 15,000 | 90,000 | 51,000 | 313,000 | ||||||||||||||||||||||||||
Total revenues | 5,737,000 | 158,000 | 7,427,000 | 454,000 | ||||||||||||||||||||||||||
Interest expense | 1,408,000 | 990,000 | 2,655,000 | 2,420,000 | ||||||||||||||||||||||||||
Total net revenues | 4,329,000 | (832,000) | 4,772,000 | (1,966,000) | ||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||
Non-interest expense | 3,011,000 | 2,281,000 | 4,442,000 | 5,239,000 | ||||||||||||||||||||||||||
Goodwill, Impairment Loss | 0 | 0 | ||||||||||||||||||||||||||||
Total expenses | 3,011,000 | 2,281,000 | 4,442,000 | 5,239,000 | ||||||||||||||||||||||||||
Other income (loss) | ||||||||||||||||||||||||||||||
Total other income (loss) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 235,000 | 808,000 | 1,181,000 | 826,000 | ||||||||||||||||||||||||||
Economic Income (Loss) / Net income (loss) attributable to Cowen Group, Inc. | 1,083,000 | (3,921,000) | (851,000) | (8,031,000) | ||||||||||||||||||||||||||
Preferred stock dividends | 357,000 | 408,000 | 679,000 | 815,000 | ||||||||||||||||||||||||||
Net income (loss) attributable to Cowen Inc. common stockholders | 726,000 | (4,329,000) | (1,530,000) | (8,846,000) | ||||||||||||||||||||||||||
Other Depreciation and Amortization | 7,000 | 46,000 | 24,000 | 103,000 | ||||||||||||||||||||||||||
Economic Operating Income | 733,000 | (4,283,000) | (1,506,000) | (8,743,000) | ||||||||||||||||||||||||||
Operating Segments | Asset Company | Consolidated Funds | ||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||
Total expenses | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Adjustments | Funds Consolidation | ||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Investment banking | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Brokerage | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Management fees | (565,000) | (612,000) | (1,066,000) | (1,815,000) | ||||||||||||||||||||||||||
Incentive income | 0 | (8,000) | (544,000) | (17,000) | ||||||||||||||||||||||||||
Investment Income | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Interest and dividends | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Reimbursement from affiliates | (33,000) | (65,000) | (67,000) | (133,000) | ||||||||||||||||||||||||||
Aircraft lease revenue | 0 | 0 | ||||||||||||||||||||||||||||
Reinsurance premiums | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Other revenues | 12,000 | 0 | 12,000 | 0 | ||||||||||||||||||||||||||
Total revenues | 2,882,000 | 2,390,000 | 4,143,000 | 4,311,000 | ||||||||||||||||||||||||||
Interest expense | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Total net revenues | 2,882,000 | 2,390,000 | 4,143,000 | 4,311,000 | ||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||
Non-interest expense | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Goodwill, Impairment Loss | 0 | 0 | ||||||||||||||||||||||||||||
Total expenses | 2,231,000 | 3,149,000 | 3,713,000 | 5,580,000 | ||||||||||||||||||||||||||
Other income (loss) | ||||||||||||||||||||||||||||||
Total other income (loss) | 2,827,000 | 23,411,000 | 3,448,000 | 33,458,000 | ||||||||||||||||||||||||||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | 3,478,000 | 22,652,000 | 3,878,000 | 32,189,000 | ||||||||||||||||||||||||||
Economic Income (Loss) / Net income (loss) attributable to Cowen Group, Inc. | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Preferred stock dividends | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Net income (loss) attributable to Cowen Inc. common stockholders | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Adjustments | Funds Consolidation | Consolidated Funds | ||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Total revenues | 3,468,000 | 3,075,000 | 5,808,000 | 6,276,000 | ||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||
Total expenses | 2,231,000 | 3,149,000 | 3,713,000 | 5,580,000 | ||||||||||||||||||||||||||
Adjustments | Other Adjustments | ||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Investment banking | [2] | 10,489,000 | 4,784,000 | 7,599,000 | 8,848,000 | |||||||||||||||||||||||||
Brokerage | [5] | (9,290,000) | (9,901,000) | (16,984,000) | (18,239,000) | |||||||||||||||||||||||||
Management fees | (2,864,000) | (4,501,000) | [6] | (5,652,000) | [6] | (9,008,000) | [6] | |||||||||||||||||||||||
Incentive income | (4,221,000) | (9,307,000) | [6] | (20,409,000) | [6] | (14,478,000) | [6] | |||||||||||||||||||||||
Investment Income | [3] | (485,000) | [7] | (19,954,000) | [8] | (17,468,000) | (34,256,000) | [8] | ||||||||||||||||||||||
Interest and dividends | [3] | 40,047,000 | 25,109,000 | [5] | 69,139,000 | [5] | 51,063,000 | [5] | ||||||||||||||||||||||
Reimbursement from affiliates | 287,000 | 401,000 | [7] | 609,000 | [7] | 846,000 | [7] | |||||||||||||||||||||||
Aircraft lease revenue | [8] | 419,000 | 1,134,000 | |||||||||||||||||||||||||||
Reinsurance premiums | 14,331,000 | [8] | 9,226,000 | [9] | 20,922,000 | [9] | 17,873,000 | [9] | ||||||||||||||||||||||
Other revenues | (3,401,000) | [8] | 1,597,000 | [9] | (3,499,000) | [9] | 2,046,000 | [9] | ||||||||||||||||||||||
Total revenues | 44,893,000 | (2,127,000) | 34,257,000 | 5,829,000 | ||||||||||||||||||||||||||
Interest expense | [3] | 32,822,000 | 20,182,000 | [5] | 55,342,000 | [5] | 38,765,000 | [5] | ||||||||||||||||||||||
Total net revenues | 12,071,000 | (22,309,000) | (21,085,000) | (32,936,000) | ||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||
Non-interest expense | [1],[2],[4] | 21,962,000 | [3] | 14,302,000 | [7] | 34,084,000 | [7] | 28,284,000 | [7] | |||||||||||||||||||||
Goodwill, Impairment Loss | 4,100,000 | [1],[2],[3],[4] | 4,100,000 | |||||||||||||||||||||||||||
Total expenses | 26,062,000 | 14,302,000 | 38,184,000 | 28,284,000 | ||||||||||||||||||||||||||
Other income (loss) | ||||||||||||||||||||||||||||||
Total other income (loss) | [3] | 6,865,000 | [10] | 23,737,000 | [4],[6],[10] | 47,186,000 | [4],[6] | 47,524,000 | [4],[6],[10] | |||||||||||||||||||||
Income tax expense (benefit) | [1] | 5,073,000 | 3,993,000 | 8,250,000 | 10,916,000 | |||||||||||||||||||||||||
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries and funds | (830,000) | (525,000) | (1,772,000) | (1,064,000) | ||||||||||||||||||||||||||
Economic Income (Loss) / Net income (loss) attributable to Cowen Group, Inc. | (11,369,000) | (16,342,000) | (18,561,000) | (23,548,000) | ||||||||||||||||||||||||||
Preferred stock dividends | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Net income (loss) attributable to Cowen Inc. common stockholders | (11,369,000) | (16,342,000) | (18,561,000) | (23,548,000) | ||||||||||||||||||||||||||
Adjustments | Other Adjustments | Consolidated Funds | ||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||
Total expenses | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||||||
|
Regulatory Requirements (Details) |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
|
Regulatory Requirements for Broker-Dealers [Line Items] | ||
Interest Income, Related Party | $ 0 | $ 0 |
Minimum net capital required | 250,000 | 250,000 |
Cowen and Company | ||
Regulatory Requirements for Broker-Dealers [Line Items] | ||
Net capital requirement under alternative method | 1,000,000 | 1,000,000 |
Net capital | 95,807,000 | 95,807,000 |
Excess capital | 94,807,000 | 94,807,000 |
Cowen Execution | ||
Regulatory Requirements for Broker-Dealers [Line Items] | ||
Cash and securities segregated under securities exchange commission regulation | 15,600,000 | 15,600,000 |
Net capital requirement under alternative method | 2,541,000 | 2,541,000 |
Required net capital under commodity exchange act | 114,400,000 | 114,400,000 |
Net capital | 116,967,000 | 116,967,000 |
Excess capital | 114,426,000 | 114,426,000 |
Cowen and Company (Asia) Limited [Member] | ||
Regulatory Requirements for Broker-Dealers [Line Items] | ||
Financial resources | 1,092,000 | 1,092,000 |
Financial resources requirement | 384,000 | 384,000 |
Excess financial resources | 708,000 | 708,000 |
ATM Execution LLC | ||
Regulatory Requirements for Broker-Dealers [Line Items] | ||
Net capital requirement under alternative method | 250,000 | 250,000 |
Net capital | 5,375,000 | 5,375,000 |
Excess capital | 5,125,000 | 5,125,000 |
Cowen Prime | ||
Regulatory Requirements for Broker-Dealers [Line Items] | ||
Net capital requirement under alternative method | 250,000 | 250,000 |
Net capital | 12,091,000 | 12,091,000 |
Excess capital | 11,841,000 | 11,841,000 |
Westminster Research | ||
Regulatory Requirements for Broker-Dealers [Line Items] | ||
Net capital requirement under alternative method | 250,000 | 250,000 |
Net capital | 21,602,000 | 21,602,000 |
Excess capital | 21,352,000 | 21,352,000 |
RCG Insurance Company | ||
Regulatory Requirements for Broker-Dealers [Line Items] | ||
Minimum net capital required | 300,000.0 | 300,000.0 |
Net capital | 32,500,000 | 32,500,000 |
Options Clearing Corporation | Cowen Execution | ||
Regulatory Requirements for Broker-Dealers [Line Items] | ||
Minimum net capital required | 2,000,000 | $ 2,000,000 |
Minimum net capital required, percent | 2.00% | |
U.K. Financial Services Authority | Cowen International Limited | ||
Regulatory Requirements for Broker-Dealers [Line Items] | ||
Financial resources | 15,479,000 | $ 15,479,000 |
Financial resources requirement | 8,562,000 | 8,562,000 |
Excess financial resources | 6,917,000 | 6,917,000 |
U.K. Financial Services Authority | Cowen Execution Services Ltd | ||
Regulatory Requirements for Broker-Dealers [Line Items] | ||
Financial resources | 5,158,000 | 5,158,000 |
Financial resources requirement | 3,087,000 | 3,087,000 |
Excess financial resources | 2,071,000 | 2,071,000 |
Minimum | Cowen Execution | ||
Regulatory Requirements for Broker-Dealers [Line Items] | ||
Required net capital under commodity exchange act | 45,000 | 45,000 |
Special Reserve Accounts | Cowen Execution | ||
Regulatory Requirements for Broker-Dealers [Line Items] | ||
Cash and securities segregated under securities exchange commission regulation | 27,700,000 | 27,700,000 |
Special Reserve Accounts | Minimum | Cowen Execution | ||
Regulatory Requirements for Broker-Dealers [Line Items] | ||
Cash and securities segregated under securities exchange commission regulation | $ 21,900,000 | $ 21,900,000 |
Related Party Transactions (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Related Party Transaction [Line Items] | |||||
Fees receivable | $ (126,500) | $ (126,500) | $ (111,946) | ||
Interest Income, Related Party | 0 | 0 | |||
Due from related parties | 29,007 | 29,007 | 33,870 | ||
Redeemable non-controlling interests, Related Party | 440,312 | 440,312 | 284,780 | ||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | (4,331) | $ (24,607) | (6,537) | $ (35,763) | |
Employees | |||||
Related Party Transaction [Line Items] | |||||
Redeemable non-controlling interests, Related Party | 35,400 | 35,400 | 25,100 | ||
Net income (loss) attributable to redeemable non-controlling interests in consolidated subsidiaries and investment funds | (800) | (1,500) | (2,300) | (4,300) | |
Employee Loans | |||||
Related Party Transaction [Line Items] | |||||
Due from employees | 14,600 | 14,600 | 17,000 | ||
Forgivable Loan Balances | 7,300 | 7,300 | 8,800 | ||
Amortization on Forgivable Loans | 900 | 800 | $ 1,800 | $ 1,400 | |
Employee Loans | Minimum | |||||
Related Party Transaction [Line Items] | |||||
Forgivable Loans, Vesting Period | 1 year | ||||
Employee Loans | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Forgivable Loans, Vesting Period | 3 years | ||||
Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Fees receivable | (19,400) | $ (19,400) | (19,400) | ||
Investor | |||||
Related Party Transaction [Line Items] | |||||
Due to Affiliate | 600 | 600 | 600 | ||
Other Funds | |||||
Related Party Transaction [Line Items] | |||||
Due from related parties | 7,600 | 7,600 | 8,900 | ||
Starboard Value LP | |||||
Related Party Transaction [Line Items] | |||||
Effective interest rate | 5.00% | ||||
Interest Income, Related Party | 100 | $ 100 | 200 | $ 200 | |
Due from related parties | $ 6,900 | $ 6,900 | $ 7,700 | ||
Finance Period | 5 years |
Guarantees and Off-Balance Sheet Arrangements (Details) |
Jun. 30, 2019
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Letter of credit, borrowing capacity | $ 370,000,000 |
Line of credit facility, remaining borrowing capacity | 370,000,000 |
Pledge Lines | |
Debt Instrument [Line Items] | |
Letter of credit, borrowing capacity | 300,000,000 |
Line of credit facility, remaining borrowing capacity | 300,000,000 |
Texas Capital Bank | Pledge Lines | |
Debt Instrument [Line Items] | |
Letter of credit, borrowing capacity | 75,000,000 |
Line of credit facility, remaining borrowing capacity | 75,000,000 |
BMO Harris Bank | Pledge Lines | |
Debt Instrument [Line Items] | |
Letter of credit, borrowing capacity | 150,000,000 |
Line of credit facility, remaining borrowing capacity | 150,000,000 |
BMO Harris Bank | Tri-Party Pledge Line | |
Debt Instrument [Line Items] | |
Letter of credit, borrowing capacity | 75,000,000 |
Line of credit facility, remaining borrowing capacity | 75,000,000 |
BMO Harris Bank | Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Letter of credit, borrowing capacity | 70,000,000 |
Line of credit facility, remaining borrowing capacity | $ 70,000,000 |
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