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Fair Value Disclosures
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value Disclosures Fair Value Disclosures
The Company classifies its fair value measurements using a three-tiered fair value hierarchy. The basis of the tiers is dependent upon the various “inputs” used to determine the fair value of the Company’s assets and liabilities. Fair value is considered the value using the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The inputs are summarized in the three broad levels listed below:
•Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.
•Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
•Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
Level 3 Valuation Techniques

In the absence of observable market prices, the Company values financial instruments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist; management’s determination of fair value is then based on the best information available in the circumstances and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors. Financial instruments for which market prices are not observable include:
•Business Combination Earn-Out Liability - The Company’s valuation approach utilized a Monte Carlo simulation to estimate future share prices and the implied earn-out payment discounted using the risk-free rate.
•TRA Liability - The Company’s valuation approach utilized a Monte Carlo simulation to estimate future taxable income, share prices, and the implied TRA payments discounted using the liability discount rate which is estimated based on the Company’s credit rating.
•AWMS Earn-Out Liability - The Company’s valuation approach utilized a Monte Carlo simulation to estimate future revenue and the implied earn out payment discounted using the liability discount rate which is estimated based on the Company’s credit rating. As of September 30, 2024, the settlement amount became known, which is based on actual revenues received. As such, the use of the Level 3 valuation technique has been discontinued. Additionally, during the fourth quarter of 2024, the AWMS earn-out liability was fully paid.
•EEA Earn-Out Liability - The Company’s valuation approach utilized a Discounted Cash Flow approach to determine the fair value using the liability discount rate which is estimated based on the Company’s credit quality.
•Envoi Earn-Out Consideration Liability - The Company’s valuation approach utilized a risk-adjusted Discounted Cash Flow approach to determine the fair value using the liability discount rate which is estimated based on the Company’s credit quality rating.
•Envoi Earn-Out Growth Consideration Liability - The Company’s valuation approach utilized a Monte Carlo simulation to estimate future revenue and the implied earn out payment discounted using the liability discount rate which is estimated based on the Company’s credit quality rating.
•Earn-In Consideration Payable - The Company’s valuation approach utilized a Monte Carlo simulation to estimate future revenue and the implied earn in payment discounted using the liability discount rate which was estimated based on the credit rating of TWMH. On July 14, 2023, the Company amended the Holbein purchase agreement related to the Holbein acquisition discussed in Note 5 (Equity-Based Compensation), which crystallized the contingent earn-in consideration amount and discontinued the use of a Level 3 valuation technique.
•Investments in External Strategic Managers - The Company utilized a Discounted Cash Flow approach to determine the fair value of the External Strategic Managers. The discount rate selection for each investment was calibrated using the implied internal rate of return as of the original investment date, adjusted for certain market- and company-specific factors. The selected long-term growth rate for each investment was based on long-term GDP growth rates in the geographic locations of the underlying External Strategic Manager, with consideration for general growth in the asset management industry.

•Contingent Consideration Receivable - The Company utilized a Monte Carlo simulation to estimate the future share price of the acquirer of LRA, and the implied contingent consideration discounted using the risk-free rate and the acquirer’s estimated credit spread.
•Preferred Stock Tranche Liability - The fair value of the Allianz Tranche Right is determined based on Level 3 inputs using a binomial lattice model. At each node of the binomial lattice model, the decision to exercise the Allianz Tranche Right is determined based on if the value of the Series A Preferred Stock at such node is greater than the right’s strike price of $1,000 per share. At nodes where the Allianz Tranche Right is exercised, the resulting payoff of the right is discounted back to the prior node at the risk-free rate. The fair value of the Allianz Tranche Right is estimated by backward inducting values in the binomial lattice model to the initial node. A probability-weighted assessment is also included as part of the inputs to the valuation of the Allianz Tranche Right.
Refer to the valuation methodologies table below for further analysis of Level 3 valuations.
The following is a summary categorization of the Company’s financial instruments based on the inputs utilized in determining the value of such financial instruments. Investments at fair value as of December 31, 2024, and December 31, 2023 are presented below:
As of December 31, 2024
Level 1Level 2Level 3
(Dollars in Thousands)Quoted PricesObservable InputsUnobservable InputsTotal
Assets:
Mutual funds$105 $— $— $105 
Exchange-traded funds and BDC funds118 — — 118 
Investments – External Strategic Managers (1)
— — 147,568 147,568 
Investments – Affiliated Funds (2)
— — — 883 
Contingent consideration receivable— — 1,389 1,389 
Total$223 $— $148,957 $150,063 
Liabilities:
Preferred stock tranche liability$— $— $3,940 $3,940 
Earn-out liabilities— — 64,639 64,639 
TRA liability (3)
— — 9,378 9,378 
Earn-in consideration payable932 — — 932 
Total$932 $— $77,957 $78,889 

(1) The fair value of certain investments within the Company’s Investments - External Strategic Managers are reported on a one-month lag from the fund financial statements due to timing of the information provided by the funds and third-party entities unless information is available on a timelier basis. As a result, any changes in the markets in which our managed funds operate, and the impact market conditions have on underlying asset valuations, may not yet be reflected in reported amounts.
(2) Investments in Affiliated Funds are measured at fair value using the net asset value (or its equivalent) practical expedient. The Company’s investments in Affiliated Funds represent interests that do not trade in an active market and are valued using the NAV of each investment company as reported and without adjustment. The Company does not have any commitments to the Affiliated Funds and redemptions are permitted on a monthly basis and require 30 days’ notice. The strategies of the Affiliated Funds primarily focus on near-dated, hard catalyst events that typically involve hostile deals, proposals, minority interest buy-ins, leverage buyouts, activism, spin-offs, recapitalizations, and agreed upon deals. The investments held in the Affiliated Funds are primarily highly liquid and marketable securities. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statement of Financial Position.
(3) The Company carries a portion of its TRA liability at fair value equal to the expected future payments under the TRA.

As of December 31, 2023
Level 1Level 2Level 3
(Dollars in Thousands)Quoted PricesObservable InputsUnobservable InputsTotal
Assets:
Mutual funds$75 $— $— $75 
Exchange-traded funds108 — — 108 
Investments – External Strategic Managers7 — 164,077 164,084 
Investments – Affiliated Funds (1)
— — — 1,627 
Total$190 $— $164,077 $165,894 
Liabilities:
Earn-out liabilities$— $— $63,444 $63,444 
TRA liability (2)
— — 13,233 13,233 
Earn-in consideration payable1,830 — — 1,830 
Total$1,830 $— $76,677 $78,507 
(1) Investments in Affiliated Funds are measured at fair value using the net asset value (or its equivalent) practical expedient. The Company’s investments in Affiliated Funds represent interests that do not trade in an active market and are valued using the NAV of each investment company as reported and without adjustment. The Company does not have any commitments to the Affiliated Funds and redemptions are permitted on a monthly basis and require 30 days’ notice. The strategies of the Affiliated Funds primarily focus on near-dated, hard catalyst events that typically involve hostile deals, proposals, minority interest buy-ins, leverage buyouts, activism, spin-offs, recapitalizations, and agreed upon deals. The investments held in the Affiliated Funds are primarily highly liquid and marketable securities. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statement of Financial Position.
(2) The Company carries a portion of its TRA liability at fair value based on the expected future payments under the TRA.
Reconciliation of Fair Value Measurements Categorized within Level 3
Unrealized gains and losses on the Company’s assets and liabilities carried at fair value on a recurring basis are included within other losses in the Consolidated Statement of Operations. During the year ended December 31, 2024, there was one transfer from Level 3 to Level 1 of the AWMS earn-out liability. During the year ended December 31, 2023, there was one transfer from Level 3 to Level 1 of the earn-in consideration payable. The following table sets forth a summary of changes in the fair value of Level 3 measurements as of December 31, 2024 and December 31, 2023:
Level 3 Liabilities as of December 31, 2024
(Dollars in Thousands)TRA liabilityEarn-out
liability		AWMS earn-out
liability		EEA earn-out liabilityEnvoi earn-out consideration liabilityEnvoi earn-out growth consideration liabilityPreferred stock tranche liabilityTotal
Beginning balance$13,233 $62,380 $1,064 $— $— $— $— $76,677 
Issuances— — — 23,308 7,980 1,020 4,540 36,848 
Settlements— — — — — — — — 
Net (gains) losses(3,855)(38,532)39 6,563 1,620 300 (600)(34,465)
Transfers out of Level 3$— $— (1,103)— — — $— $(1,103)
Ending balance$9,378 $23,848 $— $29,871 $9,600 $1,320 $3,940 $77,957 
Level 3 Liabilities as of December 31, 2023
(Dollars in Thousands)TRA LiabilityEarn-out
Liability		AWMS earn-out
liability		Earn-in consideration payableTotal
Beginning balance$13,000 $91,761 $— $1,519 $106,280 
Issuances— — 2,721 — 2,721 
Settlements— — — — — 
Net (gains) losses233 (29,381)(1,657)311 (30,494)
Transfers out of Level 3$— $— — $(1,830)$(1,830)
Ending balance$13,233 $62,380 $1,064 $— $76,677 

Level 3 Assets as of December 31, 2024
(Dollars in Thousands)Investments – External Strategic ManagersContingent Consideration ReceivableTotal
Beginning balance$164,077 $— $164,077 
Realized and Unrealized Gains (Losses)(16,509)(546)(17,055)
Purchases— 1,935 1,935 
Ending balance$147,568 $1,389 $148,957 
Level 3 Assets as of December 31, 2023
(Dollars in Thousands)Investments – External Strategic ManagersTotal
Beginning balance$146,130 $146,130 
Realized and Unrealized Gains (Losses)$2,580 $2,580 
Purchases$15,367 $15,367 
Ending balance$164,077 $164,077 
Valuation Methodologies for Fair Value Measurements Categorized within Level 3 as of December 31, 2024
(Dollars in Thousands)Fair
Value		Valuation
Techniques		Unobservable
Inputs		RangesImpact to Valuation from an Increase in Input
Level 3 Assets:
Investments – External Strategic Managers$147,568 Discounted Cash FlowDiscount rate
18.0% -33%
Lower
Long-term growth rate4.0 %Higher
Contingent consideration receivable$1,389 Monte CarloRisk-free rate4.2 %Higher
Volatility26.5 %Lower
Credit spread0.8 %Lower
Level 3 Liabilities:
TRA liability$9,378 Monte CarloVolatility55.0 %Lower
Correlation22.5 %Higher
Cost of debt range
10.2% - 10.9%
Lower
Equity risk premium
6.1% - 13.2%
Lower
Business Combination earn-out liability$23,848 Monte CarloVolatility70.0 %Higher
Risk-free rate4.3 %Higher
EEA earn-out liability$29,871 Discounted Cash FlowEBITDA Discount Rate16.3 %Lower
Risk-free rate4.3 %Lower
Credit spread7.9 %Lower
Envoi earn-out consideration liability$9,600 Discounted Cash FlowGrowth rate10.9 %Higher
Revenue risk-adjusted discount rate12.5 %Lower
Risk-free rate4.2 %Lower
Credit spread7.7 %Lower
Envoi earn-out growth consideration liability$1,320 Monte CarloMetric volatility33.0 %Lower
Risk-free rate4.3 %Lower
Revenue discount rate12.5 %Lower
Credit Risk Adjusted Discount Rate11.9 %Lower
Preferred stock tranche liability$3,940 Binomial lattice modelVolatility50.0 %Higher
Probability of option exercise50.0 %Higher
Risk-free rate4.8 %Lower
Credit spread7.9 %Lower
Valuation Methodologies for Fair Value Measurements Categorized within Level 3 as of December 31, 2023
(Dollars in Thousands)Fair
Value		Valuation
Techniques		Unobservable
Inputs		RangesImpact to Valuation from an Increase in Input
Level 3 Assets:
Investments – External Strategic Managers$164,077 Discounted Cash FlowDiscount rate
21.5% -29.0%
Lower
Long-term growth rate4.0 %Higher
Level 3 Liabilities:
TRA liability$13,233 Monte CarloVolatility40.0 %Lower
Correlation20.0 %Higher
Cost of debt range
4.1% - 5.1%
Lower
Equity risk premium
7.4% - 13.1%
Lower
Business Combination earn-out liability$62,380 Monte CarloVolatility40.0 %Higher
Risk-free rate3.9 %Higher
AWMS earn-out liability$1,064 Monte CarloRevenue Volatility14.0 %Higher
Risk-free rate1.1 %Higher
Revenue Discount Rate3.5 %Lower
Liability Discount Rate5.6 %Lower
Deferred Payment Liability Discount Rate5.3 %Lower