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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2020
Fair Value Disclosures [Abstract] |
Fair Value Measurements | 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, 2019 |
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Financial Assets |  |  |  |  |  |  |
Investments in marketable securities | $ | 59.4 |  |  | $ | 24.4 |  |  | $ | 35.0 |  |  | $ | — |
Derivative financial instruments(1) | 7.9 |  |  | — |  |  | 7.9 |  |  | — |
Financial Liabilities(2) |  |  |  |  |  |  |
Affiliate equity repurchase obligations | $ | 19.8 |  |  | $ | — |  |  | $ | — |  |  | $ | 19.8 |
Derivative financial instruments | 1.0 |  |  | — |  |  | 1.0 |  |  | — |
|  |  | Fair Value Measurements
| September 30, 2020 |
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Financial Assets |  |  |  |  |  |  |
Investments in marketable securities | $ | 68.2 |  |  | $ | 27.5 |  |  | $ | 40.7 |  |  | $ | — |
Derivative financial instruments(1) | 2.6 |  |  | — |  |  | 2.6 |  |  | — |
Financial Liabilities(2) |  |  |  |  |  |  |
Affiliate equity repurchase obligations | $ | 69.9 |  |  | $ | — |  |  | $ | — |  |  | $ | 69.9 |
Derivative financial instruments | 4.0 |  |  | — |  |  | 4.0 |  |  | — |
__________________________ (1)Amounts are presented within Other assets. (2)Amounts are presented within Other liabilities. Level 3 Financial Assets and Liabilities The following tables present the changes in level 3 assets and liabilities for Affiliate equity repurchase obligations:
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2019 |  | 2020 |  | 2019 |  | 2020
Balance, beginning of period | $ | 57.4 |  |  | $ | 73.3 |  |  | $ | 36.2 |  |  | $ | 19.8 |
Net realized and unrealized (gains) losses(1) | 0.7 |  |  | (0.2) |  |  | 0.6 |  |  | (4.1) |
Purchases and issuances(2) | 12.1 |  |  | 85.8 |  |  | 85.1 |  |  | 292.8 |
Settlements and reductions | (33.4) |  |  | (89.0) |  |  | (85.1) |  |  | (238.6) |
Balance, end of period | $ | 36.8 |  |  | $ | 69.9 |  |  | $ | 36.8 |  |  | $ | 69.9 |
Net change in unrealized (gains) losses relating to instruments still held at the reporting date | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
___________________________ (1)Accretion expense for these arrangements and obligations is 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
|  |  |  |  | December 31, 2019 |  | September 30, 2020
| Valuation Techniques |  | Unobservable Input |  | Fair Value |  | Range |  | Weighted Average(1) |  | Fair Value |  | Range |  | Weighted Average(1)
Affiliate equity repurchase obligations | Discounted cash flow |  | Growth rates(2) |  | $ | 19.8 |  |  | (9)% - 7% |  | 5% |  | $ | 69.9 |  |  | (1)% - 8% |  | 7%
|  |  | Discount rates |  |  |  | 14% - 17% |  | 15% |  |  |  | 14% - 16% |  | 15%
___________________________ (1)Calculated by comparing the relative fair value of an obligation to its respective total. (2)Represents growth rates of asset and performance based fees. Affiliate equity repurchase obligations include agreements to repurchase Affiliate equity. As of September 30, 2020, 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 net asset value (“NAV”) of these investments as a practical expedient for their fair values and reports these investments within Other investments on the Consolidated Balance Sheets. The following table summarizes the fair value of these investments and any related unfunded commitments:
| December 31, 2019 |  | September 30, 2020
Category of Investment | Fair Value |  | Unfunded Commitments |  | Fair Value |  | Unfunded Commitments
Private equity funds(1) | $ | 203.3 |  |  | $ | 127.2 |  |  | $ | 208.7 |  |  | $ | 129.4 |
Investments in other strategies(2) | 8.5 |  |  | — |  |  | 6.3 |  |  | — |
Total(3) | $ | 211.8 |  |  | $ | 127.2 |  |  | $ | 215.0 |  |  | $ | 129.4 |
___________________________ (1)The Company accounts for its interests in private equity funds under the equity method of accounting and, therefore, 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 third-party funds and 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 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 $137.6 million and $145.9 million as of December 31, 2019 and September 30, 2020, respectively. Other Financial Assets and Liabilities Not Carried at Fair Value The Company has other financial assets and liabilities, which are not required to be carried at fair value, but the Company is required to disclose their fair values. 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 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, 2019 |  | September 30, 2020 |  |
| Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value |  | Fair Value Hierarchy
Senior notes | $ | 746.8 |  |  | $ | 797.4 |  |  | $ | 1,097.2 |  |  | $ | 1,197.2 |  |  | Level 2
Junior convertible securities | 315.4 |  |  | 415.7 |  |  | 317.7 |  |  | 390.4 |  |  | Level 2
Junior subordinated notes | 290.7 |  |  | 327.7 |  |  | 565.7 |  |  | 607.9 |  |  | Level 2

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- 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 Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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