3. Investments and Fair Value Measurements

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


	March 31, 2016		December 31, 2015
	Held-to- Maturity		Held-to- Maturity
Federal agency debt instruments	$	22,581	$	23,689

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


	March 31, 2016			December 31, 2015
	Held-to- Maturity			Held-to- Maturity
Cost/amortized cost	$	22,581		$	23,689
Gross unrealized gains		150			82
Gross unrealized losses		(193	)		(609	)

Fair value	$	22,538		$	23,162

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


	March 31, 2016		December 31, 2015
	Held-to- Maturity		Held-to- Maturity
Due within one year	$	—	$	—
Due one year through five years		8,368		8,369
Due five years through ten years		2,836		3,127
Due over ten years		11,377		12,193

Total	$	22,581	$	23,689

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 $4,687 has been recorded as of March 31, 2016 (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 March 31, 2016 were 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%). These inputs were unchanged from December 31, 2015. 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 three months ended March 31, 2016 and 2015, the Company recorded an expense of $745 and $257, 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.