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Consolidation (Tables)

12 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The following table presents the balances of CIP that, after intercompany eliminations, were reflected in the Consolidated Balance Sheets as of December 31, 2019 and 2018:



	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

Schedule of VIE Consolidated Investment Product

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:



	(in thousands)
Subordinated notes	$	83,383
Accrued investment management fees	1,365
Total Beneficial Interests	$	84,748

The following table represents income and expenses of the consolidated CLOs included in the Consolidated Statements of Operations for the period indicated:



	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 summarized in the table below, the application of the measurement alternative as prescribed by ASU 2014-13 results in the consolidated net income summarized above to be equivalent to the Company’s own economic interests in the consolidated CLOs, which are eliminated upon consolidation:



	Year Ended
	December 31, 2019
	(in thousands)
Distributions received and unrealized gains (losses) on the subordinated notes held by the Company	$	1,541
Investment management fees	8,254
Total Economic Interests	$	9,795

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of CIP discussed in Note 20, as of December 31, 2019 and December 31, 2018, by fair value hierarchy level were as follows:



December 31, 2019
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	187,255	$	—	$	—	$	187,255
Investment securities - fair value
Sponsored funds	47,654		—		—		47,654
Equity securities	13,320		—		—		13,320
Debt securities	—		16		—		16
Nonqualified retirement plan assets	8,724		—		—		8,724
Total assets measured at fair value	$	256,953	$	16	$	—	$	256,969



December 31, 2018
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	158,596	$	—	$	—	$	158,596
Investment securities - fair value
Sponsored funds	40,191		—		—		40,191
Equity securities	16,981		—		—		16,981
Debt securities	—		—		2,099		2,099
Investment securities - available for sale	—		—		2,023		2,023
Nonqualified retirement plan assets	6,716		—		—		6,716
Total assets measured at fair value	$	222,484	$	—	$	4,122	$	226,606

The assets and liabilities of the CIP measured at fair value on a recurring basis by fair value hierarchy level were as follows:



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

Reconciliation of Assets of Consolidated Sponsored Investment Products For Level 3 Investments, Unobservable Inputs Used to Determine Fair Value

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



	Twelve Months Ended December 31,
(in thousands)	2019			2018
Level 3 Investments (1)
Balance at beginning of period	$	4,122		$	4,439
(Sales) purchases	(4,185		)	1,326
Change in unrealized gain (loss), net	63			(1,643		)
Balance at end of period	$	—		$	4,122

(1)

Investments that are categorized as Level 3 were valued utilizing third-party pricing information without adjustment.

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



	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


(1)	The investments that are categorized as Level 3 were valued utilizing third-party pricing information without adjustment. All transfers are deemed to occur at the end of period. Transfers between Level 2 and Level 3 were due to a decrease in trading activities at period end.

Reconciliation of Liabilities of Consolidated Sponsored Investment Products For Level 3 Investments, Unobservable Inputs Used to Determine Fair Value

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



	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

(1)

The investments that are categorized as Level 3 were valued utilizing third-party pricing information without adjustment. All transfers are deemed to occur at the end of period. Transfers between Level 2 and Level 3 were due to a decrease in trading activities at period end.

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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