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Consolidation (Tables) | 12 Months Ended
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Dec. 31, 2018
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, 2018 and 2017:
| As of December 31,
| 2018 |  | 2017
|  |  | VIEs |  |  |  | VIEs
($ in thousands) | VOEs |  | CLOs |  | Other |  | VOEs |  | CLOs |  | Other
Cash and cash equivalents | $ | 1,029 |  |  | $ | 51,363 |  |  | $ | 559 |  |  | $ | 820 |  |  | $ | 82,823 |  |  | $ | 18,489 |
Investments | 12,923 |  |  | 1,709,266 |  |  | 27,379 |  |  | 34,623 |  |  | 1,555,879 |  |  | 7,250 |
Other assets | 228 |  |  | 30,426 |  |  | 403 |  |  | 767 |  |  | 32,671 |  |  | 48 |
Notes payable | — |  |  | (1,620,260 | ) |  | — |  |  | — |  |  | (1,457,435 | ) |  | — |
Securities purchased payable and other liabilities | (823 | ) |  | (69,737 | ) |  | (146 | ) |  | (1,319 | ) |  | (110,871 | ) |  | (764 | )
Noncontrolling interests | (2,348 | ) |  | (13,958 | ) |  | (36 | ) |  | (4,178 | ) |  | (16,667 | ) |  | $ | — |
The Company’s net interests in consolidated investment products | $ | 11,009 |  |  | $ | 87,100 |  |  | $ | 28,159 |  |  | $ | 30,713 |  |  | $ | 86,400 |  |  | $ | 25,023 |
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 19, as of December 31, 2018 and December 31, 2017, by fair value hierarchy level were as follows:
December 31, 2018 |
($ in thousands) | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets |  |  |  |  |  |  |
Cash equivalents | $ | 158,596 |  |  | $ | — |  |  | $ | — |  |  | $ | 158,596 |
Investment securities - fair value |  |  |  |  |  |  |
Sponsored funds | 40,191 |  |  | — |  |  | — |  |  | 40,191 |
Equity securities | 16,981 |  |  | — |  |  | — |  |  | 16,981 |
Trading debt securities | — |  |  | — |  |  | 2,099 |  |  | 2,099 |
Investment securities - available for sale | — |  |  | — |  |  | 2,023 |  |  | 2,023 |
Nonqualified retirement plan assets | 6,716 |  |  | — |  |  | — |  |  | 6,716 |
Total assets measured at fair value | $ | 222,484 |  |  | $ | — |  |  | $ | 4,122 |  |  | $ | 226,606 |
December 31, 2017 |
($ in thousands) | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets |  |  |  |  |  |  |
Cash equivalents | $ | 72,993 |  |  | $ | — |  |  | $ | — |  |  | $ | 72,993 |
Investment securities - equity |  |  |  |  |  |  |
Sponsored funds | 50,614 |  |  | — |  |  | — |  |  | 50,614 |
Equity securities | 15,810 |  |  | — |  |  | — |  |  | 15,810 |
Trading debt securities | — |  |  | — |  |  | 2,677 |  |  | 2,677 |
Investment securities - available for sale | — |  |  | 18,900 |  |  | 1,762 |  |  | 20,662 |
Nonqualified retirement plan assets | 6,706 |  |  | — |  |  | — |  |  | 6,706 |
Total assets measured at fair value | $ | 146,123 |  |  | $ | 18,900 |  |  | $ | 4,439 |  |  | $ | 169,462 |
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, 2018 |  |  |  |  |  |  |
($ in thousands) | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets |  |  |  |  |  |  |
Cash equivalents | $ | 51,363 |  |  | $ | — |  |  | $ | — |  |  | $ | 51,363 |
Debt investments | 5,306 |  |  | 1,724,714 |  |  | 6,848 |  |  | 1,736,868 |
Equity investments | 12,700 |  |  | — |  |  | — |  |  | 12,700 |
Total assets measured at fair value | $ | 69,369 |  |  | $ | 1,724,714 |  |  | $ | 6,848 |  |  | $ | 1,800,931 |
Liabilities |  |  |  |  |  |  |
Notes payable | $ | — |  |  | $ | 1,620,260 |  |  | $ | — |  |  | $ | 1,620,260 |
Short sales | 707 |  |  | — |  |  | — |  |  | 707 |
Total liabilities measured at fair value | $ | 707 |  |  | $ | 1,620,260 |  |  | $ | — |  |  | $ | 1,620,967 |
As of December 31, 2017 |  |  |  |  |  |  |
($ in thousands) | Level 1 |  | Level 2 |  | Level 3 |  | Total
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 |
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) | 2018 |  | 2017
Level 3 Investments (a) |  |  |
Balance at beginning of period | $ | 4,439 |  |  | $ | — |
Acquired in business combination | — |  |  | 2,916 |
Purchases | 1,326 |  |  | 2,370 |
Change in unrealized gain (loss), net | (1,643 | ) |  | (847 | )
Balance at end of period | $ | 4,122 |  |  | $ | 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,
($ in thousands) | 2018 |  | 2017
Level 3 Securities (a) |  |  |
Balance at Balance at beginning of period | $ | 34,781 |  |  | $ | 25 |
Purchases | 7,122 |  |  | 3,174 |
Sales | (13,895 | ) |  | (3,357 | )
Paydowns | — |  |  | — |
Amortization | 19 |  |  | 9 |
Change in unrealized gains (losses), net | 1,993 |  |  | 434 |
Realized gains (loss), net | 562 |  |  | (49 | )
Acquired in business combination | — |  |  | 9,151 |
Transfers to Level 2 | (33,873 | ) |  | (35,258 | )
Transfers from Level 2 | 10,139 |  |  | 60,652 |
Balance at end of period | $ | 6,848 |  |  | $ | 34,781 |
(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,
($ in thousands) | 2018 |  | 2017
Level 3 Securities (a) |  |  |
Balance at Balance at beginning of period | $ | 34,781 |  |  | $ | 25 |
Purchases | 7,122 |  |  | 3,174 |
Sales | (13,895 | ) |  | (3,357 | )
Paydowns | — |  |  | — |
Amortization | 19 |  |  | 9 |
Change in unrealized gains (losses), net | 1,993 |  |  | 434 |
Realized gains (loss), net | 562 |  |  | (49 | )
Acquired in business combination | — |  |  | 9,151 |
Transfers to Level 2 | (33,873 | ) |  | (35,258 | )
Transfers from Level 2 | 10,139 |  |  | 60,652 |
Balance at end of period | $ | 6,848 |  |  | $ | 34,781 |
(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 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, 2018, as shown in the table below:
($ in thousands) |
Subordinated notes | $ | 86,011 |
Accrued investment management fees | 1,089 |
Total Beneficial Interests | $ | 87,100 |
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, 2018
Income: |
Realized and unrealized gain (loss), net | $ | (16,202 | )
Interest income | 96,666 |
Total Income | $ | 80,464 |
Expenses: |
Other operating expenses | $ | 2,547 |
Interest expense | 64,788 |
Total Expense | 67,335 |
Noncontrolling interest | (37 | )
Net Income (loss) attributable to CIPs | $ | 13,092 |
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, 2018
Distributions received and unrealized gains (losses) on the subordinated notes held by the Company | $ | 5,763 |
Investment management fees | 7,329 |
Total Economic Interests | $ | 13,092 |

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