Consolidated Sponsored Investment Products (Tables)

6 Months Ended

Jun. 30, 2015

Balances of Consolidated Sponsored Investment Products

The following table presents the balances of the consolidated sponsored investment products that were reflected in the Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014:

	As of
	June 30, 2015			December 31, 2014
($ in thousands)
Total cash	$	12,260		$	8,687
Total investments		270,997			236,652
All other assets		8,960			6,960
Total liabilities		(19,455	)		(12,556	)
Redeemable noncontrolling interests		(55,557	)		(23,071	)
The Company’s net interests in consolidated sponsored investment products	$	217,205		$	216,672

Condensed Consolidated Balance Sheets

The following tables reflect the impact of the consolidated sponsored investment products in the Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014, respectively:

As of June 30, 2015

	Balance Before Consolidation of Investment Products			Consolidated Sponsored Investment Products		Eliminations and Adjustments (a)			Balances as Reported in Condensed Consolidated Balance Sheet
($ in thousands)
Total cash	$	194,334		$	12,260	$	—		$	206,594
Total investments		276,253			270,997		(216,952	)		330,298
All other assets		176,399			8,960		(253	)		185,106
Total assets	$	646,986		$	292,217	$	(217,205	)	$	721,998
Total liabilities	$	88,013		$	19,708	$	(253	)	$	107,468
Redeemable noncontrolling interest		—			—		55,557			55,557
Equity attributable to stockholders of the Company		559,363			272,509		(272,509	)		559,363
Non-redeemable noncontrolling interest		(390	)		—		—			(390	)
Total liabilities and equity	$	646,986		$	292,217	$	(217,205	)	$	721,998

As of December 31, 2014

	Balance Before Consolidation of Investment Products			Consolidated Sponsored Investment Products		Eliminations and Adjustments (a)			Balances as Reported in Condensed Consolidated Balance Sheet
($ in thousands)
Total cash	$	202,847		$	8,687	$	—		$	211,534
Total investments		279,863			236,652		(216,415	)		300,100
All other assets		180,436			6,960		(257	)		187,139
Total assets	$	663,146		$	252,299	$	(216,672	)	$	698,773
Total liabilities	$	99,794		$	12,813	$	(257	)	$	112,350
Redeemable noncontrolling interest		—			—		23,071			23,071
Equity attributable to stockholders of the Company		563,542			239,486		(239,486	)		563,542
Non-redeemable noncontrolling interest		(190	)		—		—			(190	)
Total liabilities and equity	$	663,146		$	252,299	$	(216,672	)	$	698,773

(a) Adjustments include the elimination of intercompany transactions between the Company and its consolidated sponsored investment products, primarily the elimination of the investments and consolidated sponsored investment product equity and recording of any noncontrolling interest.

Condensed Consolidated Statement of Operations

The following table reflects the impact of the consolidated sponsored investment products in the Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2015 and 2014:

For the Three Months Ended June 30, 2015

	Balance Before Consolidation of Investment Products			Consolidated Sponsored Investment Products			Eliminations and Adjustments (a)			Balances as Reported in Condensed Consolidated Statement of Operations
($ in thousands)
Total operating revenues	$	100,052		$	—		$	(396	)	$	99,656
Total operating expenses		82,491			1,353			(396	)		83,448
Operating income (loss)		17,561			(1,353	)		—			16,208
Total other non-operating income (expense)		(127	)		(144	)		898			627
Income (loss) before income tax expense		17,434			(1,497	)		898			16,835
Income tax expense		7,823			—			—			7,823
Net income (loss)		9,611			(1,497	)		898			9,012
Noncontrolling interests		166			—			599			765
Net income (loss) attributable to the Company	$	9,777		$	(1,497	)	$	1,497		$	9,777

For the Three Months Ended June 30, 2014

	Balance Before Consolidation of Investment Products		Consolidated Sponsored Investment Products			Eliminations and Adjustments (a)			Balances as Reported in Condensed Consolidated Statement of Operations
($ in thousands)
Total operating revenues	$	112,871	$	—		$	(122	)	$	112,749
Total operating expenses		89,450		919			(122	)		90,247
Operating income (loss)		23,421		(919	)		—			22,502
Total other non-operating income		8,198		8,082			(6,884	)		9,396
Income before income tax expense		31,619		7,163			(6,884	)		31,898
Income tax expense		12,106		—			—			12,106
Net income		19,513		7,163			(6,884	)		19,792
Noncontrolling interests		30		—			(279	)		(249	)
Net income attributable to the Company	$	19,543	$	7,163		$	(7,163	)	$	19,543

For the Six Months Ended June 30, 2015

	Balance Before Consolidation of Investment Products		Consolidated Sponsored Investment Products			Eliminations and Adjustments (a)			Balances as Reported in Condensed Consolidated Statement of Operations
($ in thousands)
Total operating revenues	$	204,284	$	—		$	(797	)	$	203,487
Total operating expenses		160,962		2,572			(797	)		162,737
Operating income (loss)		43,322		(2,572	)		—			40,750
Total other non-operating income (expense)		4,288		4,770			(2,380	)		6,678
Income before income tax expense		47,610		2,198			(2,380	)		47,428
Income tax expense		18,691		—			—			18,691
Net income		28,919		2,198			(2,380	)		28,737
Noncontrolling interests		200		—			182			382
Net income attributable to the Company	$	29,119	$	2,198		$	(2,198	)	$	29,119

For the Six Months Ended June 30, 2014

	Balance Before Consolidation of Investment Products		Consolidated Sponsored Investment Products			Eliminations and Adjustments (a)			Balances as Reported in Condensed Consolidated Statement of Operations
($ in thousands)
Total operating revenues	$	220,726	$	—		$	(106	)	$	220,620
Total operating expenses		164,364		1,234			(106	)		165,492
Operating income (loss)		56,362		(1,234	)		—			55,128
Total other non-operating income		11,195		8,992			(7,640	)		12,547
Income before income tax expense		67,557		7,758			(7,640	)		67,675
Income tax expense		26,116		—			—			26,116
Net income		41,441		7,758			(7,640	)		41,559
Noncontrolling interests		40		—			(118	)		(78	)
Net income attributable to the Company	$	41,481	$	7,758		$	(7,758	)	$	41,481

(a) Adjustments include the elimination of intercompany transactions between the Company and its consolidated sponsored investment products, primarily the elimination of the investments and consolidated sponsored investment product equity and recording of any noncontrolling interest.

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

The assets of the consolidated sponsored investment products measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014 by fair value hierarchy level were as follows:

As of June 30, 2015

	Level 1		Level 2		Level 3		Total
($ in thousands)
Assets
Debt securities	$	—	$	147,282	$	852	$	148,134
Equity securities		122,443		420		—		122,863
Derivatives		105		28		—		133
Total Assets Measured at Fair Value	$	122,548	$	147,730	$	852	$	271,130
Liabilities
Derivatives	$	262	$	66	$	—	$	328
Short sales		9,573		228		—		9,801
Total Liabilities Measured at Fair Value	$	9,835	$	294	$	—	$	10,129

As of December 31, 2014

	Level 1		Level 2		Level 3		Total
($ in thousands)
Assets
Debt securities	$	—	$	135,050	$	1,065	$	136,115
Equity securities		82,417		18,120		—		100,537
Derivatives		154		227		—		381
Total Assets Measured at Fair Value	$	82,571	$	153,397	$	1,065	$	237,033
Liabilities
Derivatives	$	191	$	—	$	—	$	191
Short sales		7,491		674		—		8,165
Total Liabilities Measured at Fair Value	$	7,682	$	674	$	—	$	8,356

Consolidated Sponsored Investment Products [Member]

Reconciliation of Assets Related to Consolidated Sponsored Investment Products

The following table is a reconciliation of assets of consolidated sponsored investment products for Level 3 investments for which significant unobservable inputs were used to determine fair value.

	Six Months Ended June 30,
	2015			2014
Level 3 Debt securities (a)
Balance at beginning of period	$	1,065		$	—
Purchases		—			450
Paydowns		(3	)		—
Transferred to Level 2		(162	)		—
Change in unrealized gain/(loss), net		(48	)		—
Balance at end of period	$	852		$	450

(a) None of the securities reflected in the above table were internally fair valued at June 30, 2015.