Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

The following table summarizes the carrying amount of intangible assets as of December 31, 2015 and 2014:



	As of December 31,
	2015			2014
	(Dollars in millions)
Acquired contractual rights	$	830.4		$	843.0
Acquired trademarks	6.6			6.7
Accumulated amortization	(739.6		)	(455.1		)
Finite-lived intangible assets, net	97.4			394.6
Goodwill	38.3			47.5
Intangible assets, net	$	135.7		$	442.1

The following table summarizes the changes in the carrying amount of goodwill by segment as of December 31, 2015. There was no goodwill associated with the Partnership’s Corporate Private Equity and Real Assets segments.



	Global Market Strategies		Investment Solutions			Total
	(Dollars in millions)
Balance as of December 31, 2014	$	28.0	$	19.5		$	47.5
Impairment charge	—		(7.0		)	(7.0		)
Foreign currency translation	—		(2.2		)	(2.2		)
Balance as of December 31, 2015	$	28.0	$	10.3		$	38.3

As discussed in Note 2, the Partnership reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. During the year ended December 31, 2015, the Partnership evaluated for indicators of impairment certain definite-lived intangible assets associated with acquired contractual rights for fee income. Evaluations were performed on the intangible assets related to the open-ended credit hedge funds in the Global Market Strategies segment as well as the open-ended fund of hedge funds in the Investment Solutions segment. In the third quarter of 2015, Claren Road, a hedge fund family within our Global Market Strategies segment, received approximately $1.9 billion of investor redemption notices, which are expected to be paid over the next several quarters, starting in the fourth quarter of 2015. These redemptions, and any further reductions in assets managed by Claren Road, will result in lower management fees by Claren Road in subsequent periods and lower earnings contributions to the Partnership from Claren Road. As a result of these events, the Partnership concluded that the carrying value of its intangible assets associated with the acquisition of Claren Road was impaired and recorded an impairment of $186.6 million during the year ended ended December 31, 2015. When including the reduction of the related liabilities for contingent consideration associated with Claren Road, the pre-tax net impact to the Partnership's financial results for the year ended December 31, 2015 was $162.4 million.

Further, in the fourth quarter of 2015, the Partnership recorded an impairment loss of $15.0 million to reduce the carrying value of the intangible assets related to the fund of hedge funds within the Investment Solutions segment to their estimated fair value based on redemptions received in the fourth quarter of 2015 and lower profit projections. As a result, the Partnership concluded that the carrying value of the intangible asset associated with our fund of hedge funds was impaired and recorded the impairment. Also, as disclosed in Note 3, the Partnership recorded a goodwill impairment charge in 2015 in connection with its decision to restructure the Investment Solutions segment.

Finally, the Partnership recorded additional impairment losses of $11.8 million, $66.2 million, and $20.8 million for the years ended December 31, 2015, 2014 and 2013, respectively, to reduce the carrying value of other Global Markets Strategies intangible assets to their estimated fair value.

The fair value determinations were based on a probability-weighted discounted cash flow model. These fair value measurements were based on significant inputs not observable in the market (primarily discount rates ranging from 10% to 20%) and thus represented Level III measurements as defined in the accounting guidance for fair value measurements. The impairment losses were included in general, administrative and other expenses in the accompanying consolidated financial statements for the years ended December 31, 2015, 2014 and 2013.

Intangible asset amortization expense, excluding impairment losses, was $76.1 million, $103.0 million and $117.9 million for the years ended December 31, 2015, 2014 and 2013, respectively, and is included in general, administrative, and other expenses in the consolidated statements of operations.

The following table summarizes the expected amortization expense for 2016 through 2020 and thereafter (Dollars in millions):




2016	$	36.7
2017	31.6
2018	15.6
2019	5.4
2020	5.4
Thereafter	2.7
	$	97.4

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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