Investment Securities (Tables)

9 Months Ended

Sep. 30, 2019

Investment Securities

Schedule of investment securities

Investment securities at September 30, 2019 and December 31, 2018 were as follows:

	September 30,		December 31,
	2019		2018
		(in thousands)
Available for sale securities:
Certificates of deposit	$	—	5,001
Commercial paper		1,975	7,970
Corporate bonds		267,064	218,121
U.S. Treasury bills		—	19,672
Total available for sale securities		269,039	250,764
Trading debt securities:
Commercial paper		1,975	1,993
Corporate bonds		89,057	77,250
U.S. Treasury bills		5,968	5,884
Mortgage-backed securities		5	7
Term loans		42,272	—
Consolidated sponsored funds		41,269	33,088
Total trading securities		180,546	118,222
Equity securities:
Common stock		31,744	21,204
Sponsored funds		174,219	153,548
Sponsored privately offered funds		781	678
Consolidated sponsored funds		—	24,879
Total equity securities		206,744	200,309
Equity method securities:
Sponsored funds		35,287	47,840
Total securities	$	691,616	617,135

Summary of maturities of securities held

Commercial paper and corporate bonds accounted for as available for sale and held as of September 30, 2019 mature as follows:

		Amortized
		cost	Fair value
		(in thousands)
Within one year	$	83,965	84,173
After one year but within five years		181,873	184,866
	$	265,838	269,039

Commercial paper, corporate bonds, U.S. Treasury bills, mortgage-backed securities and term loans accounted for as trading and held as of September 30, 2019 mature as follows:

		Fair value
		(in thousands)
Within one year	$	32,977
After one year but within five years		76,645
After five years but within 10 years		29,655
	$	139,277

Summary of the gross unrealized gains (losses) related to securities

The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at September 30, 2019:

	Amortized		Unrealized	Unrealized
	cost		gains	losses	Fair value
	(in thousands)
Available for sale securities:
Commercial paper	$	1,975	—	—	1,975
Corporate bonds		263,863	3,240	(39)	267,064
	$	265,838	3,240	(39)	269,039

The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at December 31, 2018:

	Amortized		Unrealized	Unrealized
	cost		gains	losses	Fair value
	(in thousands)
Available for sale securities:
Certificates of deposit	$	5,000	1	—	5,001
Commercial paper		7,902	68	—	7,970
Corporate bonds		219,236	254	(1,369)	218,121
U.S. Treasury bills		19,672	—	—	19,672
	$	251,810	323	(1,369)	250,764

Summary of available for sale sponsored funds with fair values below carrying values

A summary of available for sale investment securities with fair values below carrying values at September 30, 2019 is as follows:

	Less than 12 months			12 months or longer		Total
			Unrealized		Unrealized		Unrealized
September 30, 2019	Fair value		losses	Fair value	losses	Fair value	losses
	(in thousands)
Corporate bonds	$	19,987	(19)	27,105	(20)	47,092	(39)

A summary of available for sale investment securities with fair values below carrying values at December 31, 2018 is as follows:

	Less than 12 months			12 months or longer		Total
			Unrealized		Unrealized		Unrealized
December 31, 2018	Fair value		losses	Fair value	losses	Fair value	losses
	(in thousands)
Corporate bonds	$	36,302	(160)	119,480	(1,209)	155,782	(1,369)

Summary of balances related to consolidated sponsored funds as well the company's net interest in these funds

The following table details the balances related to consolidated sponsored funds at September 30, 2019 and December 31, 2018, as well as the Company’s net interest in these funds:

	September 30,		December 31,
	2019		2018
	(in thousands)
Cash	$	5,161	4,285
Investments		41,269	57,967
Other assets		486	872
Other liabilities		—	(79)
Redeemable noncontrolling interests		(16,913)	(11,463)
Net interest in consolidated sponsored funds	$	30,003	51,582

Schedule of fair value of investment securities

The following tables summarize our investment securities as of September 30, 2019 and December 31, 2018 that are recognized in our consolidated balance sheets using fair value measurements based on the differing levels of inputs.

September 30, 2019	Level 1		Level 2	Level 3	Other Assets Held at Net Asset Value	Total
	(in thousands)
Cash equivalents: (1)
Money market funds	$	3,090	—	—	—	3,090
U.S. government sponsored enterprise note		—	896	—	—	896
Commercial paper		—	37,104	—	—	37,104
Total cash equivalents	$	3,090	38,000	—	—	41,090
Available for sale securities:
Commercial paper	$	—	1,975	—	—	1,975
Corporate bonds		—	267,064	—	—	267,064
Trading debt securities:
Commercial paper		—	1,975	—	—	1,975
Corporate bonds		—	89,057	—		89,057
U.S. Treasury bills		—	5,968	—	—	5,968
Mortgage-backed securities		—	5	—	—	5
Term loans		—	40,879	1,393	—	42,272
Consolidated sponsored funds		—	41,269	—	—	41,269
Equity securities:
Common stock		31,742	—	2	—	31,744
Sponsored funds		174,219	—	—	—	174,219
Sponsored privately offered funds measured at net asset value (2)		—	—	—	781	781
Equity method securities: (3)
Sponsored funds		35,287	—	—	—	35,287
Total investment securities	$	241,248	448,192	1,395	781	691,616

December 31, 2018	Level 1		Level 2	Level 3	Other Assets Held at Net Asset Value	Total
	(in thousands)
Cash equivalents: (1)
Money market funds	$	121,759	—	—	—	121,759
U.S. government sponsored enterprise note		—	895	—	—	895
Commercial paper		—	74,277	—	—	74,277
Total cash equivalents	$	121,759	75,172	—	—	196,931
Available for sale securities:
Certificates of deposit	$	—	5,001	—	—	5,001
Commercial paper		—	7,970	—	—	7,970
Corporate bonds		—	218,121	—	—	218,121
U.S. Treasury bills		—	19,672	—	—	19,672
Trading debt securities:
Commercial paper		—	1,993	—	—	1,993
Corporate bonds		—	77,250	—		77,250
U.S. Treasury bills		—	5,884	—	—	5,884
Mortgage-backed securities		—	7	—	—	7
Consolidated sponsored funds		—	33,088	—	—	33,088
Equity securities:
Common stock		21,192	—	12	—	21,204
Sponsored funds		153,548	—	—	—	153,548
Sponsored privately offered funds measured at net asset value (2)		—	—	—	678	678
Consolidated sponsored funds		24,879	—	—	—	24,879
Equity method securities: (3)
Sponsored funds		47,840	—	—	—	47,840
Total investment securities	$	247,459	368,986	12	678	617,135

(1) Cash equivalents include highly liquid investments with original maturities of 90 days or less. Cash investments in actively traded money market funds are measured at net asset value and are classified as Level 1. Cash investments in commercial paper are measured at cost, which approximates fair value because of the short time between purchase of the instrument and its expected realization, and are classified as Level 2.

(2) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy.  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 balance sheets.

(3) Substantially all of the Company’s equity method investments are investment companies that record their underlying investments at fair value.

Schedule of activity of investments categorized as Level 3

The following table summarizes the activity of investments categorized as Level 3 for the nine months ended September 30, 2019:

	For the nine months ended
	September 30, 2019
	(in thousands)
Level 3 assets at December 31, 2018	$	12
Additions		2,357
Transfers out of level 3		(196)
Losses in Investment and other income		(23)
Redemptions/Paydowns		(755)
Level 3 assets at September 30, 2019	$	1,395
Change in unrealized losses for Level 3 assets held at September 30, 2019	$	(21)