Investments

12 Months Ended

Dec. 31, 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 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 funds, sovereign treasury securities, common stock, and warrants are based on quoted prices for recent trading activity in identical or similar instruments. The Company generally invests in sovereign treasury securities with maturities of less than twelve months and considers U.S. and U.K. treasury securities 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 December 31, 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
Sovereign treasury securities	$	55,938	$	—	$	55,938	$	—
Money market funds		41,210		—		41,210		—
Investments
Sovereign treasury securities		205,779		—		205,779		—
Common stock		12,149		12,149		—		—
Warrants		153		153		—		—
Total financial assets	$	315,229	$	12,302	$	302,927	$	—

For the year ended December 31, 2022, unrealized losses of $15,038 were recognized related to equity investments measured at fair value held at the reporting date. All losses were recognized in other income and expenses on the consolidated statement of operations. The cost basis of the financial assets recorded at fair value included in investments on the consolidated statement of financial condition was $234,546 as of December 31, 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
Sovereign treasury securities	$	301,992	$	—	$	301,992	$	—
Money market funds		83,004		—		83,004		—
Investments
Sovereign treasury securities		200,973		—		200,973		—
Common stock		15,964		15,964		—		—
Warrants		684		684		—		—
Total financial assets	$	602,617	$	16,648	$	585,969	$	—

For the year ended December 31, 2021, unrealized losses of $2,788 were recognized related to equity investments measured at fair value held at the reporting date. All losses were recognized in other income and expenses

on the consolidated statement of operations. 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.

Investments Held at Cost

The Company made investments in the sponsors (collectively referred to herein as "Atlas Crest Sponsors") of several Atlas Crest Entities, each a SPAC. The Company's Chief Executive Officer, Kenneth Moelis, was the managing member of the Atlas Crest Sponsors and served 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 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, 2022 and December 31, 2021, the aggregate investment balances of the Atlas Crest Sponsors held at cost was $0 and $1,895, respectively. During 2022, the remaining Atlas Crest Entities were wound up and the remainder of the Company's investments were liquidated. The Company recognized $983 in realized losses in other income and expenses on the consolidated statement of operations related to the wind-ups.

Equity Method Investments

Equity-method investments are presented within investments on the Company’s consolidated statements of financial condition. As of December 31, 2022, and 2021, the carrying value of the Company's equity method investment in MA Financial (formerly known as Moelis Australia Limited) was $47,164 and $43,825, 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, 2022, 2021 and 2020, MA Financial declared dividends, of which the Company received $2,936, $3,356, and $1,942, 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 consolidated statements of operations.