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Fair Value Measurement (Tables)
 6 Months Ended
Jun. 30, 2017
Fair Value Disclosures [Abstract]  
Summary of partnership's assets and liabilities measured at fair value on recurring basis
The following table summarizes the Partnership’s assets and liabilities measured at fair value on a recurring basis by the above fair value hierarchy levels as of June 30, 2017:
(Dollars in millions)
Level I
 
Level II
 
Level III
 
Total
Assets
 
 
 
 
 
 
 
Investments of Consolidated Funds:
 
 
 
 
 
 
 
Equity securities
$
—

 
$
—

 
$
9.7

 
$
9.7

Bonds
—

 
—

 
395.9

 
395.9

Loans
—

 
—

 
3,500.1

 
3,500.1

Other
—

 
—

 
2.0

 
2.0

 
—

 
—

 
3,907.7

 
3,907.7

Investments in CLOs and other
—

 
—

 
222.9

 
222.9

Corporate treasury investments
 
 
 
 
 
 
 
Bonds
—

 
80.6

 
—

 
80.6

Commercial paper and other
—

 
34.8

 
—

 
34.8

 
—

 
115.4

 
—

 
115.4

Foreign currency forward contracts
—

 
0.7

 
—

 
0.7

Total
$
—

 
$
116.1

 
$
4,130.6

 
$
4,246.7

Liabilities
 
 
 
 
 
 
 
Loans payable of Consolidated Funds(1)
$
—

 
$
—

 
$
3,721.2

 
$
3,721.2

Contingent consideration(2)
—

 
—

 
1.3

 
1.3

Loans payable of a consolidated real estate VIE
—

 
—

 
72.6

 
72.6

Foreign currency forward contracts
—

 
7.4

 
—

 
7.4

Total
$
—

 
$
7.4

 
$
3,795.1

 
$
3,802.5

 
(1)
Senior and subordinated notes issued by CLO vehicles are classified based on the more observable fair value of the CLO financial assets, less (i) the fair value of any beneficial interests held by the Partnership and (ii) the carrying value of any beneficial interests that represent compensation for services.
(2)
Related to contingent consideration associated with the Partnership's acquisitions, excluding employment-based contingent consideration (see Note 8).
The following table summarizes the Partnership’s assets and liabilities measured at fair value on a recurring basis by the above fair value hierarchy levels as of December 31, 2016:
 
(Dollars in millions)
Level I
 
Level II
 
Level III
 
Total
Assets
 
 
 
 
 
 
 
Investments of Consolidated Funds:
 
 
 
 
 
 
 
Equity securities
$
—

 
$
—

 
$
10.3

 
$
10.3

Bonds
—

 
—

 
396.4

 
396.4

Loans
—

 
—

 
3,485.6

 
3,485.6

Other
—

 
—

 
1.4

 
1.4

 
—

 
—

 
3,893.7

 
3,893.7

Investments in CLOs and other
—

 
—

 
152.6

 
152.6

Corporate treasury investments
 
 
 
 
 
 
 
Bonds
—

 
91.3

 
—

 
91.3

Commercial paper and other
—

 
98.9

 
—

 
98.9

 
—

 
190.2

 
—

 
190.2

Foreign currency forward contracts
—

 
2.5

 
—

 
2.5

Total
$
—

 
$
192.7

 
$
4,046.3

 
$
4,239.0

Liabilities
 
 
 
 
 
 
 
Loans payable of Consolidated Funds(1)
$
—

 
$
—

 
$
3,866.3

 
$
3,866.3

Contingent consideration(2)
—

 
—

 
1.5

 
1.5

Loans payable of a consolidated real estate VIE
—

 
—

 
79.4

 
79.4

Foreign currency forward contracts
—

 
10.0

 
—

 
10.0

Total
$
—

 
$
10.0

 
$
3,947.2

 
$
3,957.2

 
(1)
Senior and subordinated notes issued by CLO vehicles are classified based on the more observable fair value of the CLO financial assets, less (i) the fair value of any beneficial interests held by the Partnership and (ii) the carrying value of any beneficial interests that represent compensation for services.
(2)
Related to contingent consideration associated with the Partnership's acquisitions, excluding employment-based contingent consideration (see Note 8).
Changes in financial assets measured at fair value for which the Partnership has used Level III inputs
The changes in financial instruments measured at fair value for which the Partnership has used Level III inputs to determine fair value are as follows (Dollars in millions):
 
Financial Assets
 
Three Months Ended June 30, 2017
 
Investments of Consolidated Funds
 
 
 
 
 
Equity
securities
 
Bonds
 
Loans
 
Other
 
Investments in CLOs and other
 
Total
Balance, beginning of period
$
10.8

 
$
417.6

 
$
3,473.2

 
$
1.5

 
$
155.9

 
$
4,059.0

Purchases
—

 
50.7

 
772.7

 
—

 
60.8

 
884.2

Sales and distributions
(1.6
)
 
(99.9
)
 
(595.4
)
 
0.1

 
(1.0
)
 
(697.8
)
Settlements
—

 
—

 
(294.3
)
 
—

 
—

 
(294.3
)
Realized and unrealized gains (losses), net
 
 
 
 
 
 
 
 
 
 
 
Included in earnings
—

 
0.4

 
(5.1
)
 
0.3

 
3.2

 
(1.2
)
Included in other comprehensive income
0.5

 
27.1

 
149.0

 
0.1

 
4.0

 
180.7

Balance, end of period
$
9.7

 
$
395.9

 
$
3,500.1

 
$
2.0

 
$
222.9

 
$
4,130.6

Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date
$
5.0

 
$
0.7

 
$
5.8

 
$
0.4

 
$
3.2

 
$
15.1

 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Assets
 
Six Months Ended June 30, 2017
 
Investments of Consolidated Funds
 
 
 
 
 
Equity
securities
 
Bonds
 
Loans
 
Other
 
Investments in CLOs and other
 
Total
Balance, beginning of period
$
10.3

 
$
396.4

 
$
3,485.6

 
$
1.4

 
$
152.6

 
$
4,046.3

Purchases
—

 
116.8

 
1,398.1

 
—

 
60.8

 
1,575.7

Sales and distributions
(1.6
)
 
(156.3
)
 
(1,003.5
)
 
0.1

 
(3.1
)
 
(1,164.4
)
Settlements
—

 
—

 
(585.4
)
 
—

 
—

 
(585.4
)
Realized and unrealized gains (losses), net
 
 
 
 
 
 
 
 
 
 
 
Included in earnings
0.3

 
5.7

 
25.9

 
0.4

 
6.1

 
38.4

Included in other comprehensive income
0.7

 
33.3

 
179.4

 
0.1

 
6.5

 
220.0

Balance, end of period
$
9.7

 
$
395.9

 
$
3,500.1

 
$
2.0

 
$
222.9

 
$
4,130.6

Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date
$
5.3

 
$
5.6

 
$
24.7

 
$
0.4

 
$
6.1

 
$
42.1

 

 
 
Financial Assets
 
Three Months Ended June 30, 2016
 
Investments of Consolidated Funds
 
 
 
 
 
Equity
securities
 
Bonds
 
Loans
 
Partnership
and LLC
interests
 
Other
 
Investments in CLOs and other
 
Total
Balance, beginning of period
$
11.5

 
$
331.9

 
$
2,263.9

 
$
74.3

 
$
0.2

 
$
124.2

 
$
2,806.0

Initial consolidation /
deconsolidation of funds
—

 
—

 
—

 
(74.3
)
 
—

 
—

 
(74.3
)
Purchases
2.2

 
101.1

 
886.2

 
—

 
—

 
24.9

 
1,014.4

Sales and distributions
(0.1
)
 
(24.8
)
 
(68.6
)
 
—

 
—

 
(1.6
)
 
(95.1
)
Settlements
—

 
—

 
(195.5
)
 
—

 
—

 
—

 
(195.5
)
Realized and unrealized gains (losses), net
 
 
 
 
 
 
 
 
 
 
 
 
 
Included in earnings
(1.5
)
 
9.8

 
85.6

 
—

 
(0.1
)
 
14.2

 
108.0

Included in other comprehensive income
(0.2
)
 
(10.2
)
 
(38.5
)
 
—

 
—

 
(9.0
)
 
(57.9
)
Balance, end of period
$
11.9

 
$
407.8

 
$
2,933.1

 
$
—

 
$
0.1

 
$
152.7

 
$
3,505.6

Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date
$
0.1

 
$
9.4

 
$
78.2

 
$
(2.3
)
 
$
(0.1
)
 
$
14.2

 
$
99.5


 
Financial Assets
 
Six Months Ended June 30, 2016
 
Investments of Consolidated Funds
 
 
 
 
 
 
 
Equity
securities
 
Bonds
 
Loans
 
Partnership
and LLC 
interests(2)
 
Other
 
Investments in CLOs and other
 
Restricted securities of Consolidated Funds
 
Total
Balance, beginning of period
$
575.3

 
$
1,180.9

 
$
15,686.7

 
$
59.6

 
$
5.0

 
$
1.4

 
$
8.7

 
$
17,517.6

Deconsolidation of funds(1)
(562.1
)
 
(890.7
)
 
(13,506.9
)
 
(74.3
)
 
(5.0
)
 
123.8

 
(8.7
)
 
(14,923.9
)
Purchases
11.1

 
149.0

 
1,138.0

 
12.4

 
—

 
24.9

 
—

 
1,335.4

Sales and distributions
(5.2
)
 
(37.3
)
 
(127.9
)
 
—

 
—

 
(4.2
)
 
—

 
(174.6
)
Settlements
—

 
—

 
(296.2
)
 
—

 
—

 
—

 
—

 
(296.2
)
Realized and unrealized gains (losses), net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Included in earnings
(7.5
)
 
1.8

 
23.9

 
2.3

 
0.1

 
18.2

 
—

 
38.8

Included in other comprehensive income
0.3

 
4.1

 
15.5

 
—

 
—

 
(11.4
)
 
—

 
8.5

Balance, end of period
$
11.9

 
$
407.8

 
$
2,933.1

 
$
—

 
$
0.1

 
$
152.7

 
$
—

 
$
3,505.6

Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date
$
(5.6
)
 
$
1.9

 
$
22.8

 
$
—

 
$
0.3

 
$
18.2

 
$
—

 
$
37.6

 
(1)
As a result of the adoption of ASU 2015-2 and the deconsolidation of certain CLOs on January 1, 2016, $123.8 million of investments that the Partnership held in those CLOs are no longer eliminated in consolidation and are now included in investments in CLOs and other for the six months ended June 30, 2016.
(2)
As a result of the retrospective adoption of ASU 2015-7, the beginning balance of Partnership and LLC interests that are measured at fair value using the NAV per share practical expedient have been revised to reflect their exclusion from the fair value hierarchy.
Changes in financial liabilities measured at fair value for which the Partnership has used Level III inputs
 
Financial Liabilities
 
Three Months Ended June 30, 2017
 
Loans Payable
of Consolidated
Funds
 
Contingent
Consideration
 
Loans Payable of
a consolidated
real estate VIE
 
Total
Balance, beginning of period
$
3,587.5

 
$
1.5

 
$
77.8

 
$
3,666.8

Borrowings
1,137.5

 
—

 
—

 
1,137.5

Paydowns
(1,117.4
)
 
(0.4
)
 
(6.9
)
 
(1,124.7
)
Realized and unrealized (gains) losses, net
 
 
 
 
 
 
 
Included in earnings
(46.4
)
 
0.1

 
(2.0
)
 
(48.3
)
Included in other comprehensive income
160.0

 
0.1

 
3.7

 
163.8

Balance, end of period
$
3,721.2

 
$
1.3

 
$
72.6

 
$
3,795.1

Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date
$
(42.5
)
 
$
0.1

 
$
(2.0
)
 
$
(44.4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Liabilities
 
Six Months Ended June 30, 2017
 
Loans Payable
of Consolidated
Funds
 
Contingent
Consideration
 
Loans Payable of
a consolidated
real estate VIE
 
Total
Balance, beginning of period
$
3,866.3

 
$
1.5

 
$
79.4

 
$
3,947.2

Borrowings
1,569.0

 
—

 
—

 
1,569.0

Paydowns
(1,879.4
)
 
(0.4
)
 
(14.3
)
 
(1,894.1
)
Realized and unrealized (gains) losses, net
 
 
 
 
 
 
 
Included in earnings
(28.3
)
 
0.1

 
3.3

 
(24.9
)
Included in other comprehensive income
193.6

 
0.1

 
4.2

 
197.9

Balance, end of period
$
3,721.2

 
$
1.3

 
$
72.6

 
$
3,795.1

Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date
$
(25.8
)
 
$
0.1

 
$
3.3

 
$
(22.4
)


 
Financial Liabilities
 
Three Months Ended June 30, 2016
 
Loans Payable
of Consolidated
Funds
 
Derivative
Instruments of
Consolidated
Funds
 
Contingent
Consideration
 
Loans Payable of a consolidated real estate VIE
 
Total
Balance, beginning of period
$
2,459.0

 
$
—

 
$
24.3

 
$
73.5

 
$
2,556.8

Initial consolidation of funds
379.0

 
—

 
—

 
—

 
379.0

Borrowings
632.0

 
—

 
—

 
—

 
632.0

Paydowns
(227.3
)
 
—

 
—

 
(7.5
)
 
(234.8
)
Realized and unrealized (gains) losses, net
 
 
 
 
 
 
 
 
 
Included in earnings
87.3

 
0.3

 
0.7

 
6.7

 
95.0

Included in other comprehensive income
(45.3
)
 
—

 
—

 
9.0

 
(36.3
)
Balance, end of period
$
3,284.7

 
$
0.3

 
$
25.0

 
$
81.7

 
$
3,391.7

Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date
$
88.8

 
$
0.3

 
$
0.7

 
$
6.7

 
$
96.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Liabilities
 
Six Months Ended June 30, 2016
 
Loans Payable
of Consolidated
Funds
 
Derivative
Instruments of
Consolidated
Funds
 
Contingent
Consideration
 
Loans Payable of a consolidated real estate VIE
 
Total
Balance, beginning of period
$
17,046.7

 
$
29.1

 
$
20.8

 
$
75.4

 
$
17,172.0

Initial consolidation /
deconsolidation of funds
(14,221.3
)
 
(29.0
)
 
—

 
—

 
(14,250.3
)
Borrowings
644.7

 
—

 
—

 
—

 
644.7

Paydowns
(232.4
)
 
—

 
(0.3
)
 
(16.9
)
 
(249.6
)
Realized and unrealized (gains) losses, net
 
 
 
 
 
 
 
 
 
Included in earnings
28.0

 
0.2

 
4.5

 
13.8

 
46.5

Included in other comprehensive income
19.0

 
—

 
—

 
9.4

 
28.4

Balance, end of period
$
3,284.7

 
$
0.3

 
$
25.0

 
$
81.7

 
$
3,391.7

Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date
$
26.3

 
$
(0.3
)
 
$
4.5

 
$
13.8

 
$
44.3
Summary of quantitative information about Partnership's Level III inputs
The following table summarizes quantitative information about the Partnership’s Level III inputs as of June 30, 2017:
 
 
Fair Value at
 
Valuation Technique(s)
 
Unobservable Input(s)
 
Range
(Weighted Average)
(Dollars in millions)
June 30, 2017
 
 
 
Assets
 
 
 
 
 
 
 
Investments of Consolidated Funds:
 
 
 
 
 
 
 
Equity securities
$
8.8

 
Discounted Cash Flow
 
Discount Rates
 
9% - 10% (9%)
 
 
 
 
 
Exit Cap Rate
 
7% - 10% (7%)
 
0.9

 
Consensus Pricing
 
Indicative Quotes ($ per share)
 
13 - 13 (13)
 
 
 
 
 
 
 
 
Bonds
395.9

 
Consensus Pricing
 
Indicative Quotes (% of Par)
 
77 - 110 (101)
Loans
3,500.1

 
Consensus Pricing
 
Indicative Quotes (% of Par)
 
49 - 102 (100)
Other
2.0

 
Counterparty Pricing
 
Indicative Quotes
(% of Notional Amount)
 
8 - 9 (8)
 
3,907.7

 
 
 
 
 
 
Investments in CLOs and other:
 
 
 
 
 
 
 
Senior secured notes
181.1

 
Discounted Cash Flow with Consensus Pricing
 
Discount Rates
 
1% - 9% (2%)
 
 
 
 
 
Default Rates
 
1% - 3% (2%)
 
 
 
 
 
Recovery Rates
 
50% - 70% (60%)
 
 
 
 
 
Indicative Quotes (% of Par)
 
91 - 102 (100)
Subordinated notes and preferred shares
39.6

 
Discounted Cash Flow with Consensus Pricing
 
Discount Rates
 
8% - 10% (9%)
 
 
 
 
 
Default Rates
 
1% - 3% (2%)
 
 
 
 
 
Recovery Rates
 
50% - 70% (60%)
 
 
 
 
 
Indicative Quotes (% of Par)
 
0 - 100 (92)
Other
2.2

 
Comparable Multiple
 
LTM EBITDA Multiple
 
5.8x - 5.8x (5.8x)
Total
$
4,130.6

 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Loans payable of Consolidated Funds:
 
 
 
 
 
 
 
Senior secured notes (1)
$
3,544.7

 
Other
 
N/A
 
N/A
Subordinated notes and preferred shares (1)
29.4

 
Other
 
N/A
 
N/A
 
147.1

 
Discounted Cash Flow with Consensus Pricing
 
Discount Rates
 
8% - 10% (9%)
 
 
 
 
 
Default Rates
 
 1% - 3% (2%)
 
 
 
 
 
Recovery Rates
 
 50% - 70% (60%)
 
 
 
 
 
Indicative Quotes (% of Par)
 
9 - 99 (82)
Loans payable of a consolidated real estate VIE
72.6

 
Discounted Cash Flow
 
Discount to Expected Payment
 
10% - 60% (45%)
 
 
 
 
 
Discount Rate
 
20% - 30% (23%)
Contingent consideration(2)
1.3

 
Other
 
N/A
 
N/A
Total
$
3,795.1

 
 
 
 
 
 
 
(1)
Beginning on January 1, 2016, CLO loan payables held by third party beneficial interest holders are measured on the basis of the fair value of the financial assets of the CLO and the beneficial interests held by the Partnership.
(2)
Relates to contingent consideration associated with the Partnership's acquisitions (see Note 8).




The following table summarizes quantitative information about the Partnership’s Level III inputs as of December 31, 2016:
 
 
Fair Value at
 
Valuation Technique(s)
 
Unobservable Input(s)
 
Range
(Weighted Average)
(Dollars in millions)
December 31, 2016
 
 
 
Assets
 
 
 
 
 
 
 
Investments of Consolidated Funds:
 
 
 
 
 
 
 
Equity securities
$
9.6

 
Discounted Cash Flow
 
Discount Rates
 
9% - 10% (9%)
 
 
 
 
 
Exit Cap Rate
 
7% - 9% (7%)
 
0.7

 
Consensus Pricing
 
Indicative Quotes ($ per share)
 
10 - 10 (10)
 
 
 
 
 
 
 
 
Bonds
396.4

 
Consensus Pricing
 
Indicative Quotes (% of Par)
 
74 - 108 (99)
Loans
3,485.6

 
Consensus Pricing
 
Indicative Quotes (% of Par)
 
31 - 102 (99)
Other
1.4

 
Counterparty Pricing
 
Indicative Quotes
(% of Notional Amount)
 
6 - 8 (7)
 
3,893.7

 
 
 
 
 
 
Investments in CLOs and other
 
 
 
 
 
 
 
Senior secured notes
115.9

 
Discounted Cash Flow with Consensus Pricing
 
Discount Rate
 
1% - 11% (2%)
 
 
 
 
 
Default Rates
 
1% - 3% (2%)
 
 
 
 
 
Recovery Rates
 
50% - 74% (71%)
 
 
 
 
 
Indicative Quotes (% of Par)
 
82 - 102 (99)
Subordinated notes and preferred shares
35.4

 
Discounted Cash Flow with Consensus Pricing
 
Discount Rate
 
9% - 14% (12%)
 
 
 
 
 
Default Rates
 
1% - 10% (2%)
 
 
 
 
 
Recovery Rates
 
50% - 74% (64%)
 
 
 
 
 
Indicative Quotes (% of Par)
 
2 - 101 (96)
Other
1.3

 
Comparable Multiple
 
LTM EBITDA Multiple
 
5.7 x - 5.7x (5.7x)
Total
$
4,046.3

 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Loans payable of Consolidated Funds:
 
 
 
 
 
 
 
Senior secured notes(1)
$
3,672.5

 
Other
 
N/A
 
N/A
Subordinated notes and preferred shares(1)
26.9

 
Other
 
N/A
 
N/A
 
166.9

 
Discounted Cash Flow with Consensus Pricing
 
Discount Rates
 
9% - 14% (12%)
 
 
 
 
 
Default Rates
 
1% - 3% (2%)
 
 
 
 
 
Recovery Rates
 
50% - 74% (66%)
 
 
 
 
 
Indicative Quotes (% of Par)
 
7 - 90 (68)
Loans payable of a consolidated real estate VIE
79.4

 
Discounted Cash Flow
 
Discount to Expected Payment
 
10% - 55% (37%)
 
 
 
 
 
Discount Rate
 
20% - 30% (23%)
Contingent consideration(2)
1.5

 
Other
 
N/A
 
N/A
Total
$
3,947.2

 
 
 
 
 
 
 
(1)
Beginning on January 1, 2016, CLO loan payables held by third party beneficial interest holders are measured on the basis of the fair value of the financial assets of the CLOs and the beneficial interests held by the Partnership.
(2)
Relates to contingent consideration associated with the Partnership's acquisitions (see Note 8).