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FAIR VALUE

6 Months Ended

Jun. 30, 2023

5. FAIR VALUE

Fair Value of Financial Instruments Held by the Company and Consolidated Funds

The following tables summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of June 30, 2023:


Financial Instruments of the Company	Level I		Level II		Level III		Investments Measured at NAV		Total
Assets, at fair value
Investments:
Common stock and other equity securities	$	—	$	82,174	$	165,371	$	—	$	247,545
Collateralized loan obligations and other fixed income	—		—		73,777		—		73,777
Partnership interests	—		—		—		1,125		1,125
Total investments, at fair value	—		82,174		239,148		1,125		322,447
Derivatives-foreign currency forward contracts	—		3,345		—		—		3,345
Total assets, at fair value	$	—	$	85,519	$	239,148	$	1,125	$	325,792
Liabilities, at fair value
Derivatives-foreign currency forward contracts	$	—	$	(2,318)	$	—	$	—	$	(2,318)

Total liabilities, at fair value	$	—	$	(2,318)	$	—	$	—	$	(2,318)


Financial Instruments of the Consolidated Funds	Level I		Level II		Level III		Investments Measured at NAV		Total
Assets, at fair value
Investments:
Fixed income investments:
Loans	$	—	$	9,504,196	$	648,130	$	—	$	10,152,326
Investments held in trust account	1,000,949		—		—		—		1,000,949
Bonds	—		579,695		1		—		579,696

Total fixed income investments	1,000,949		10,083,891		648,131		—		11,732,971
Partnership interests	—		—		—		1,287,240		1,287,240
Equity securities	701		4,911		1,066,065		—		1,071,677
Total investments, at fair value	1,001,650		10,088,802		1,714,196		1,287,240		14,091,888

Derivatives-foreign currency forward contracts	—		2,399		—		—		2,399


Total assets, at fair value	$	1,001,650	$	10,091,201	$	1,714,196	$	1,287,240	$	14,094,287
Liabilities, at fair value
Loan obligations of CLOs	$	—	$	(11,460,999)	$	—	$	—	$	(11,460,999)
Derivatives:
Warrants	(16,000)		—		—		—		(16,000)
Asset swaps	—		—		(2,693)		—		(2,693)
Foreign currency forward contracts	—		(2,468)		—		—		(2,468)
Total derivative liabilities, at fair value	(16,000)		(2,468)		(2,693)		—		(21,161)
Total liabilities, at fair value	$	(16,000)	$	(11,463,467)	$	(2,693)	$	—	$	(11,482,160)

The following tables summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of December 31, 2022:


Financial Instruments of the Company	Level I		Level II		Level III		Investments Measured at NAV		Total
Assets, at fair value
Investments:
Common stock and other equity securities	$	—	$	77,022	$	121,785	$	—	$	198,807
Collateralized loan obligations and other fixed income	—		—		76,934		—		76,934
Partnership interests	—		—		—		1,385		1,385
Total investments, at fair value	—		77,022		198,719		1,385		277,126
Derivatives-foreign currency forward contracts	—		4,173		—		—		4,173
Total assets, at fair value	$	—	$	81,195	$	198,719	$	1,385	$	281,299
Liabilities, at fair value
Derivatives-foreign currency forward contracts	$	—	$	(3,423)	$	—	$	—	$	(3,423)

Total liabilities, at fair value	$	—	$	(3,423)	$	—	$	—	$	(3,423)


Financial Instruments of the Consolidated Funds	Level I		Level II		Level III		Investments Measured at NAV		Total
Assets, at fair value
Investments:
Fixed income investments:
Loans	$	—	$	8,663,678	$	616,844	$	—	$	9,280,522
Investments held in trust account	1,013,382		—		—		—		1,013,382
Bonds	—		534,137		252,824		—		786,961
Total fixed income investments	1,013,382		9,197,815		869,668		—		11,080,865
Partnership interests	—		—		368,655		1,023,514		1,392,169
Equity securities	719		—		730,880		—		731,599
Total investments, at fair value	1,014,101		9,197,815		1,969,203		1,023,514		13,204,633

Derivatives-foreign currency forward contracts	—		2,900		—		—		2,900


Total assets, at fair value	$	1,014,101	$	9,200,715	$	1,969,203	$	1,023,514	$	13,207,533
Liabilities, at fair value
Loan obligations of CLOs	$	—	$	(10,701,720)	$	—	$	—	$	(10,701,720)
Derivatives:
Warrants	(9,326)		—		—		—		(9,326)
Asset swaps	—		—		(3,556)		—		(3,556)
Foreign currency forward contracts	—		(2,942)		—		—		(2,942)
Total derivative liabilities, at fair value	(9,326)		(2,942)		(3,556)		—		(15,824)
Total liabilities, at fair value	$	(9,326)	$	(10,704,662)	$	(3,556)	$	—	$	(10,717,544)

The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended June 30, 2023:



Level III Assets of the Company	Equity Securities		Fixed Income		Total
Balance, beginning of period	$	125,073	$	75,169	$	200,242

Purchases(1)	38,208		771		38,979

Sales/settlements(2)	(881)		(841)		(1,722)
Realized and unrealized appreciation (depreciation), net	2,971		(1,322)		1,649
Balance, end of period	$	165,371	$	73,777	$	239,148
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	$	2,971	$	(1,322)	$	1,649


Level III Net Assets of Consolidated Funds	Equity Securities		Fixed Income		Partnership Interests		Derivatives, Net		Total
Balance, beginning of period	$	932,635	$	732,804	$	374,049	$	(1,698)	$	2,037,790
Transfer out due to changes in consolidation	(2,076)		(4,563)		(374,049)		—		(380,688)
Transfer in	—		57,540		—		—		57,540
Transfer out	—		(214,205)		—		—		(214,205)
Purchases(1)	48,645		250,912		—		—		299,557
Sales/settlements(2)	(4)		(177,095)		—		(149)		(177,248)
Amortized discounts/premiums	—		421		—		—		421
Realized and unrealized appreciation (depreciation), net	86,865		2,317		—		(846)		88,336
Balance, end of period	$	1,066,065	$	648,131	$	—	$	(2,693)	$	1,711,503
Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date	$	86,879	$	(27,469)	$	—	$	(1,055)	$	58,355

(1)Purchases include paid-in-kind interest and securities received in connection with restructurings.

(2)Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings.

The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended June 30, 2022:



Level III Assets and Liabilities of the Company	Equity Securities		Fixed Income		Partnership Interests		Contingent Consideration		Total
Balance, beginning of period	$	114,499	$	51,458	$	2,575	$	(10,550)	$	157,982


Change in fair value	—		—		—		(198)		(198)
Sales/settlements(1)	(934)		(993)		—		—		(1,927)
Realized and unrealized appreciation (depreciation), net	316		(4,109)		—		—		(3,793)
Balance, end of period	$	113,881	$	46,356	$	2,575	$	(10,748)	$	152,064
Change in net unrealized appreciation/depreciation and fair value included in earnings related to financial assets and liabilities still held at the reporting date	$	316	$	(4,109)	$	—	$	(198)	$	(3,991)


Level III Net Assets of Consolidated Funds	Equity Securities		Fixed Income		Partnership Interests		Derivatives, Net		Total
Balance, beginning of period	$	351,140	$	859,301	$	241,123	$	(3,162)	$	1,448,402

Transfer in	—		358,779		—		—		358,779
Transfer out	—		(152,750)		—		—		(152,750)
Purchases(2)	110,322		201,882		3,000		—		315,204
Sales/settlements(1)	(18,422)		(140,607)		(9,000)		—		(168,029)
Amortized discounts/premiums	—		177		—		—		177
Realized and unrealized appreciation (depreciation), net	37,874		(50,528)		15,000		127		2,473
Balance, end of period	$	480,914	$	1,076,254	$	250,123	$	(3,035)	$	1,804,256
Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date	$	25,622	$	(37,145)	$	15,000	$	(64)	$	3,413

(1)Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings.

(2)Purchases include paid-in-kind interest and securities received in connection with restructurings.

The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2023:



Level III Assets of the Company	Equity Securities		Fixed Income		Total
Balance, beginning of period	$	121,785	$	76,934	$	198,719


Purchases(1)	38,260		1,966		40,226
Sales/settlements(2)	(836)		(2,377)		(3,213)

Realized and unrealized appreciation (depreciation), net	6,162		(2,746)		3,416
Balance, end of period	$	165,371	$	73,777	$	239,148
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	$	5,949	$	(2,533)	$	3,416


Level III Net Assets of Consolidated Funds	Equity Securities		Fixed Income		Partnership Interests		Derivatives, Net		Total
Balance, beginning of period	$	730,880	$	869,668	$	368,655	$	(3,556)	$	1,965,647
Transfer out due to changes in consolidation	(2,076)		(4,563)		(374,049)		—		(380,688)
Transfer in	—		195,575		—		—		195,575
Transfer out	—		(489,165)		—		—		(489,165)
Purchases(1)	229,016		391,086		49,000		—		669,102
Sales/settlements(2)	(126)		(325,968)		(48,889)		(149)		(375,132)
Amortized discounts/premiums	—		963		—		—		963
Realized and unrealized appreciation, net	108,371		10,535		5,283		1,012		125,201
Balance, end of period	$	1,066,065	$	648,131	$	—	$	(2,693)	$	1,711,503
Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date	$	108,324	$	(20,381)	$	—	$	814	$	88,757

(1)Purchases include paid-in-kind interest and securities received in connection with restructurings.

(2)Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings.

The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2022:



Level III Assets and Liabilities of the Company	Equity Securities		Fixed Income		Partnership Interests		Contingent Consideration		Total
Balance, beginning of period	$	108,949	$	52,397	$	2,575	$	(57,435)	$	106,486
Transfer in due to changes in consolidation	1,491		—		—		—		1,491


Sales/settlements(1)	(1,147)		(1,878)		—		47,873		44,848
Change in fair value	—		—		—		(1,186)		(1,186)
Realized and unrealized appreciation (depreciation), net	4,588		(4,163)		—		—		425
Balance, end of period	$	113,881	$	46,356	$	2,575	$	(10,748)	$	152,064
Change in net unrealized appreciation/depreciation and fair value included in earnings related to financial assets and liabilities still held at the reporting date	$	4,588	$	(4,163)	$	—	$	(1,186)	$	(761)


Level III Net Assets of Consolidated Funds	Equity Securities		Fixed Income		Partnership Interests		Derivatives, Net		Total
Balance, beginning of period	$	339,183	$	742,952	$	238,673	$	(3,105)	$	1,317,703

Transfer in	—		338,080		—		—		338,080
Transfer out	—		(80,261)		—		—		(80,261)
Purchases(2)	117,642		367,274		27,000		—		511,916
Sales/settlements(1)	(28,611)		(226,660)		(30,500)		(2)		(285,773)
Amortized discounts/premiums	—		679		—		—		679
Realized and unrealized appreciation (depreciation), net	52,700		(65,810)		14,950		72		1,912
Balance, end of period	$	480,914	$	1,076,254	$	250,123	$	(3,035)	$	1,804,256
Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date	$	26,150	$	(61,044)	$	14,445	$	(175)	$	(20,624)

(1)Sales/settlements include distributions, principal redemptions, securities disposed of in connection with restructurings and contingent consideration payments.

(2)Purchases include paid-in-kind interest and securities received in connection with restructurings.

Transfers out of Level III were generally attributable to certain investments that experienced a more significant level of market activity during the period and thus were valued using observable inputs either from independent pricing services or multiple brokers. Transfers into Level III were generally attributable to certain investments that experienced a less significant level of market activity during the period and thus were only able to obtain one or fewer quotes from a broker or independent pricing service.

The following tables summarize the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds’ Level III measurements as of June 30, 2023:

Level III Measurements of the Company

Fair Value

Valuation Technique(s)

Significant Unobservable Input(s)

Range

Weighted Average

Assets

Equity securities

62,702

Market approach

Multiple of book value

2.4x

52,125

Transaction price(1)

N/A

49,778

Market approach

Multiple of book value

1.3x

766

Market approach

EBITDA multiple(2)

13.0x

Fixed income investments

31,705

Transaction price(1)

N/A

21,582

Other

N/A

20,490

Broker quotes and/or 3rd party pricing services

N/A

Total assets

239,148

Level III Measurements of the Consolidated Funds

Fair Value

Valuation Technique(s)

Significant Unobservable Input(s)

Range

Weighted Average

Assets

Equity securities

592,725

Discounted cash flow

Discount rate

8.0% - 18.0%

12.0%

436,375

Market approach

Multiple of book value

1.0x - 1.3x

1.2x

36,064

Market approach

Net income multiple

30.0x

766

Market approach

EBITDA multiple(2)

6.3x - 32.5x

15.9x

135

Other

N/A

Fixed income investments

522,269

Broker quotes and/or 3rd party pricing services

N/A

116,265

Market approach

Yield

8.8% - 24.5%

13.0%

5,769

Transaction price(1)

N/A

2,980

Market approach

EBITDA multiple(2)

6.3x - 32.5x

8.8x

848

Other

N/A

Total assets

1,714,196

Liabilities

Derivative instruments

(2,693)

Broker quotes and/or 3rd party pricing services

N/A

Total liabilities

(2,693)

(1)Transaction price consists of securities purchased or restructured. The Company determined that there was no change to the valuation based on the underlying assumptions used at the closing of such transactions.

(2)“EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization.

The following tables summarize the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds’ Level III measurements as of December 31, 2022:

Level III Measurements of the Company

Fair Value

Valuation Technique(s)

Significant Unobservable Input(s)

Range

Weighted Average

Assets

Equity securities

62,129

Market approach

Multiple of book value

3.2x

44,166

Market approach

Multiple of book value

1.3x

15,490

Transaction price(1)

N/A

Fixed income investments

30,189

Transaction price(1)

N/A

25,163

Broker quotes and/or 3rd party pricing services

N/A

21,582

Other

N/A

Total assets

198,719

Level III Measurements of the Consolidated Funds

Fair Value

Valuation Technique(s)

Significant Unobservable Input(s)

Range

Weighted Average

Assets

Equity securities

401,229

Discounted cash flow

Discount rate

8.0% - 18.0%

12.0%

290,258

Market approach

Multiple of book value

1.0x - 1.2x

1.2x

36,681

Market approach

Net income multiple

30.0x

2,064

Market approach

EBITDA multiple(2)

6.3x - 31.0x

13.6x

648

Other

N/A

Partnership interests

368,655

Discounted cash flow

Discount rate

10.3% - 22.0%

18.9%

Fixed income investments

731,708

Broker quotes and/or 3rd party pricing services

N/A

125,612

Market approach

Yield

6.6% - 21.7%

12.8%

6,155

Transaction price(1)

N/A

4,479

Market approach

EBITDA multiple(2)

8.0x - 9.0x

8.5x

1,714

Other

N/A

Total assets

1,969,203

Liabilities

Derivative instruments

(3,556)

Broker quotes and/or 3rd party pricing services

N/A

Total liabilities

(3,556)

(1)Transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions.

(2)“EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization.

The Company has an insurance-related investment in a private fund managed by a third party that is valued using NAV per share. The terms and conditions of this fund do not allow for redemptions without certain events or approvals that are outside the Company’s control. This investment had a fair value of $1.1 million and $1.4 million as of June 30, 2023 and December 31, 2022, respectively. The Company has no unfunded commitments for this investment.

The Consolidated Funds have limited partnership interests in private equity funds managed by the Company that are valued using NAV per share. The terms and conditions of these funds do not allow for redemptions without certain events or approvals that are outside the Company’s control. As of June 30, 2023, these investments had a fair value of $1,287.2 million and unfunded commitments of $1,002.3 million. As of December 31, 2022, these investments had a fair value of $1,023.5 million and unfunded commitments of $869.0 million.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details