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Consolidation (Tables)

9 Months Ended

Sep. 30, 2024

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, 2024 and December 31, 2023:


	As of
	September 30, 2024						December 31, 2023
	VOEs		VIEs				VOEs		VIEs
(in thousands)			CLOs		GFs				CLOs		GFs
Cash and cash equivalents	$	10,294	$	105,261	$	825	$	1,223	$	98,101	$	2,088
Investments	23,032		1,973,688		78,690		30,985		1,972,342		79,386
Other assets	157		30,041		2,427		174		41,985		1,076
Notes payable	—		(1,940,085)		—		—		(1,922,243)		—
Securities purchased payable and other liabilities	(719)		(80,817)		(2,290)		(740)		(89,167)		(616)
Noncontrolling interests	(7,917)		(3,676)		(31,180)		(7,316)		(4,363)		(23,327)
Net interests in CIP	$	24,847	$	84,412	$	48,472	$	24,326	$	96,655	$	58,607

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, 2024, as shown in the table below:





	(in thousands)
Subordinated notes	$	83,366
Accrued investment management fees	1,046
Total Beneficial Interests	$	84,412

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, 2024
	(in thousands)
Income:
Realized and unrealized gain (loss), net	$	(21,594)
Interest income	148,370

Total Income	126,776

Expenses:
Other operating expenses	3,425
Interest expense	120,035
Total Expense	123,460
Noncontrolling interests	(119)
Net Income (Loss) Attributable to CLOs	$	3,197

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


	Nine Months Ended September 30, 2024
	(in thousands)
Distributions received and unrealized gains (losses) on the subordinated notes held by the Company	$	(3,334)
Investment management fees	6,531

Total Economic Interests	$	3,197

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, 2024 and December 31, 2023 by fair value hierarchy level were as follows:

September 30, 2024


(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	164,878	$	—	$	—	$	164,878
Investment securities - fair value
Sponsored funds	80,303		—		—		80,303
Equity securities	21,693		—		—		21,693
Debt securities	259		1,216		24,443		25,918

Nonqualified retirement plan assets	14,927		—		—		14,927
Total assets measured at fair value	$	282,060	$	1,216	$	24,443	$	307,719

Liabilities
Contingent consideration	$	—	$	—	$	34,408	$	34,408
Total liabilities measured at fair value	$	—	$	—	$	34,408	$	34,408

December 31, 2023


(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	197,240	$	—	$	—	$	197,240
Investment securities - fair value
Sponsored funds	77,433		—		—		77,433
Equity securities	19,871		—		—		19,871


Nonqualified retirement plan assets	12,682		—		—		12,682
Total assets measured at fair value	$	307,226	$	—	$	—	$	307,226

Liabilities
Contingent consideration	$	—	$	—	$	56,200	$	56,200
Total liabilities measured at fair value	$	—	$	—	$	56,200	$	56,200

The assets and liabilities of CIP measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 by fair value hierarchy level were as follows:

As of September 30, 2024


(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	113,951	$	—	$	—	$	113,951
Debt investments	427		1,998,089		53,632		2,052,148
Equity investments	20,982		74		2,206		23,262
Derivatives	242		—		—		242
Total assets measured at fair value	$	135,602	$	1,998,163	$	55,838	$	2,189,603
Liabilities
Notes payable	$	—	$	1,940,085	$	—	$	1,940,085
Short sales	415		—		—		415
Derivatives	83		—		—		83
Total liabilities measured at fair value	$	498	$	1,940,085	$	—	$	1,940,583

As of December 31, 2023


(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents	$	98,101	$	—	$	—	$	98,101
Debt investments	241		2,012,760		36,616		2,049,617
Equity investments	32,642		8		446		33,096

Total assets measured at fair value	$	130,984	$	2,012,768	$	37,062	$	2,180,814
Liabilities
Notes payable	$	—	$	1,922,243	$	—	$	1,922,243

Short sales	518		—		—		518
Total liabilities measured at fair value	$	518	$	1,922,243	$	—	$	1,922,761

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

The following table presents a reconciliation of beginning and ending balances of the Company's Level 3 debt securities:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Debt securities, beginning of period	$	—	$	—	$	—	$	—

Purchases (sales), net	24,443		24,339		24,443		24,339


Debt securities, end of period	$	24,443	$	24,339	$	24,443	$	24,339

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)	2024		2023
Balance at beginning of period	$	37,062	$	43,581


Realized and unrealized gains (losses), net	918		(42)

Purchases	19		3,430


Sales	(36,452)		(7,890)
Transfers to Level 2	(71,236)		(79,288)
Transfers from Level 2	125,527		103,491
Balance at end of period (1)	$	55,838	$	63,282

(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 fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details

- 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.

+ References + Details