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Consolidation (Tables)

9 Months Ended

Sep. 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 September 30, 2023 and December 31, 2022:


	As of
	September 30, 2023						December 31, 2022
	VOEs		VIEs				VOEs		VIEs
(in thousands)			CLOs		GFs				CLOs		GFs
Cash and cash equivalents	$	865	$	208,056	$	1,509	$	1,153	$	249,003	$	789
Investments	19,147		1,978,308		71,760		24,669		2,106,764		58,680
Other assets	110		33,143		1,228		295		43,993		1,157
Notes payable	—		(1,943,949)		—		—		(2,083,314)		—
Securities purchased payable and other liabilities	(547)		(183,520)		(750)		(573)		(230,141)		(183)
Noncontrolling interests	(6,451)		(5,448)		(19,265)		(7,879)		(5,917)		(10,389)
Net interests in CIP	$	13,124	$	86,590	$	54,482	$	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 September 30, 2023, as shown in the table below:





	(in thousands)
Subordinated notes	$	85,556
Accrued investment management fees	1,034
Total Beneficial Interests	$	86,590

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:


	Nine Months Ended September 30, 2023
	(in thousands)
Income:
Realized and unrealized gain (loss), net	$	(3,317)
Interest income	140,078

Total Income	136,761

Expenses:
Other operating expenses	1,236
Interest expense	112,153
Total Expense	113,389
Noncontrolling interests	(786)
Net Income (Loss) Attributable to CLOs	$	22,586

The following table represents the Company’s own economic interests in the consolidated CLOs, which are eliminated upon consolidation:


	Nine Months Ended September 30, 2023
	(in thousands)
Distributions received and unrealized gains (losses) on the subordinated notes held by the Company	$	15,907
Investment management fees	6,679

Total Economic Interests	$	22,586

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

September 30, 2023


(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	157,635	$	—	$	—	$	157,635
Investment securities - fair value
Sponsored funds	76,958		—		—		76,958
Equity securities	17,167		—		—		17,167
Debt securities	—		—		24,339		24,339

Nonqualified retirement plan assets	11,328		—		—		11,328
Total assets measured at fair value	$	263,088	$	—	$	24,339	$	287,427

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

As of September 30, 2023


(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	208,056	$	—	$	—	$	208,056
Debt investments	167		1,976,568		61,939		2,038,674
Equity investments	28,761		437		1,343		30,541

Total assets measured at fair value	$	236,984	$	1,977,005	$	63,282	$	2,277,271
Liabilities
Notes payable	$	—	$	1,943,949	$	—	$	1,943,949

Short sales	489		—		—		489
Total liabilities measured at fair value	$	489	$	1,943,949	$	—	$	1,944,438

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:


	Nine Months Ended September 30,
(in thousands)	2023		2022
Balance at beginning of period	$	43,581	$	3,157
Realized gains (losses), net	(4,306)		(596)
Change in unrealized gains (losses), net	3,980		(425)

Purchases	3,430		1,930

Amortization	284		9
Sales	(7,890)		(12,142)
Transfers to Level 2	(79,288)		(53,746)
Transfers from Level 2	103,491		107,622
Balance at end of period (1)	$	63,282	$	45,809

(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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