Investments

12 Months Ended

Dec. 31, 2021

Investments, All Other Investments [Abstract]

Investments

5.INVESTMENTS

Investments Measured at Fair Value

Fair value investments are presented within investments on the Company’s consolidated statements of financial condition. The Company established a fair value hierarchy which prioritizes and ranks the level of market price observability used in measuring investments at fair value. See Note 2 for further information on the Company's fair value hierarchy.

The estimated fair value of money market securities, U.S. Treasury instruments, common stock, and warrants are based on quoted prices for recent trading activity in identical or similar instruments. The Company generally invests in U.S. Treasury instruments with maturities of less than twelve months and considers U.S. Treasury instruments to be risk free and does not reserve for expected credit losses on these investments. From time to time, the Company may receive equity or other financial instruments from clients, in addition to cash, in partial satisfaction of services rendered. Common stock and warrants held of publicly-traded companies are categorized as level 1 in the fair value hierarchy.

The fair value of the Company's financial assets as of December 31, 2021, have been categorized based upon the fair value hierarchy as follows:

	Total		Level 1		Level 2		Level 3
Financial assets:
Included in cash and cash equivalents
U.S. treasury instruments	$	301,992	$	—	$	301,992	$	—
Money market securities		83,004		—		83,004		—
Investments
U.S. treasury instruments		200,973		—		200,973		—
Common stock		15,964		15,964		—		—
Warrants		684		684		—		—
Total financial assets	$	602,617	$	16,648	$	585,969	$	—

For the twelve months ended December 31, 2021, unrealized losses of $2,788 were recognized in other income and expenses on the consolidated statement of operations related to equity investments measured at fair value held at

December 31, 2021. The cost basis of the financial assets recorded at fair value included in investments on the consolidated statement of financial condition was $220,422 as of December 31, 2021.

The fair value of the Company's financial assets as of December 31, 2020 have been categorized based upon the fair value hierarchy as follows:

	Total		Level 1		Level 2		Level 3
Financial assets:
Included in cash and cash equivalents
U.S. treasury instruments	$	15,599	$	—	$	15,599	$	—
Money market securities		103,406		—		103,406		—
Investments
U.S. treasury instruments		172,671		—		172,671		—
Total financial assets	$	291,676	$	—	$	291,676	$	—

For the year ended December 31, 2020, there were no unrealized gains or losses recognized in other income and expenses on the consolidated statement of operations related to equity investments measured at fair value held at December 31, 2020. The cost basis of the financial assets recorded at fair value included in investments on the consolidated statement of financial condition was $172,640 as of December 31, 2020.

Investments Held at Cost

The Company made investments in the sponsors of several Atlas Crest Investment Corp. entities, each a special purpose acquisition company. The Company's Chief Executive Officer, Kenneth Moelis, is the managing member of the Atlas Crest Sponsors and serves as Non-Executive Chairman of the Atlas Crest Entities. The Company does not direct the activities of the Atlas Crest Sponsors or the related SPACs.

Investments in the Atlas Crest Sponsors (discussed in the preceding section) that do not have readily determinable fair values are measured at cost less impairment, and are included in investments on the consolidated statements of financial condition. As of December 31, 2021 and December 31, 2020, the aggregate investment balances of the Atlas Crest Sponsors held at cost was $1,895 and $887, respectively.

Equity Method Investments

Equity-method investments are presented within investments on the Company’s consolidated statements of financial condition. As of December 31, 2021, and 2020, the carrying value of the Company's equity method investment in MA Financial (formerly known as Moelis Australia Holdings PTY Limited) was $43,825 and $38,143, respectively. The Company’s share of earnings on this investment is recorded in other income and expenses on the consolidated statements of operations.

During the years ended December 31, 2021, 2020, and 2019, MA Financial declared dividends, of which the Company received $3,356, $1,942, and $2,848, respectively. The Company accounted for the dividends as returns on investment and reduced the carrying value of the investment in MA Financial by the amount of dividends received.

During the year ended December 31, 2021, the Company recognized gains of $9,917 related to share issuances by MA Financial. The shares were issued at fair values greater than the carrying values of the ownership interests held, resulting in dilution gains. During the years ended December 31, 2021, and 2019, the Company sold 6.0 million shares and 20.5 million shares of MA Financial common stock, respectively, resulting in gains of $20,174, and $20,714, respectively. All gains were recorded in other income and expenses on the consolidated statements of operations. The Company’s ownership interest in MA Financial was reduced by each transaction.