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, 2017		Fair Value Measurements
	December 31, 2017		Level 1		Level 2		Level 3
Financial Assets
Investments in marketable securities	$	77.8	$	77.8	$	—	$	—
Derivative financial instruments⁽¹⁾	0.2		—		0.2		—
Financial Liabilities⁽²⁾
Contingent payment arrangements	$	9.4	$	—	$	—	$	9.4
Affiliate equity repurchase obligations	49.2		—		—		49.2
Derivative financial instruments	0.6		—		0.6		—



			Fair Value Measurements
	December 31, 2018		Fair Value Measurements
	December 31, 2018		Level 1		Level 2		Level 3
Financial Assets
Investments in marketable securities	$	119.3	$	119.3	$	—	$	—
Derivative financial instruments⁽¹⁾	5.8		—		5.8		—
Financial Liabilities⁽²⁾
Contingent payment arrangements	$	1.9	$	—	$	—	$	1.9
Affiliate equity repurchase obligations	36.2		—		—		36.2
Derivative financial instruments	1.4		—		1.4		—

__________________________


⁽¹⁾	Amounts are presented within Other assets.


⁽²⁾	Amounts are presented within Other liabilities.

Level 3 Financial Assets and Liabilities

The following table presents the changes in level 3 liabilities:



	For the Years Ended December 31,
	2017						2018
	Contingent Payment Arrangements			Affiliate Equity Repurchase Obligations			Contingent Payment Arrangements			Affiliate Equity Repurchase Obligations
Balance, beginning of period	$	8.6		$	12.1		$	9.4		$	49.2
Net realized and unrealized losses⁽¹⁾	7.6			5.5			1.3			—
Purchases and issuances⁽²⁾	—			206.1			—			105.4
Settlements and reductions	(6.8		)	(174.5		)	(8.8		)	(118.4		)
Balance, end of period	$	9.4		$	49.2		$	1.9		$	36.2

Net change in unrealized losses relating to instruments still held at the reporting date⁽¹⁾	$	2.8		$	—		$	0.2		$	—

__________________________

⁽¹⁾

For the years ended December 31, 2017 and 2018, net realized and unrealized losses resulting from changes to contingent payment arrangements were $6.6 million and $0.6 million, respectively, and were recorded in Other expenses (net). For the years ended December 31, 2017 and 2018, the accretion expense for these arrangements was $1.0 million and $0.7 million, respectively, and was recorded in Interest expense.


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

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



	Quantitative Information about Level 3 Fair Value Measurements
	Valuation Techniques	Unobservable Input	Fair Value at December 31, 2017		Range at December 31, 2017	Weighted Average at December 31, 2017	Fair Value at December 31, 2018		Range at December 31, 2018	Weighted Average at December 31, 2018
Contingent payment arrangements	Discounted cash flow	Growth rates	$	9.4	7% - 8%	7%	$	1.9	7%	7%
		Discount rates			15% - 16%	15%			15%	15%
Affiliate equity repurchase obligations	Discounted cash flow	Growth rates	49.2		0% - 11%	6%	36.2		(4)% - 9%	3%
		Discount rates			12% - 16%	14%			14% - 16%	15%

Contingent payment arrangements represents the present value of the expected future settlement amounts related to the Company’s investments in consolidated Affiliates. As of December 31, 2018, there were no changes to growth rates or discount rates that had a significant impact to contingent payment arrangements.

Affiliate equity repurchase obligations include agreements to repurchase Affiliate equity. As of December 31, 2018, there were no changes to growth or discount rates that had a significant impact to Affiliate equity repurchase obligations recorded in prior periods.

Investments Measured at NAV as a Practical Expedient

The Company’s Affiliates sponsor investment products in which the Company and its 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 and reports these products within Other investments. 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, 2017				December 31, 2018
Category of Investment	Fair Value		Unfunded Commitments		Fair Value		Unfunded Commitments
Private equity⁽¹⁾	$	156.1	$	98.8	$	193.2	$	131.0
Other funds⁽²⁾	8.9		—		7.9		—
Other investments⁽³⁾	$	165.0	$	98.8	$	201.1	$	131.0

__________________________


⁽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 $80.1 million and $123.2 million as of December 31, 2017 and 2018, respectively.

Other Financial Assets and Liabilities Not Carried at Fair Value

The carrying amount of Cash and cash equivalents, 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 in the Consolidated Balance Sheets, approximates fair value because the credit facilities have 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, 2017				December 31, 2018
	Carrying Value		Fair Value		Carrying Value		Fair Value		Fair Value Hierarchy
Senior notes	$	745.7	$	765.2	$	746.2	$	747.5	Level 2
Convertible securities	309.9		549.8		312.5		391.5		Level 2