RELATED-PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2014

RELATED-PARTY TRANSACTIONS

RELATED-PARTY TRANSACTIONS

8. RELATED-PARTY TRANSACTIONS

        Aircraft—On April 21, 2010, Manager acquired an aircraft with funds received solely from its managing member. Manager is obligated to bear all depreciation and other costs of operating the aircraft related to uses other than for the Company's business. As the aircraft is typically used for Company business purposes, the Company in the ordinary course advances Manager amounts related to the aircraft's operating costs. As of March 31, 2014, $158 was due from Manager to the Company (December 31, 2013: $58). Such amounts are included in other receivables on the condensed combined statements of financial condition. To the extent the Company utilizes the aircraft for business, the Company is obligated to incur such expenses.

        Promissory Notes—As of March 31, 2014, the Company held an unsecured promissory note from an employee aggregating $145 (December 31, 2013: $831) which is reflected in other receivables on the condensed combined statements of financial condition. The note bears interest at a variable rate (4.75% as of March 31, 2014). During the three months ended March 31, 2014 and 2013, the Company received $686 and $383, respectively of principal repayments and recognized interest income of $4 and $11, respectively, on notes, which is included in other income and expenses on the condensed combined statements of operations.

        Allocated Expenses—In most cases, corporate overhead expenses specific to the Advisory business were both identifiable and quantifiable, and allocated directly to the Company. The remaining corporate overhead expenses were allocated to the Company based on usage or the relative proportion of the Company's headcount to that of the Parent.

        Management believes the assumptions and allocations underlying the condensed combined financial statements are reasonable and the allocated amounts are representative of the amounts that would have been recorded in the condensed combined financial statements had the Company been operated independent of the Parent for historical periods presented.

        Joint Venture—As of March 31, 2014, the Company had a net balance due to the Australian JV (see Note 4) of $1,467 (December 31, 2013: $1,145), which is reflected in other assets on the condensed combined statements of financial condition. This balance consists of amounts due to the Australian JV for advisory services performed and billable expenses incurred on behalf of the Company during the period, offset by expenses paid by the Company on behalf of the Australian JV. This relationship between the Company and the Australian JV is governed by a service agreement between the Australian JV and the Parent.

        Due from Parent—As of March 31, 2014, the Company had a net balance due from Parent of $219, which is reflected in the other assets on the condensed combined statements of financial condition. This balance consists of amounts due to the Company for expenses paid by the Company on behalf of the Parent.