Investments

6 Months Ended

Jun. 30, 2022

Investments, All Other Investments [Abstract]

Investments

5.INVESTMENTS

Investments Measured at Fair Value

Fair value investments are presented within investments on the Company’s condensed 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. 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 June 30, 2022, 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	$	15,870	$	—	$	15,870	$	—
Money market securities		28,294		—		28,294		—
Investments
U.S. treasury instruments		137,755		—		137,755		—
Common stock		7,351		7,351		—		—
Warrants		336		336		—		—
Total financial assets	$	189,606	$	7,687	$	181,919	$	—

For the three months ended June 30, 2022 and 2021, unrealized losses of $5,056 and $0 were recognized related to equity investments measured at fair value held at the reporting date, respectively. For the six months ended June 30, 2022 and 2021, unrealized losses of $8,936 and $0 were recognized related to equity investments held at the reporting date, respectively. All losses were recognized in other income and expenses on the condensed consolidated statement of operations. The cost basis of the financial assets recorded at fair value is included in investments on the condensed consolidated statement of financial condition was $157,494 as of June 30, 2022.

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	$	—

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

Investments Held at Cost

The Company made investments in the sponsors (collectively referred to herein as "Atlas Crest Sponsors") of several Atlas Crest Investment Corp. entities (each an "Atlas Crest Entity" and collectively referred to as "Atlas Crest Entities"), each a special purpose acquisition company ("SPAC"). 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 condensed consolidated statements of financial condition. As of June

30, 2022, and December 31, 2021, the aggregate investment balances of the Atlas Crest Sponsors held at cost was $1,955 and $1,895, respectively.

Equity Method Investments

Equity-method investments are presented within investments on the Company’s condensed consolidated statements of financial condition. As of June 30, 2022 and December 31, 2021, the carrying value of the Company's equity method investment in MA Financial (formerly known as Moelis Australia Limited) was $44,499 and $43,825, respectively. The Company's share of earnings on this investment is recorded in other income and expenses on the condensed consolidated statements of operations.

During the six months ended June 30, 2022 and 2021, MA Financial declared dividends, of which the Company received $2,029 and $2,279, 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.

From time to time, MA Financial may issue shares in connection with a transaction or employee compensation which reduces the Company's ownership interest in MA Financial and can result in dilution gains or losses. Such gains or losses are recorded in other income and expenses on the condensed consolidated statements of operation.