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Investments

3 Months Ended

Mar. 31, 2024

Investments, All Other Investments [Abstract]

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 sovereign debt securities, money market funds and certificates of deposit are based on quoted prices for recent trading activity in identical or similar instruments. The Company primarily invests in U.S. and U.K. sovereign debt securities with maturities of less than twelve months and we consider these securities to be risk free. Therefore, we do not reserve for expected credit losses on these investments.

Fair Value of Financial Assets

The fair value of the Company's financial assets as of March 31, 2024, have been categorized based upon the fair value hierarchy as follows:


	Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents
Money market funds	$	58,026	$	—	$	58,026	$	—
Certificates of Deposit		10,628		—		10,628		—
Total financial assets included in cash and cash equivalents		68,654		—		68,654		—
Investments
Sovereign debt securities		22,290		—		22,290		—
Total financial assets included in investments		22,290		—		22,290		—
Total financial assets	$	90,944	$	—	$	90,944	$	—

During the year ended December 31, 2023, the Company liquidated its equity investments measured at fair value, and the Company held no such investments as of March 31, 2024. Therefore, there were no unrealized gains or losses on equity securities held at the reporting date for the three months ended March 31, 2024. Unrealized losses of $2,015 were recognized on equity investments measured at fair value and held at the reporting date for the three months ended March 31, 2023. For sovereign debt securities measured at fair value and held at the reporting date, unrealized losses of $48 and unrealized gains of

$373 were recognized for the three months ended March 31, 2024 and 2023, respectively. All gains and losses were recognized in other income and expenses on the condensed consolidated statement of operations. The cost basis of the investments recorded at fair value shown in the preceding table and included in investments on the condensed consolidated statement of financial condition was $22,338 as of March 31, 2024.

The fair value of the Company's financial assets as of December 31, 2023 have been categorized based upon the fair value hierarchy as follows:


	Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents
Sovereign debt securities	$	84,343	$	—	$	84,343	$	—
Money market funds		46,818		—		46,818		—
Certificates of Deposit		6,202				6,202
Total financial assets included in cash and cash equivalents		137,363		—		137,363		—
Investments
Sovereign debt securities		162,899		—		162,899		—
Total financial assets included in investments		162,899		—		162,899		—
Total financial assets	$	300,262	$	—	$	300,262	$	—

The cost basis of the financial assets recorded at fair value included in investments on the condensed consolidated statement of financial condition was $160,125 as of December 31, 2023.

Equity Method Investments

Equity-method investments are presented within investments on the Company’s condensed consolidated statements of financial condition. As of March 31, 2024 and December 31, 2023, the carrying value of the Company's equity method investment in MA Financial (formerly known as Moelis Australia Limited) was $45,386 and $47,458, respectively. The Company's share of earnings on this investment is recorded in other income and expenses on the condensed consolidated statements of operation.

During the three months ended March 31, 2024 and 2023, MA Financial declared dividends, of which the Company received $2,155 and $2,189, 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.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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