The consolidated financial statements include the accounts of the Company, its subsidiaries and investment products that are consolidated. VOEs are consolidated when the Company is considered to have a controlling financial interest, which is typically present when the Company owns a majority of the voting interest in an entity or otherwise has the power to govern the financial and operating policies of the entity.

The Company evaluates any VIEs in which the Company has a variable interest for consolidation. A VIE is an entity in which either (a) the equity investment at risk is not sufficient to permit the entity to finance its own activities without additional financial support, or (b) where as a group, the holders of the equity investment at risk do not possess (i) the power through voting or similar rights to direct the activities that most significantly impact the entity’s economic performance; (ii) the obligation to absorb expected losses or the right to receive expected residual returns of the entity; or (iii) proportionate voting and economic interests and where substantially all of the entity’s activities either involve or are conducted on behalf of an

investor with disproportionately fewer voting rights. If an entity has any of these characteristics, it is considered a VIE and is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that has both the power to direct the activities that most significantly impact the VIE’s economic performance and has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE.

In the normal course of its business, the Company sponsors various investment products, some of which are consolidated by the Company. CIP includes both VOEs, made up primarily of open-end funds in which the Company holds a controlling financial interest, and VIEs, which primarily consist of CLOs of which the Company is considered the primary beneficiary. The consolidation and deconsolidation of these investment products have no impact on net income (loss) attributable to stockholders. The Company’s risk with respect to these investment products is limited to its beneficial interests in these products. The Company has no right to the benefits from, and does not bear the risks associated with, these investment products beyond the Company’s investments in, and fees generated from, these products.



	As of December 31,
	2019									2018
				VIEs									VIEs
(in thousands)	VOEs			CLOs			Other			VOEs			CLOs			Other
Cash and cash equivalents	$	2,665		$	97,130		$	363		$	1,029		$	51,363		$	559
Investments	22,223			1,976,148			31,739			12,923			1,709,266			27,379
Other assets	1,563			21,450			599			228			30,426			403
Notes payable	—			(1,834,535		)	—			—			(1,620,260		)	—
Securities purchased payable and other liabilities	(2,964		)	(164,887		)	(200		)	(823		)	(69,737		)	(146		)
Noncontrolling interests	(3,865		)	(10,558		)	(1,564		)	(2,348		)	(13,958		)	$	(36	)
Net interests in CIP	$	19,622		$	84,748		$	30,937		$	11,009		$	87,100		$	28,159

The majority of the Company's CIP that are VIEs are CLOs. At December 31, 2019, the Company consolidated five CLOs and one CLO in the warehouse stage. The financial information of certain CLOs is included in the Company's consolidated financial statements on a one-month lag based upon the availability of financial information. Majority-owned consolidated private funds, whose primary purpose is to invest in CLOs for which the Company serves as the collateral manager, are also included.

The CLOs' investments of $2.0 billion at December 31, 2019 represent bank loan investments, which comprise the majority of the CLOs' portfolio asset collateral and are senior secured corporate loans across a variety of industries. These bank loan investments mature at various dates between 2020 and 2028 and pay interest at LIBOR plus a spread of up to 10.0%. The CLOs may elect to reinvest any prepayments received on bank loan investments between April 2020 and October 2021, depending on the CLO. Generally, subsequent prepayments received after the reinvestment period must be used to pay down the note obligations. At December 31, 2019, the unpaid principal balance of the bank loan investments exceeded the fair value by approximately $59.5 million. At December 31, 2019, there were no material collateral assets in default.

The CLOs hold notes payable with a total value, at par, of $2.0 billion, consisting of senior secured floating rate notes payable with a par value of $1.8 billion, warehouse facility debt of $8.3 million and subordinated notes with a par value of $193.0 million. These note obligations bear interest at variable rates based on LIBOR plus a pre-defined spread ranging from 0.8% to 8.7%. The principal amounts outstanding of the note obligations issued by the CLOs mature on dates ranging from October 2027 to April 2029.

The Company’s beneficial interests and maximum exposure to loss related to these consolidated CLOs is limited to (a) ownership in the subordinated notes and (b) accrued management fees. The secured notes of the consolidated CLOs have contractual recourse only to the related assets of the CLO and are classified as financial liabilities. Although these beneficial interests are eliminated upon consolidation, the application of the measurement alternative prescribed by ASU 2014-13, results in the net assets of the consolidated CLOs shown above to be equivalent to the beneficial interests retained by the Company at December 31, 2019, as shown in the table below:



	Year Ended
	December 31, 2019
	(in thousands)
Income:
Realized and unrealized gain (loss), net	$	(8,914	)
Interest income	113,053
Total Income	$	104,139

Expenses:
Other operating expenses	$	3,367
Interest expense	92,005
Total Expense	95,372
Noncontrolling interests	1,028
Net Income (loss) attributable to CIP	$	9,795



As of December 31, 2019
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	97,130	$	—	$	—	$	97,130
Debt investments	218		1,973,427		39,389		2,013,034
Equity investments	15,872		171		1,033		17,076
Total assets measured at fair value	$	113,220	$	1,973,598	$	40,422	$	2,127,240
Liabilities
Notes payable	$	—	$	1,834,535	$	—	$	1,834,535
Short sales	430		—		—		430
Total liabilities measured at fair value	$	430	$	1,834,535	$	—	$	1,834,965



As of December 31, 2018
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	51,363	$	—	$	—	$	51,363
Debt investments	5,306		1,724,714		6,848		1,736,868
Equity investments	12,700		—		—		12,700
Total assets measured at fair value	$	69,369	$	1,724,714	$	6,848	$	1,800,931
Liabilities
Notes payable	$	—	$	1,620,260	$	—	$	1,620,260
Short sales	707		—		—		707
Total liabilities measured at fair value	$	707	$	1,620,260	$	—	$	1,620,967

Debt and equity investments represent the underlying debt, equity and other securities held in CIP. Equity investments are valued at the official closing price on the exchange on which the securities are traded and are generally categorized within Level 1. Level 2 investments represent most debt securities, including bank loans and certain equity securities (including non-U.S. securities), for which closing prices are not readily available or are deemed to not reflect readily available market prices, and are valued using an independent pricing service. Debt investments are valued based on quotations received from independent pricing services or from dealers who make markets in such securities. Bank loan investments, which are included as debt investments are generally priced at the average mid-point of bid and ask quotations obtained from a third-party pricing service. Fair value may also be based upon valuations obtained from independent third-party brokers or dealers utilizing matrix pricing models that consider information regarding securities with similar characteristics. In certain instances, fair value has been determined utilizing discounted cash flow analyses or single broker non-binding quotes. Depending on the nature of the inputs, these assets are classified as Level 1, 2 or 3 within the fair value measurement hierarchy. Level 3 investments include debt and equity securities that are not widely traded, are illiquid, or are priced by dealers based on pricing models used by market makers in the security.

Notes payable represent notes issued by CIP CLOs and are measured using the measurement alternative in ASU 2014-13. Accordingly, the fair value of CLO liabilities was measured as the fair value of CLO assets less the sum of (a) the fair value of the beneficial interests held by the Company, and (b) the carrying value of any beneficial interests that represent compensation for services. The fair value of the beneficial interests held by the Company is based on third-party pricing information without adjustment.

Short sales are transactions in which a security is sold that is not owned or is owned but there is no intention to deliver, in anticipation that the price of the security will decline. Short sales are recorded in the Consolidated Balance Sheets within other liabilities of CIP and are classified as Level 1 based on the underlying equity security.



	Year Ended December 31,
(in thousands)	2019			2018
Level 3 Investments of CIP (1)
Balance at beginning of period	$	6,848		$	34,781
Purchases	2,466			7,122
Sales	(7,310		)	(13,895		)
Amortization	(13		)	19
Change in unrealized gains (losses), net	235			1,993
Realized gains (loss), net	(94		)	562
Transfers to Level 2	(52,875		)	(33,873		)
Transfers from Level 2	91,165			10,139
Balance at end of period	$	40,422		$	6,848

The Company serves as the collateral manager for other collateralized loan and collateralized bond obligations (collectively, "CDOs") that are not consolidated. The assets and liabilities of these CDOs reside in bankruptcy remote, special purpose entities in which the Company has no ownership of, nor holds any notes issued by, the CDOs, and provides neither recourse nor guarantees. The Company has determined that the investment management fees it receives for serving as collateral manager for these CDOs did not represent a variable interest since (a) the fees the Company earns are compensation for services provided and are commensurate with the level of effort required to provide the investment management services, (b) the Company does not hold other interests in the CDOs that individually, or in the aggregate, would absorb more than an insignificant amount of the CDOs' expected losses or receive more than an insignificant amount of the CDOs' expected residual return, and (c) the investment management arrangement only includes terms, conditions and amounts that are customarily present in arrangements for similar services negotiated at arm's length.

The Company has interests in certain other entities that are VIEs that the Company does not consolidate as it is not the primary beneficiary of those entities. The Company is not the primary beneficiary as its interest in these entities does not provide the Company with the power to direct the activities that most significantly impact the entities' economic performance. At December 31, 2019, the carrying value and maximum risk of loss related to the Company's interest in these VIEs was $14.4 million.