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Consolidation (Tables)

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Condensed Consolidated Balance Sheets

The following table presents the balances of CIP that, after intercompany eliminations, were reflected on the Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022:


	As of
	June 30, 2023						December 31, 2022
	VOEs		VIEs				VOEs		VIEs
(in thousands)			CLOs		Other				CLOs		Other
Cash and cash equivalents	$	906	$	153,549	$	1,762	$	1,153	$	249,003	$	789
Investments	23,222		1,933,812		67,952		24,669		2,106,764		58,680
Other assets	180		23,545		1,555		295		43,993		1,157
Notes payable	—		(1,911,579)		—		—		(2,083,314)		—
Securities purchased payable and other liabilities	(662)		(108,794)		(807)		(573)		(230,141)		(183)
Noncontrolling interests	(7,816)		(5,196)		(14,993)		(7,879)		(5,917)		(10,389)
Net interests in CIP	$	15,830	$	85,337	$	55,469	$	17,665	$	80,388	$	50,054

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,

Consolidation (Topic 810) ("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 June 30, 2023, as shown in the table below:





	(in thousands)
Subordinated notes	$	82,971
Accrued investment management fees	2,366
Total Beneficial Interests	$	85,337

The following table represents income and expenses of the consolidated CLOs included on the Company’s Condensed Consolidated Statements of Operations for the period indicated:


	Six Months Ended June 30, 2023
	(in thousands)
Income:
Realized and unrealized gain (loss), net	$	(4,326)
Interest income	91,682

Total Income	87,356

Expenses:
Other operating expenses	810
Interest expense	73,935
Total Expense	74,745
Noncontrolling interests	(115)
Net Income (Loss) Attributable to CLOs	$	12,496

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:


	Six Months Ended June 30, 2023
	(in thousands)
Distributions received and unrealized gains (losses) on the subordinated notes held by the Company	$	7,952
Investment management fees	4,544

Total Economic Interests	$	12,496

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 16, as of June 30, 2023 and December 31, 2022 by fair value hierarchy level were as follows:

June 30, 2023


(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	163,053	$	—	$	—	$	163,053
Investment securities - fair value
Sponsored funds	73,381		—		—		73,381
Equity securities	15,930		—		—		15,930


Nonqualified retirement plan assets	11,499		—		—		11,499
Total assets measured at fair value	$	263,863	$	—	$	—	$	263,863

Liabilities
Contingent consideration	$	—	$	—	$	54,910	$	54,910
Total liabilities measured at fair value	$	—	$	—	$	54,910	$	54,910

December 31, 2022


(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	287,126	$	—	$	—	$	287,126
Investment securities - fair value
Sponsored funds	62,744		—		—		62,744
Equity securities	14,255		—		—		14,255


Nonqualified retirement plan assets	10,154		—		—		10,154
Total assets measured at fair value	$	374,279	$	—	$	—	$	374,279

Liabilities
Contingent consideration	$	—	$	—	$	78,100	$	78,100
Total liabilities measured at fair value	$	—	$	—	$	78,100	$	78,100

The assets and liabilities of CIP measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 by fair value hierarchy level were as follows:

As of June 30, 2023


(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	153,549	$	—	$	—	$	153,549
Debt investments	278		1,952,096		42,175		1,994,549
Equity investments	27,439		1,633		1,365		30,437

Total assets measured at fair value	$	181,266	$	1,953,729	$	43,540	$	2,178,535
Liabilities
Notes payable	$	—	$	1,911,579	$	—	$	1,911,579

Short sales	511		—		—		511
Total liabilities measured at fair value	$	511	$	1,911,579	$	—	$	1,912,090

As of December 31, 2022


(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	249,003	$	—	$	—	$	249,003
Debt investments	243		2,119,082		42,246		2,161,571
Equity investments	25,003		2,204		1,335		28,542

Total assets measured at fair value	$	274,249	$	2,121,286	$	43,581	$	2,439,116
Liabilities
Notes payable	$	—	$	2,083,314	$	—	$	2,083,314

Short sales	414		—		—		414
Total liabilities measured at fair value	$	414	$	2,083,314	$	—	$	2,083,728

Schedule of 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 of CIP for Level 3 investments for which significant unobservable inputs were used to determine fair value:


	Six Months Ended June 30,
(in thousands)	2023		2022
Balance at beginning of period	$	43,581	$	3,157
Realized gains (losses), net	(3,299)		27
Change in unrealized gains (losses), net	2,656		(930)

Purchases	2,903		—

Amortization	176		(9)
Sales	(7,231)		(2,135)
Transfers to Level 2	(48,337)		(36,833)
Transfers from Level 2	53,091		68,480
Balance at end of period (1)	$	43,540	$	31,757

(1)The investments that are categorized as Level 3 were valued utilizing third-party pricing information without adjustment. Transfers in and/or out of levels are reflected when significant inputs, including market inputs or performance attributes, used for the fair value measurement become observable/unobservable 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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