3. Investments and Fair Value Measurements

The following table is a summary of the Company’s investments:


	2015		2014
	Held-to- Maturity		Held-to- Maturity
Federal agency debt instruments	$	23,689	$	13,990

The following table summarizes unrealized gains, losses, and fair value of investments:


	2015			2014
	Held-to- Maturity			Held-to- Maturity
Cost/amortized cost	$	23,689		$	13,990
Gross unrealized gains		82			112
Gross unrealized losses		(609	)		(386	)

Fair value	$	23,162		$	13,716

The following table sets forth the maturity profile of investments; however these investments may be called prior to maturity date:


	2015		2014
	Held-to- Maturity		Held-to- Maturity
Due within one year	$	—	$	—
Due one year through five years		8,369		1,409
Due five years through ten years		3,127		350
Due over ten years		12,193		12,231

Total	$	23,689	$	13,990

Fair Value Measurement

Under the accounting for fair value measurements and disclosures, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, or the exit price, in an orderly transaction between market participants at the measurement date. The accounting guidance establishes a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions.

These three types of inputs create the following fair value hierarchy:

Level 1—Quoted prices for identical instruments in active markets.

Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3—Instruments whose significant value drivers are unobservable.

This hierarchy requires the use of observable market data when available. The Company’s held-to-maturity securities are categorized as Level 1.

The Company estimated the fair value of the acquisition payable to be $9,900, of which $3,942 has been recorded as of December 31, 2015 (Note 11). The fair value measurement of the acquisition payable is categorized as Level 3 and based on a predefined formula that includes the following inputs: the contractual minimum payment obligation, European AUM, the Company’s enterprise value over global AUM, and operating results of the European business.

At each reporting period, the fair value of the acquisition payable is determined using a discounted cash flows analysis. The significant unobservable inputs used in the fair value measurement as of December 31, 2015 are the projected AUM of the European listed ETPs (ranging from $1.0 billion to $6.0 billion), the projected operating results of the European business, and the discount rate (27.5%). Significant increases (decreases) to the projected AUM of the European listed ETPs or operating results of the European business in isolation would result in a higher (lower) fair value measurement. Significant increases (decreases) to the discount rate in isolation would be expected to result in a lower (higher) fair value measurement. During the year ended December 31, 2015, the Company recorded an expense of $2,185, which was recorded as acquisition contingent payment on the Company’s Consolidated Statements of Operations.

Some of the Company’s financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature.