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Consolidated Sponsored Investment Products (Tables) | 9 Months Ended
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Sep. 30, 2014
Balances of Consolidated Sponsored Investment Products | The following table presents the balances of the consolidated sponsored investment products that were reflected in the Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013:
|  | As of |
|  | September 30, 2014 |  |  | December 31, 2013 |
($ in thousands) |  |  |  |  |  |
Total cash |  | $ | 13,547 |  |  | $ | 531 |
Total investments |  |  | 241,107 |  |  |  | 139,054 |
All other assets |  |  | 8,756 |  |  |  | 9,595 |
Total liabilities |  |  | (23,838 | ) |  |  | (8,435 | )
Redeemable noncontrolling interests |  |  | (22,265 | ) |  |  | (42,186 | )
The Company’s net interests in consolidated sponsored investment products |  | $ | 217,307 |  |  | $ | 98,559 |
Condensed Consolidated Balance Sheets | The following tables reflect the impact of the consolidated sponsored investment products in the Condensed Consolidated Balance Sheets as of September, 30, 2014 and December 31, 2013, respectively: As of September 30, 2014
|  | Balance Before Consolidation of Investment Products |  |  | Consolidated Sponsored Investment Products |  |  | Eliminations and Adjustments (a) |  |  | Balances as Reported in Condensed Consolidated Balance Sheet |
($ in thousands) |  |  |  |  |  |  |  |  |  |  |  |
Total cash |  | $ | 172,709 |  |  | $ | 13,547 |  |  | $ | — |  |  | $ | 186,256 |
Total investments |  |  | 280,953 |  |  |  | 241,107 |  |  |  | (217,294 | ) |  |  | 304,766 |
All other assets |  |  | 196,236 |  |  |  | 8,756 |  |  |  | (13 | ) |  |  | 204,979 |
Total assets |  | $ | 649,898 |  |  | $ | 263,410 |  |  | $ | (217,307 | ) |  | $ | 696,001 |
Total liabilities |  | $ | 89,468 |  |  | $ | 23,851 |  |  | $ | (13 | ) |  | $ | 113,306 |
Redeemable noncontrolling interests |  |  | — |  |  |  | — |  |  |  | 22,265 |  |  |  | 22,265 |
Equity attributable to stockholders of the Company |  |  | 560,576 |  |  |  | 239,559 |  |  |  | (239,559 | ) |  |  | 560,576 |
Non-redeemable noncontrolling interests |  |  | (146 | ) |  |  | — |  |  |  | — |  |  |  | (146 | )
Total liabilities and equity |  | $ | 649,898 |  |  | $ | 263,410 |  |  | $ | (217,307 | ) |  | $ | 696,001 |
(a) | Adjustments include the elimination of intercompany transactions between the Company and its consolidated sponsored investment products, primarily the elimination of the investments and equity and recording of any noncontrolling interest.
As of December 31, 2013
|  | Balance Before Consolidation of Investment Products |  |  | Consolidated Sponsored Investment Products |  |  | Eliminations and Adjustments (a) |  |  | Balances as Reported in Condensed Consolidated Balance Sheet |
($ in thousands) |  |  |  |  |  |  |  |  |  |  |  |
Total cash |  | $ | 271,014 |  |  | $ | 531 |  |  | $ | — |  |  | $ | 271,545 |
Total investments |  |  | 135,692 |  |  |  | 139,054 |  |  |  | (98,434 | ) |  |  | 176,312 |
All other assets |  |  | 187,627 |  |  |  | 9,595 |  |  |  | (125 | ) |  |  | 197,097 |
Total assets |  | $ | 594,333 |  |  | $ | 149,180 |  |  | $ | (98,559 | ) |  | $ | 644,954 |
Total liabilities |  | $ | 101,465 |  |  | $ | 8,560 |  |  | $ | (125 | ) |  | $ | 109,900 |
Redeemable noncontrolling interests |  |  | — |  |  |  | — |  |  |  | 42,186 |  |  |  | 42,186 |
Equity attributable to stockholders of the Company |  |  | 492,930 |  |  |  | 140,620 |  |  |  | (140,620 | ) |  |  | 492,930 |
Non-redeemable noncontrolling interests |  |  | (62 | ) |  |  | — |  |  |  | — |  |  |  | (62 | )
Total liabilities and equity |  | $ | 594,333 |  |  | $ | 149,180 |  |  | $ | (98,559 | ) |  | $ | 644,954 |
(a) | Adjustments include the elimination of intercompany transactions between the Company and its consolidated sponsored investment products, primarily the elimination of the investments and equity and recording of any noncontrolling interest.
Condensed Consolidated Statement of Operations | The following table reflects the impact of the consolidated sponsored investment products in the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2014 and 2013, respectively: For the Three Months Ended September 30, 2014
|  | Balance Before Consolidation of Investment Products |  |  | Consolidated Sponsored Investment Products |  |  | Eliminations and Adjustments (a) |  |  | Balances as Reported in Condensed Consolidated Statement of Operations |
($ in thousands) |  |  |  |  |  |  |  |  |  |  |  |
Total operating revenues |  | $ | 117,808 |  |  | $ | — |  |  | $ | 33 |  |  | $ | 117,841 |
Total operating expenses |  |  | 77,668 |  |  |  | 1,213 |  |  |  | 33 |  |  |  | 78,914 |
Operating income (loss) |  |  | 40,140 |  |  |  | (1,213 | ) |  |  | — |  |  |  | 38,927 |
Total other non-operating (loss) income |  |  | (4,649 | ) |  |  | (3,109 | ) |  |  | 4,021 |  |  |  | (3,737 | )
Income (loss) before income tax expense |  |  | 35,491 |  |  |  | (4,322 | ) |  |  | 4,021 |  |  |  | 35,190 |
Income tax benefit |  |  | (1,805 | ) |  |  | — |  |  |  | — |  |  |  | (1,805 | )
Net income (loss) |  |  | 37,296 |  |  |  | (4,322 | ) |  |  | 4,021 |  |  |  | 36,995 |
Noncontrolling interests |  |  | 44 |  |  |  | — |  |  |  | 301 |  |  |  | 345 |
Net income (loss) attributable to common stockholders |  | $ | 37,340 |  |  | $ | (4,322 | ) |  | $ | 4,322 |  |  | $ | 37,340 |
(a) | Adjustments include the elimination of intercompany transactions between the Company and its consolidated sponsored investment products, primarily the elimination of the investments and equity and recording of any noncontrolling interest.
For the Three Months Ended September 30, 2013
|  | Balance Before Consolidation of Investment Products |  |  | Consolidated Investment Products |  |  | Eliminations and Adjustments (a) |  |  | Balances as Reported in Condensed Consolidated Statement of Operations |
($ in thousands) |  |  |  |  |  |  |  |  |  |  |  |
Total operating revenues |  | $ | 100,319 |  |  | $ | — |  |  | $ | 90 |  |  | $ | 100,409 |
Total operating expenses |  |  | 68,547 |  |  |  | 142 |  |  |  | 90 |  |  |  | 68,779 |
Operating income (loss) |  |  | 31,772 |  |  |  | (142 | ) |  |  | — |  |  |  | 31,630 |
Total other non-operating income (expense) |  |  | 1,870 |  |  |  | 923 |  |  |  | (554 | ) |  |  | 2,239 |
Income (loss) before income tax expense |  |  | 33,642 |  |  |  | 781 |  |  |  | (554 | ) |  |  | 33,869 |
Income tax expense |  |  | 12,567 |  |  |  | — |  |  |  | — |  |  |  | 12,567 |
Net income (loss) |  |  | 21,075 |  |  |  | 781 |  |  |  | (554 | ) |  |  | 21,302 |
Noncontrolling interests |  |  | 14 |  |  |  | — |  |  |  | (227 | ) |  |  | (213 | )
Net income (loss) attributable to common stockholders |  | $ | 21,089 |  |  | $ | 781 |  |  | $ | (781 | ) |  | $ | 21,089 |
(a) | Adjustments include the elimination of intercompany transactions between the Company and its consolidated sponsored investment products, primarily the elimination of the investments and equity and recording of any noncontrolling interest.
For the Nine Months Ended September 30, 2014
|  | Balance Before Consolidation of Investment Products |  |  | Consolidated Sponsored Investment Products |  |  | Eliminations and Adjustments (a) |  |  | Balances as Reported in Condensed Consolidated Statement of Operations |
($ in thousands) |  |  |  |  |  |  |  |  |  |  |  |
Total operating revenues |  | $ | 338,534 |  |  | $ | — |  |  | $ | (73 | ) |  | $ | 338,461 |
Total operating expenses |  |  | 242,032 |  |  |  | 2,447 |  |  |  | (73 | ) |  |  | 244,406 |
Operating income (loss) |  |  | 96,502 |  |  |  | (2,447 | ) |  |  | — |  |  |  | 94,055 |
Total other non-operating income (expense) |  |  | 6,545 |  |  |  | 5,883 |  |  |  | (3,618 | ) |  |  | 8,810 |
Income (loss) before income tax expense |  |  | 103,047 |  |  |  | 3,436 |  |  |  | (3,618 | ) |  |  | 102,865 |
Income tax expense |  |  | 24,311 |  |  |  | — |  |  |  | — |  |  |  | 24,311 |
Net income (loss) |  |  | 78,736 |  |  |  | 3,436 |  |  |  | (3,618 | ) |  |  | 78,554 |
Noncontrolling interests |  |  | 85 |  |  |  | — |  |  |  | 182 |  |  |  | 267 |
Net income (loss) attributable to common stockholders |  | $ | 78,821 |  |  | $ | 3,436 |  |  | $ | (3,436 | ) |  | $ | 78,821 |
(a) | Adjustments include the elimination of intercompany transactions between the Company and its consolidated sponsored investment products, primarily the elimination of the investments and equity and recording of any noncontrolling interest.
For the Nine Months Ended September 30, 2013
|  | Balance Before Consolidation of Investment Products |  |  | Consolidated Investment Products |  |  | Eliminations and Adjustments (a) |  |  | Balances as Reported in Condensed Consolidated Statement of Operations |
($ in thousands) |  |  |  |  |  |  |  |  |  |  |  |
Total operating revenues |  | $ | 282,575 |  |  | $ | — |  |  | $ | 142 |  |  | $ | 282,717 |
Total operating expenses |  |  | 202,557 |  |  |  | 406 |  |  |  | 142 |  |  |  | 203,105 |
Operating income (loss) |  |  | 80,018 |  |  |  | (406 | ) |  |  | — |  |  |  | 79,612 |
Total other non-operating income (expense) |  |  | 705 |  |  |  | (768 | ) |  |  | 1,056 |  |  |  | 993 |
Income (loss) before income tax expense |  |  | 80,723 |  |  |  | (1,174 | ) |  |  | 1,056 |  |  |  | 80,605 |
Income tax expense |  |  | 30,335 |  |  |  | — |  |  |  | — |  |  |  | 30,335 |
Net income (loss) |  |  | 50,388 |  |  |  | (1,174 | ) |  |  | 1,056 |  |  |  | 50,270 |
Noncontrolling interests |  |  | 46 |  |  |  | — |  |  |  | 118 |  |  |  | 164 |
Net income (loss) attributable to common stockholders |  | $ | 50,434 |  |  | $ | (1,174 | ) |  | $ | 1,174 |  |  | $ | 50,434 |
(a) | Adjustments include the elimination of intercompany transactions between the Company and its consolidated sponsored investment products, primarily the elimination of the investments and equity and recording of any noncontrolling interest.
Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis | The assets and liabilities of the consolidated sponsored investment products measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013 by fair value hierarchy level were as follows: September 30, 2014
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
($ in thousands) |  |  |  |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities |  | $ | — |  |  | $ | 146,245 |  |  | $ | 447 |  |  | $ | 146,692 |
Equity securities |  |  | 94,219 |  |  |  | 196 |  |  |  | — |  |  |  | 94,415 |
Derivatives |  |  | 140 |  |  |  | 148 |  |  |  | — |  |  |  | 288 |
Total Assets Measured at Fair Value |  | $ | 94,359 |  |  | $ | 146,589 |  |  | $ | 447 |  |  | $ | 241,395 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short sales |  | $ | 10,249 |  |  | $ | 485 |  |  | $ | — |  |  | $ | 10,734 |
Total Liabilities Measured at Fair Value |  | $ | 10,249 |  |  | $ | 485 |  |  | $ | — |  |  | $ | 10,734 |
December 31, 2013
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
($ in thousands) |  |  |  |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities |  | $ | — |  |  | $ | 47,114 |  |  | $ | — |  |  | $ | 47,114 |
Equity securities |  |  | 91,940 |  |  |  | — |  |  |  | — |  |  |  | 91,940 |
Total Assets Measured at Fair Value |  | $ | 91,940 |  |  | $ | 47,114 |  |  | $ | — |  |  | $ | 139,054 |
Consolidated Sponsored Investment Products [Member] |
Reconciliation of Assets Related to Consolidated Sponsored Investment Products | The following table is a reconciliation of assets of consolidated sponsored investment products for Level 3 investments for which significant unobservable inputs were used to determine fair value.
|  | Level 3 Debt securities (a) |
Balance at December 31, 2013 |  | $ | — |
Purchases |  |  | 450 |
Sales |  |  | — |
Paydowns |  |  | (2 | )
Change in unrealized gain/loss |  |  | (1 | )
Balance at September 30, 2014 |  | $ | 447 |
(a) | None of the securities in the above table are internally fair valued at September 30, 2014.

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