XML 39 R26.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Investments | 3 Months Ended
--- | ---
Mar. 31, 2018
Equity Method Investments And Joint Ventures [Abstract] |
Investments |
18. | Investments
Equity Method Investments The carrying value of the Company’s equity method investments was $139.7 million as of March 31, 2018 and $135.6 million as of December 31, 2017, and is included in “Investments” in the Company’s unaudited condensed consolidated statements of financial condition. The Company recognized a gain of $5.8 million and $0.2 million related to its equity method investments for the three months ended March 31, 2018 and 2017, respectively. The Company’s share of the gains or losses is reflected in “Gains (losses) on equity method investments” in the Company’s unaudited condensed consolidated statements of operations. On September 8, 2017, the Company invested $100.0 million in Real Estate LP, which is controlled and managed by Cantor. As of March 31, 2018, the Company’s investment is accounted for under the equity method. There was a $3.2 million gain recognized for the three months ended March 31, 2018. See Note 17—“Related Party Transactions,” for information regarding related party transactions with unconsolidated entities included in the Company’s unaudited condensed consolidated financial statements. Investments Carried Under Measurements Alternative The Company had previously acquired investments for which it did not have the ability to exert significant influence over operating and financial policies of the investees. Prior to January 1, 2018, these investments were accounted for using the cost method in accordance with U.S. GAAP guidance, Investments—Other. The carrying value of the cost method investments was $6.2 million and is included in “Investments” in the Company’s unaudited condensed consolidated statements of financial condition as of December 31, 2017. The Company did not recognize any gain or loss relating to cost method investments for the three months ended March 31, 2017. Effective January 1, 2018, these investments are accounted for using the measurement alternative in accordance with the new guidance on recognition and measurement. The carrying value of these investments was $13.8 million and is included in “Investments” in the Company’s unaudited condensed statements of financial condition as of March 31, 2018. The Company did not recognize any gains, losses, or impairments relating to investments carried under the measurement alternative for the three months ended March 31, 2018. In addition, the Company owns membership shares, which are included in “Other Assets” in the Company’s unaudited condensed consolidated statements of financial condition as of March 31, 2018 and December 31, 2017. Prior to January 1, 2018, these shares were accounted for using the cost method in accordance with U.S. GAAP guidance, Investments—Other. Effective January 1, 2018, these shares are accounted for using the measurement alternative in accordance with the new guidance on recognition and measurement. The Company recognized a $20.6 million unrealized gain (upward adjustment) to reflect an observable transaction for these shares during the three months ended March 31, 2018. The unrealized gain is reflected in “Other Income” in the Company’s unaudited condensed consolidated statements of operations. The Company did not recognize any impairment charges on these shares for the three months ended March 31, 2018. Investments in Variable Interest Entities Certain of the Company’s equity method investments included in the tables above are considered Variable Interest Entities (“VIEs”), as defined under the accounting guidance for consolidation. The Company is not considered the primary beneficiary of and therefore does not consolidate these VIEs. The Company’s involvement with such entities is in the form of direct equity interests and related agreements. The Company’s maximum exposure to loss with respect to the VIEs is its investment in such entities as well as a credit facility and a subordinated loan. The following table sets forth the Company’s investment in its unconsolidated VIEs and the maximum exposure to loss with respect to such entities as of March 31, 2018 and December 31, 2017 (in thousands).
|  | March 31, 2018 |  |  | December 31, 2017 |
|  | Investment |  |  | Maximum Exposure to Loss |  |  | Investment |  |  | Maximum Exposure to Loss |
Variable interest entities1 |  | $ | 107,319 |  |  | $ | 108,299 |  |  | $ | 103,892 |  |  | $ | 104,872 |
1 | The Company has entered into a subordinated loan agreement with Aqua, whereby the Company agreed to lend the principal sum of $980 thousand. As of March 31, 2018 and December 31, 2017, the Company’s maximum exposure to loss with respect to its unconsolidated VIEs includes the sum of its equity investments in its unconsolidated VIEs and the $980 thousand subordinated loan to Aqua.
Consolidated VIE The Company is invested in a limited liability company that is focused on developing a proprietary trading technology. The limited liability company is a VIE and it was determined that the Company is the primary beneficiary of this VIE because the Company, through GFI, was the provider of the majority of this VIE’s start-up capital and has the power to direct the activities of this VIE that most significantly impact its economic performance, primarily through its voting percentage and consent rights on the activities that would most significantly influence the entity. The consolidated VIE had total assets of $7.4 million as of March 31, 2018, which primarily consisted of clearing margin. There were no material restrictions on the consolidated VIE’s assets. The consolidated VIE had total liabilities of $1.9 million and $1.6 million as of March 31, 2018 and December 31, 2017, respectively. The Company’s exposure to economic loss on this VIE was approximately $3.5 million and $2.4 million as of March 31, 2018 and December 31, 2017, respectively.

X
- Definition The entire disclosure for cost method and equity method investments included basis, impairment losses, recognized or unrecognized gains (losses). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 325 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2197087 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
Name: | us-gaap_CostAndEquityMethodInvestmentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_EquityMethodInvestmentsAndJointVenturesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration