Fair Value Measurements

9 Months Ended

Sep. 30, 2018

The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of consolidated investment products, which are separately discussed in Note 16, as of September 30, 2018 and December 31, 2017 by fair value hierarchy level were as follows:

September 30, 2018



	Level 1		Level 2		Level 3		Total
($ in thousands)
Assets
Cash equivalents	$	138,301	$	—	$	—	$	138,301
Marketable securities:
Sponsored funds	39,951		—		—		39,951
Equity securities	18,641		—		—		18,641
Sponsored closed-end funds	3,738		—		—		3,738
Other investments:
Investments in collateralized loan obligations	—		—		5,043		5,043
Nonqualified retirement plan assets	7,409		—		—		7,409
Total assets measured at fair value	$	208,040	$	—	$	5,043	$	213,083

December 31, 2017



	Level 1		Level 2		Level 3		Total
($ in thousands)
Assets
Cash equivalents	$	72,993	$	—	$	—	$	72,993
Marketable securities:
Sponsored funds	46,849		—		—		46,849
Equity securities	15,810		—		—		15,810
Sponsored closed-end funds	3,765		—		—		3,765
Other investments
Investment in collateralized loan obligations	—		18,900		4,439		23,339
Nonqualified retirement plan assets	6,706		—		—		6,706
Total assets measured at fair value	$	146,123	$	18,900	$	4,439	$	169,462

The following is a discussion of the valuation methodologies used for the Company’s assets measured at fair value:

Cash equivalents represent investments in money market funds. Cash investments in actively traded money market funds are valued using published net asset values and are classified as Level 1.

Sponsored funds represent investments in open-end mutual funds, closed-end funds and ETFs for which the Company acts as the investment manager. The fair value of open-end mutual funds is determined based on their published net asset values and are categorized as Level 1. The fair value of closed-end funds and ETFs are determined based on the official closing price on the exchange on which they are traded and are categorized as Level 1.

Equity securities include securities traded on active markets and are valued at the official closing price (typically last sale or bid) on the exchange on which the securities are primarily traded and are categorized as Level 1.

Investments in collateralized loan obligations represent investments in CLOs for which the Company provides investment management services. The investments in collateralized loan obligations are measured at fair value based on independent third-party valuations and are categorized as Level 2 or Level 3.

Nonqualified retirement plan assets represent open-end mutual funds within a nonqualified retirement plan whose fair value is determined based on their published net asset value and are categorized as Level 1.

Cash, accounts receivable, accounts payable and accrued liabilities equal or approximate fair value based on the short-term nature of these instruments.

Transfers into and out of levels are reflected when: (1) significant inputs used for the fair value measurement, including market inputs or performance attributes, become observable or unobservable; or (2) if the book value no longer represents fair value. There were no transfers between levels during the three and nine months ended September 30, 2018 and 2017.

The following table is a reconciliation of assets for Level 3 investments for which significant unobservable inputs were used to determine fair value.



	Three Months Ended September 30,						Nine Months Ended September 30,
($ in thousands)	2018			2017			2018			2017
Level 3 Investments ^(a)
Balance at beginning of period	$	5,744		$	2,909		$	4,439		$	—
Acquired in period	—			—			1,326			2,916
Change in unrealized gain (loss), net	(701		)	(168		)	(722		)	(175		)
Balance at end of period	$	5,043		$	2,741		$	5,043		$	2,741


^(a)	The investments that are categorized as Level 3 were valued utilizing third-party pricing information without adjustment.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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