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Consolidation (Tables)

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidated Balance Sheets

The following table presents the balances of the consolidated investment products that, after intercompany eliminations, are reflected in the Consolidated Balance Sheets as of December 31, 2017 and 2016:

	As of December 31,
	2017												2016
					VIEs												VIEs
	VOEs				CLOs				Other				VOEs				CLOs				Other
($ in thousands)
Cash and cash equivalents	$	820			$	82,823			$	18,489			$	1,859			$	14,449			$	2,775
Investments	34,623				1,555,879				7,250				99,247				346,967				42,828
Other assets	767				32,671				48				2,211				5,888				1,059
Notes payable	—				(1,457,435		)		—				—				(328,761		)		—
Securities purchased payable and other liabilities	(1,319		)		(110,871		)		(764		)		(2,310		)		(12,534		)		(1,799		)
Noncontrolling interests	(4,178		)		(16,667		)		—				(12,505		)		—				$	(24,761	)
The Company’s net interests in consolidated investment products	$	30,713			$	86,400			$	25,023			$	88,502			$	26,009			$	20,102

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of consolidated investment products discussed in Note 18, as of December 31, 2017 and December 31, 2016, by fair value hierarchy level were as follows:

December 31, 2017
	Level 1				Level 2				Level 3				Total
($ in thousands)
Assets
Cash equivalents	$	72,993			$	—			$	—			$	72,993
Marketable securities trading:
Sponsored funds	46,849				—				—				46,849
Equity securities	15,810				—				—				15,810
Marketable securities available-for-sale:
Sponsored closed-end funds	3,765				—				—				3,765
Other investments
Investments in collateralized loan obligations	—				18,900				4,439				23,339
Nonqualified retirement plan assets	6,706				—				—				6,706
Total assets measured at fair value	$	146,123			$	18,900			$	4,439			$	169,462

December 31, 2016
	Level 1				Level 2				Level 3				Total
($ in thousands)
Assets
Cash equivalents	$	48,620			$	—			$	—			$	48,620
Marketable securities trading:
Sponsored funds	60,019				—				—				60,019
Equity securities	11,473				—				—				11,473
Marketable securities available-for-sale:
Sponsored closed-end funds	3,415				—				—				3,415
Other investments
Nonqualified retirement plan assets	5,808				—				—				5,808
Total assets measured at fair value	$	129,335			$	—			$	—			$	129,335

The assets and liabilities of the consolidated investment products measured at fair value on a recurring basis by fair value hierarchy level were as follows:

As of December 31, 2017
	Level 1				Level 2				Level 3				Total
($ in thousands)
Assets
Cash equivalents	$	82,769			$	—			$	—			$	82,769
Debt investments	—				1,527,845				33,887				1,561,732
Equity investments	35,126				—				894				36,020
Total assets measured at fair value	$	117,895			$	1,527,845			$	34,781			$	1,680,521
Liabilities
Notes payable	$	—			$	1,457,435			$	—			$	1,457,435
Derivatives	2				—				—				2
Short sales	719				—				—				719
Total liabilities measured at fair value	$	721			$	1,457,435			$	—			$	1,458,156

As of December 31, 2016
	Level 1				Level 2				Level 3				Total
($ in thousands)
Assets
Cash equivalents	$	14,449			$	—			$	—			$	14,449
Debt investments	—				448,477				87				448,564
Equity investments	40,270				208				—				40,478
Derivatives	4				—				—				4
Total assets measured at fair value	$	54,723			$	448,685			$	87			$	503,495
Liabilities
Notes payable	$	—			$	328,761			$	—			$	328,761
Derivatives	$	3			$	235			$	62			$	300
Short sales	649				—				—				649
Total liabilities measured at fair value	$	652			$	328,996			$	62			$	329,710

Reconciliation of Assets of Consolidated Sponsored Investment Products For Level 3 Investments, Unobservable Inputs Used to Determine Fair Value

The following table is a reconciliation of assets for Level 3 investments for which significant unobservable inputs were used to determine fair value:

	Twelve Months Ended December 31,
($ in thousands)	2017				2016
Level 3 Investments (a)
Balance at beginning of period	$	—			$	—
Acquired in business combination	2,916				—
Purchases	2,370				—
Change in unrealized gain (loss), net	(847		)		—
Balance at end of period	$	4,439			$	—

^(a) The investments that are categorized as Level 3 were valued utilizing third-party pricing information without adjustment.

The following table is a reconciliation of assets and liabilities of consolidated investment products for Level 3 investments for which significant unobservable inputs were used to determine fair value.

	Year Ended December 31,
	2017				2016
(in thousands)
Level 3 Securities (a)
Balance at beginning of period	$	25			$	1,397
Purchases	3,174				174
Sales	(3,357		)		(1,472		)
Paydowns	—				(5		)
Amortization	9				—
Change in unrealized gains (losses), net	434				348
Realized gains (loss), net	(49		)		(355		)
Acquired in business combination	9,151				—
Transfers to Level 2	(35,258		)		—
Transfers from Level 2	60,652				(62		)
Balance at end of period	$	34,781			$	25

(a) The investments that are categorized as Level 3 were valued utilizing third-party pricing information without adjustment. All transfers are deemed to occur at the end of period. Transfers between Level 2 and Level 3 were due to a decrease in trading activities at period end.

Reconciliation of Liabilities of Consolidated Sponsored Investment Products For Level 3 Investments, Unobservable Inputs Used to Determine Fair Value

The following table is a reconciliation of assets and liabilities of consolidated investment products for Level 3 investments for which significant unobservable inputs were used to determine fair value.

	Year Ended December 31,
	2017				2016
(in thousands)
Level 3 Securities (a)
Balance at beginning of period	$	25			$	1,397
Purchases	3,174				174
Sales	(3,357		)		(1,472		)
Paydowns	—				(5		)
Amortization	9				—
Change in unrealized gains (losses), net	434				348
Realized gains (loss), net	(49		)		(355		)
Acquired in business combination	9,151				—
Transfers to Level 2	(35,258		)		—
Transfers from Level 2	60,652				(62		)
Balance at end of period	$	34,781			$	25

(a) The investments that are categorized as Level 3 were valued utilizing third-party pricing information without adjustment. All transfers are deemed to occur at the end of period. Transfers between Level 2 and Level 3 were due to a decrease in trading activities at period end.

Schedule of VIE Consolidated Investment Product

Although these beneficial interests are eliminated upon consolidation, the application of the measurement alternative, as adopted on January 1, 2016, prescribed by ASU 2014-13, results in the net assets of the consolidated CLOs shown above to be equivalent to the beneficial interests retained by the Company at December 31, 2017, as shown in the table below:

($ in thousands)
Subordinated notes	$	85,066
Accrued investment management fees	1,334
Total Beneficial Interests	$	86,400

The following table represents income and expenses of the consolidated CLOs included in the Company's Consolidated Statements of Operations for the period indicated:

	Year Ended
($ in thousands)	December 31, 2017
Income:
Realized and unrealized gain (loss), net	$	7,270
Interest income	45,526
Other income	1,552
Total income	$	54,348
Expenses:
Other operating expenses	$	6,684
Interest expense	35,243
Total Expense	41,927
Noncontrolling interest	(1,507		)
Net Income (loss) attributable to CIPs	$	10,914

As summarized in the table below, the application of the measurement alternative as prescribed by ASU 2014-13 results in

the consolidated net income summarized above to be equivalent to the Company’s own economic interests in the consolidated CLOs, which are eliminated upon consolidation:

	Year Ended
($ in thousands)	December 31, 2017
Distributions received and unrealized gains on the subordinated notes held by the Company	$	6,830
Investment management fees	4,084
Total Economic Interests	$	10,914

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References

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Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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