Variable interest entities

The Company's policy is to consolidate all subsidiaries in which it has a controlling financial interest, as well as any VIEs where the Company is deemed to be the primary beneficiary, when it has the power to make the decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb significant losses or the right to receive benefits that could potentially be significant to the VIE.

For funds that the Company has concluded are not VIEs, the Company then evaluates whether the fund is a partnership or similar entity. If the fund is a partnership or similar entity, the Company evaluates the fund under the partnership consolidation guidance. Pursuant to that guidance, the Company consolidates funds in which it is the general partner, unless presumption of control by the Company can be overcome. This presumption is overcome only when unrelated investors in the fund have the substantive ability to liquidate the fund or otherwise remove the Company as the general partner without cause, based on a simple majority vote of unaffiliated investors, or have other substantive participating rights. If the presumption of control can be overcome, the Company accounts for its interest in the fund pursuant to the equity method of accounting.

The Company serves as general partner of hedge funds and private equity funds that were established for the purpose of providing investment alternatives to both its institutional and qualified retail clients. The Company holds variable interests in these funds as a result of its right to receive management and incentive fees. The Company's investment in and additional capital commitments to these hedge funds and private equity funds are also considered variable interests. The Company's additional capital commitments are subject to call at a later date and are limited to the amount committed.

The Company assesses whether it is the primary beneficiary of the hedge funds and private equity funds in which it holds a variable interest in the form of general and limited partner interests. In each instance, the Company has determined that it is not the primary beneficiary and therefore need not consolidate the hedge funds or private equity funds. The subsidiaries' general and limited partnership interests, additional capital commitments, and management fees receivable represent its maximum exposure to loss. The subsidiaries' general partnership and limited partnership interests and management fees receivable are included in other assets on the consolidated balance sheet.

The following tables set forth the total VIE assets, the carrying value of the subsidiaries' variable interests, and the Company's maximum exposure to loss in Company-sponsored non-consolidated VIEs in which the Company holds variable interests and other non-consolidated VIEs in which the Company holds variable interests as of December 31, 2019 and 2018:



(Expressed in thousands)
	As of December 31, 2019
	Total VIE Assets ⁽¹⁾		Carrying Value of the Company's Variable Interest				Capital Commitments		Maximum Exposure to Loss in Non-consolidated VIEs
	Total VIE Assets ⁽¹⁾		Assets ⁽²⁾		Liabilities		Capital Commitments		Maximum Exposure to Loss in Non-consolidated VIEs
Hedge funds	$	390,063	$	259	$	—	$	—	$	259



(Expressed in thousands)
	As of December 31, 2018
	Total VIE Assets ⁽¹⁾		Carrying Value of the Company's Variable Interest				Capital Commitments		Maximum Exposure to Loss in Non-consolidated VIEs
	Total VIE Assets ⁽¹⁾		Assets ⁽²⁾		Liabilities		Capital Commitments		Maximum Exposure to Loss in Non-consolidated VIEs
Hedge funds	$	291,200	$	337	$	—	$	—	$	337
Private equity funds	7,454		8		—		—		8
Total	$	298,654	$	345	$	—	$	—	$	345

(1) Represents the total assets of the VIEs and does not represent the Company's interests in the VIEs.

(2) Represents the Company's interests in the VIEs and is included in other assets on the consolidated

balance sheet.