Fair Value Measurements

The following tables summarize the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:



			Fair Value Measurements
	December 31, 2016		Fair Value Measurements
	December 31, 2016		Level 1		Level 2		Level 3
Financial Assets
Cash equivalents	$	64.1	$	64.1	$	—	$	—
Investments in marketable securities⁽¹⁾
Trading securities	40.5		40.5		—		—
Available-for-sale securities	81.9		81.9		—		—
Other investments	3.4		3.4		—		—
Foreign currency forward contracts⁽²⁾	0.6		—		0.6		—
Financial Liabilities⁽²⁾
Contingent payment arrangements	$	8.6	$	—	$	—	$	8.6
Affiliate equity obligations	12.1		—		—		12.1
Foreign currency forward contracts	0.5		—		0.5		—



			Fair Value Measurements
	December 31, 2017		Fair Value Measurements
	December 31, 2017		Level 1		Level 2		Level 3
Financial Assets
Cash equivalents	$	40.4	$	40.4	$	—	$	—
Investments in marketable securities⁽¹⁾
Trading securities	57.2		57.2		—		—
Available-for-sale securities	20.6		20.6		—		—
Foreign currency forward contracts⁽²⁾	0.2		—		0.2		—
Financial Liabilities⁽²⁾
Contingent payment arrangements	$	9.4	$	—	$	—	$	9.4
Affiliate equity obligations	49.2		—		—		49.2
Foreign currency forward contracts	0.6		—		0.6		—

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⁽¹⁾	Principally investments in equity securities.

⁽²⁾Amounts are presented within Other assets or Other liabilities.

During 2017, the Company measured the fair value of one of its equity method investments using a discounted cash flow analysis. See Note 13.

The following are descriptions of the significant financial assets and liabilities measured at fair value and the fair value methodologies used.

Cash equivalents consist primarily of highly liquid investments in daily redeeming money market funds, without enacted liquidity fees or redemption gates that are valued at net asset value (“NAV”).

Investments in marketable securities consist primarily of investments in publicly traded securities and funds advised by Affiliates that are valued at NAV. Publicly traded securities valued using unadjusted quoted market prices for identical instruments in active markets are classified as level 1. Publicly traded securities valued using quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active are classified as level 2. Investments in funds advised by Affiliates that are valued at NAV are classified as level 1.

Contingent payment arrangements represent the present value of the expected future settlement of contingent payment arrangements related to the Company’s investments in consolidated Affiliates. The significant unobservable inputs that are used in the fair value measurement of these obligations are growth and discount rates. Increases in the growth rate result in a higher obligation while increases in the discount rate results in a lower obligation.

Affiliate equity obligations include agreements to repurchase Affiliate equity. The significant unobservable inputs that are used in the fair value measurement of the agreements to repurchase Affiliate equity are growth and discount rates. Increases in the growth rate result in a higher obligation while increases in the discount rate results in a lower obligation.

Foreign currency forward contracts use model-derived valuations in which all significant inputs are observable in active markets to determine fair value.

It is the Company’s policy to value financial assets or liabilities transferred as of the beginning of the period in which the transfer occurs. There were no significant transfers of financial assets or liabilities from level 1 to level 2 in 2016 or 2017.

Level 3 Financial Assets and Liabilities

The following tables present the changes in level 3 liabilities:



	For the Years Ended December 31,
	2016						2017
	Contingent Payment Arrangements			Affiliate Equity Obligations			Contingent Payment Arrangements			Affiliate Equity Obligations
Balance, beginning of period	$	10.2		$	62.3		$	8.6		$	12.1
Net realized and unrealized (gains) losses⁽¹⁾	(1.6		)	3.1			7.6			5.5
Purchases and issuances⁽²⁾	—			69.1			—			206.1
Settlements and reductions	—			(122.4		)	(6.8		)	(174.5		)
Balance, end of period	$	8.6		$	12.1		$	9.4		$	49.2

Net change in unrealized (gains) losses relating to instruments still held at the reporting date	$	(1.6	)	$	—		$	2.8		$	—

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⁽¹⁾	Accretion and changes in the expected value of the Company’s contingent payment arrangements and Affiliate equity obligations are recorded in Imputed interest expense and contingent payment arrangements.


⁽²⁾	Includes transfers from Redeemable non-controlling interests and other activity.

The following table presents certain quantitative information about the significant unobservable inputs used in valuing the Company’s level 3 financial liabilities:



	Quantitative Information about Level 3 Fair Value Measurements
	Valuation Techniques	Unobservable Input	Fair Value at December 31, 2016		Range at December 31, 2016	Fair Value at December 31, 2017		Range at December 31, 2017
Contingent payment arrangements	Discounted cash flow	Growth rates	$	8.6	3% - 8%	$	9.4	7% - 8%
		Discount rates			14% - 15%			15% - 16%
Affiliate equity obligations	Discounted cash flow	Growth rates	12.1		4% - 10%	49.2		0% - 11%
		Discount rates			15% - 16%			12% - 16%

Investments Measured at NAV as a Practical Expedient

The Company’s Affiliates sponsor investment products in which the Company and Affiliates may make general partner and seed capital investments. The Company uses the NAV of these investments as a practical expedient for their fair value. The following table summarizes the nature of the Company’s investments, unfunded commitments and any related liquidity restrictions or other factors that may impact the ultimate value realized:



	December 31, 2016				December 31, 2017
Category of Investment	Fair Value		Unfunded Commitments		Fair Value		Unfunded Commitments
Private equity⁽¹⁾	$	137.8	$	92.2	$	156.1	$	98.8
Other funds⁽²⁾	9.7		—		8.9		—
Other investments⁽³⁾	$	147.5	$	92.2	$	165.0	$	98.8

__________________________


⁽¹⁾	The Company uses NAV as a practical expedient one quarter in arrears (adjusted for current period calls and distributions) to determine the fair value. These funds primarily invest in a broad range of private equity funds, as well as making direct investments. Distributions will be received as the underlying assets are liquidated over the life of the funds, which is generally up to 15 years.


⁽²⁾	These are multi-disciplinary funds that invest across various asset classes and strategies, including long/short equity, credit and real estate. Investments are generally redeemable on a daily, monthly or quarterly basis.


⁽³⁾	Fair value attributable to the controlling interest was $59.9 million and $80.1 million as of December 31, 2016 and 2017, respectively.

Other Financial Assets and Liabilities Not Carried at Fair Value

The carrying amount of Receivables and Payables and accrued liabilities approximates fair value because of the short-term nature of these instruments. The carrying value of notes receivable, which is reported in Other assets, approximates fair value because interest rates and other terms are at market rates. The carrying value of the credit facilities, which is reported in Senior bank debt, approximates fair value because the debt has variable interest based on selected short-term rates. The following table summarizes the Company’s other financial liabilities not carried at fair value:



	December 31, 2016				December 31, 2017
	Carrying Value		Fair Value		Carrying Value		Fair Value		Fair Value Hierarchy
Senior notes	$	945.1	$	936.0	$	745.7	$	765.2	Level 2
Convertible securities	307.5		466.9		309.9		549.8		Level 2