AdvisorEngine - Financial Interests

12 Months Ended

Dec. 31, 2019

AdvisorEngine - Financial Interests

17. Variable Interest Entity

VIEs are entities with any of the following characteristics: (i) the entity does not have enough equity to finance its activities without additional financial support; (ii) the equity holders, as a group, lack the characteristics of a controlling financial interest; or (iii) the entity is structured with non-substantive voting rights.

Consolidation of a VIE is required for the party deemed to be the primary beneficiary, if any. The primary beneficiary is the party who has both (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. The Company is not the primary beneficiary of any entities in which it has a variable interest as it does not have the power to direct the activities that most significantly impact the entities’ economic  performance. Such power is conveyed through the entities’ boards of directors and the Company does not have control over the boards.  

The following table presents information about the Company’s variable interests in non-consolidated VIEs:

	December 31, 2019			December 31, 2018
Carrying Amount—Assets (Securrency)
Preferred stock	$	8,112		$	—
Carrying Amount—Assets (AdvisorEngine)
Unsecured convertible notes receivable	$	2,126		$	—
Unsecured non-convertible note receivable		26,046	(1)		28,722
Preferred stock		—	(1)		25,000
Total carrying amount—Assets (AdvisorEngine)	$	28,172		$	53,722
Total carrying amount—Assets	$	36,284		$	53,722
Maximum exposure to loss	$	36,284	(1)	$	53,722

(1) Net of an impairment of $30,138 in the aggregate (Note 8).

Advisor Engine [Member]

AdvisorEngine - Financial Interests

8. AdvisorEngine—Financial Interests

The following table sets forth the carrying value of the Company’s financial interests in AdvisorEngine:

	December 31, 2019							Dec. 31, 2018
	Gross Carrying Value		Impairment			Net Carrying Value		Net Carrying Value
Unsecured convertible note (Note 9)	$	2,126	$	—		$	2,126	$	—
Unsecured non-convertible note (Note 9)		31,184		(5,138	)		26,046		28,722
Preferred stock (Note 10)		25,000		(25,000	)		—		25,000
Total	$	58,310	$	(30,138	)	$	28,172	$	53,722

The Company is currently pursuing an exit from its investment in AdvisorEngine. While the process is not yet finalized, it is expected that consideration payable to the Company will include contingent payments that are payable only upon satisfaction of various operational and financial conditions. During the year ended December 31, 2019, the Company recognized an impairment of $30,138 to reduce the carrying value of its financial interests in AdvisorEngine to fair value. Fair value (classified as Level 3 in the fair value hierarchy) includes the value of consideration that is payable upfront, as well as the Company’s assessment of AdvisorEngine achieving the various operational and financial conditions. Impairment was recognized on each respective financial interest based upon their liquidation preferences.