10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission file number: 1-32551

CIFC CORP.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	20-2008622  (I.R.S. Employer Identification No.)
250 Park Avenue, 4th Floor, New York, NY  (Address of principal executive offices)	10177  (Zip code)

Registrant’s telephone number, including area code: 212-624-1200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o No x

There were 20,705,634 shares of the registrant’s common stock outstanding as of May 3, 2013.

CIFC CORP.

Index to Form 10-Q

	Page
Part I. Financial Information
Item 1. Condensed Consolidated Financial Statements and Notes (Unaudited)	2
Condensed Consolidated Balance Sheets (Unaudited)	2
Condensed Consolidated Statements of Operations (Unaudited)	3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)	4
Condensed Consolidated Statements of Cash Flows (Unaudited)	5
Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3. Quantitative and Qualitative Disclosures About Market Risk	39
Item 4. Controls and Procedures	39
Part II. Other Information
Item 1. Legal Proceedings	40
Item 1A. Risk Factors	40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3. Defaults Upon Senior Securities	40
Item 4. Mine Safety Disclosures	40
Item 5. Other Information	40
Item 6. Exhibits	41
Signatures	42

CERTAIN DEFINITIONS

Unless otherwise noted or the context otherwise requires, we refer to CIFC Corp. as "CIFC," to CIFC and its subsidiaries as "we," "us," "our," "our company" or "the Company," to CIFC Asset Management LLC, one of our wholly-owned subsidiaries, as "CIFCAM," to Deerfield Capital Management LLC, one of our indirect wholly-owned subsidiaries, as "DCM," to CypressTree Investment Management, LLC, one of our indirect wholly-owned subsidiaries, as "CypressTree," to Columbus Nova Credit Investments Management, LLC, one of our indirect wholly-owned subsidiaries, as "CNCIM" and to CIFCAM, DCM, CypressTree and CNCIM together as the "Advisers."

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this quarterly report on Form 10-Q (the "Quarterly Report"), and the information incorporated by reference into this Quarterly Report are forward-looking statements, as permitted by the Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements regarding future results or expectations. Forward-looking statements can be identified by forward-looking language, including words such as "believes," "anticipates," "expects," "estimates," "intends," "may," "plans," "projects," "will" and similar expressions, or the negative of these words. Such forward-looking statements are based on facts and conditions as they exist at the time such statements are made, various operating assumptions and predictions as to future facts and conditions, which may be difficult to accurately make and involve the assessment of events beyond our control. Caution must be exercised in relying on forward-looking statements. Our actual results may differ materially from the forward-looking statements contained in this Quarterly Report. We believe these factors include, but are not limited to, those described under the section entitled Item 1A—"Risk Factors" in our 2012 Annual Report on Form 10-K (the "Annual Report"), as such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov.

The forward-looking statements contained in this Quarterly Report are made as of the date hereof, and we do not undertake any obligation to update any forward-looking statement to reflect subsequent events, new information or circumstances arising after the date of this Quarterly Report. All future written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referenced above. In addition, it is our policy generally not to make any specific projections as to future earnings, and we do not endorse any projections regarding future performance that may be made by third parties.

1

Part I. Financial Information

Item 1.    Condensed Consolidated Financial Statements and Notes (unaudited)

CIFC CORP. AND ITS SUBSIDIARIES

Condensed Consolidated Balance Sheets

(unaudited)

	March 31, 2013			December 31, 2012
	(In thousands, except share and per share amounts)
ASSETS
Cash and cash equivalents	$	39,130		$	47,692
Due from brokers	5,876			1,150
Restricted cash and cash equivalents	1,613			1,612
Investments at fair value	5,261			5,058
Receivables	12,756			2,432
Prepaid and other assets	5,057			5,392
Deferred tax asset, net	53,381			50,545
Equipment and improvements, net	3,975			3,979
Intangible assets, net	39,087			43,136
Goodwill	76,000			76,000
Subtotal	242,136			236,996
Assets of Consolidated Variable Interest Entities:
Due from brokers	262,896			103,008
Restricted cash and cash equivalents	1,308,974			1,059,283
Investments at fair value	9,734,093			9,066,779
Receivables	49,495			38,845
Total assets of Consolidated Variable Interest Entities	11,355,458			10,267,915
TOTAL ASSETS	$	11,597,594		$	10,504,911
LIABILITIES
Due to brokers	$	37		$	—
Accrued and other liabilities	15,655			15,734
Deferred purchase payments	4,915			4,778
Contingent liabilities at fair value	30,330			33,783
Long-term debt	138,450			138,233
Subtotal	189,387			192,528
Non-Recourse Liabilities of Consolidated Variable Interest Entities:
Due to brokers	896,801			494,641
Accrued and other liabilities	134			5,207
Interest payable	16,392			16,753
Long-term debt at fair value	10,262,893			9,596,434
Total Non-Recourse Liabilities of Consolidated Variable Interest Entities	11,176,220			10,113,035
TOTAL LIABILITIES	11,365,607			10,305,563
EQUITY
Common stock, par value $0.001: 500,000,000 shares authorized; 20,801,107 issued and 20,705,634 outstanding as of March 31, 2013 and 20,778,053 issued and 20,682,604 outstanding as of December 31, 2012	21			21
Treasury stock, at cost: 95,473 shares as of March 31, 2013, and 95,449 shares as of December 31, 2012	(664		)	(664		)
Additional paid-in capital	957,108			955,407
Accumulated other comprehensive income (loss)	(6		)	(3		)
Retained earnings (deficit)	(830,655		)	(833,442		)
TOTAL CIFC CORP. STOCKHOLDERS’ EQUITY	125,804			121,319
Appropriated retained earnings (deficit) of Consolidated Variable Interest Entities	106,183			78,029
TOTAL EQUITY	231,987			199,348
TOTAL LIABILITIES AND EQUITY	$	11,597,594		$	10,504,911

   See notes to Condensed Consolidated Financial Statements.

2

CIFC CORP. AND ITS SUBSIDIARIES

Condensed Consolidated Statements of Operations

(unaudited)

	For the Three Months Ended March 31,
	2013			2012
	(In thousands, except share and per share amounts)
Revenues
Investment advisory fees	$	2,642		$	2,744
Net investment income	(9		)	1
Total net revenues	2,633			2,745
Expenses
Compensation and benefits	7,524			5,744
Professional services	1,923			724
General and administrative expenses	1,483			1,404
Depreciation and amortization	4,218			4,851
Restructuring charges	—			3,904
Total expenses	15,148			16,627
Other Income (Expense) and Gain (Loss)
Net gain (loss) on investments at fair value	349			—
Net gain (loss) on liabilities at fair value (Note 9)	(114		)	(2,377		)
Corporate interest expense	(1,482		)	(1,469		)
Net gain on sale of management contract	752			5,772
Other, net	3			(41		)
Net other income (expense) and gain (loss)	(492		)	1,885
Operating income (loss)	(13,007		)	(11,997		)
Results of Consolidated Variable Interest Entities
Net gain (loss) from activities of Consolidated Variable Interest Entities	56,898			40,563
Expenses of Consolidated Variable Interest Entities	(9,840		)	(1,783		)
Net results of Consolidated Variable Interest Entities (Note 8)	47,058			38,780
Income (loss) before income tax (expense) benefit	34,051			26,783
Income tax (expense) benefit	(3,110		)	1,724
Net income (loss)	30,941			28,507
Net (income) attributable to noncontrolling interest and Consolidated Variable Interest Entities (Note 5)	(28,154		)	(26,912		)
Net income (loss) attributable to CIFC Corp.	$	2,787		$	1,595
Earnings (loss) per share (Note 13)—
Basic	$	0.13		$	0.08
Diluted	$	0.13		$	0.08
Weighted-average number of shares outstanding (Note 13)—
Basic	20,797,490			20,426,118
Diluted	25,793,831			24,610,121

See notes to Condensed Consolidated Financial Statements.

3

CIFC CORP. AND ITS SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(unaudited)

	For the Three Months Ended March 31,
	2013			2012
	(In thousands)
Net income (loss)	$	30,941		$	28,507
Other comprehensive income (loss):
Foreign currency translation	(3		)	6
Other comprehensive income (loss)	(3		)	6
Comprehensive income (loss)	30,938			28,513
Comprehensive (income) attributable to noncontrolling interest and Consolidated Variable Interest Entities	(28,154		)	(26,912		)
Comprehensive income (loss) attributable to CIFC Corp.	$	2,784		$	1,601

   See notes to Condensed Consolidated Financial Statements.

4

CIFC CORP. AND ITS SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(unaudited)

	For the Three Months Ended March 31,
	2013			2012
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	30,941		$	28,507
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Net premium and discount (accretion) amortization on investments, loans and debt issuance costs	395			222
Share-based compensation	1,794			278
Net (gain) loss on investments and liabilities at fair value / other (gain) loss	(235		)	2,377
Net gain on the sale of management contract	(752		)	(5,772		)
Depreciation and amortization	4,218			4,851
Loss on disposal of equipment and improvements	—			1,417
Lease expense greater (less) than payments	(57		)	—
Deferred income tax expense (benefit)	(2,836		)	175
Consolidated Variable Interest Entity:
Net premium and discount (accretion) amortization on investments, loans and debt issuance costs	—			(633		)
Net (gain) loss on investments at fair value	(81,093		)	(169,196		)
Net (gain) loss on liabilities at fair value	110,493			202,018
Net other (gain) loss	(55		)	(309		)
Changes in operating assets and liabilities:
Due from brokers	(4,726		)	—
Receivables	(10,324		)	(2,584		)
Prepaid and other assets	298			(867		)
Due to brokers	37			—
Accrued and other liabilities	(25		)	(8,955		)
Consolidated Variable Interest Entity:
Due from brokers	(159,888		)	(3,883		)
Purchase of investments at fair value	(2,876,503		)	(1,316,760		)
Sales of investments at fair value	2,290,337			949,579
Receivables	(10,650		)	(633		)
Prepaid and other assets	—			(384		)
Due to brokers	402,160			284,443
Accrued and other liabilities	(5,073		)	10
Interest Payable	(361		)	3,394
Net cash provided by (used in) operating activities	(311,905		)	(32,705		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in restricted cash and cash equivalents	(1		)	(1		)
Proceeds from the sale of the DFR MM CLO	—			36,500
Proceeds from the sale of management contracts	752			6,468
Purchases of equipment and improvements	(166		)	(507		)
Consolidated Variable Interest Entity:
Change in restricted cash and cash equivalents	(249,691		)	(220,703		)
Principal receipts on and proceeds from sale of loans previously classified as held for investment	—			1,118
Net cash provided by (used in) investing activities	(249,106		)	(177,125		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of stock and debt issuance costs	(93		)	—
Deferred purchase payments and payments on contingent liabilities	(3,566		)	(5,223		)
Consolidated Variable Interest Entity:
Proceeds from issuance of long-term debt	1,135,255			414,976
Payments made on long-term debt	(579,144		)	(139,921		)
Net cash provided by (used in) financing activities	552,452			269,832
Foreign currency translation	(3		)	6
Net increase (decrease) in cash and cash equivalents	(8,562		)	60,008
Cash and cash equivalents at beginning of period	47,692			35,973
Cash and cash equivalents at end of period	$	39,130		$	95,981

5

CIFC CORP. AND ITS SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (continued)

(unaudited)

	For the Three Months Ended March 31,
	2013		2012
	(In thousands)
SUPPLEMENTAL DISCLOSURE:
Cash paid for interest	$	486	$	994
Cash paid for income taxes	$	2,781	$	695
Consolidated Variable Interest Entity Related:
Cash paid for interest	$	27,237	$	20,424
Other non-cash disclosures:
Non-cash settlement of interest receivables with increases in principal	$	567	$	1,777

See notes to Condensed Consolidated Financial Statements.

6

CIFC CORP. AND ITS SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 1—Organization and Business

Organization—CIFC Corp. (“CIFC” and, together with its subsidiaries, the “Company”) is a Delaware corporation that specializes in managing investment products which include corporate credit obligations and primarily senior secured corporate loans (“SSCLs”), as the primary underlying investments.

Business—The Company establishes and manages investment products for various types of investors, including pension funds, hedge funds and other asset management firms, banks, insurance companies and other types of institutional investors across the world. The Company's existing investment products are primarily collateralized loan obligations ("CLOs") and also include collateralized debt obligations ("CDOs") and other investment vehicles. The Company also makes investments in certain investment products it manages and SSCLs that the Company warehouses to launch new investment products.

The investment advisory fees paid to the Company by these investment products are the Company's primary source of revenue and are generally paid on a quarterly basis and are ongoing as long as the Company manages the products. Investment advisory fees typically consist of senior and subordinated management fees based on the amount of assets held in the investment product and, in some cases, incentive fees based on the returns generated for certain investors. The Company also earns net investment income and incurs gains/losses from its investments in CLOs, warehouses and other investment products it manages.

Note 2—Basis of Presentation and Principles of Consolidation

Basis of Presentation—The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in conformity with the instructions to Form 10-Q and Article 10-01 of Regulation S-X for interim financial statements. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles in the United States of America ("GAAP") for complete financial statements. The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Management believes that estimates utilized in the preparation of the Condensed Consolidated Financial Statements are prudent and reasonable. Actual results could differ from those estimates and such differences could be material. These interim unaudited Condensed Consolidated Financial Statements and related Notes should be read in conjunction with the Consolidated Financial Statements and related Notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012.

In the opinion of management, the accompanying Condensed Consolidated Financial Statements contain all adjustments, consisting of normal recurring adjustments necessary for a fair statement of the results for the interim periods presented. Such operating results may not be indicative of the expected results for any other interim periods or the entire year.

Principles of Consolidation—The Condensed Consolidated Financial Statements include the financial statements of CIFC and (i) its wholly-owned subsidiaries, (ii) subsidiaries in which the Company has a controlling interest and (iii) variable interest entities ("VIEs") for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated upon consolidation. This consolidation, particularly with respect to the VIEs, significantly impacts the Company's Condensed Consolidated Financial Statements.

7

Consolidated VIEs—As of March 31, 2013, the Company consolidated the following CLOs and CDOs (collectively, the “Consolidated CLOs”) as follows:

	Date Consolidation Began	CLOs	CDOs	Total
Consolidation upon adoption of ASU 2009-17 (1)	January 2010	6	1	7
Acquisition of Columbus Nova Credits Investments Management LLC ("CNCIM")	June 2010	4	—	4
For the year ended December 31, 2011
Merger with Legacy CIFC (2)	April 2011	9	—	9
For the year ended December 31, 2012
Issuances	January 2012 - November 2012	3	—	3
Navigator CDO 2006, Ltd. ("Navigator 2006 CLO") (3)	September 2012	1	—	1
For the three months ended March 31, 2013
CIFC Funding 2012-III, Ltd. (“CIFC CLO 2012-III”)	January 2013	1	—	1
CIFC Funding 2013-I, Ltd. (“CIFC CLO 2013-I”)	March 2013	1	—	1
		25	1	26

Explanatory Notes:

_________________________________________________________________________

(1) Upon adoption of Accounting Standards Update ("ASU") 2009-17, on January 1, 2010, the Company evaluated all investments and other contractual arrangements held prior to January 1, 2010 to determine which CLOs and CDOs it would be required to consolidate.

(2) On April 13, 2011, the Company entered into a merger (the "Merger") with Commercial Industrial Finance Corp. ("Legacy CIFC").

(3) See Note 4 for further details on the acquisition of the Navigator CLOs through the closing of the five year strategic relationship with General Electric Capital Corporation's Bank Loan Group referred to as the "GECC transaction".

Other Consolidated Entities—Warehouses—The Company generally creates special purpose vehicles (“SPVs”) to warehouse SSCL's prior to the issuance of new CLOs.  The warehouse agreements these SPVs enter into vary depending on the terms agreed upon with the warehousing counterparties.  The Company generally makes investments in these warehouse entities. During the three months ended March 31, 2013, the Company consolidated and deconsolidated CIFC Funding 2013-I, Ltd. ("CIFC 2013-I Warehouse") in conjunction with the issuance of CIFC CLO 2013-I and deconsolidated CIFC 2012-III Warehouse in conjunction with the issuance of CIFC CLO 2012-III. As of March 31, 2013, the Company consolidated CIFC Funding 2013-II, Ltd. ("CIFC 2013-II Warehouse"). See Note 5 for more information.

Unconsolidated VIEs—As of March 31, 2013, the Company had variable interests in 22 additional CLOs and CDOs and other investment products, which the Company manages, that were not consolidated (the "Unconsolidated VIEs") as the Company was not deemed to be the primary beneficiary with respect to those VIEs. As of March 31, 2013 and December 31, 2012, the Company's maximum exposure to loss associated with the Unconsolidated VIEs was limited to $5.3 million and $5.1 million, respectively, of investments made by the Company in an Unconsolidated VIE and current investment advisory fee receivables of $0.6 million for both periods. In addition, exposure to loss includes future investment advisory fees on the Consolidated VIEs.

Note 3—Summary of Significant Accounting Policies and Recent Accounting Updates

As of March 31, 2013, the Company's significant accounting policies, which are detailed in the Company's Annual Report on Form 10-K for the year ended December 31, 2012, have not changed materially.

8

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 4—Strategic Transactions

GECC Transaction—On September 24, 2012 (the "Closing Date"), the Company closed a five year strategic relationship with General Electric Capital Corporation's (“GE Capital”) Bank Loan Group to provide new CIFC-managed investment products, including those involving GE Capital loan originations and/or vehicles to which GE Capital provides financing. Further, partnering with GE Capital positions the Company for unique opportunities given GE Capital's strength as a leading corporate lender coupled with CIFC's loan asset management platform. Pursuant to the transaction: (i) a commercial council (the “Commercial Council”) comprised of senior members of both GE Capital and the Company was formed to explore joint business opportunities; (ii) the Company and GE Capital entered into a referral agreement (the “Referral Agreement”) pursuant to which (a) GE Capital will refer certain potential investment advisory clients (“Referred Clients”) to the Company for a period of five years (which may be extended by mutual consent for up to two consecutive one year periods) and (b) the Company is obligated to pay GE Capital 15% of any advisory fees in excess of $9.0 million earned from Referred Clients in the aggregate, subject to certain exclusions, and (iii) GE Capital Debt Advisors LLC, a wholly owned indirect subsidiary of GE Capital (“GECDA”), exited the business of providing certain loan management services to third parties and assigned to CIFC Asset Management LLC ("CIFCAM") the right to manage four “Navigator” CLOs (the “Navigator Management Agreements”). The transaction described in this paragraph shall hereinafter be referred to as the “GECC Transaction”.

The GECC Transaction is considered a taxable business combination in accordance with ASC Topic 805-Business Combinations (“ASC Topic 805”). As consideration for the GECC Transaction, on the Closing Date, the Company (i) issued 1.0 million shares of its common stock to GE Capital Equity Investments, Inc., a wholly-owned subsidiary of GE Capital (“GECEII”), with a Closing Date fair value of $7.5 million, (ii) issued a warrant to GECEII to purchase 2.0 million shares of a newly created class of non-voting stock (the “GECEII Warrant”) at a per share exercise price of $6.375 with an estimated Closing Date fair value of $3.7 million and (iii) paid to GECDA $4.5 million in cash, subject to certain adjustments. In addition, the Company and GECEII entered into an investment agreement setting forth certain rights and obligations of GECEII as a stockholder of the Company, including a right of GECEII to designate a member of the board of directors (the "Board") so long as GECEII (together with its affiliates) owns at least 5% of the outstanding capital stock of the Company, calculated assuming the full conversion of all outstanding Convertible Notes into common stock and the full exercise of the GECEII Warrant. The Company did not record contingent consideration for its obligation to pay GE Capital 15% of investment advisory fees in excess of the first $9.0 million as the estimated fair value was deemed immaterial as of the Closing Date. Future payments to GE Capital under the Referral Agreement, if any, will reduce the Company's investment advisory revenue earned. Calculation of purchase consideration is as follows:

	(In thousands, except share and per share information)
Shares issued	1,000,000
Multiplied by Closing Date share price (1)	$	7.51
Value of shares			$	7,510
Warrants issued	2,000,000
Multiplied by Closing Date estimated fair value per warrant (2)	$	1.83
Value of warrants			3,660
Cash			4,525
Total purchase consideration			$	15,695

Explanatory Notes: 

________________________________

(1) Represents the closing price of the Company's common stock on the Closing Date.

(2) The estimated fair value per warrant was determined utilizing a Black-Scholes model with the assistance of an independent valuation firm.

9

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

 The following is a summary of the recognized amounts of assets acquired and liabilities assumed in the GECC Transaction (1):

	(In thousands)
Receivables	$	147
Identifiable intangible assets	7,470
Excess of purchase consideration over identifiable net assets acquired - Goodwill (2) (3)	8,078
Recognized assets acquired and liabilities assumed	$	15,695

Explanatory Notes: 

________________________________

(1) Management is in the process of finalizing the purchase price calculations and allocations related to identifiable intangible assets, goodwill and contingent liabilities, pending finalization of revenue projections.

(2) Total amount is tax deductible.

(3) Relates to additional strategic opportunities that management believes will be available to the Company as a result of the association with GE Capital primarily sourced through the Commercial Council, including, but not limited to (i) growth in AUM, (ii) newly developed CIFC-managed investment products and business lines and (iii) preferred access to GE Capital originated loans.

The fair values of the assets acquired were estimated by management with the assistance of an independent valuation firm. The identifiable intangible assets acquired by asset class are as follows:

	Closing Date Estimated Fair Value		Closing Date Estimated Average Remaining Useful Life
	(In thousands)		(In years)
Intangible asset class:
Investment management contracts (1)	$	3,660	3
Referral Arrangement (2)	3,810		7
	$	7,470

Explanatory Notes: 

________________________________

(1) Related to the Navigator Management Agreements. Fair values were determined utilizing an excess earnings approach based upon projections of future investment advisory fees from the CLOs. Significant inputs to the investment advisory fee projections include the structure of the CLOs and estimates related to loan default, recovery and discount rates. The intangible assets related to the management contracts are amortized based on a ratio of expected discounted cash flows from the contracts over their expected remaining useful lives.

(2) Related to the Referral Arrangement (a defined term intended to encompass both referrals under the Referral Agreement described herein and any other business GE Capital may refer to the Company) was determined utilizing an excess earnings approach based upon projections of future revenues generated from the relationship. Significant inputs utilized in the projections include the structure of potential new investment vehicles generating revenues, the timing of investments in such vehicles and discount rates. The intangible assets related to the Referral Arrangement will be amortized based on estimated discounted cash flows of the significant projected future revenue streams. See Note 10 for additional disclosures regarding intangible assets.

During the three months ended March 31, 2013, the Company recorded net income attributable to CIFC Corp. of $0.8 million which represents investment advisory fees from the Navigator CLOs.

As a result of the GECC Transaction, the Company consolidated one Navigator CLO, Navigator 2006 CLO. As of the Closing Date, the Company consolidated assets of $318.3 million and non-recourse liabilities of $313.2 million related to this CLO. As of March 31, 2013, the Company consolidated assets of $334.7 million and non-recourse liabilities of $332.4 million related to this CLO.

10

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 5—Consolidated VIEs

Although the Company consolidates all the assets and liabilities of the Consolidated VIEs, its maximum exposure to loss is limited to its investments and beneficial interests in the Consolidated VIEs and the receivables of the Consolidated VIEs. All these items are eliminated upon consolidation. The assets of each of the Consolidated VIEs are generally held by the trustee of each fund solely as collateral to satisfy the obligations of the Consolidated VIEs. If the Company were to liquidate, the assets of the Consolidated VIEs would not be available to the Company's general creditors, and as a result, the Company does not consider them its assets. Additionally, the investors in the debt of the Consolidated VIEs have no recourse to the Company's general assets. Therefore, this debt is not the Company's obligation.

Consolidated CLOs—The following table summarizes the Company's consolidated assets and non-recourse liabilities of the Consolidated CLOs included in the Condensed Consolidated Balance Sheets and the total maximum exposure to loss on these Consolidated CLOs, as follows (1):

	March 31, 2013		December 31, 2012
	(In thousands)
Total Assets	$	11,098,564	$	9,933,495
Total Liabilities (non-recourse)	10,934,644		9,806,010
Maximum exposure to loss:
Investments and beneficial interests	$	54,954	$	47,454
Receivables	2,828		2,674
Total maximum exposure to loss	$	57,782	$	50,128

Explanatory Note: 

________________________________

(1) In addition, exposure to loss includes future investment advisory fees on the Consolidated VIEs. This has not been included in the table above.

Other Consolidated Entities—The following table summarizes the Company's consolidated assets and non-recourse liabilities of other consolidated VIEs included in the Condensed Consolidated Balance Sheets:

	March 31, 2013						December 31, 2012
	Consolidated Assets		Consolidated Total Non-Recourse Liabilities		Maximum Exposure to Loss (1)		Consolidated Assets		Consolidated Total Non-Recourse Liabilities		Maximum Exposure to Loss (1)
	(In thousands)
Warehouses (1)	$	256,894	$	241,576	$	15,273	$	334,420	$	307,025	$	26,723

Explanatory Note: 

________________________________

(1) Maximum exposure to loss is generally limited to the Company's investment in the entity. As of March 31, 2013 and December 31, 2012, outstanding warehouses included the CIFC 2013-II Warehouse and CIFC 2012-III Warehouse, respectively.

11

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The table below represents total net results of the Company's share of the Consolidated VIEs included on the Condensed Consolidated Statements of Operations as follows:

	For the Three Months Ended March 31,
	2013			2012
	(In thousands)
Consolidated CLOs	$	47,686		$	37,519
Warehouses (1)	(628		)	1,431
DFR MM CLO (2)	—			(170		)
Net results of Consolidated VIEs	47,058			38,780
Net (income) attributable to noncontrolling interest and Consolidated VIEs	(28,154		)	(26,912		)
Net results of Consolidated VIEs attributable to CIFC Corp.	$	18,904		$	11,868
Characteristics of net results of Consolidated VIEs attributable to CIFC Corp:
Consolidated VIE investment advisory fees	$	18,155		$	11,501
Consolidated VIE net investment income	749			367
Net results of Consolidated VIEs attributable to CIFC Corp.	$	18,904		$	11,868

Explanatory Notes: 

________________________________

(1) During the three months ended March 31, 2013 and 2012, the Company consolidated three and one warehouse investment(s), respectively.

(2) In February 2012, the Company sold its investments in and the rights to manage the DFR MM CLO for $36.5 million and deconsolidated the entity. The economic impact of the Company's investments in the DFR MM CLO had been determined by its initial investment of $69.0 million ($50.0 million of subordinated notes and $19.0 million of debt) and total cash distributed to the Company from initial investment to the date of sale of $52.2 million on the subordinated notes investment and $4.8 million in interest on the debt investment.

12

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 6—Fair Value of Financial Instruments

Assets and Liabilities Measured at Fair Value on a Recurring Basis—The following tables summarizes the Company's assets and liabilities carried at fair value on a recurring basis, by class and by level:

	March 31, 2013								December 31, 2012
	Level 1 (1)		Level 2		Level 3		Estimated Fair Value		Level 1 (1)		Level 2		Level 3		Estimated Fair Value
	(In thousands)								(In thousands)
Assets
Investments at fair value	$	—	$	5,261	$	—	$	5,261	$	—	$	5,058	$	—	$	5,058
Consolidated VIEs:
Loans	—		8,257,814		1,342,176		9,599,990		—		7,740,574		1,177,058		8,917,632
Corporate bonds	—		—		37,806		37,806		—		—		67,438		67,438
Other	—		—		96,194		96,194		—		—		81,661		81,661
Derivative assets	—		—		103		103		—		—		48		48
Total Consolidated VIEs	—		8,257,814		1,476,279		9,734,093		—		7,740,574		1,326,205		9,066,779
Total Assets	$	—	$	8,263,075	$	1,476,279	$	9,739,354	$	—	$	7,745,632	$	1,326,205	$	9,071,837
Liabilities
Contingent liabilities	$	—	$	—	$	30,330	$	30,330	$	—	$	—	$	33,783	$	33,783
Consolidated VIEs:
Long-term debt	—		—		10,262,893		10,262,893		—		—		9,596,434		9,596,434
Total Consolidated VIEs	—		—		10,262,893		10,262,893		—		—		9,596,434		9,596,434
Total Liabilities	$	—	$	—	$	10,293,223	$	10,293,223	$	—	$	—	$	9,630,217	$	9,630,217

Explanatory Note:

______________________________

(1) There have been no transfers in or out of Level 1 for the periods presented.

13

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Changes in Level 3 Recurring Fair Value Measurements—The following tables summarize by class the changes in financial assets and liabilities measured at fair value classified within Level 3 of the valuation hierarchy. Net realized and unrealized gains (losses) for Level 3 financial assets and liabilities measured at fair value are included in the Condensed Consolidated Statements of Operations. 

	Level 3 Financial Assets at Fair Value
	Three months ended For the Three Months Ended March 31, 2013														For the Three Months Ended March 31, 2012
	Investment and Derivative Assets of Consolidated Variable Interest Entities														Investment and Derivative Assets of Consolidated Variable Interest Entities
	Loans			Corporate Bonds			Other			Derivative Assets		Total			Loans			Corporate Bonds			Other			Derivative Assets			Total
	(In thousands)
Estimated fair value, beginning of period	$	1,177,058		$	67,438		$	81,661		$	48	$	1,326,205		$	19,729		$	154,096		$	47,806		$	5,281		$	226,912
Transfers into Level 3 (1)	226,070			—			—			—		226,070			77			—			—			—			77
Transfers out ofLevel 3 (2)	(280,605		)	—			—			—		(280,605		)	(5,453		)	—			—			—			(5,453		)
Transfers out due to deconsolidation (3)	—			—			—			—		—			—			(5,708		)	—			—			(5,708		)
Transfers between classes (4)	—			—			—			—		—			—			(33,290		)	33,290			—			—
Net realized/unrealized gains (losses)	10,696			280			3,269			55		14,300			1,614			2,913			10,206			(5,215		)	9,518
Purchases	413,088			750			18,538			—		432,376			—			—			4,930			—			4,930
Sales	(62,099		)	(30,165		)	(6,250		)	—		(98,514		)	(1,430		)	(5,931		)	(545		)	—			(7,906		)
Settlements	(142,032		)	(497		)	(1,024		)	—		(143,553		)	(14,104		)	(640		)	(2,161		)	—			(16,905		)
Estimated fair value, end of period	$	1,342,176		$	37,806		$	96,194		$	103	$	1,476,279		$	433		$	111,440		$	93,526		$	66		$	205,465
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	$	13,927		$	14		$	8,502		$	55	$	22,498		$	1,564		$	2,596		$	7,264		$	(5,215	)	$	6,209

Explanatory Notes:

______________________________

(1) 2013 transfers in represent loans valued by a third party pricing service using composite prices determined using less than two quotes which were previously valued by the same third party pricing service using composite prices determined using two or more quotes and loans. 2012 transfers in represent loans valued by an internally developed model utilizing unobservable market inputs which were previously valued by the comparable companies pricing model.

(2) 2013 transfers out represent loans previously marked by an internally developed pricing model, broker quotes, or a third party pricing service using composite prices determined using less than two quotes and are now being marked by a third party pricing service using composite prices determined using two or more quotes. 2012 transfers out represent loans valued by the comparable companies pricing model, which were previously valued by an internally developed model utilizing unobservable market inputs.

(3) The transfers out due to deconsolidation represent corporate bonds held in the DFR MM CLO (which was sold in 2012).

(4) The transfers between classes represent investments in CLOs and CDOs classified as corporate bonds as of December 31, 2011.

14

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	Level 3 Financial Liabilities at Fair Value
	For the Three Months Ended March 31, 2013									For the Three Months Ended March 31, 2012
	Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Variable Interest Entities			Total			Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Variable Interest Entities			Total
	(In thousands)
Estimated fair value, beginning of period	$	33,783		$	9,596,434		$	9,630,217		$	39,279		$	7,559,568		$	7,598,847
Net realized/unrealized (gains) losses	114			52,442			52,556			2,377			150,531			152,908
Purchases	—			1,135,255			1,135,255			—			37,600			37,600
Sales	—			—			—			—			(5,000		)	(5,000		)
Issuances	—			—			—			—			377,377			377,377
Settlements (1)	(3,567		)	(521,238		)	(524,805		)	(5,224		)	(62,441		)	(67,665		)
Estimated fair value, end of period	$	30,330		$	10,262,893		$	10,293,223		$	36,432		$	8,057,635		$	8,094,067
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period	$	(114	)	$	(47,988	)	$	(48,102	)	$	2,551		$	146,499		$	149,050

Explanatory Note:

__________________________

(1) For Contingent Liabilities at fair value, amount represents payments made related to contingent liabilities assumed for the Merger with Legacy CIFC.

15

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Quantitative Information about Level 3 Assets & Liabilities—ASC Topic 820, as amended by ASU 2011-04, requires disclosure of quantitative information about the significant unobservable inputs used in the valuation of assets and liabilities classified as Level 3 within the fair value hierarchy.  Disclosure of this information is not required in circumstances where a valuation (unadjusted) is obtained from a third-party pricing service and the information regarding the unobservable inputs is not reasonably available to the Company.  As such, the disclosure provided below provides quantitative information only about the significant unobservable inputs used in the valuation of the contingent liabilities and the long-term debt of the Consolidated CLOs.

The valuation of both the contingent liabilities and the long-term debt of the Consolidated CLOs begins with a model of projected cash flows for the relevant CLO.  In addition to the structure of each of the CLOs (as provided in the indenture for each CLO), the following table provides quantitative information about the significant unobservable inputs utilized in this projection.  Significant increases in any of the significant unobservable inputs, in isolation, will generally have an increase or decrease correlation with the fair value measurement of contingent liabilities and the long-term debt of the Consolidated CLOs, as shown in the table.

	March 31, 2013		December 31, 2012
Significant Unobservable Input	Range	Impact of Increase in Input on Fair Value Measurement (2)	Range	Impact of Increase in Input on Fair Value Measurement (2)
Default rate (1)	1-2%	Decrease	1-2%	Decrease
Recovery rate (1)	70-75%	Increase	70-75%	Increase
Pre-payment rate (1)	25-30%	Decrease	25-30%	Decrease
Reinvestment spread above LIBOR	3.0-3.8%	Increase	3.0-4.0%	Increase
Reinvestment price	99.5-100.0	Increase	99.5-100.0	Increase

Explanatory Notes:

____________________________

(1) Generally an increase in the default rate would be accompanied by a directionally opposite change in assumption for the recovery and pre-payment rates.

(2) Conversely, the impact of a decrease in input would have the opposite impact to the fair value as that presented in the table.

The valuation of the contingent liabilities as of March 31, 2013 discounts the investment advisory fees subject to fee-sharing arrangements provided from the projected cash flow model (described above) at discount rates ranging from 7% to 15%.  The discount rate varies by type of investment advisory fee (senior management fee, subordinated management fee, or incentive fee), the priority of that investment advisory fee in the waterfall of the CLO and the relative risk associated with the respective investment advisory fee cash flow projections. Increases (decreases) in the discount rates in isolation would result in a lower (higher) fair value measurement.

The valuation of the long-term debt of the Consolidated CLOs as of March 31, 2013 discounts the cash flows to each tranche of debt and subordinated notes provided from the projected cash flow model (described above) at discount rates ranging from 1% to 8% above LIBOR for the debt tranches and a discount rate of 12% for the subordinated notes tranches.  The discount rate varies by the original credit rating of each tranche of debt or year of issuance for the subordinated notes. Increases (decreases) in the discount rates in isolation would result in a lower (higher) fair value measurement.

16

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Carrying Value and Estimated Fair Value of Financial Assets and Liabilities—The Company has not elected the fair value option for certain financial liabilities. A summary of the carrying value and estimated fair value of those liabilities is as follows:

	As of March 31, 2013		As of December 31, 2012
	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value
	(In thousands)
Financial liabilities:
Long-term debt:
Convertible Notes (1)	18,450	34,008	18,233	33,058
Junior Subordinated Notes (2)	120,000	51,716	120,000	47,752

Explanatory Notes:

________________________________

(1) The estimated fair value of the Convertible Notes was determined using a third-party valuation firm that used a binomial tree model which utilizes significant unobservable inputs, including volatility and yield assumptions.  This methodology is classified as Level 3 within the fair value hierarchy.

(2) Junior Subordinated Notes include both the March and October Junior Subordinated Notes (see Note 11). The estimated fair values of the Junior Subordinated Notes were determined using a discounted cash flow model which utilizes significant unobservable inputs, including yield and forward LIBOR curve assumptions.  This methodology is classified as Level 3 within the fair value hierarchy.

The carrying value of other financial instruments including cash and cash equivalents, due from brokers, restricted cash and cash equivalents, receivables, due to brokers, deferred purchase payments, Consolidated VIE due from brokers, Consolidated VIE restricted cash and cash equivalents approximate the fair value of the instruments and are all considered Level 1 on the fair value hierarchy. The fair value of other financial instruments including investments at fair value, contingent liabilities at fair value, Consolidated VIE investment and derivative assets at fair value and Consolidated VIE long-term debt are included in the previous fair value hierarchy tables above.

The loans and other investments classified as investments at fair value of the Consolidated CLOs are diversified over many industries, primarily as a result of industry concentration limits outlined in the indentures of each CLO, and as such management does not believe the Company has any significant concentration risk.

Fair Value Methodologies of Financial Instruments—The following is a description of the Company's valuation methodologies for financial instruments measured at fair value by class as required by ASC Topic 820, including the general classification of such instruments pursuant to the valuation hierarchy. Under certain market conditions, the Company may make adjustments to the valuation methodologies described below. The Company maintains a consistent policy for the process of identifying when and how such adjustments should be made. To the extent that the Company makes a significant fair value adjustment, the valuation classification would generally be considered Level 3 within the fair value hierarchy.  The Company determined its classes of financial instruments based on an analysis of the nature, characteristics and risks of such financial instruments at fair value.

Loans—Loans are generally valued via a third-party pricing service. The value represents a composite of the mid-point in the bid-ask spread of broker quotes or is based on the composite price of a different tranche of the same or similar security if broker quotes are unavailable for the specific tranche the Company owns. The third-party pricing service provides the number of quotes used in determining the composite price, a factor that the Company uses in determining the observability level of the inputs to the composite price. When the fair value of the loan investments is based on a composite price determined using 2 or more quotes the composite price is considered to be based on significant observable inputs and classified as Level 2 within the fair value hierarchy. Effective December 31, 2012, when the fair value of certain loan investments is based on a composite price determined using less than two quotes, the composite price is considered to be based on significant unobservable inputs. In these instances, the Company performs certain procedures on a sample basis to determine that composite prices approximate fair market value. Alternative methodologies are used to value the loans such as a comparable company pricing model (an internally developed model using composite or other observable comparable market inputs) or an internally developed model using data including unobservable market inputs. Accordingly, loans valued using alternative methodologies are classified as Level 3 within the fair value hierarchy.

17

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Corporate Bonds—Corporate bonds are generally valued via a third-party pricing service.  The inputs to the valuation include recent trades, discount rates and forward yield curves. Although the inputs used in the third-party pricing services valuation model are generally obtained from active markets and are observable, the third-party pricing service does not provide sufficient visibility into their pricing model. When a value is unavailable, the Company uses an internally developed discounted cash flow model that includes unobservable market inputs or broker quotes.  Accordingly corporate bonds are classified as Level 3 within the fair value hierarchy.

Other Assets—Other assets at fair value primarily represent investments in CLOs or CDOs which are generally valued via a third-party pricing service. The inputs to the valuation include recent trades, discount rates, forward yield curves, and loan level information (including loan loss, recovery and default rates, prepayment speeds and other security specific information obtained from the trustee and other service providers related to the product being valued). Although the inputs used in the third-party pricing services valuation model are generally obtained from active markets and are observable, the third-party pricing service does not provide sufficient visibility into their pricing model. When a value from a third-party pricing service is unavailable, the value may be based on an internally developed discounted cash flow model which includes unobservable market inputs or by broker quote.  Inputs to the internally developed model include the structure of the product being valued, estimates related to loan default, recovery and discount rates. Accordingly other assets are classified as Level 3 within the fair value hierarchy.

Investments in Funds—The fair value of investments in funds are generally valued based on the Company's proportionate share of the Net Asset Value ("NAV") of the fund. The Company has the ability to redeem its investment at its proportionate share of NAV at, or within three months of the reporting date. The NAV calculation includes significant inputs including the valuation of assets and liabilities of the fund. A third-party pricing service provides the underlying asset prices in the fund, which are generally observable. Investments at fair value valued in this manner are classified as Level 2 within the fair value hierarchy.

Contingent Liabilities—The fair value of contingent liabilities is determined via a third-party valuation firm and is based on a discounted cash flow model. The model is based on projections of the relevant future investment advisory fee cash flows and utilizes both observable and unobservable inputs in the determination of fair value. Significant inputs to the valuation model includes the structure of the underlying CLO and estimates related to loan default, recovery and discount rates.  Contingent liabilities are classified as Level 3 within the fair value hierarchy.

Long-Term Debt of the Consolidated CLOs & Warehouses—Long-term debt of the Consolidated CLOs and Warehouses consists of debt and subordinated notes of the Consolidated CLOs or Warehouses. The fair value of the debt and subordinated notes of the Consolidated CLOs or Warehouses is based upon discounted cash flow models and utilizes both observable and unobservable inputs in the determination of fair value. Significant inputs to the valuation models include the structure of the Consolidated CLO or Warehouses and estimates related to loan default, recovery and discount rates. Accordingly, the debt and subordinated notes are classified as Level 3 within the fair value hierarchy.

Note 7—Derivative Instruments and Hedging Activities

Warrants—The Company and its Consolidated VIEs hold warrants to purchase equity interests in companies where they are/were, also a debt holder. These warrants are typically issued in connection with renegotiations and amendments of the loan agreements. As of both March 31, 2013 and December 31, 2012, the Company had 12 warrant contracts of which 10 warrant contracts were held by the Consolidated VIEs.

Unfunded Debt and Loan Commitments—Certain of the Consolidated CLOs have debt structures which include unfunded revolvers. Unfunded debt commitments represent the estimated fair value of those unfunded revolving debt facilities. The Consolidated CLOs also include holdings of unfunded revolvers of loan facilities. Unfunded loan commitments represent the estimated fair value of those unfunded revolvers of loan facilities. See Note 17 for more information on unfunded loan commitments.

18

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 8—Net Results of Consolidated VIEs

The following table is a summary of the components of "Net results of Consolidated Variable Interest Entities":

	For the Three Months Ended March 31,
	2013			2012
	(in thousands)
Investment income	$	119,163		$	96,082
Interest expense	(32,920		)	(23,569		)
Net investment income	86,243			72,513
Net gain (loss) on investments at fair value	81,093			169,196
Net gain (loss) on liabilities at fair value	(110,493		)	(202,018		)
Net gain (loss) on other investments	—			(727		)
Net gain (loss) on derivatives	55			1,599
Net gain (loss) from activities of Consolidated VIEs	$	56,898		$	40,563
Expenses of Consolidated VIEs	(9,840		)	(1,783		)
Net Results of Consolidated VIEs (1)	$	47,058		$	38,780

Explanatory Note:

________________________________

(1) See Note 5 for a reconciliation of Net Results from Consolidated VIEs attributable to CIFC Corp. as amount does not impact the Company's operating results.

Note 9—Contingent Liabilities at Fair Value

The estimated fair value of the Company's contingent liabilities are as follows:

	March 31, 2013		December 31, 2012
	(In thousands)
Contingent liabilities from the Merger (related party) - Note 15	$	26,319	$	29,152
Contingent liabilities assumed through the Merger	4,011		4,631
Total contingent liabilities	$	30,330	$	33,783

The contingent liabilities from the Merger are payable to CIFC Parent. The terms of these payments are as follows: (i) the first $15.0 million of incentive fees received by the combined company from six of the CLOs managed by CIFCAM (the "Legacy CIFC CLOs") as of April 13, 2011 (the "Merger Closing Date"), (ii) 50% of any incentive fees in excess of $15.0 million in aggregate received from Legacy CLOs by the combined company over ten years from the Merger Closing Date and (iii) payments relating to the present value of any such incentive fees from the Legacy CIFC CLOs that remain payable to the combined company after the tenth anniversary of the Merger Closing Date. During the three months ended March 31, 2013 and 2012, the Company made payments of $2.9 million and $1.0 million, respectively, related to these contingent liabilities. As of March 31, 2013, the remaining payments under item (i) was $3.1 million.

In addition, there were contingent liabilities assumed in the Merger that primarily represent contingent consideration related to Legacy CIFC’s acquisition of CypressTree in December 2010. The assumed contingent liabilities are based on a fixed percentage of certain advisory fees from the CypressTree CLOs. These fixed percentages vary by CLO and have a minimum fixed percentage of 55%. During the three months ended March 31, 2013 and 2012, the Company made payments of $0.7 million and $4.3 million, respectively, related to these contingent liabilities.  Payments made during the three months ended March 31, 2012, included $3.0 million of one-time earn out payments for three of the CypressTree management contracts which reduced the required future payments.

19

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents the changes in fair value of contingent liabilities recorded within "Net gain (loss) on liabilities at fair value" on the Condensed Consolidated Statements of Operations:

	For the Three Months Ended March 31,
	2013			2012
	(In thousands)
Contingent liabilities from the Merger	$	(76	)	$	(2,110	)
Contingent liabilities assumed through the Merger	(38		)	(267		)
Total net gain (loss) on liabilities at fair value	$	(114	)	$	(2,377	)

Note 10—Intangible Assets

Intangible assets comprised of the following (1):

	Weighted-Average Remaining Estimated Useful Life	Gross Carrying Amount (1)		Accumulated Amortization (2)		Net Carrying Amount
	(In years)	(In thousands)
March 31, 2013::
Investment management contracts	5.3	$	76,047	$	42,576	$	33,471
Referral arrangement	6.5	3,810		191		3,619
Non-compete agreements	4.7	1,535		538		997
Trade name	8.0	1,250		250		1,000
Total intangible assets		$	82,642	$	43,555	$	39,087
December 31, 2012::
Investment management contracts	5.4	$	76,047	$	38,727	$	37,320
Referral Arrangement	6.8	3,810		95		3,715
Non-compete agreements	4.8	1,535		465		1,070
Trade name	8.3	1,250		219		1,031
Total intangible assets		$	82,642	$	39,506	$	43,136

Explanatory Notes:

_________________________________

(1) Gross carrying amounts exclude any amounts related to assets fully impaired as of the date presented.

(2) During the three months ended March 31, 2013 and 2012, the Company recorded amortization expense on its intangible assets of $4.0 million and $4.7 million, respectively.

20

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents expected amortization expense of the existing intangible assets:

	(In thousands)
2013 (remaining 9 months)	$	11,080
2014	10,861
2015	7,096
2016	4,165
2017	2,286
Thereafter	3,599
	$	39,087

In January 2012, the Company completed the sale of its rights to manage Gillespie CLO PLC (“Gillespie”), a European CLO. The sale price was comprised of a $7.1 million payment on the closing date and contingent payments of which $0.7 million remain outstanding as of March 31, 2013. For the three months ended March 31, 2013 and 2012, the Company recorded a net gain on the sale of Gillespie of $0.8 million and $5.8 million, respectively, within "Net gain on the sale of management contract" in the Condensed Consolidated Statements of Operations.

Note 11—Long-Term Debt

The following table summarizes the Company's long-term debt:

	March 31, 2013					December 31, 2012
	Carrying Value		Current Weighted Average Borrowing Rate		Weighted Average Remaining Maturity	Carrying Value		Current Weighted Average Borrowing Rate		Weighted Average Remaining Maturity
	(In thousands)				(In years)	(In thousands)				(In years)
Recourse debt:
March Junior Subordinated Notes (1)	$	95,000	1.00	%	22.6	$	95,000	1.00	%	22.8
October Junior Subordinated Notes (2)	25,000		3.80	%	22.6	25,000		3.81	%	22.8
Total Subordinated Notes Debt	$	120,000	1.58	%	22.6	$	120,000	1.59	%	22.8
Convertible Notes (3)	$	18,450	9.00	%	4.7	$	18,233	9.00	%	4.9
Total recourse debt	$	138,450				$	138,233
Non-recourse Consolidated VIE debt:
Consolidated CLOs (4)	$	10,129,709	1.28	%	8.3	$	9,325,982	1.16	%	8.1
Warehouses (5) (6)	133,184		1.03	%	0.2	270,452		2.12	%	n/m
Total non-recourse Consolidated VIE debt	$	10,262,893	1.28	%	8.2	$	9,596,434	1.19	%	7.9
Total long-term debt	$	10,401,343				$	9,734,667

21

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Explanatory Notes:

________________________________

n/m - not meaningful

(1) March Junior Subordinated Notes bear interest at an annual rate of 1% through April 30, 2015 and LIBOR plus 2.58% thereafter until maturity, October 30, 2035.

(2) October Junior Subordinated Notes bear interest at an annual rate of LIBOR plus 3.50% and mature on October 30, 2035.

(3) As of March 31, 2013 and December 31, 2012, Convertible Notes were recorded net of discount of $6.5 million and $6.8 million, respectively. The Convertible Notes currently pay interest at the 9.00% stated rate; however, including the discount, the effective rate of interest is 18.14%. The Convertible Notes have a $25.0 million aggregate principal amount and will mature on December 9, 2017.

(4) Long-term debt of the Consolidated CLOs is recorded at fair value. The subordinated notes do not have a stated interest rate, and are therefore excluded from the calculation of the weighted average borrowing rate. The par value of the Consolidated CLOs long-term debt (including subordinated notes) was $10.6 billion and $9.8 billion as of March 31, 2013 and December 31, 2012, respectively.

(5) Long-term debt of warehouses not held by the Company is recorded at fair value. As of March 31, 2013 and December 31, 2012, the fair value excludes the preferred shares of CIFC 2013-II Warehouse and CIFC 2012-III Warehouse, respectively, which have a par value of $25.1 million and $14.3 million, respectively. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate. As of March 31, 2013 and December 31, 2012 total carrying value of warehouses related to CIFC 2013-II Warehouse and CIFC 2012-III Warehouse, respectively.

(6) Weighted average remaining maturity for warehouses are based on anticipated settlement dates. Contractual maturity for CIFC 2013-II Warehouse is January 23, 2015.

Non-Recourse Consolidated VIE Debt

Consolidated CLOs—During the three months ended March 31, 2013, the Consolidated CLOs issued $1.0 billion of debt, paid down $250.7 million of their outstanding debt and distributed $57.9 million to the holders of their subordinated notes.  During the three months ended March 31, 2012, the Consolidated CLOs issued $377.4 million of debt, made net borrowings under revolving credit facilities of $32.6 million, paid down $62.4 million of their outstanding debt and distributed $51.5 million to the holders of their subordinated notes.  

The carrying value of the assets of the Consolidated CLOs, which are the only assets to which the Consolidated CLO debt holders have recourse for repayment was $11.1 billion and $9.9 billion as of March 31, 2013 and December 31, 2012, respectively.

Other Consolidated Entities—The debt and equity holders have recourse to the total assets of the respective Consolidated VIE's assets. See Note 5 for further details of the Company's exposure to loss on Consolidated VIEs.

Note 12—Equity

Common Stock—In addition to common stock outstanding, the Company has Convertible Notes that are convertible into 4.1 million shares (the “Conversion Shares”) of common stock (such amount may be adjusted in certain events or increased in connection with the payment of in-kind interest at an initial conversion price of $6.05 per share, subject to adjustment). The Company did not declare dividends during the three months ended March 31, 2013 and 2012.

Treasury Stock/Stock Repurchases—During the three months ended March 31, 2013, the Company repurchased 24 common shares in open-market transactions for a de minimus aggregate cost with an average price per share of $7.28.  As of March 31, 2013 the Company was authorized to repurchase up to $5.6 million of its common stock under a board of director's (the "Board") approved share repurchase program.

Stock Options—The Company recorded total stock-based compensation expense of $0.9 million and $0.2 million for the three months ended March 31, 2013 and 2012, respectively, on the Condensed Consolidated Statements of Operations within "Compensation and benefits." As of March 31, 2013, there was $7.4 million of estimated unrecognized compensation expense related to unvested awards, net of estimated forfeitures which is expected to be recognized over a weighted average vesting period of 2.9 years. As of March 31, 2013, an aggregate of 213,140 shares remain available for issuance under the Company's 2011 Stock Plan ("2011 Stock Plan").

22

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes certain 2011 Stock Plan activity:

	Number of Shares Underlying Stock-Based Awards		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
					(In years)	(In thousands)
Outstanding at December 31, 2012	3,594,813		$	6.05
Granted	430,000		8.65
Exercised	(100,000	)	5.41		n/a	$	312
Outstanding at March 31, 2013	3,924,813		$	6.35	8.94	$	7,552
Exercisable at March 31, 2013	1,011,141		$	6.16	8.56	$	2,098
Vested and Expected to vest at March 31, 2013 (1)	3,532,332		$	6.35	8.94	$	6,797

Explanatory Note:

________________________________

(1) Represents a reduction to outstanding options at period end for expected forfeiture rate over the life of the options.

Management estimates the fair value of stock-based awards using the Black-Scholes option pricing model. The Black-Scholes option pricing model includes assumptions regarding dividend yield, expected volatility, expected option term and risk-free interest rates. The assumptions used in computing the fair value of stock-based awards reflect management's best estimates, but involve uncertainties relating to market and other conditions, many of which are outside of the Company's control. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by the employees who receive stock-based awards. In addition to the exercise and grant date prices of these awards, management utilized certain weighted average assumptions to estimate the initial fair value of stock-based awards. Weighted average assumptions related to stock-based awards (by period issued) are listed in the table below:

	For the Three Months Ended March 31,
	2013	2012
Expected dividend yield	—	—
Expected volatility	48.75%	50.52%
Risk-free interest rate	1.10%	1.27%
Expected life (years)	6.11	6.09

The stock-based awards granted have exercise prices equal to the fair market value of the stock on the date of grant, a contractual term of 10 years and a vesting period of approximately 4 years. In addition to awards with service conditions, certain of the awards also contain performance conditions. The expected dividend yield is the expected annual dividend as a percentage of the fair market value of the stock on the date of grant. The Company does not expect to make dividend distributions in the foreseeable future. The expected volatility is estimated by considering the historical volatility of the Company's stock, the historical and implied volatility of peer companies and the Company's expectations of volatility for the expected life of the stock-based awards. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for an instrument which closely approximates the expected option term. The expected option term is the number of years management estimates that the stock-based award will be outstanding prior to exercise. The expected life of the stock-based awards issued is determined using the simplified method.

Profits Interest Awards—During 2011, CIFC Parent (a related party, see Note 15) granted certain employees of the Company profits interests in CIFC Parent. During the three months ended March 31, 2013, the Company recorded a non-cash compensation expense of $0.9 million in "Compensation and benefits" on the Condensed Consolidated Statements of Operations related to the amortization and remeasurement of the value of awards. As of March 31, 2013, there was $2.2 million of estimated unrecognized compensation expense related to these awards.

Appropriated Retained Earnings (Deficit) of Consolidated VIEs—Appropriated retained earnings (deficit) of Consolidated VIEs represents the excess fair value of the Consolidated CLOs’ assets over the Consolidated CLOs’ liabilities upon initial consolidation and is subsequently adjusted each period for the net income (loss) attributable to the Consolidated CLOs.

23

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 13 —Earnings (Loss) Per Share

The following table presents the calculation of basic and diluted earnings (loss) per share:

	For the Three Months Ended March 31,
	2013		2012
	(In thousands, except per share data)
Net income (loss) attributable to CIFC Corp. - basic	$	2,787	$	1,595
Dilutive effect of Convertible Notes	449		260
Net income (loss) attributable to CIFC Corp. - diluted	3,236		1,855
Weighted-average shares - basic	20,797		20,426
Warrants	603		52
Stock options (1)	261		—
Convertible Notes	4,132		4,132
Weighted-average shares - diluted (2)	25,794		24,610
Earnings (loss) per share
Basic	$	0.13	$	0.08
Diluted	$	0.13	$	0.08

Explanatory Notes:

________________________________

(1) For the three months ended March 31, 2012, outstanding stock options were anti-dilutive under the treasury stock method.

(2) Includes the dilutive effect under the if-converted method for the Conversion Shares related to the Convertible Notes and the treasury stock method for the stock options and warrants. 

For the three months ended March 31, 2013 and 2012, the Company excluded 1.2 million and 3.5 million, respectively, of stock options from the calculation of diluted earnings per share because their effect was anti-dilutive under the treasury stock method.

Note 14—Income Taxes

The Condensed Consolidated Statement of Operations does not include a provision for income tax expense or (benefit) on the income or (loss) earned by Consolidated VIEs in which the Company is not a holder of the subordinated notes. The Consolidated VIEs are generally foreign entities exempt from U.S. federal and state income taxes. Income taxes, if any, are the responsibility of the individual holders of each security.  As such, the Company does record a provision for income tax expense or (benefit) on the income or (loss) earned by Consolidated VIEs in which the Company is a subordinated note holder. The provision is based on the Consolidated VIE's proportionate share of income or (loss) required to be included in the Company's taxable income. The effective tax rate, adjusted for non-controlling interests in the Consolidated VIEs was 52.7% and 1,335.0% for the three months ended March 31, 2013 and 2012.

The effective tax rate, including non-controlling interests in Consolidated VIEs was 9.1% and (6.4)% for the three months ended March 31, 2013 and 2012. The difference between the statutory federal tax rate and the Company's effective tax rate for the three months ended March 31, 2013 and 2012, was primarily attributable to state income taxes and certain discrete and other permanent items including, purchase accounting adjustments for fair value changes of contingent liabilities related to the Merger and the sale of the Company's rights to manage Gillespie. 

As of March 31, 2013 and December 31, 2012, total deferred tax assets was $53.4 million, net of a valuation allowance of $13.2 million and $50.5 million, net of a valuation allowance of $13.2 million, respectively.

24

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 15—Related Party Transactions

CIFC Parent—CIFC Parent is considered a related party as a result its ownership of 9.1 million shares of the Company's common stock, issued as part of the consideration for the Merger with Legacy CIFC. As such, related party transactions include (i) the deferred purchase payments including those classified as contingent liabilities (see Note 9), (ii) CIFC Parent's investments in CLOs managed by the Company; including eight CLOs of which six were Consolidated CLOs as of March 31, 2013 and nine CLOs of which seven were Consolidated CLOs as of December 31, 2012 and (iii) the management agreement to provide certain administrative and support services to CIFC Parent.

DFR Holdings—DFR Holdings is considered a related party as a result of its ownership of 4.5 million shares of the Company's common stock, issued as part of the consideration for the acquisition of CNCIM. In addition, DFR Holdings owns $25.0 million aggregate principal amount of the Company's Convertible Notes which is convertible into 4.1 million shares of the Company's common stock. As such, related party transactions include (i) the interest expense on Convertible notes of $0.8 million for both the three months ended March 31, 2013 and 2012, (ii) the deferred purchase payments and (iii) the management agreement to provide certain administrative and support services to DFR Holdings.

Total related party receivables and investment advisory fee revenues related to management agreements noted above are as follows:

	Receivables				Investment Advisory Fees
	March 31, 2013		December 31, 2012		For the Three Months Ended March 31,
					2013		2012
	(in thousands)
CIFC Parent	$	65	$	19	$	46	$	50
DFR Holdings	30		17		13		20
Total Related Party Investment Advisory Fees	$	95	$	36	$	59	$	70

Note 16—Restructuring Charges

The table below provides a rollforward of the accrued restructuring charges:

	For the Three Months Ended March 31,
	2013			2012
	(in thousands)
Accrued Restructuring Charges, beginning of period	$	1,410		$	1,490
Provision (1)	—			3,904
Payments	(523		)	(3,434		)
Non-Cash Settlement (2)	—			(783		)
Accrued Restructuring Charges, end of period	$	887		$	1,177

Explanatory Notes:

_________________________________

(1) During the three months ended March 31, 2012, the Company recorded lease termination fees of $3.1 million, a loss on disposal of associated equipment and improvements of $1.4 million, partially offset by a $(0.6) million reversal of deferred rent in conjunction with the closure of the Company's former Rosemont, Illinois office.

(2) For the three months ended March 31, 2012, non-cash settlement represents the loss on disposal of equipment and improvements partially offset by the reversal of deferred rent payments noted above.

25

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 17—Commitments and Contingencies

Legal Proceedings

In the ordinary course of business, the Company may be subject to legal and regulatory proceedings and examinations that are generally incidental to the Company's ongoing operations. While there can be no assurance of the ultimate disposition of any such proceedings or examinations, the Company does not believe their disposition will have a material adverse effect on the Company's Condensed Consolidated Financial Statements.

In addition, in connection with activities of one of the Company's investment advisor subsidiaries that occurred prior to the Company's acquisition of such investment advisor, the Company made certain voluntary reimbursements and other payments to certain investors and CLOs currently or formerly managed by such investment advisor. As a result of a contractual arrangement the Company was fully indemnified for these payments by the seller of such investment advisor and do not believe they had a material adverse impact on the Company's Condensed Consolidated Financial Statements.

Lease Commitments

Total occupancy expense for both the three months ended March 31, 2013 and 2012 was $0.4 million. The future minimum commitments under the Company's lease agreement are as follows:

	(In thousands)
2013 (remaining 9 months)	$	803
2014	1,607
2015	1,607
2016	1,607
2017	1,607
Thereafter	8,690
	$	15,921

Other Commitments and Contingencies

The Consolidated CLOs have unfunded investment commitments on loans of $54.2 million and $55.3 million as of March 31, 2013 and December 31, 2012, respectively. The timing and amount of additional funding on these loans are at the discretion of the borrower, to the extent the borrower satisfies certain requirements and provides certain documentation. The Company does not have any obligation to fund these commitments.

Note 18—Subsequent Events

On May 10, 2013, the Company announced its plan to enter into a strategic relationship with HarbourVest Partners, LLC ("HarbourVest"), a leading, global private markets investment firm for over 30 years and an established investor in mezzanine and European senior loans. HarbourVest plans to offer investment opportunities in U.S. senior secured loans to its investors, exclusively with CIFC.

26

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion together with our Condensed Consolidated Financial Statements and notes thereto included in Part I—Item 1. Condensed Consolidated Financial Statements and Notes (Unaudited) of this Quarterly Report on Form 10-Q (the “Quarterly Report”).  The statements in this discussion regarding the industry outlook and our expectations regarding the future performance of our business and the other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in Special Note Regarding Forward-Looking Statements and Part I—Item 1A. Risk Factors in our 2012 Annual Report on Form 10-K. Unless otherwise noted or the context otherwise requires, we refer to CIFC Corp. as “CIFC,” to CIFC and its subsidiaries as “we,” “us,” “our,” “our company” or “the Company,” to CIFC Asset Management LLC, one of our wholly-owned subsidiaries, as “CIFCAM,” to Deerfield Capital Management LLC, one of our indirect wholly-owned subsidiaries, as “DCM,” to CypressTree Investment Management, LLC, one of our indirect wholly-owned subsidiaries, as “CypressTree,” to Columbus Nova Credit Investments Management, LLC, one of our indirect wholly-owned subsidiaries, as “CNCIM” and to CIFCAM, DCM, CypressTree and CNCIM together as the “Advisors.”

Overview

CIFC Corp. (“CIFC” and, together with its subsidiaries, “we” or "us") is a Delaware corporation that specializes in managing investment products which include corporate credit obligations and primarily senior secured corporate loans (“SSCLs”), as the primary underlying investments.

We establish and manage investment products for various types of investors, including pension funds, hedge funds and other asset management firms, banks, insurance companies and other types of institutional investors located across the world. Our existing investment products are primarily collateralized loan obligations ("CLOs") and also include collateralized debt obligations ("CDOs") and other investment vehicles. We also make investments in certain investment products we manage and SSCLs that we warehouse to launch new investment products.

The investment advisory fees paid to us by these investment products is our primary source of revenue and are generally paid on a quarterly basis and are ongoing as long as we manage the products. Investment advisory fees typically consist of senior and subordinated management fees based on the amount of assets held in the investment product and, in some cases, incentive fees based on the returns generated for certain investors. We also earn net investment income and incur gains/losses from our investments in CLOs (also referred to as equity investments in CLOs below), warehouses and other investment products we manage.

Market and Economic Conditions

During the first quarter of 2013, the CLO market showed signs of improvement from the fourth quarter of 2012, with higher levels of CLO issuances. The new-issued leveraged loan volume topped $185.2 billion, a year over year increase of 61%. During the quarter, the credit market started seeing a move from fixed rate bonds to floating rate loans as investors contributed $12.7 billion into loan mutual funds and the CLO volume reached a post-crisis high of $26.3 billion. We also witnessed benchmark rates remaining near historic lows, high yield spreads tightening moderately and default rates remaining relatively consistent at 2.21%. Overall, the loan market has been generally unaffected by the different risk markets with strong inflows, CLO issuances, pay downs and coupon payments.

The overall U.S. economy saw further improvements in consumer and business spending, housing and unemployment rates which is a contrast to the overall global economy. Fiscal tightening in the U.S., however, has had a negative impact on growth and could impact U.S. corporate profitability as well as curtail U.S. growth. With respect to the overall U.S., global and CLO markets, we remain cautious with respect to investments and could be vulnerable to volatility in transaction activity, fees and potential future investment gains.

Executive Overview

We had a strong first quarter with asset management fee revenues and Economic Net Income ("ENI") increasing significantly over the prior year quarter. We sponsored two newly issued CLOs totaling $1.0 billion and our loan-based Fee Earning Assets Under Management ("Fee Earning AUM" or "AUM") increased (after normal attrition) to $12.4 billion from $11.8 billion at December 31, 2012 and from $10.4 billion at March 31, 2012. Also, we are excited to be teaming up with HarbourVest and see significant opportunity to jointly deliver investment solutions focused on private debt.  We continue to focus on growth in this market environment.

27

CIFC reported net income attributable to CIFC Corp. of $2.8 million for the first quarter of 2013, compared to $1.6 million in the same period of the prior year. This $1.2 million increase from the prior year period was primarily due to the increases in (i) incentive fees as more CLOs reached their incentive fee hurdles compared the first quarter of the prior year, (ii) senior and subordinated management fees from the issuances of five new CLOs and the acquisition of CLOs since the first quarter of 2012, (iii) net investment income from realized gains due to the settlement on two warehouses, (iv) decreases in net losses on contingent liabilities due to changes in expected performance on certain CLOs and (v) the absence of restructuring costs during the current period. These increases were offset by (i) higher unrealized losses on the investments in CLOs and warehouses due to the softening in CLO equity prices during the period, (ii) principal paydowns, calls and redemptions of certain legacy CLOs and CDOs, (iii) higher taxes, (iv) higher compensation and professional fees to support our continued growth and (iv) during the first quarter of 2012, CIFC recorded a gain on sale from Gillespie CLO PLC ("Gillespie", a European CLO) of $5.8 million.

CIFC reported non-GAAP ENI of $6.2 million for the first quarter of 2013, compared to $2.3 million for the same period in the prior year. See the reconciliation to GAAP net income under the Section entitled Economic Net Income "ENI" (Non-GAAP Measures).ENI increased period to period by $3.9 million primarily as a result of the increase in (i) incentive fees as more CLOs reached their incentive fee hurdles compared to the first quarter of the prior year, (ii) senior and subordinated management fees from the issuances of five new CLOs and the acquisition of four CLOs since the first quarter of 2012 and (iii) net investment income from realized gains due to the settlement on two warehouses. These increases were partially offset by (i) higher unrealized losses on investments in CLOs and warehouses due to the changes in the current market values of the assets, (ii) principal paydowns, calls and redemptions of certain legacy CLOs and CDOs as well as (iii) higher expenses to support our continued growth.

Fee Earning AUM

The following table summarizes the Fee Earning AUM, for which we are paid a management fee by significant investment product category (1):

	March 31, 2013			December 31, 2012			March 31, 2012
	Number of Accounts	Fee Earning AUM (2)		Number of Accounts	Fee Earning AUM (2)		Number of Accounts	Fee Earning AUM (2)
		(In thousands)			(In thousands)			(In thousands)
Post 2011 CLOs	5	$	2,585,214	3	$	1,579,558	1	$	398,683
Legacy CLOs (3)	27	9,004,131		29	9,599,220		27	9,945,083
Total CLOs	32	11,589,345		32	11,178,778		28	10,343,766
Other Loan-Based Products	2	780,288		3	666,120		1	73,256
Total Loan-Based AUM	34	12,369,633		35	11,844,898		29	10,417,022
ABS CDOs	9	2,038,739		10	2,402,088		10	2,823,527
Corporate Bond CDOs	3	48,578		4	67,053		4	180,692
Total Fee Earning AUM	46	$	14,456,950	49	$	14,314,039	43	$	13,421,241

Explanatory Notes:

_________________________________

(1) We do not expect to issue new CDOs in the future. Fee Earning AUM on CDOs are expected to continue to decline as these funds run-off per their contractual terms.

(2) Fee Earning AUM generally reflects the aggregate principal or notional balance of the collateral and, in some cases, the cash balance held by the CLO as of the date of the last trustee report received for each CLO prior to the respective AUM date.

(3) Legacy CLOs represent all managed CLOs issued prior to 2011, including CLOs acquired since 2011 but issued prior to 2011.

28

Total Fee Earning AUM activity for the three months ended March 31, 2013 is as follows:

	(In thousands)
Total loan-based AUM - Beginning Balance	$	11,844,898
CLO New Issuances	1,001,334
CLO Principal Paydown	(412,412		)
CLO Calls, Redemptions and Sales	(165,141		)
Fund Subscriptions	122,597
Fund Redemptions	(10,354		)
Other (1)	(11,289		)
Total loan-based AUM - Ending Balance	12,369,633
Total CDOs	2,087,317
Total Fee Earning AUM - Ending Balance	$	14,456,950

Explanatory Note:

_________________________________

(1)     Other includes changes in collateral balances of CLOs between periods and market appreciation on other loan-based products.

During the three months ended March 31, 2013, total AUM increased by $0.1 billion primarily as a result of increases in loan-based AUM of $0.5 billion, partially offset by the decreases in CDO AUM of $0.4 billion. The increase in loan-based AUM was primarily a result of the issuance of two CLOs with AUM of approximately $1.0 billion. These increases were partially offset by the calls and redemptions of two CLOs: Cumberland II CLO Ltd. and Rosemont CLO, Ltd., as well as declines in AUM from certain CLOs which have reached the end of their contractual reinvestment periods. Most of the CLOs and CDOs issued prior to 2011 that we manage have passed their first optional call date and are generally callable by their subordinated note holders, subject to satisfaction of certain conditions. CDO AUM declined during the three months ended March 31, 2013, primarily due to the exit of their scheduled reinvestment periods. We do not expect to issue new CDOs so we expect CDO AUM to continue to decline going forward as these funds run-off per their contractual terms.

29

The structure of the CLOs we manage affects the investment advisory fees paid to us. The following summarizes select details of the structure of each of the CLOs we manage:

	Issuance Date	March 31, 2013 Fee Earning AUM		First Optional Call Date (1)	Termination of Reinvestment Period (2)	Maturity Year (3)
	Month/Year	(In thousands)		Month/Year
Post 2011 CLOs
CIFC Funding 2011-I, Ltd. ("CIFC CLO 2011-I")	01/12	$	401,771	01/14	01/15	2023
CIFC Funding 2012-I, Ltd. ("CIFC CLO 2012-I")	07/12	452,493		08/14	08/16	2024
CIFC Funding 2012-II, Ltd. ("CIFC CLO 2012-II")	11/12	729,617		12/14	12/16	2024
CIFC Funding 2012-III, Ltd. ("CIFC CLO 2012-III")	01/13	500,295		01/15	01/17	2025
CIFC Funding 2013-I, Ltd. ("CIFC CLO 2013-I")	03/13	501,038		04/15	04/17	2025
Total Post 2011 CLOs		2,585,214
Legacy CLOs
Forest Creek CLO Ltd.	05/03	21,323		07/07	07/08	2015
Navigator 2003 CLO, Ltd. (4)	12/03	15,749		02/07	11/08	2015
Navigator 2004 CLO, Ltd. (4)	10/04	87,639		01/11	01/11	2017
Hewett's Island CLO II, Ltd.	12/04	53,962		12/08	12/10	2016
Market Square CLO Ltd.	05/05	80,276		07/07	04/11	2017
Navigator 2005 CLO, Ltd. (4)	07/05	166,695		10/11	10/11	2017
Hewett's Island CLO III, Ltd.	08/05	142,678		08/09	08/11	2017
Marquette Park CLO Ltd.	12/05	184,209		04/10	01/12	2020
Bridgeport CLO Ltd.	06/06	480,677		10/09	07/13	2020
CIFC Funding 2006-I, Ltd.	08/06	457,909		10/10	10/12	2020
Columbus Nova 2006-I, Ltd.	08/06	378,258		10/09	10/12	2018
Navigator 2006 CLO, Ltd. (4)	09/06	323,075		09/10	09/13	2020
CIFC Funding 2006-I B, Ltd.	10/06	394,499		12/10	12/12	2020
Burr Ridge CLO Plus Ltd.	12/06	283,233		06/12	03/13	2023
CIFC Funding 2006-II, Ltd.	12/06	616,438		3/11	03/13	2021
Columbus Nova 2006-II, Ltd.	12/06	495,360		02/10	02/13	2018
Hewett's Island CLO V, Ltd.	12/06	361,401		12/09	12/12	2018
CIFC Funding 2007-I, Ltd.	02/07	395,811		05/11	11/13	2021
CIFC Funding 2007-II, Ltd.	03/07	591,601		04/11	04/14	2021
Columbus Nova 2007-I, Ltd.	03/07	479,078		05/10	05/13	2019
Hewett's Island CLO VI, Ltd.	05/07	362,369		06/10	06/13	2019
Schiller Park CLO Ltd.	05/07	409,389		07/11	04/13	2021
Bridgeport CLO II Ltd.	06/07	492,404		12/10	09/14	2021
CIFC Funding 2007-III, Ltd.	07/07	439,410		07/10	07/14	2021
Primus CLO II, Ltd.	07/07	367,242		10/11	07/14	2021
CIFC Funding 2007-IV, Ltd.	09/07	490,679		09/10	09/12	2019
Columbus Nova 2007-II, Ltd.	11/07	432,767		10/10	10/14	2021
Total Legacy CLOs		9,004,131
Total CLOs		$	11,589,345

Explanatory Notes:

_________________________________

(1) CLOs are generally callable by equity holders once per quarter beginning on the "first optional call date" and subject to satisfaction of certain conditions. 

(2) Termination of reinvestment period refers to the date after which we can no longer use certain principal collections to purchase additional collateral, and such collections are instead used to repay the outstanding amounts of certain debt securities issued by the CLO. 

(3) Represents the contractual maturity of the CLO. Generally, the actual maturity of the deal is expected to occur in advance of contractual maturity. 

(4) Represents acquisition of rights to manage four CLOs through the completion of the GECC transaction. See "Item1 - Condensed Consolidated Financial Statements - Note 4" for further details.

30

Results of Consolidated Operations

We are required to consolidate into our financial statements certain variable interest entities (“Consolidated VIEs”) in which we are deemed to be the primary beneficiary in accordance with GAAP consolidation guidance. This includes certain of the CLOs, CDOs and other entities we manage. See below—Consolidated VIEs for the additional information. The following table presents our comparative Condensed Consolidated Statements of Operations for the three months ended March 31, 2013 and 2012:

	For the Three Months Ended March 31,						2013 vs. 2012
	2013			2012			Variance			% Variance
	(In thousands, except share and per share amounts)
Revenues
Investment advisory fees	$	2,642		$	2,744		$	(102	)	(4	)%
Net investment income	(9		)	1			(10		)	>(100%)
Total net revenues	2,633			2,745			(112		)	(4	)%
Expenses
Compensation and benefits	7,524			5,744			1,780			31	%
Professional services	1,923			724			1,199			166	%
General and administrative expenses	1,483			1,404			79			6	%
Depreciation and amortization	4,218			4,851			(633		)	(13	)%
Restructuring charges	—			3,904			(3,904		)	(100	)%
Total expenses	15,148			16,627			(1,479		)	(9	)%
Other Income (Expense) and Gain (Loss)
Net gain (loss) on investments at fair value	349			—			349			100	%
Net gain (loss) on liabilities at fair value	(114		)	(2,377		)	2,263			(95	)%
Corporate interest expense	(1,482		)	(1,469		)	(13		)	1	%
Net gain on the sale of management contract	752			5,772			(5,020		)	(87	)%
Other, net	3			(41		)	44			>(100%)
Net other income (expense) and gain (loss)	(492		)	1,885			(2,377		)	>(100%)
Operating income (loss)	(13,007		)	(11,997		)	(1,010		)	8	%
Results of Consolidated VIEs
Net gain (loss) from activities of Consolidated VIEs	56,898			40,563			16,335			40	%
Expenses of Consolidated VIEs	(9,840		)	(1,783		)	(8,057		)	>(100%)
Net results of Consolidated VIEs	47,058			38,780			8,278			21	%
Income (loss) before income tax (expense) benefit	34,051			26,783			7,268			27	%
Income tax (expense) benefit	(3,110		)	1,724			(4,834		)	>(100%)
Net income (loss)	30,941			28,507			2,434			9	%
Net (income) attributable to noncontrolling interest and Consolidated VIEs	(28,154		)	(26,912		)	(1,242		)	5	%
Net income (loss) attributable to CIFC Corp.	$	2,787		$	1,595		$	1,192		75	%
Earnings (loss) per share:
Basic	$	0.13		$	0.08		$	0.05		63	%
Diluted	$	0.13		$	0.08		$	0.05		63	%
Weighted-average number of shares outstanding:
Basic	20,797,490			20,426,118			371,372			2	%
Diluted	25,793,831			24,610,121			1,183,710			5	%

Net income attributable to CIFC Corp. was $2.8 million, or $0.13 per fully diluted share, for the three months ended March 31, 2013, compared to $1.6 million, or $0.08 per fully diluted share, in the same period of the prior year. Net income attributable to CIFC Corp. increased by $1.2 million from the prior year predominantly due to the following:

Total Net Revenues—Total net revenues remained relatively flat period to period.

31

Total Expenses—Our total expenses decreased year over year as we did not incur restructuring costs during the current quarter compared to the prior year quarter. This decrease was partially offset by higher compensation and benefits and professional fees.

During 2012, restructuring charges included the termination of our Rosemont, Illinois lease related to the consolidation of operations at the corporate headquarters in New York, the disposal of the related fixed assets from the lease termination and additional severance costs from the final integration of management teams after the April 13, 2011 merger with Commercial Industrial Finance Corp. ("Legacy CIFC") (also known as the "Merger").

Compensation and benefits increased by $1.8 million from the prior year primarily related to the amortization of stock options granted during 2012 to date as well as the amortization and re-measurement of the profits interest granted in 2011 by CIFC Parent Holdings LLC ("CIFC Parent," one of our significant shareholders) to our employees. In addition, professional fees increased period to period as prior year fees included the benefit of proceeds received from an insurance settlement related to legal fees from 2011.

Net other income (expense) and gain (loss)—Total Net other income (expense) and gain (loss) decreased by $2.4 million period to period, primarily due to gains on the sale of management contracts during the first quarter of 2012, as we sold our rights to manage Gillespie (see "Item 1—Notes to Consolidated Financial Statements—Note 10"). This decrease was partially offset by an increase in Net gain (loss) on liabilities at fair value as a result of smaller declines in the fair value of our contingent liabilities related to fee sharing due to the expected performance on certain CLOs.

Net results of Consolidated VIEs attributable to CIFC Corp.—Net results of Consolidated VIEs attributable to CIFC Corp. includes the operating results of our portion of the Consolidated VIEs (including our Consolidated CLOs). For the three months ended March 31, 2013 and 2012, we had $18.9 million and $11.9 million, respectively,  of  Consolidated VIE investment advisory fees and net investment interest income related to our investments in the equity of CLOs we manage (see  below - Consolidated VIEs for further details).

The increase in Net results of Consolidated VIEs attributable to CIFC Corp. is primarily due to an increase in Consolidated VIE investment advisory fees due to the issuances of five new CLOs since the first quarter of 2012 and net investment income from realized gains due to the settlement of two warehouses.

Income tax expense (benefit)—Income tax expense increased during the quarter primarily due to higher pre-tax net income attributable to CIFC Corp. in the current quarter compared to the same quarter in the prior year.

Economic Net Income "ENI" (Non-GAAP Measures)

ENI is a non-GAAP financial measure of profitability which we use in addition to GAAP to measure the performance of our core business. We believe ENI reflects the nature and substance of the business and the economic results driven by investment advisory fee revenues from the management of client funds and earnings on our investments. ENI represents net income (loss) attributable to CIFC Corp. before taxes, realized and unrealized gain (loss) on dispositions of non-core assets, a portion of non-cash compensation related to profits interests granted by CIFC Parent (one of our significant shareholders) in June 2011, amortization and impairments of intangible assets, gains (losses) on derivatives and liabilities, certain non-recurring operating expenses and strategic transaction expenses (such as those associated with mergers and acquisitions). ENI also presents investment advisory fee revenues net of any fee-sharing arrangements.

     ENI provided herein may not be comparable to similar measures presented by other companies, and is a non-GAAP financial measure that is not based on a comprehensive set of accounting rules or principles and therefore, may be defined differently by other companies. In addition, ENI should be considered in addition to, not as a substitute for, or superior to, financial measures determined in accordance with GAAP. The following is a reconciliation of GAAP Net income (loss) attributable to CIFC Corp. to ENI:

32

	For the Three Months Ended March 31,
	2013			2012
	(in thousands)
GAAP Net income (loss) attributable to CIFC Corp.	$	2,787		$	1,595
Advisory fee sharing arrangements (1)	(4,210		)	(2,409		)
Compensation costs (2)	1,098			—
Professional services - insurance settlement received	—			(657		)
Amortization and impairment of intangibles	4,049			4,726
Restructuring charges	—			3,904
Net gain/loss on liabilities, derivatives and other	111			2,588
Gain on sales of contracts	(752		)	(5,772		)
Income tax (expense) benefit	3,110			(1,724		)
Total reconciling and non-recurring items	3,406			656
ENI	$	6,193		$	2,251

Explanatory Notes:

______________________________

(1) We share advisory fees on certain of the CLOs we manage (for example, advisory fees on certain acquired funds are shared with the party that sold the funds to us). These amounts are netted from investment advisory fees in the computation of ENI.

(2) For the three months ended March 31, 2013, compensation has been adjusted for non-cash compensation related to profits interest granted to certain CIFC employees by CIFC Parent Holdings LLC (as a significant stockholder in us) in 2011 and sharing of incentive fees with certain former employees established in connection with our acquisition of CNCIM.

The following table presents our components of ENI for the three months ended March 31, 2013 and 2012:

	For the Three Months Ended March 31,				2013 vs. 2012
	2013		2012		Variance		% Variance
	(in thousands)
Adjusted revenues
Investment advisory fees (1)	$	16,588	$	11,836	$	4,752	40	%
Net investment income	1,089		538		551		>100%
Total adjusted net revenues	17,677		12,374		5,303		43	%
Adjusted expenses
Compensation and benefits	6,426		5,744		682		12	%
Professional services	1,923		1,381		542		39	%
General and administrative expenses	1,484		1,404		80		6	%
Depreciation and amortization	169		125		44		35	%
Corporate interest expense	1,482		1,469		13		1	%
Total adjusted expenses	11,484		10,123		1,361		13	%
ENI	$	6,193	$	2,251	$	3,942	>100%

Explanatory Note:

______________________________

(1) See Adjusted investment advisory fees table below for details of revenue components.

33

Adjusted investment advisory fees—The following table presents our components of investment advisory fees as adjusted for ENI for the three months ended March 31, 2013 and 2012: 

	For the Three Months Ended March 31,
	2013						2012						2013 vs. 2012
	CLOs		CDOs		Total		CLOs		CDOs		Total		Variance		% Variance
	(In thousands)
Senior management fees	$	4,765	$	483	$	5,248	$	4,030	$	751	$	4,781	$	467	10	%
Subordinated management fees	8,346		—		8,346		6,742		—		6,742		1,604		24	%
Incentive management fees	2,613		—		2,613		213		—		213		2,400		>100%
Subtotal	$	15,724	$	483	$	16,207	$	10,985	$	751	$	11,736	4,471		38	%
Other advisory fees	—		—		381		—		—		100		281		>100%
Total adjusted investment advisory fee revenues	$	15,724	$	483	$	16,588	$	10,985	$	751	$	11,836	$	4,752	40	%

Total adjusted advisory fee revenue increased by $4.8 million or 40% primarily as a result of an increase in incentive fees as more CLOs reached their incentive fee hurdles compared to the first quarter of the prior year. In addition, total adjusted advisory fee revenues includes a full quarter of results from CLOs issued and acquired since 2012 to date, including the issuance of two new CLOs: CIFC CLO 2012-III and CIFC CLO 2013-I during the first quarter of 2013. These increases were offset by the principal paydowns, calls and redemptions of certain legacy CLOs and CDOs.

During the three months ended March 31, 2013 and 2012, adjusted investment advisory fees from CLOs comprised of 95% and 93%, respectively, of adjusted total investment advisory fee revenues.

Adjusted net investment income—Adjusted net investment income increased by $0.6 million from the first quarter of the prior year. During the three months ended March 31, 2013, we realized gains on the settlement of two warehouses related to the issuances of CLOs and recognized higher interest income on our CLO investments from new investments entered into since 2012 to date. These increases were offset by net total unrealized loss positions on our CLO and warehouse investments due to the softening in CLO equity prices during the period.

Adjusted expenses—Adjusted expenses increased $1.4 million or 13% from the same period in the prior year primarily due to the increase in adjusted compensation and benefits and adjusted professional fees to support the continued growth of the business. Compensation and benefits increased primarily as a result of the amortization of additional stock options granted during 2012 and 2013 under the 2011 Stock Plan (see "Item 1—Condensed Consolidated Financial Statements—Note 12)".

Liquidity and Capital Resources

As of March 31, 2013, the Company's total liquidity was comprised of unrestricted cash and cash equivalents of $39.1 million, warehouse investments of $15.3 million and other investments of $60.2 million. The decrease of $8.6 million in cash and cash equivalents from $47.7 million as of December 31, 2012, was primarily attributable to (i) net new investments in equity of CLOs and warehouses during the period and (ii) a bridge loan provided by the Company to a third party investor in a warehouse investment, which was subsequently repaid in April and (iii) payments of contingent liabilities. This was partially offset by (i) proceeds received from the settlement of two warehouses related to the two CLOs that were issued in the quarter, and (ii) quarterly operating cash flow.

Other Sources and Uses of Funds

Deferred Purchase Payments—In April 2011, we completed the Merger with Legacy CIFC. As a result of the Merger, Legacy CIFC became CIFCAM, a wholly-owned subsidiary of CIFC. The consideration for the Merger includes the payment to CIFC Parent, the sole stockholder of Legacy CIFC, $7.5 million of cash payable in three equal installments of $2.5 million (subject to certain adjustments). Subsequent to quarter end, on April 12, 2013, we made the final deferred purchase payment related to the Merger of $2.5 million leaving no remaining amounts outstanding under this agreement.

34

In March 2010, we entered into an acquisition and investment agreement with DFR Holdings LLC ("DFR Holdings") and CNCIM pursuant to which we agreed to acquire all of the equity interests in CNCIM from DFR Holdings. The consideration for the acquisition includes deferred purchase payments totaling $7.5 million in cash payable in five equal annual installments beginning in December 2010. The remaining two deferred purchase payments aggregate to $3.0 million, with the next $1.5 million payable on December 9, 2013.

The present value of the remaining deferred purchase payments of $4.9 million is included in the Condensed Consolidated Balance Sheets as of March 31, 2013.

Contingent Liabilities and Other Commitments—In connection with the Merger, we established or assumed certain contingent liabilities that combine to have an estimated fair value of $30.3 million as of March 31, 2013.

The contingent liabilities from the Merger are payable to CIFC Parent. The terms of these payments are as follows: (i) the first $15.0 million of incentive fees received by the combined company from six of the CLOs managed by CIFC Asset Management LLC (the "Legacy CIFC CLOs") as of April 13, 2011 (the "Merger Closing Date"), (ii) 50% of any incentive fees in excess of $15.0 million in aggregate received from Legacy CLOs by the combined company over ten years from the Merger Closing Date and (iii) payments relating to the present value of any such incentive fees from the Legacy CIFC CLOs that remain payable to the combined company after the tenth anniversary of the Merger Closing Date. During the three months ended March 31, 2013 and 2012, we made payments of $2.9 million and $1.0 million, respectively, related to these contingent liabilities. As of March 31, 2013, the remaining payments under item (i) was $3.1 million.

In addition, there were contingent liabilities assumed in the Merger that primarily represent contingent consideration related to Legacy CIFC’s acquisition of CypressTree in December 2010. The assumed contingent liabilities are based on a fixed percentage of certain advisory fees from the CypressTree CLOs. These fixed percentages vary by CLO and have a minimum fixed percentage of 55%. During the three months ended March 31, 2013 and 2012, we made payments of $0.7 million and $4.3 million, respectively, related to these contingent liabilities.  Payments made during the three months ended March 31, 2012, included $3.0 million of one-time earn out payments for three of the CypressTree management contracts which reduced the required future payments.

Tax Payments—The Merger resulted in an Ownership Change (as defined in Sections 382 and 383 of the Internal Revenue Code of 1986, as amended) of Legacy CIFC thereby resulting in a Section 382 Limitation of approximately $9.5 million annually on our ability to utilize the Legacy CIFC NOLs to reduce taxable income. As of December 31, 2012, the combined federal NOL, NCL and built-in loss carryforwards related to Legacy CIFC were fully utilized. Accordingly, these benefits will not be available to reduce cash taxes in 2013.

Long-Term Debt—The following table summarizes our long-term debt:

	March 31, 2013					December 31, 2012
	Carrying Value		Current Weighted Average Borrowing Rate		Weighted Average Remaining Maturity	Carrying Value		Current Weighted Average Borrowing Rate		Weighted Average Remaining Maturity
	(In thousands)				(In years)	(In thousands)				(In years)
Recourse debt:
March Junior Subordinated Notes (1)	$	95,000	1.00	%	22.6	$	95,000	1.00	%	22.8
October Junior Subordinated Notes (2)	25,000		3.80	%	22.6	25,000		3.81	%	22.8
Total Subordinated Notes Debt	$	120,000	1.58	%	22.6	$	120,000	1.59	%	22.8
Convertible Notes (3)	$	18,450	9.00	%	4.7	$	18,233	9.00	%	4.9
Total recourse debt	$	138,450				$	138,233
Non-recourse Consolidated VIE debt:
Consolidated CLOs (4)	$	10,129,709	1.28	%	8.3	$	9,325,982	1.16	%	8.1
Warehouses (5) (6)	133,184		1.03	%	0.2	270,452		2.12	%	n/m
Total non-recourse Consolidated VIE debt	$	10,262,893	1.28	%	8.2	$	9,596,434	1.19	%	7.9
Total long-term debt	$	10,401,343				$	9,734,667

35

Explanatory Notes:

________________________________

n/m - not meaningful

(1) March Junior Subordinated Notes bear interest at an annual rate of 1% through April 30, 2015 and LIBOR plus 2.58% thereafter until maturity, October 30, 2035.

(2) October Junior Subordinated Notes bear interest at an annual rate of LIBOR plus 3.50% and mature on October 30, 2035.

(3) As of March 31, 2013 and December 31, 2012, Convertible Notes were recorded net of discount of $6.5 million and $6.8 million, respectively. The Convertible Notes currently pay interest at the 9.00% stated rate; however, including the discount, the effective rate of interest is 18.14%. The Convertible Notes will mature on December 9, 2017.

(4) Long-term debt of the Consolidated CLOs is recorded at fair value. The subordinated notes do not have a stated interest rate, and are therefore excluded from the calculation of the weighted average borrowing rate. The par value of the Consolidated CLOs long-term debt (including subordinated notes) was $10.6 billion and $9.8 billion as of March 31, 2013 and December 31, 2012, respectively.

(5) Long-term debt of warehouses not held by us is recorded at fair value. As of March 31, 2013 and December 31, 2012, the fair value excludes the preferred shares of CIFC 2013-II Warehouse and CIFC 2012-III Warehouse, respectively, which have a par value of $25.1 million and $14.3 million, respectively. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate. As of March 31, 2013 and December 31, 2012 total carrying value of warehouses related to CIFC 2013-II Warehouse and CIFC 2012-III Warehouse, respectively.

(6) Weighted average remaining maturity for warehouses are based on anticipated settlement dates. Contractual maturity for CIFC 2013-II Warehouse is January 23, 2015.

Covenants—Junior Subordinated Notes—The Junior Subordinated Notes contain certain restrictive covenants including (i) a requirement that all asset management activities to be conducted by CIFC Corp. and its subsidiaries, and which permits us to sell equity and material assets of DCM only if all investment advisory fees and proceeds from equity and asset sales are subject to the limits on restricted payments set forth in the Note Indentures, (ii) a debt covenant that permits CIFC Corp. and DCM to incur indebtedness only if the proceeds of such indebtedness are subject to the limits on restricted payments set forth in the Note Indentures and (iii) a restricted payments covenant that restricts our ability to pay dividends or make distributions in respect of our equity securities, subject to a number of exceptions and conditions.

Covenants—Convertible Notes—The Convertible Notes Agreement contains customary events of default and covenants including (i) that we will not, and will not permit any of our subsidiaries to, incur any indebtedness that is contractually subordinated in right of payment to our other indebtedness unless such indebtedness is also contractually subordinated in right of payment to the Convertible Notes on substantially similar terms; (ii) that we will not consolidate or merge with or into another person or sell, transfer or otherwise dispose of all or substantially all of our assets to another person unless certain conditions are satisfied; (iii) that, upon a change of control, we will offer to repurchase all or any part of the Convertible Notes of each holder of Convertible Notes at a purchase price in cash equal to 100% of the aggregate principal amount of the Convertible Notes repurchased, plus accrued and unpaid interest; and (iv) that we will use commercially reasonable efforts to keep the Conversion Shares listed on the NASDAQ Stock Market or another securities exchange on which our common stock is listed or quoted.

Lease Commitments—The future minimum commitments under our lease agreement are as follows:

	(In thousands)
2013 (remaining 9 months)	$	803
2014	1,607
2015	1,607
2016	1,607
2017	1,607
Thereafter	8,690
	$	15,921

Share Repurchase Program—During the three months ended March 31, 2013, we repurchased 24 common shares in open-market transactions for a de minimus aggregate cost with an average price per share of $7.28.  As of March 31, 2013 we were authorized to repurchase up to $5.6 million of our common stock under a board of director's approved share repurchase program.

Consolidated VIEs

Although we consolidate all the assets and liabilities of the Consolidated VIEs, our maximum exposure to loss is limited to our investments and beneficial interests in the Consolidated VIEs and the receivables of the Consolidated VIEs. All these items are eliminated upon consolidation. The assets of each of the Consolidated VIEs are generally held by the trustee of each fund solely as collateral to satisfy the obligations of the Consolidated VIEs. If we were to liquidate, the assets of the Consolidated VIEs would not be available to our general creditors, and as a result, we do not consider them our assets. Additionally, the investors in the debt of the Consolidated VIEs have no recourse to our general assets. Therefore, this debt is not our obligation.

36

Consolidated CLOs—As of March 31, 2013, we consolidated 25 CLOs and 1 CDO (the "Consolidated CLOs"). See "Item 1—Condensed Consolidated Financial Statements—Note 2" for additional information. The following table summarizes our consolidated assets and non-recourse liabilities of the Consolidated CLOs included in the Condensed Consolidated Balance Sheets and the total maximum exposure to loss on these Consolidated CLOs, as follows (1):

	March 31, 2013		December 31, 2012
	(In thousands)
Total Assets	$	11,098,564	$	9,933,495
Total Liabilities (non-recourse)	10,934,644		9,806,010
Maximum exposure to loss:
Investments and beneficial interests	$	54,954	$	47,454
Receivables	2,828		2,674
Total maximum exposure to loss	$	57,782	$	50,128

Explanatory Note: 

________________________________

(1) In addition, exposure to loss includes future investment advisory fees on the Consolidated VIEs. This has not been included in the table above.

Other Consolidated Entities—The following table summarizes our consolidated assets and non-recourse liabilities of other consolidated VIEs included in the Condensed Consolidated Balance Sheets:

	March 31, 2013						December 31, 2012
	Consolidated Assets		Consolidated Total Non-Recourse Liabilities		Maximum Exposure to Loss (1)		Consolidated Assets		Consolidated Total Non-Recourse Liabilities		Maximum Exposure to Loss (1)
	(In thousands)
Warehouses (1)	$	256,894	$	241,576	$	15,273	$	334,420	$	307,025	$	26,723

Explanatory Note: 

________________________________

(1) Maximum exposure to loss is generally limited to our investment in the entity. As of March 31, 2013 and December 31, 2012, outstanding warehouses included the CIFC 2013-II Warehouse and CIFC 2012-III Warehouse, respectively

Total net results of consolidated VIEs included on our Condensed Consolidated Statements of Operations was as follows:

	For the Three Months Ended March 31,
	2013			2012
	(In thousands)
Consolidated CLOs	$	47,686		$	37,519
Warehouses (1)	(628		)	1,431
DFR MM CLO (2)	—			(170		)
Net results of Consolidated VIEs	47,058			38,780
Net (income) attributable to noncontrolling interest and Consolidated VIEs	(28,154		)	(26,912		)
Net results of Consolidated VIEs attributable to CIFC Corp.	$	18,904		$	11,868
Characteristics of net results of Consolidated VIEs attributable to CIFC Corp:
Consolidated VIE investment advisory fees	$	18,155		$	11,501
Consolidated VIE net investment income	749			367
Net results of Consolidated VIEs attributable to CIFC Corp.	$	18,904		$	11,868

37

Explanatory Notes: 

________________________________

(1) During the three months ended March 31, 2013 and 2012, we consolidated three and one warehouse investment(s), respectively.

(2) In February 2012, we sold its investments in and the rights to manage the DFR Middle Market CLO Ltd.

Unconsolidated VIEs—As of March 31, 2013, we had variable interests in 22 additional CLOs and CDOs and other investment products, which we manage, that were not consolidated (the "Unconsolidated VIEs") as we were not deemed to be the primary beneficiary with respect to those VIEs. As of March 31, 2013 and December 31, 2012, our maximum exposure to loss associated with the Unconsolidated VIEs was limited to $5.3 million and $5.1 million, respectively, of investments made by us in an Unconsolidated VIE and current investment advisory fee receivables of $0.6 million for both periods. In addition, exposure to loss includes future investment advisory fees on the Consolidated VIEs.

Related Party Transactions

CIFC Parent—CIFC Parent is considered a related party as a result its ownership of 9.1 million shares of our common stock, issued as part of the consideration for the Merger with Legacy CIFC. As such, related party transactions include (i) the deferred purchase payments including those classified as contingent liabilities (see above—Deferred Purchase Payments and Contingent Liabilities and Other Commitments), (ii) CIFC Parent's investments in CLOs managed by us; including eight CLOs of which six were Consolidated CLOs as of March 31, 2013 and nine CLOs of which seven were Consolidated CLOs as of December 31, 2012 and (iii) the management agreement to provide certain administrative and support services to CIFC Parent.

DFR Holdings—DFR Holdings is considered a related party as a result of its ownership of 4.5 million shares of our common stock, issued as part of the consideration for the acquisition of CNCIM. In addition, DFR Holdings owns $25.0 million aggregate principal amount of our Convertible Notes which is convertible into 4.1 million shares of our common stock. As such, related party transactions include (i) the interest expense on Convertible notes of $0.8 million for both the three months ended March 31, 2013 and 2012, (ii) the deferred purchase payments (see above—Deferred Purchase Payments and Contingent Liabilities and Other Commitments) and (iii) the management agreement to provide certain administrative and support services to DFR Holdings.

Total related party receivables and investment advisory fee revenues related to management agreements noted above are as follows:

	Receivables				Investment Advisory Fees
	March 31, 2013		December 31, 2012		For the Three Months Ended March 31,
					2013		2012
	(in thousands)
CIFC Parent	$	65	$	19	$	46	$	50
DFR Holdings	30		17		13		20
Total Related Party Investment Advisory Fees	$	95	$	36	$	59	$	70

Off-Balance Sheet Arrangements—As of March 31, 2013, we did not maintain any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance, special purpose or VIEs, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Further, as of March 31, 2013, we did not guarantee any obligations of unconsolidated entities, enter into any commitments or express intent to provide additional funding to any such entities.

Subsequent Events

On May 10, 2013, we announced our plan to enter into a strategic relationship with HarbourVest Partners, LLC ("HarbourVest"), a leading, global private markets investment firm for over 30 years and an established investor in mezzanine and European senior loans. HarbourVest plans to offer investment opportunities in U.S. senior secured loans to its investors, exclusively with CIFC.

38

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments in certain circumstances that affect amounts reported as assets, liabilities, revenues and expenses. We have established detailed policies and control procedures intended to ensure that valuation methods, including any judgments made as part of such methods, are well controlled, reviewed and applied consistently from period to period. We base our estimates on corporate and industry experience and various other assumptions that we believe to be appropriate under the circumstances.    

A summary of our critical accounting estimates is included in our Annual Report on Form 10-K for the year ended December 31, 2012, in Management's Discussion and Analysis of Financial Condition. There have been no significant changes to our critical accounting estimates as of March 31, 2013.

Recent Accounting Updates

For a discussion of the impact of new accounting pronouncements on our financial condition or results of operations, see "Item 1—Condensed Consolidated Financial Statements—Note 3" of the Notes to the Condensed Consolidated Financial Statements.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

As a smaller reporting company, we are not required to provide the information required by Item 3.

Item 4.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, we carried out an evaluation, with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report. Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective.

Change in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting as of the end of the reporting period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

There are inherent limitations in the effectiveness of any control system, including the potential for human error and the circumvention or overriding of the controls and procedures. Additionally, judgments in decision-making can be faulty and breakdowns can occur because of simple error or mistake. An effective control system can provide only reasonable, not absolute, assurance that the control objectives of the system are adequately met. Accordingly, our management, including our Chief Executive Officer and our Chief Financial Officer do not expect that our control system can prevent or detect all errors or fraud. Finally, projections of any evaluation or assessment of effectiveness of a control system to future periods are subject to the risks that, over time, controls may become inadequate because of changes in an entity's operating environment or deterioration in the degree of compliance with policies or procedures.

39

PART II. Other Information

Item 1.    Legal Proceedings

None.

Item 1A.    Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I—Item 1A. Risk Factors of our 2012 Form 10-K.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

The number and average price of shares of common stock purchased during the three months ended March 31, 2013 are set forth in the table below:

	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
March 1 - March 31, 2013	24	$	7.28	24	$	5,617,667
Total	24	$	7.28	24

Explanatory Note:

_________________________________

(1) On March 29, 2012, we announced that our Board approved a $10.0 million share repurchase program. Shares may be repurchased from time to time and in such amounts as market conditions warrant, subject to price ranges set by management and regulatory considerations. The share repurchase program does not have an expiration date. The indentures governing our Junior Subordinated Notes contain limits on share repurchases, subject to a number of exceptions and conditions.  The share repurchases allowed under the share repurchase program are within these limits.

The indentures governing our Junior Subordinated Notes contain limits on share repurchases, subject to a number of exceptions and conditions. The share repurchases allowed under the share repurchase program are within these limits.

Item 3. Defaults Upon Senior Securities

None.

Item 4.    Mine Safety Disclosures

None.

Item 5.    Other Information

None.

40

Item 6.    Exhibits

Ex. No.	Description of Exhibit
31.1	Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
***101.0	Financial statements from the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2013, formatted in XBRL: (i) the Condensed Consolidated Balance Sheets (unaudited); (ii) the Condensed Consolidated Statements of Operations (unaudited); (iii) the Condensed Consolidated Statements of Equity (unaudited), (iv) the Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited), (v) the Condensed Consolidated Statements of Cash Flows (unaudited); and (vi) the Notes to Condensed Consolidated Financial Statements (unaudited) furnished herewith.

Explanatory Notes:

_________________________________________________________________________

* Filed herewith.

*** In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934 and otherwise is not subject to liability under these sections.

41

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CIFC CORP.
	(Registrant)
May 15, 2013	By:	/s/ PETER GLEYSTEEN
	Peter Gleysteen, Chief Executive Officer and Director
	(Principal Executive Officer)
May 15, 2013	By:	/s/ RAHUL AGARWAL
	Rahul Agarwal, Chief Financial Officer
	(Principal Financial and Accounting Officer)

42

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Peter Gleysteen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CIFC Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 15, 2013	/s/ PETER GLEYSTEEN
		Peter Gleysteen
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Rahul Agarwal, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CIFC Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 15, 2013	/s/ RAHUL AGARWAL
		Rahul Agarwal
		Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CIFC Corp. (the “Company”) on Form 10-Q for the period ending March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ PETER GLEYSTEEN	Date:	May 15, 2013
Peter Gleysteen
Chief Executive Officer
(Principal Executive Officer)
/s/ RAHUL AGARWAL	Date:	May 15, 2013
Rahul Agarwal
Chief Financial Officer
(Principal Financial Officer)

XML

STRATEGIC TRANSACTIONS (Details 2) (USD $) In Thousands, unless otherwise specified					0 Months Ended				3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Sep. 24, 2012 General Electric Capital Corporation [Member]		Sep. 24, 2012 General Electric Capital Corporation [Member] Investment management contracts		Sep. 24, 2012 General Electric Capital Corporation [Member] Referral Agreement		Mar. 31, 2013 CypressTree
Calculation of the purchase consideration
Cash			$ 4,525
Fair value of fixed deferred payments to the seller	4,915	4,778
Total purchase consideration			15,695	[1]
Recognized amounts of assets acquired and liabilities assumed
Receivables			147	[1]
Identifiable intangible assets			7,470	[1]
Excess of purchase consideration over identifiable net assets acquired - Goodwill			8,078	[1],[2],[3]
Identifiable intangible assets acquired by asset class
Closing Date Estimated Fair Value			7,470		3,660	[4]	3,810	[5]
Closing Date Estimated Average Remaining Useful Life (In years)					3 years	[4]	7 years	[5]
Business acquisition disclosures
Business Acquisition Contingent Consideration Minimum Percentage of Investment Advisory Fees									55.00%
Excess of purchase consideration over identifiable net assets acquired - Goodwill			$ 8,078	[1],[2],[3]

[1] (1)Management is in the process of finalizing the purchase price calculations and allocations related to identifiable intangible assets, goodwill and contingent liabilities, pending finalization of revenue projections.

[2] Total amount is tax deductible.

[3] (3)Relates to additional strategic opportunities that management believes will be available to the Company as a result of the association with GE Capital primarily sourced through the Commercial Council, including, but not limited to (i) growth in AUM, (ii) newly developed CIFC-managed investment products and business lines and (iii) preferred access to GE Capital originated loans.

[4] (1)Related to the Navigator Management Agreements. Fair values were determined utilizing an excess earnings approach based upon projections of future investment advisory fees from the CLOs. Significant inputs to the investment advisory fee projections include the structure of the CLOs and estimates related to loan default, recovery and discount rates. The intangible assets related to the management contracts are amortized based on a ratio of expected discounted cash flows from the contracts over their expected remaining useful lives.

[5] (2)Related to the Referral Arrangement (a defined term intended to encompass both referrals under the Referral Agreement described herein and any other business GE Capital may refer to the Company) was determined utilizing an excess earnings approach based upon projections of future revenues generated from the relationship. Significant inputs utilized in the projections include the structure of potential new investment vehicles generating revenues, the timing of investments in such vehicles and discount rates. The intangible assets related to the Referral Arrangement will be amortized based on estimated discounted cash flows of the significant projected future revenue streams. See Note 10 for additional disclosures regarding intangible assets.

XML

EQUITY (Details 3) (USD $)	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012	Dec. 31, 2012
Stock Options [Member]
EQUITY
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	3,924,813			3,594,813
Additional disclosures
Compensation expense (in dollars)	$ 900,000		$ 200,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Exercise Price	$ 6.35			$ 6.05
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	430,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 8.65
Exercised (in shares)	(100,000)
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price	$ 5.41
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	8 years 11 months 9 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value	7,552,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	1,011,141
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 6.16
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	8 years 6 months 22 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value	2,098,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number	3,532,332	[1]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price	$ 6.35	[1]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term	8 years 11 months 9 days	[1]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value	6,797,000	[1]
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options	7,400,000
CIFC Parent Profits Interest Awards[Member] [Member]
Additional disclosures
Compensation expense (in dollars)	900,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options	$ 2,200,000

[1] (1) Represents a reduction to outstanding options at period end for expected forfeiture rate over the life of the options.

XML

INTANGIBLE ASSETS AND GOODWILL (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended									1 Months Ended
	Mar. 31, 2013		Mar. 31, 2012	Dec. 31, 2012		Mar. 31, 2013 Investment management contracts		Dec. 31, 2012 Investment management contracts		Jan. 31, 2012 Investment management contracts Gillespie	Mar. 31, 2013 Investment management contracts Gillespie	Mar. 31, 2013 Referral Agreement		Dec. 31, 2012 Referral Agreement		Mar. 31, 2013 Non-compete agreements		Dec. 31, 2012 Non-compete agreements		Mar. 31, 2013 Trade name		Dec. 31, 2012 Trade name
Intangible assets
Weighted-Average Remaining Estimated Useful Life (In years)						5 years 3 months 18 days		5 years 4 months 24 days				6 years 6 months		6 years 9 months 18 days		4 years 8 months 12 days		4 years 9 months 18 days		8 years		8 years 3 months 18 days
Gross Carrying Amount	$ 82,642	[1]		$ 82,642	[1]	$ 76,047	[1]	$ 76,047	[1]			$ 3,810	[1]	$ 3,810	[1]	$ 1,535	[1]	$ 1,535	[1]	$ 1,250	[1]	$ 1,250	[1]
Accumulated Amortization	43,555	[2]		39,506	[2]	42,576	[2]	38,727	[2]			191	[2]	95	[2]	538	[2]	465	[2]	250	[2]	219	[2]
Net Carrying Amount	39,087			43,136		33,471		37,320				3,619		3,715		997		1,070		1,000		1,031
Amortization of intangible assets	4,049		4,694
Expected amortization expense of the existing intangible assets
2013	11,080
2014	10,861
2015	7,096
2016	4,165
2017	2,286
Thereafter	3,599
Expected amortization expense	39,087
Intangible assets, other disclosures
Proceeds from the sale of management contracts	752		6,468							7,100
Contingent payments											726
Gain on sale of intangible assets	$ 752		$ 5,772

[1] (1)Gross carrying amounts exclude any amounts related to assets fully impaired as of the date presented.

[2] (2)During the three months ended March 31, 2013 and 2012, the Company recorded amortization expense on its intangible assets of $4.0 million and $4.7 million, respectively.

XML

EQUITY (Details 4) (Warrants, General Electric Capital Corporation [Member], USD $)	0 Months Ended
	Sep. 24, 2012
Class of Warrant or Right [Line Items]
Warrants issued	2,000,000
GECEII
Class of Warrant or Right [Line Items]
Warrants issued	2,000,000
Exercise price (usd per share)	6.375

XML

DERIVATIVE INSTRUMENTS (Details) (Warrants)	Mar. 31, 2013 item	Dec. 31, 2012 item
Derivative instruments
Number of Contracts	12	12
Consolidated Variable Interest Entities
Derivative instruments
Number of Contracts	10	10

XML

EQUITY (Tables)

3 Months Ended

Mar. 31, 2013

Stockholders' Equity Note [Abstract]

Schedule of weighted average assumptions related to the entity's stock based awards

Management estimates the fair value of stock-based awards using the Black-Scholes option pricing model. The Black-Scholes option pricing model includes assumptions regarding dividend yield, expected volatility, expected option term and risk-free interest rates. The assumptions used in computing the fair value of stock-based awards reflect management's best estimates, but involve uncertainties relating to market and other conditions, many of which are outside of the Company's control. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by the employees who receive stock-based awards. In addition to the exercise and grant date prices of these awards, management utilized certain weighted average assumptions to estimate the initial fair value of stock-based awards. Weighted average assumptions related to stock-based awards (by period issued) are listed in the table below:

	For the Three Months Ended March 31,
	2013	2012
Expected dividend yield	—	—
Expected volatility	48.75%	50.52%
Risk-free interest rate	1.10%	1.27%
Expected life (years)	6.11	6.09

Summary of 2011 Stock Plan activity

The following table summarizes certain 2011 Stock Plan activity:

	Number of Shares Underlying Stock-Based Awards		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
					(In years)	(In thousands)
Outstanding at December 31, 2012	3,594,813		$	6.05
Granted	430,000		8.65
Exercised	(100,000	)	5.41		n/a	$	312
Outstanding at March 31, 2013	3,924,813		$	6.35	8.94	$	7,552
Exercisable at March 31, 2013	1,011,141		$	6.16	8.56	$	2,098
Vested and Expected to vest at March 31, 2013 (1)	3,532,332		$	6.35	8.94	$	6,797

Explanatory Note:

________________________________

(1) Represents a reduction to outstanding options at period end for expected forfeiture rate over the life of the options.

XML

INCOME TAXES (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Income Tax [Line Items]
Effective Income Tax Rate, Continuing Operations	9.10%	(6.40%)
Deferred Tax Assets, Net	$ 53,381		$ 50,545
effective tax rate after adjusting for non-controlling intersts in consoldiated VIEs	52.70%	1335.00%
Deferred Tax Assets, Valuation Allowance	$ 13,200		$ 13,246

XML

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION (Tables)

3 Months Ended

Mar. 31, 2013

Schedule of Number of CLOs Consolidated [Abstract]

Schedule of Number of CLOs Consolidated

Consolidated VIEs—As of March 31, 2013, the Company consolidated the following CLOs and CDOs (collectively, the “Consolidated CLOs”) as follows:

	Date Consolidation Began	CLOs	CDOs	Total
Consolidation upon adoption of ASU 2009-17 (1)	January 2010	6	1	7
Acquisition of Columbus Nova Credits Investments Management LLC ("CNCIM")	June 2010	4	—	4
For the year ended December 31, 2011
Merger with Legacy CIFC (2)	April 2011	9	—	9
For the year ended December 31, 2012
Issuances	January 2012 - November 2012	3	—	3
Navigator CDO 2006, Ltd. ("Navigator 2006 CLO") (3)	September 2012	1	—	1
For the three months ended March 31, 2013
CIFC Funding 2012-III, Ltd. (“CIFC CLO 2012-III”)	January 2013	1	—	1
CIFC Funding 2013-I, Ltd. (“CIFC CLO 2013-I”)	March 2013	1	—	1
		25	1	26

Explanatory Notes:

_________________________________________________________________________

(1) Upon adoption of Accounting Standards Update ("ASU") 2009-17, on January 1, 2010, the Company evaluated all investments and other contractual arrangements held prior to January 1, 2010 to determine which CLOs and CDOs it would be required to consolidate.

(2) On April 13, 2011, the Company entered into a merger (the "Merger") with Commercial Industrial Finance Corp. ("Legacy CIFC").

(3) See Note 4 for further details on the acquisition of the Navigator CLOs through the closing of the five year strategic relationship with General Electric Capital Corporation's Bank Loan Group referred to as the "GECC transaction".

XML

CONTINGENT LIABILITIES AT FAIR VALUE (Details 2) (USD $)	1 Months Ended	3 Months Ended
	Apr. 30, 2011	Mar. 31, 2013	Mar. 31, 2012	Apr. 13, 2011
Contingent liabilities at fair value
Gain (Loss) on Liabilities at Fair Value		$ (114,000)	$ (2,377,000)
Deferred Purchase Payments and Payments on Contingent Liabilities		3,566,000	5,223,000
CLOs Managed by CIFCAM [Member]
Contingent liabilities at fair value
Gain (Loss) on Liabilities at Fair Value		(76,000)	(2,110,000)
Business Acquisition Cost of Acquired Entity Initial Incentive Fees				15,000,000
Business Acquisition Cost of Acquired Entity Final Contingent Consideration Payment Date	10 years
Business Acquisition, Cost of Acquired Entity Percentage of Fees in Excess of Initial Incentive Fees	50.00%
Remaining payments		3,100,000
Deferred Purchase Payments and Payments on Contingent Liabilities		2,900,000	1,000,000
CypressTree
Contingent liabilities at fair value
Gain (Loss) on Liabilities at Fair Value		(38,000)	(267,000)
Business Acquisition Contingent Consideration Minimum Percentage of Investment Advisory Fees		55.00%
Deferred Purchase Payments and Payments on Contingent Liabilities		700,000	4,300,000
Business Acquisition, Contingent Consideration One Time Earn Out Payments			$ 3,000,000

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) (Fair Value, Inputs, Level 3 [Member], Recurring basis, Consolidated Variable Interest Entities, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Loans
Changes in financial asset measured at fair value classified within Level 3
Estimated fair value, beginning of period	$ 1,177,058		$ 19,729
Transfers into Level 3	226,070	[1]	77	[1]
Transfers out of Level 3	(280,605)	[2]	(5,453)	[2]
Transfers out due to deconsolidation			0
Transfers between classes			0
Net realized/unrealized gains (losses)	10,696		1,614
Purchases	413,088		0
Sales	(62,099)		(1,430)
Settlements	(142,032)		(14,104)
Estimated fair value, end of period	1,342,176		433
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	13,927		1,564
Corporate Bonds
Changes in financial asset measured at fair value classified within Level 3
Estimated fair value, beginning of period	67,438		154,096
Transfers into Level 3			0
Transfers out due to deconsolidation			(5,708)	[3]
Transfers between classes			(33,290)	[4]
Net realized/unrealized gains (losses)	280		2,913
Purchases	750
Sales	(30,165)		(5,931)
Settlements	(497)		(640)
Estimated fair value, end of period	37,806		111,440
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	14		2,596
Other
Changes in financial asset measured at fair value classified within Level 3
Estimated fair value, beginning of period	81,661		47,806
Transfers into Level 3			0
Transfers out of Level 3			0
Transfers out due to deconsolidation			0
Transfers between classes			33,290	[4]
Net realized/unrealized gains (losses)	3,269		10,206
Purchases	18,538		4,930
Sales	(6,250)		(545)
Settlements	(1,024)		(2,161)
Estimated fair value, end of period	96,194		93,526
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	8,502		7,264
Derivative Assets
Changes in financial asset measured at fair value classified within Level 3
Estimated fair value, beginning of period	48		5,281
Transfers into Level 3			0
Transfers out due to deconsolidation			0
Transfers between classes			0
Net realized/unrealized gains (losses)	55		(5,215)
Sales	0		0
Settlements	0		0
Estimated fair value, end of period	103		66
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	55		(5,215)
Investment and Derivative Assets
Changes in financial asset measured at fair value classified within Level 3
Estimated fair value, beginning of period	1,326,205		226,912
Transfers into Level 3	226,070	[1]	77
Transfers out of Level 3	(280,605)	[2]	(5,453)	[2]
Transfers out due to deconsolidation	0		(5,708)	[3]
Transfers between classes	0		0
Net realized/unrealized gains (losses)	14,300		9,518
Purchases	432,376		4,930
Sales	(98,514)		(7,906)
Settlements	(143,553)		(16,905)
Estimated fair value, end of period	1,476,279		205,465
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	$ 22,498		$ 6,209

[1] (1)2013 transfers in represent loans valued by a third party pricing service using composite prices determined using less than two quotes which were previously valued by the same third party pricing service using composite prices determined using two or more quotes and loans.

[2] (2)2013 transfers out represent loans previously marked by an internally developed pricing model, broker quotes, or a third party pricing service using composite prices determined using less than two quotes and are now being marked by a third party pricing service using composite prices determined using two or more quotes.

[3] (3)The transfers out due to deconsolidation represent corporate bonds held in the DFR MM CLO (which was sold in 2012).

[4] (4)The transfers between classes represent investments in CLOs and CDOs classified as corporate bonds as of December 31, 2011.

XML

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013 item	Mar. 22, 2013 item	Jan. 08, 2013 item	Sep. 24, 2012 item		Jan. 02, 2012 item	Apr. 13, 2011 item		Jun. 09, 2010 item	Jan. 01, 2010 item		Mar. 31, 2013 Investments [Member] Consolidated Clo [Member]	Dec. 31, 2012 Investments [Member] Consolidated Clo [Member]	Mar. 31, 2013 Accounts Receivable [Member] Consolidated Clo [Member]	Dec. 31, 2012 Accounts Receivable [Member] Consolidated Clo [Member]
Schedule of Number of CLOs Consolidated [Line Items]
Number of CLOs for which consolidation began		1	1	1	[1]	3	9	[2]	4	6	[3]
Number of Consolidated Debt Obligations for which Consolidation Began		0	0	0	[1]	0	0	[2]	0	1	[3]
Number of Collateralized Loan and Debt Obligations for which Consolidation Began		1	1	1	[1]	3	9	[2]	4	7	[3]
Consolidated CLOs	25
Number of CDOs consolidated	1
Number of Collateralized Loan and Debt Obligations Consolidated	26
Number of CLOs and CDOs that were not consolidated	22
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount												$ 5,300	$ 5,100	$ 600	$ 600

[1] (3)See Note 4 for further details on the acquisition of the Navigator CLOs through the closing of the five year strategic relationship with General Electric Capital Corporation's Bank Loan Group referred to as the "GECC transaction".

[2] (2)On April 13, 2011, the Company entered into a merger (the "Merger") with Commercial Industrial Finance Corp. ("Legacy CIFC").

[3] Upon adoption of Accounting Standards Update ("ASU") 2009-17, on January 1, 2010, the Company evaluated all investments and other contractual arrangements held prior to January 1, 2010 to determine which CLOs and CDOs it would be required to consolidate.

XML

EQUITY (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		3 Months Ended			0 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2013 Stock options	Mar. 31, 2012 Stock options	Mar. 31, 2013 Common Stock	Sep. 24, 2012 Warrants General Electric Capital Corporation [Member]	Sep. 24, 2012 GECEII Warrants General Electric Capital Corporation [Member]
Common Stock
Shares of common stock outstanding	20,705,634	20,682,604
Conversion shares					4,132,231
Initial conversion price (in dollars per share)					$ 6.05
Shares issued related to the GECC transaction						2,000,000	2,000,000
Compensation expense (in dollars)			$ 0.9	$ 0.2
Share Repurchase Program
Number of shares repurchased	24
Shares repurchased, average price per share (in dollars per share)	$ 7.28
Remaining authorized repurchase amount	5.6
Shares repurchased not yet retired (shares)	95,473	95,449
GECEII Warrant
Shares or warrants issued						2,000,000	2,000,000
Exercise price (usd per share)							$ 6.375
Stock Options
Compensation cost not yet recognized			$ 7.4
Weighted average vesting period			2 years 10 months 24 days
Expected volatility			48.75%	50.52%
Risk-free interest rate			1.10%	1.27%
Expected life (years)			6 years 1 month 10 days	6 years 1 month 2 days
Contractual term			10 years
Vesting period			4 years

XML

NET RESULTS OF CONSOLIDATED VIEs (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Consolidated Variable Interest Entities
Net investment and interest income	$ (9)		$ 1
Gain (Loss) on Investments	349
Gain (Loss) on Liabilities at Fair Value	(114)		(2,377)
Net results of Consolidated Variable Interest Entities	47,058		38,780
Consolidated Variable Interest Entities
Consolidated Variable Interest Entities
Investment and interest income	119,163		96,082
Interest expense	(32,920)		(23,569)
Net investment and interest income	86,243		72,513
Gain (Loss) on Investments	81,093		169,196
Gain (Loss) on Liabilities at Fair Value	(110,493)		(202,018)
Net gain (loss) on loans	0		(727)
Net gain (loss) on derivatives	55		1,599
Net gain (loss) from activities of Consolidated Variable Interest Entities	56,898		40,563
Expenses of Consolidated Variable Interest Entities	(9,840)		(1,783)
Net results of Consolidated Variable Interest Entities	47,058	[1]	38,780	[1]
Consolidated Variable Interest Entities
Consolidated Variable Interest Entities
Gain (Loss) on Investments	81,093		169,196
Gain (Loss) on Liabilities at Fair Value	(110,493)		(202,018)
Net results of Consolidated Variable Interest Entities	$ 47,058		$ 38,780

[1] (1)See Note 5 for a reconciliation of Net Results from Consolidated VIEs attributable to CIFC Corp. as amount does not impact the Company's operating results.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING UPDATES

3 Months Ended

Mar. 31, 2013

Accounting Policies [Abstract]

ACCOUNTING POLICIES AND RECENT ACCOUNTING UPDATES

Summary of Significant Accounting Policies and Recent Accounting Updates

As of March 31, 2013, the Company's significant accounting policies, which are detailed in the Company's Annual Report on Form 10-K for the year ended December 31, 2012, have not changed materially.

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Level 3 Financial Liabilities at Fair Value
Estimated fair value, beginning of period	$ 9,630,217		$ 7,598,847
Net realized/unrealized (gains) losses	52,556		152,908
Purchases	1,135,255		37,600
Sales	0		(5,000)
Issuances	0		377,377
Settlements	(524,805)	[1]	(67,665)	[1]
Estimated fair value, end of period	10,293,223		8,094,067
Change in unrealized gains (losses) for the period for the liabilities held as of the end of the period	(48,102)		149,050
Contingent Liabilities at Fair Value
Level 3 Financial Liabilities at Fair Value
Estimated fair value, beginning of period	33,783		39,279
Net realized/unrealized (gains) losses	114		2,377
Settlements	(3,567)	[1]	(5,224)	[1]
Estimated fair value, end of period	30,330		36,432
Change in unrealized gains (losses) for the period for the liabilities held as of the end of the period	(114)		2,551
Long-term Debt | Consolidated Variable Interest Entities
Level 3 Financial Liabilities at Fair Value
Estimated fair value, beginning of period	9,596,434		7,559,568
Net realized/unrealized (gains) losses	52,442		150,531
Purchases	1,135,255		37,600
Sales	0		(5,000)
Issuances	0		377,377
Settlements	(521,238)		(62,441)
Estimated fair value, end of period	10,262,893		8,057,635
Change in unrealized gains (losses) for the period for the liabilities held as of the end of the period	$ (47,988)		$ 146,499

[1] (1)Generally an increase in the default rate would be accompanied by a directionally opposite change in assumption for the recovery and pre-payment rates.

XML

NET RESULTS OF CONSOLIDATED VIEs (Tables)

3 Months Ended

Mar. 31, 2013

Net Gain (Loss) From Activities Of Consolidated Variable Interest Entities

Summary of components of the entity's net gain (loss) on activities of Consolidated Variable Interest Entities

The following table is a summary of the components of "Net results of Consolidated Variable Interest Entities":

	For the Three Months Ended March 31,
	2013			2012
	(in thousands)
Investment income	$	119,163		$	96,082
Interest expense	(32,920		)	(23,569		)
Net investment income	86,243			72,513
Net gain (loss) on investments at fair value	81,093			169,196
Net gain (loss) on liabilities at fair value	(110,493		)	(202,018		)
Net gain (loss) on other investments	—			(727		)
Net gain (loss) on derivatives	55			1,599
Net gain (loss) from activities of Consolidated VIEs	$	56,898		$	40,563
Expenses of Consolidated VIEs	(9,840		)	(1,783		)
Net Results of Consolidated VIEs (1)	$	47,058		$	38,780

Explanatory Note:

________________________________

(1) See Note 5 for a reconciliation of Net Results from Consolidated VIEs attributable to CIFC Corp. as amount does not impact the Company's operating results.

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Schedule of financial instruments carried at fair value on a recurring basis

The following tables summarizes the Company's assets and liabilities carried at fair value on a recurring basis, by class and by level:

	March 31, 2013								December 31, 2012
	Level 1 (1)		Level 2		Level 3		Estimated Fair Value		Level 1 (1)		Level 2		Level 3		Estimated Fair Value
	(In thousands)								(In thousands)
Assets
Investments at fair value	$	—	$	5,261	$	—	$	5,261	$	—	$	5,058	$	—	$	5,058
Consolidated VIEs:
Loans	—		8,257,814		1,342,176		9,599,990		—		7,740,574		1,177,058		8,917,632
Corporate bonds	—		—		37,806		37,806		—		—		67,438		67,438
Other	—		—		96,194		96,194		—		—		81,661		81,661
Derivative assets	—		—		103		103		—		—		48		48
Total Consolidated VIEs	—		8,257,814		1,476,279		9,734,093		—		7,740,574		1,326,205		9,066,779
Total Assets	$	—	$	8,263,075	$	1,476,279	$	9,739,354	$	—	$	7,745,632	$	1,326,205	$	9,071,837
Liabilities
Contingent liabilities	$	—	$	—	$	30,330	$	30,330	$	—	$	—	$	33,783	$	33,783
Consolidated VIEs:
Long-term debt	—		—		10,262,893		10,262,893		—		—		9,596,434		9,596,434
Total Consolidated VIEs	—		—		10,262,893		10,262,893		—		—		9,596,434		9,596,434
Total Liabilities	$	—	$	—	$	10,293,223	$	10,293,223	$	—	$	—	$	9,630,217	$	9,630,217

Explanatory Note:

______________________________

(1) There have been no transfers in or out of Level 1 for the periods presented.

Schedule of level 3 financial assets at fair value

The following tables summarize by class the changes in financial assets and liabilities measured at fair value classified within Level 3 of the valuation hierarchy. Net realized and unrealized gains (losses) for Level 3 financial assets and liabilities measured at fair value are included in the Condensed Consolidated Statements of Operations. 

	Level 3 Financial Assets at Fair Value
	Three months ended For the Three Months Ended March 31, 2013														For the Three Months Ended March 31, 2012
	Investment and Derivative Assets of Consolidated Variable Interest Entities														Investment and Derivative Assets of Consolidated Variable Interest Entities
	Loans			Corporate Bonds			Other			Derivative Assets		Total			Loans			Corporate Bonds			Other			Derivative Assets			Total
	(In thousands)
Estimated fair value, beginning of period	$	1,177,058		$	67,438		$	81,661		$	48	$	1,326,205		$	19,729		$	154,096		$	47,806		$	5,281		$	226,912
Transfers into Level 3 (1)	226,070			—			—			—		226,070			77			—			—			—			77
Transfers out ofLevel 3 (2)	(280,605		)	—			—			—		(280,605		)	(5,453		)	—			—			—			(5,453		)
Transfers out due to deconsolidation (3)	—			—			—			—		—			—			(5,708		)	—			—			(5,708		)
Transfers between classes (4)	—			—			—			—		—			—			(33,290		)	33,290			—			—
Net realized/unrealized gains (losses)	10,696			280			3,269			55		14,300			1,614			2,913			10,206			(5,215		)	9,518
Purchases	413,088			750			18,538			—		432,376			—			—			4,930			—			4,930
Sales	(62,099		)	(30,165		)	(6,250		)	—		(98,514		)	(1,430		)	(5,931		)	(545		)	—			(7,906		)
Settlements	(142,032		)	(497		)	(1,024		)	—		(143,553		)	(14,104		)	(640		)	(2,161		)	—			(16,905		)
Estimated fair value, end of period	$	1,342,176		$	37,806		$	96,194		$	103	$	1,476,279		$	433		$	111,440		$	93,526		$	66		$	205,465
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	$	13,927		$	14		$	8,502		$	55	$	22,498		$	1,564		$	2,596		$	7,264		$	(5,215	)	$	6,209

Explanatory Notes:

______________________________

(1) 2013 transfers in represent loans valued by a third party pricing service using composite prices determined using less than two quotes which were previously valued by the same third party pricing service using composite prices determined using two or more quotes and loans. 2012 transfers in represent loans valued by an internally developed model utilizing unobservable market inputs which were previously valued by the comparable companies pricing model.

(2) 2013 transfers out represent loans previously marked by an internally developed pricing model, broker quotes, or a third party pricing service using composite prices determined using less than two quotes and are now being marked by a third party pricing service using composite prices determined using two or more quotes. 2012 transfers out represent loans valued by the comparable companies pricing model, which were previously valued by an internally developed model utilizing unobservable market inputs.

(3) The transfers out due to deconsolidation represent corporate bonds held in the DFR MM CLO (which was sold in 2012).

(4) The transfers between classes represent investments in CLOs and CDOs classified as corporate bonds as of December 31, 2011.

Schedule of level 3 financial liabilities at fair value

	Level 3 Financial Liabilities at Fair Value
	For the Three Months Ended March 31, 2013									For the Three Months Ended March 31, 2012
	Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Variable Interest Entities			Total			Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Variable Interest Entities			Total
	(In thousands)
Estimated fair value, beginning of period	$	33,783		$	9,596,434		$	9,630,217		$	39,279		$	7,559,568		$	7,598,847
Net realized/unrealized (gains) losses	114			52,442			52,556			2,377			150,531			152,908
Purchases	—			1,135,255			1,135,255			—			37,600			37,600
Sales	—			—			—			—			(5,000		)	(5,000		)
Issuances	—			—			—			—			377,377			377,377
Settlements (1)	(3,567		)	(521,238		)	(524,805		)	(5,224		)	(62,441		)	(67,665		)
Estimated fair value, end of period	$	30,330		$	10,262,893		$	10,293,223		$	36,432		$	8,057,635		$	8,094,067
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period	$	(114	)	$	(47,988	)	$	(48,102	)	$	2,551		$	146,499		$	149,050

Explanatory Note:

__________________________

(1) For Contingent Liabilities at fair value, amount represents payments made related to contingent liabilities assumed for the Merger with Legacy CIFC.

Schedule of quantitative information about level 3 liabilities

Significant increases in any of the significant unobservable inputs, in isolation, will generally have an increase or decrease correlation with the fair value measurement of contingent liabilities and the long-term debt of the Consolidated CLOs, as shown in the table.

	March 31, 2013		December 31, 2012
Significant Unobservable Input	Range	Impact of Increase in Input on Fair Value Measurement (2)	Range	Impact of Increase in Input on Fair Value Measurement (2)
Default rate (1)	1-2%	Decrease	1-2%	Decrease
Recovery rate (1)	70-75%	Increase	70-75%	Increase
Pre-payment rate (1)	25-30%	Decrease	25-30%	Decrease
Reinvestment spread above LIBOR	3.0-3.8%	Increase	3.0-4.0%	Increase
Reinvestment price	99.5-100.0	Increase	99.5-100.0	Increase

Explanatory Notes:

____________________________

(1) Generally an increase in the default rate would be accompanied by a directionally opposite change in assumption for the recovery and pre-payment rates.

(2) Conversely, the impact of a decrease in input would have the opposite impact to the fair value as that presented in the table.

Schedule of carrying amounts and estimated fair values of financial assets and liabilities

The Company has not elected the fair value option for certain financial liabilities. A summary of the carrying value and estimated fair value of those liabilities is as follows:

	As of March 31, 2013		As of December 31, 2012
	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value
	(In thousands)
Financial liabilities:
Long-term debt:
Convertible Notes (1)	18,450	34,008	18,233	33,058
Junior Subordinated Notes (2)	120,000	51,716	120,000	47,752

Explanatory Notes:

________________________________

(1) The estimated fair value of the Convertible Notes was determined using a third-party valuation firm that used a binomial tree model which utilizes significant unobservable inputs, including volatility and yield assumptions.  This methodology is classified as Level 3 within the fair value hierarchy.

(2) Junior Subordinated Notes include both the March and October Junior Subordinated Notes (see Note 11). The estimated fair values of the Junior Subordinated Notes were determined using a discounted cash flow model which utilizes significant unobservable inputs, including yield and forward LIBOR curve assumptions.  This methodology is classified as Level 3 within the fair value hierarchy.

XML

EARNINGS (LOSS) PER SHARE (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net Income (Loss) Available to Common Stockholders, Basic	$ 2,787		$ 1,595
Interest on Convertible Debt, Net of Tax	449		260
Net Income (Loss) Available to Common Stockholders, Diluted	$ 3,236		$ 1,855
Weighted-average shares used in basic calculation	20,797,490		20,426,118
Incremental Common Shares Attributable to Call Options and Warrants	602,958		51,772
Incremental Common Shares Attributable to Share-based Payment Arrangements	261,152	[1]	0	[1]
Incremental Common Shares Attributable to Conversion of Debt Securities	4,132,231		4,132,231
Weighted-average shares used in diluted calculation	25,793,831		24,610,121
Earnings Per Share, Basic	$ 0.13		$ 0.08
Earnings Per Share, Diluted	$ 0.13		$ 0.08
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,200,000		3,500,000

[1] (1)For the three months ended March 31, 2012, outstanding stock options were anti-dilutive under the treasury stock method.

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 4) (Projected cash flow model, Recurring basis, Level 3)	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Contingent Liabilities at Fair Value | Minimum
Quantitative Information about Level 3 Assets & Liabilities
Discount rate (as a percent)	7.00%
Contingent Liabilities at Fair Value | Maximum
Quantitative Information about Level 3 Assets & Liabilities
Discount rate (as a percent)	15.00%
Debt tranches of Consolidated CLOs | Minimum
Quantitative Information about Level 3 Assets & Liabilities
Discount rate (as a percent)	1.00%
Debt tranches of Consolidated CLOs | Maximum
Quantitative Information about Level 3 Assets & Liabilities
Discount rate (as a percent)	8.00%
Contingent liabilities and the long-term debt of the Consolidated CLOs
Quantitative Information about Level 3 Assets & Liabilities
Variable rate basis	LIBOR
Contingent liabilities and the long-term debt of the Consolidated CLOs | Minimum
Quantitative Information about Level 3 Assets & Liabilities
Default rate (as a percent)	1.00%	1.00%
Recovery rate (as a percent)	70.00%	70.00%
Pre-payment rate (as a percent)	25.00%	25.00%
Reinvestment spread over LIBOR (as a percent)	3.00%	3.00%
Reinvestment price	99.50%	99.50%
Contingent liabilities and the long-term debt of the Consolidated CLOs | Maximum
Quantitative Information about Level 3 Assets & Liabilities
Default rate (as a percent)	2.00%	2.00%
Recovery rate (as a percent)	75.00%	75.00%
Pre-payment rate (as a percent)	30.00%	30.00%
Reinvestment spread over LIBOR (as a percent)	3.80%	4.00%
Reinvestment price	100.00%	100.00%
Subordinated notes of Consolidated CLOs | Minimum
Quantitative Information about Level 3 Assets & Liabilities
Discount rate (as a percent)	12.00%

XML

INTANGIBLE ASSETS AND GOODWILL (Tables)

3 Months Ended

Mar. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

Intangible assets comprised of the following (1):

	Weighted-Average Remaining Estimated Useful Life	Gross Carrying Amount (1)		Accumulated Amortization (2)		Net Carrying Amount
	(In years)	(In thousands)
March 31, 2013::
Investment management contracts	5.3	$	76,047	$	42,576	$	33,471
Referral arrangement	6.5	3,810		191		3,619
Non-compete agreements	4.7	1,535		538		997
Trade name	8.0	1,250		250		1,000
Total intangible assets		$	82,642	$	43,555	$	39,087
December 31, 2012::
Investment management contracts	5.4	$	76,047	$	38,727	$	37,320
Referral Arrangement	6.8	3,810		95		3,715
Non-compete agreements	4.8	1,535		465		1,070
Trade name	8.3	1,250		219		1,031
Total intangible assets		$	82,642	$	39,506	$	43,136

Explanatory Notes:

_________________________________

(1) Gross carrying amounts exclude any amounts related to assets fully impaired as of the date presented.

(2) During the three months ended March 31, 2013 and 2012, the Company recorded amortization expense on its intangible assets of $4.0 million and $4.7 million, respectively.

Schedule of expected amortization expense of the existing intangible assets

The following table presents expected amortization expense of the existing intangible assets:

	(In thousands)
2013 (remaining 9 months)	$	11,080
2014	10,861
2015	7,096
2016	4,165
2017	2,286
Thereafter	3,599
	$	39,087

XML

CONTINGENT LIABILITIES AT FAIR VALUE (Tables)

3 Months Ended

Mar. 31, 2013

Business Combination, Contingent Consideration Arrangements [Abstract]

Schedule of estimated fair value of the contingent liabilities

The estimated fair value of the Company's contingent liabilities are as follows:

	March 31, 2013		December 31, 2012
	(In thousands)
Contingent liabilities from the Merger (related party) - Note 15	$	26,319	$	29,152
Contingent liabilities assumed through the Merger	4,011		4,631
Total contingent liabilities	$	30,330	$	33,783

Schedule of changes in fair value of contingent liabilities recorded within net gain (loss) on investments, loans, derivatives and liabilities

The following table presents the changes in fair value of contingent liabilities recorded within "Net gain (loss) on liabilities at fair value" on the Condensed Consolidated Statements of Operations:

	For the Three Months Ended March 31,
	2013			2012
	(In thousands)
Contingent liabilities from the Merger	$	(76	)	$	(2,110	)
Contingent liabilities assumed through the Merger	(38		)	(267		)
Total net gain (loss) on liabilities at fair value	$	(114	)	$	(2,377	)

XML

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

Basis of Presentation and Principles of Consolidation

Basis of Presentation—The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in conformity with the instructions to Form 10-Q and Article 10-01 of Regulation S-X for interim financial statements. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles in the United States of America ("GAAP") for complete financial statements. The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Management believes that estimates utilized in the preparation of the Condensed Consolidated Financial Statements are prudent and reasonable. Actual results could differ from those estimates and such differences could be material. These interim unaudited Condensed Consolidated Financial Statements and related Notes should be read in conjunction with the Consolidated Financial Statements and related Notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012.

In the opinion of management, the accompanying Condensed Consolidated Financial Statements contain all adjustments, consisting of normal recurring adjustments necessary for a fair statement of the results for the interim periods presented. Such operating results may not be indicative of the expected results for any other interim periods or the entire year.

Principles of Consolidation—The Condensed Consolidated Financial Statements include the financial statements of CIFC and (i) its wholly-owned subsidiaries, (ii) subsidiaries in which the Company has a controlling interest and (iii) variable interest entities ("VIEs") for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated upon consolidation. This consolidation, particularly with respect to the VIEs, significantly impacts the Company's Condensed Consolidated Financial Statements.

Consolidated VIEs—As of March 31, 2013, the Company consolidated the following CLOs and CDOs (collectively, the “Consolidated CLOs”) as follows:

	Date Consolidation Began	CLOs	CDOs	Total
Consolidation upon adoption of ASU 2009-17 (1)	January 2010	6	1	7
Acquisition of Columbus Nova Credits Investments Management LLC ("CNCIM")	June 2010	4	—	4
For the year ended December 31, 2011
Merger with Legacy CIFC (2)	April 2011	9	—	9
For the year ended December 31, 2012
Issuances	January 2012 - November 2012	3	—	3
Navigator CDO 2006, Ltd. ("Navigator 2006 CLO") (3)	September 2012	1	—	1
For the three months ended March 31, 2013
CIFC Funding 2012-III, Ltd. (“CIFC CLO 2012-III”)	January 2013	1	—	1
CIFC Funding 2013-I, Ltd. (“CIFC CLO 2013-I”)	March 2013	1	—	1
		25	1	26

Explanatory Notes:

_________________________________________________________________________

(1) Upon adoption of Accounting Standards Update ("ASU") 2009-17, on January 1, 2010, the Company evaluated all investments and other contractual arrangements held prior to January 1, 2010 to determine which CLOs and CDOs it would be required to consolidate.

(2) On April 13, 2011, the Company entered into a merger (the "Merger") with Commercial Industrial Finance Corp. ("Legacy CIFC").

(3) See Note 4 for further details on the acquisition of the Navigator CLOs through the closing of the five year strategic relationship with General Electric Capital Corporation's Bank Loan Group referred to as the "GECC transaction".

Other Consolidated Entities—Warehouses—The Company generally creates special purpose vehicles (“SPVs”) to warehouse SSCL's prior to the issuance of new CLOs.  The warehouse agreements these SPVs enter into vary depending on the terms agreed upon with the warehousing counterparties.  The Company generally makes investments in these warehouse entities. During the three months ended March 31, 2013, the Company consolidated and deconsolidated CIFC Funding 2013-I, Ltd. ("CIFC 2013-I Warehouse") in conjunction with the issuance of CIFC CLO 2013-I and deconsolidated CIFC 2012-III Warehouse in conjunction with the issuance of CIFC CLO 2012-III. As of March 31, 2013, the Company consolidated CIFC Funding 2013-II, Ltd. ("CIFC 2013-II Warehouse"). See Note 5 for more information.

Unconsolidated VIEs—As of March 31, 2013, the Company had variable interests in 22 additional CLOs and CDOs and other investment products, which the Company manages, that were not consolidated (the "Unconsolidated VIEs") as the Company was not deemed to be the primary beneficiary with respect to those VIEs. As of March 31, 2013 and December 31, 2012, the Company's maximum exposure to loss associated with the Unconsolidated VIEs was limited to $5.3 million and $5.1 million, respectively, of investments made by the Company in an Unconsolidated VIE and current investment advisory fee receivables of $0.6 million for both periods. In addition, exposure to loss includes future investment advisory fees on the Consolidated VIEs.

XML

LONG-TERM DEBT (Tables)

3 Months Ended

Mar. 31, 2013

Debt Disclosure [Abstract]

Schedule of long-term debt

The following table summarizes the Company's long-term debt:

	March 31, 2013					December 31, 2012
	Carrying Value		Current Weighted Average Borrowing Rate		Weighted Average Remaining Maturity	Carrying Value		Current Weighted Average Borrowing Rate		Weighted Average Remaining Maturity
	(In thousands)				(In years)	(In thousands)				(In years)
Recourse debt:
March Junior Subordinated Notes (1)	$	95,000	1.00	%	22.6	$	95,000	1.00	%	22.8
October Junior Subordinated Notes (2)	25,000		3.80	%	22.6	25,000		3.81	%	22.8
Total Subordinated Notes Debt	$	120,000	1.58	%	22.6	$	120,000	1.59	%	22.8
Convertible Notes (3)	$	18,450	9.00	%	4.7	$	18,233	9.00	%	4.9
Total recourse debt	$	138,450				$	138,233
Non-recourse Consolidated VIE debt:
Consolidated CLOs (4)	$	10,129,709	1.28	%	8.3	$	9,325,982	1.16	%	8.1
Warehouses (5) (6)	133,184		1.03	%	0.2	270,452		2.12	%	n/m
Total non-recourse Consolidated VIE debt	$	10,262,893	1.28	%	8.2	$	9,596,434	1.19	%	7.9
Total long-term debt	$	10,401,343				$	9,734,667

Explanatory Notes:

________________________________

n/m - not meaningful

(1) March Junior Subordinated Notes bear interest at an annual rate of 1% through April 30, 2015 and LIBOR plus 2.58% thereafter until maturity, October 30, 2035.

(2) October Junior Subordinated Notes bear interest at an annual rate of LIBOR plus 3.50% and mature on October 30, 2035.

(3) As of March 31, 2013 and December 31, 2012, Convertible Notes were recorded net of discount of $6.5 million and $6.8 million, respectively. The Convertible Notes currently pay interest at the 9.00% stated rate; however, including the discount, the effective rate of interest is 18.14%. The Convertible Notes have a $25.0 million aggregate principal amount and will mature on December 9, 2017.

(4) Long-term debt of the Consolidated CLOs is recorded at fair value. The subordinated notes do not have a stated interest rate, and are therefore excluded from the calculation of the weighted average borrowing rate. The par value of the Consolidated CLOs long-term debt (including subordinated notes) was $10.6 billion and $9.8 billion as of March 31, 2013 and December 31, 2012, respectively.

(5) Long-term debt of warehouses not held by the Company is recorded at fair value. As of March 31, 2013 and December 31, 2012, the fair value excludes the preferred shares of CIFC 2013-II Warehouse and CIFC 2012-III Warehouse, respectively, which have a par value of $25.1 million and $14.3 million, respectively. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate. As of March 31, 2013 and December 31, 2012 total carrying value of warehouses related to CIFC 2013-II Warehouse and CIFC 2012-III Warehouse, respectively.

(6) Weighted average remaining maturity for warehouses are based on anticipated settlement dates. Contractual maturity for CIFC 2013-II Warehouse is January 23, 2015.

XML

CONSOLIDATED VIEs (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012		Dec. 31, 2012
Consolidated Variable Interest Entities
Net results of Consolidated VIEs	$ 47,058		$ 38,780
Net income (losses) recorded in condensed consolidated statements of operations	28,154		26,912
Deconsolidation of Variable Interest Entities
Sale of investments in and rights to manage the VIE			36,500
Net income (loss) attributable to CIFC Corp.	2,787		1,595
Investment advisory fees	2,642		2,744
Net investment and interest income	(9)		1
CIFC Warehouses [Member]
Consolidated Variable Interest Entities
Consolidated assets	256,894				334,420
Consolidated liabilities	241,576				307,025
Maximum exposure to loss	15,273	[1]			26,723
Net results of Consolidated VIEs	(628)	[2]	1,431	[2]
Consolidated CLO [Member]
Consolidated Variable Interest Entities
Consolidated assets	11,098,564				9,933,495
Consolidated liabilities	10,934,644				9,806,010
Maximum exposure to loss	57,782				50,128
Net results of Consolidated VIEs	47,686		37,519
Consolidated CLO [Member] | Investment and beneficial interests in CLOs
Consolidated Variable Interest Entities
Maximum exposure to loss	54,954				47,454
Consolidated CLO [Member] | Investment advisory fee receivables
Consolidated Variable Interest Entities
Maximum exposure to loss	2,828				2,674
DFR MM CLO
Consolidated Variable Interest Entities
Net results of Consolidated VIEs	0	[3]	(170)	[3]
Consolidated Variable Interest Entities
Consolidated Variable Interest Entities
Net results of Consolidated VIEs	47,058		38,780
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member]
Deconsolidation of Variable Interest Entities
Net income (loss) attributable to CIFC Corp.	18,904		11,868
Investment advisory fees	18,155		11,501
Net investment and interest income	$ 749		$ 367

[1] (1)Maximum exposure to loss is generally limited to the Company's investment in the entity. As of March 31, 2013 and December 31, 2012, outstanding warehouses included the CIFC 2013-II Warehouse and CIFC 2012-III Warehouse, respectively

[2] (1)During the three months ended March 31, 2013 and 2012, the Company consolidated three and one warehouse investment(s), respectively.

[3] (2)In February 2012, the Company sold its investments in and the rights to manage the DFR MM CLO for $36.5 million and deconsolidated the entity. The economic impact of the Company's investments in the DFR MM CLO had been determined by its initial investment of $69.0 million ($50.0 million of subordinated notes and $19.0 million of debt) and total cash distributed to the Company from initial investment to the date of sale of $52.2 million on the subordinated notes investment and $4.8 million in interest on the debt investment.

XML

EQUITY (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2013		Dec. 31, 2012
EQUITY
Treasury stock, shares	95,473		95,449
Aggregate Intrinsic Value
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 5,600,000
Repurchases of common stock	24
Stock options
EQUITY
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Exercisable Options	213,140
Number of Shares Underlying Stock-Based Awards
Outstanding at the beginning of the period (in shares)	3,594,813
Granted (in shares)	430,000
Outstanding at the end of the period (in shares)	3,924,813
Exercised (in shares)	(100,000)
Exercisable at the end of the period (in shares)	1,011,141
Vested and Expected to vest at the end of the period (in shares)	3,532,332	[1]
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 6.05
Granted (in dollars per share)	$ 8.65
Exercised (in dollars per share)	$ 5.41
Outstanding at the end of the period (in dollars per share)	$ 6.35
Exercisable at the end of the period (in dollars per share)	$ 6.16
Vested and Expected to vest at the end of the period (in dollars per share)	$ 6.35	[1]
Weighted Average Remaining Contractual Term
Outstanding at the end of the period	8 years 11 months 9 days
Exercisable at the end of the period	8 years 6 months 22 days
Vested and Expected to vest at the end of the period	8 years 11 months 9 days	[1]
Aggregate Intrinsic Value
Outstanding at the end of the period (in dollars)	7,552,000
Exercisable at the end of the period (in dollars)	2,098,000
Vested and Expected to vest at the end of the period (in dollars)	6,797,000	[1]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Total Intrinsic Value	$ 312,000

[1] (1) Represents a reduction to outstanding options at period end for expected forfeiture rate over the life of the options.

XML

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
ASSETS
Cash and cash equivalents	$ 39,130	$ 47,692
Due from brokers	5,876	1,150
Restricted cash and cash equivalents	1,613	1,612
Investments and derivative assets at fair value	5,261	5,058
Receivables	12,756	2,432
Prepaid and other assets	5,057	5,392
Deferred Tax Assets, Net	53,381	50,545
Equipment and improvements, net	3,975	3,979
Intangible assets, net	39,087	43,136
Goodwill	76,000	76,000
Subtotal	242,136	236,996
TOTAL ASSETS	11,597,594	10,504,911
LIABILITIES
Due to brokers	37
Accrued and other liabilities	15,655	15,734
Deferred purchase payments	4,915	4,778
Contingent liabilities at fair value	30,330	33,783
Long-term debt	138,450	138,233
Subtotal	189,387	192,528
TOTAL LIABILITIES	11,365,607	10,305,563
EQUITY
Common stock, par value $0.001: 500,000,000 shares authorized; 20,778,053 issued and 20,682,604 outstanding as of December 31, 2012 and 20,255,430 shares issued and outstanding as of December 31, 2011	21	21
Treasury stock, at cost; 95,449 shares as of December 31, 2012	(664)	(664)
Additional paid-in capital	957,108	955,407
Accumulated other comprehensive income (loss)	(6)	(3)
Retained earnings (deficit)	(830,655)	(833,442)
Stockholders' Equity Attributable to Parent	125,804	121,319
TOTAL EQUITY	231,987	199,348
TOTAL LIABILITIES AND EQUITY	11,597,594	10,504,911
Consolidated Variable Interest Entities
ASSETS
Due from brokers	262,896	103,008
Restricted cash and cash equivalents	1,308,974	1,059,283
Investments and derivative assets at fair value	9,734,093	9,066,779
Receivables	49,495	38,845
TOTAL ASSETS	11,355,458	10,267,915
LIABILITIES
Due to brokers	896,801	494,641
Accrued and other liabilities	134	5,207
Interest payable	16,392	16,753
Long-term debt at fair value	10,262,893	9,596,434
TOTAL LIABILITIES	11,176,220	10,113,035
EQUITY
Retained earnings (deficit)	$ 106,183	$ 78,029

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 5) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012
Long-term debt:
Long-term debt	$ 138,450		$ 138,233
Consolidated CLOs
Long-term debt:
Long-term debt	10,129,709	[1]	9,325,982	[1]
Estimated Fair Value
Long-term debt:
Convertible Notes	34,008	[2]	33,058	[2]
Junior Subordinated Notes	51,716	[3]	47,752	[3]
Subordinated Debt Obligations [Member]
Long-term debt:
Long-term debt	$ 120,000	[4]	$ 120,000	[4]

[1] (6)Weighted average remaining maturity for warehouses are based on anticipated settlement dates. Contractual maturity for CIFC 2013-II Warehouse is January 23, 2015.

[2] (1)The estimated fair value of the Convertible Notes was determined using a third-party valuation firm that used a binomial tree model which utilizes significant unobservable inputs, including volatility and yield assumptions. This methodology is classified as Level 3 within the fair value hierarchy.

[3] (2)Junior Subordinated Notes include both the March and October Junior Subordinated Notes (see Note 11). The estimated fair values of the Junior Subordinated Notes were determined using a discounted cash flow model which utilizes significant unobservable inputs, including yield and forward LIBOR curve assumptions. This methodology is classified as Level 3 within the fair value hierarchy.

[4] (2)October Junior Subordinated Notes bear interest at an annual rate of LIBOR plus 3.50% and mature on October 30, 2035.

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 30,941	$ 28,507
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Net premium and discount (accretion) amortization on investments, loans and debt issuance costs	395	222
Share-based compensation	1,794	278
Net (gain) loss on investments and liabilities at fair value / other (gain) loss	(235)	2,377
Net gain on the sale of management contract	(752)	(5,772)
Depreciation and amortization	4,218	4,851
Loss on disposal of equipment and improvements		1,417
Lease expense greater (less) than payments	(57)
Deferred income tax expense (benefit)	(2,836)	175
Net (gain) loss on investments at fair value	(349)
Net (gain) loss on liabilities at fair value	114	2,377
Changes in operating assets and liabilities:
Due from brokers	(4,726)
Receivables	(10,324)	(2,584)
Prepaid and other assets	298	(867)
Due to brokers	37
Accrued and other liabilities	(25)	(8,955)
Net cash provided by (used in) operating activities	(311,905)	(32,705)
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in restricted cash and cash equivalents	(1)	(1)
Proceeds from the sale of the DFR MM CLO		36,500
Proceeds from the sale of management contracts	752	6,468
Purchases of equipment and improvements	(166)	(507)
Principal receipts on and proceeds from sale of loans previously classified as held for investment		1,118
Net cash provided by (used in) investing activities	(249,106)	(177,125)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of stock and debt issuance costs	(93)
Deferred purchase payments and payments on contingent liabilities	(3,566)	(5,223)
Net cash provided by (used in) financing activities	552,452	269,832
Foreign currency translation	(3)	6
Net increase (decrease) in cash and cash equivalents	(8,562)	60,008
Cash and cash equivalents at beginning of period	47,692	35,973
Cash and cash equivalents at end of period	39,130	95,981
SUPPLEMENTAL DISCLOSURE:
Cash paid for interest	486	994
Cash paid for income taxes	2,781	695
Consolidated Variable Interest Entities
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Net premium and discount (accretion) amortization on investments, loans and debt issuance costs		(633)
Net (gain) loss on investments at fair value	(81,093)	(169,196)
Net (gain) loss on liabilities at fair value	110,493	202,018
Net other (gain) loss	(55)	(309)
Changes in operating assets and liabilities:
Due from brokers	(159,888)	(3,883)
Net (purchases) sales of investments at fair value	(2,876,503)	(1,316,760)
Proceeds from Sale of Available-for-sale Securities	2,290,337	949,579
Receivables	(10,650)	(633)
Prepaid and other assets		(384)
Due to brokers	402,160	284,443
Accrued and other liabilities	(5,073)	10
Increase (Decrease) in Interest Payable, Net	(361)	3,394
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in restricted cash and cash equivalents	(249,691)	(220,703)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt	1,135,255	414,976
Payments made on long-term debt	(579,144)	(139,921)
SUPPLEMENTAL DISCLOSURE:
Cash paid for interest	$ 27,237	$ 20,424

XML

RESTRUCTURING CHARGES (Details) (USD $)	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Rollforward of accrued restructuring charges
Accrued Restructuring Charges at beginning of period	$ 1,410,000		$ 1,490,000
Provision for Restructuring Charges		[1]	3,904,000	[1]
Payments for Restructuring Charges	(523,000)		(3,434,000)
Non-Cash Settlement of Restructuring Charges		[2]	(783,000)	[2]
Accrued Restructuring Charges at end of period	887,000		1,177,000
Lease termination fees			3,100,000
Loss on disposal of equipment and improvements			1,417,000
Deferred rent reversal			$ 600,000

[1] (1)During the three months ended March 31, 2012, the Company recorded lease termination fees of $3.1 million, a loss on disposal of associated equipment and improvements of $1.4 million, partially offset by a $(0.6) million reversal of deferred rent in conjunction with the closure of the Company's former Rosemont, Illinois office.

[2] (2)For the three months ended March 31, 2012, non-cash settlement represents the loss on disposal of equipment and improvements partially offset by the reversal of deferred rent payments noted above.

XML

RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS (Tables)

3 Months Ended

Mar. 31, 2013

Related Party Transactions [Abstract]

Schedule of Related Party Transactions [Table Text Block]

Total related party receivables and investment advisory fee revenues related to management agreements noted above are as follows:

	Receivables				Investment Advisory Fees
	March 31, 2013		December 31, 2012		For the Three Months Ended March 31,
					2013		2012
	(in thousands)
CIFC Parent	$	65	$	19	$	46	$	50
DFR Holdings	30		17		13		20
Total Related Party Investment Advisory Fees	$	95	$	36	$	59	$	70

XML

RESTRUCTURING CHARGES

3 Months Ended

Mar. 31, 2013

Restructuring and Related Activities [Abstract]

RESTRUCTURING CHARGES

Restructuring Charges

The table below provides a rollforward of the accrued restructuring charges:

	For the Three Months Ended March 31,
	2013			2012
	(in thousands)
Accrued Restructuring Charges, beginning of period	$	1,410		$	1,490
Provision (1)	—			3,904
Payments	(523		)	(3,434		)
Non-Cash Settlement (2)	—			(783		)
Accrued Restructuring Charges, end of period	$	887		$	1,177

Explanatory Notes:

_________________________________

(1) During the three months ended March 31, 2012, the Company recorded lease termination fees of $3.1 million, a loss on disposal of associated equipment and improvements of $1.4 million, partially offset by a $(0.6) million reversal of deferred rent in conjunction with the closure of the Company's former Rosemont, Illinois office.

(2) For the three months ended March 31, 2012, non-cash settlement represents the loss on disposal of equipment and improvements partially offset by the reversal of deferred rent payments noted above.

XML

COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Schedule of future minimum commitments under the lease

Total occupancy expense for both the three months ended March 31, 2013 and 2012 was $0.4 million. The future minimum commitments under the Company's lease agreement are as follows:

	(In thousands)
2013 (remaining 9 months)	$	803
2014	1,607
2015	1,607
2016	1,607
2017	1,607
Thereafter	8,690
	$	15,921

XML

SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2013

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Events

On May 10, 2013, the Company announced its plan to enter into a strategic relationship with HarbourVest Partners, LLC ("HarbourVest"), a leading, global private markets investment firm for over 30 years and an established investor in mezzanine and European senior loans. HarbourVest plans to offer investment opportunities in U.S. senior secured loans to its investors, exclusively with CIFC.

XML

ORGANIZATION

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION

Organization and Business

Organization—CIFC Corp. (“CIFC” and, together with its subsidiaries, the “Company”) is a Delaware corporation that specializes in managing investment products which include corporate credit obligations and primarily senior secured corporate loans (“SSCLs”), as the primary underlying investments.

Business—The Company establishes and manages investment products for various types of investors, including pension funds, hedge funds and other asset management firms, banks, insurance companies and other types of institutional investors across the world. The Company's existing investment products are primarily collateralized loan obligations ("CLOs") and also include collateralized debt obligations ("CDOs") and other investment vehicles. The Company also makes investments in certain investment products it manages and SSCLs that the Company warehouses to launch new investment products.

The investment advisory fees paid to the Company by these investment products are the Company's primary source of revenue and are generally paid on a quarterly basis and are ongoing as long as the Company manages the products. Investment advisory fees typically consist of senior and subordinated management fees based on the amount of assets held in the investment product and, in some cases, incentive fees based on the returns generated for certain investors. The Company also earns net investment income and incurs gains/losses from its investments in CLOs, warehouses and other investment products it manages.

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	20,801,107	20,778,053
Common stock, shares outstanding	20,705,634	20,682,604
Treasury stock, shares	95,473	95,449

XML

LONG-TERM DEBT

3 Months Ended

Mar. 31, 2013

Debt Disclosure [Abstract]

LONG-TERM DEBT

Long-Term Debt

The following table summarizes the Company's long-term debt:

	March 31, 2013					December 31, 2012
	Carrying Value		Current Weighted Average Borrowing Rate		Weighted Average Remaining Maturity	Carrying Value		Current Weighted Average Borrowing Rate		Weighted Average Remaining Maturity
	(In thousands)				(In years)	(In thousands)				(In years)
Recourse debt:
March Junior Subordinated Notes (1)	$	95,000	1.00	%	22.6	$	95,000	1.00	%	22.8
October Junior Subordinated Notes (2)	25,000		3.80	%	22.6	25,000		3.81	%	22.8
Total Subordinated Notes Debt	$	120,000	1.58	%	22.6	$	120,000	1.59	%	22.8
Convertible Notes (3)	$	18,450	9.00	%	4.7	$	18,233	9.00	%	4.9
Total recourse debt	$	138,450				$	138,233
Non-recourse Consolidated VIE debt:
Consolidated CLOs (4)	$	10,129,709	1.28	%	8.3	$	9,325,982	1.16	%	8.1
Warehouses (5) (6)	133,184		1.03	%	0.2	270,452		2.12	%	n/m
Total non-recourse Consolidated VIE debt	$	10,262,893	1.28	%	8.2	$	9,596,434	1.19	%	7.9
Total long-term debt	$	10,401,343				$	9,734,667

Explanatory Notes:

________________________________

n/m - not meaningful

(1) March Junior Subordinated Notes bear interest at an annual rate of 1% through April 30, 2015 and LIBOR plus 2.58% thereafter until maturity, October 30, 2035.

(2) October Junior Subordinated Notes bear interest at an annual rate of LIBOR plus 3.50% and mature on October 30, 2035.

(3) As of March 31, 2013 and December 31, 2012, Convertible Notes were recorded net of discount of $6.5 million and $6.8 million, respectively. The Convertible Notes currently pay interest at the 9.00% stated rate; however, including the discount, the effective rate of interest is 18.14%. The Convertible Notes have a $25.0 million aggregate principal amount and will mature on December 9, 2017.

(4) Long-term debt of the Consolidated CLOs is recorded at fair value. The subordinated notes do not have a stated interest rate, and are therefore excluded from the calculation of the weighted average borrowing rate. The par value of the Consolidated CLOs long-term debt (including subordinated notes) was $10.6 billion and $9.8 billion as of March 31, 2013 and December 31, 2012, respectively.

(5) Long-term debt of warehouses not held by the Company is recorded at fair value. As of March 31, 2013 and December 31, 2012, the fair value excludes the preferred shares of CIFC 2013-II Warehouse and CIFC 2012-III Warehouse, respectively, which have a par value of $25.1 million and $14.3 million, respectively. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate. As of March 31, 2013 and December 31, 2012 total carrying value of warehouses related to CIFC 2013-II Warehouse and CIFC 2012-III Warehouse, respectively.

(6) Weighted average remaining maturity for warehouses are based on anticipated settlement dates. Contractual maturity for CIFC 2013-II Warehouse is January 23, 2015.

Non-Recourse Consolidated VIE Debt

Consolidated CLOs—During the three months ended March 31, 2013, the Consolidated CLOs issued $1.0 billion of debt, paid down $250.7 million of their outstanding debt and distributed $57.9 million to the holders of their subordinated notes.  During the three months ended March 31, 2012, the Consolidated CLOs issued $377.4 million of debt, made net borrowings under revolving credit facilities of $32.6 million, paid down $62.4 million of their outstanding debt and distributed $51.5 million to the holders of their subordinated notes.  

The carrying value of the assets of the Consolidated CLOs, which are the only assets to which the Consolidated CLO debt holders have recourse for repayment was $11.1 billion and $9.9 billion as of March 31, 2013 and December 31, 2012, respectively.

Other Consolidated Entities—The debt and equity holders have recourse to the total assets of the respective Consolidated VIE's assets. See Note 5 for further details of the Company's exposure to loss on Consolidated VIEs.

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2013	May 03, 2013
Document And Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Entity Registrant Name	CIFC Corp.
Entity Central Index Key	0001313918
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		20,705,634

XML

EQUITY

3 Months Ended

Mar. 31, 2013

Stockholders' Equity Note [Abstract]

EQUITY

Equity

Common Stock—In addition to common stock outstanding, the Company has Convertible Notes that are convertible into 4.1 million shares (the “Conversion Shares”) of common stock (such amount may be adjusted in certain events or increased in connection with the payment of in-kind interest at an initial conversion price of $6.05 per share, subject to adjustment). The Company did not declare dividends during the three months ended March 31, 2013 and 2012.

Treasury Stock/Stock Repurchases—During the three months ended March 31, 2013, the Company repurchased 24 common shares in open-market transactions for a de minimus aggregate cost with an average price per share of $7.28.  As of March 31, 2013 the Company was authorized to repurchase up to $5.6 million of its common stock under a board of director's (the "Board") approved share repurchase program.

Stock Options—The Company recorded total stock-based compensation expense of $0.9 million and $0.2 million for the three months ended March 31, 2013 and 2012, respectively, on the Condensed Consolidated Statements of Operations within "Compensation and benefits." As of March 31, 2013, there was $7.4 million of estimated unrecognized compensation expense related to unvested awards, net of estimated forfeitures which is expected to be recognized over a weighted average vesting period of 2.9 years. As of March 31, 2013, an aggregate of 213,140 shares remain available for issuance under the Company's 2011 Stock Plan ("2011 Stock Plan").

The following table summarizes certain 2011 Stock Plan activity:

	Number of Shares Underlying Stock-Based Awards		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
					(In years)	(In thousands)
Outstanding at December 31, 2012	3,594,813		$	6.05
Granted	430,000		8.65
Exercised	(100,000	)	5.41		n/a	$	312
Outstanding at March 31, 2013	3,924,813		$	6.35	8.94	$	7,552
Exercisable at March 31, 2013	1,011,141		$	6.16	8.56	$	2,098
Vested and Expected to vest at March 31, 2013 (1)	3,532,332		$	6.35	8.94	$	6,797

Explanatory Note:

________________________________

(1) Represents a reduction to outstanding options at period end for expected forfeiture rate over the life of the options.

Management estimates the fair value of stock-based awards using the Black-Scholes option pricing model. The Black-Scholes option pricing model includes assumptions regarding dividend yield, expected volatility, expected option term and risk-free interest rates. The assumptions used in computing the fair value of stock-based awards reflect management's best estimates, but involve uncertainties relating to market and other conditions, many of which are outside of the Company's control. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by the employees who receive stock-based awards. In addition to the exercise and grant date prices of these awards, management utilized certain weighted average assumptions to estimate the initial fair value of stock-based awards. Weighted average assumptions related to stock-based awards (by period issued) are listed in the table below:

	For the Three Months Ended March 31,
	2013	2012
Expected dividend yield	—	—
Expected volatility	48.75%	50.52%
Risk-free interest rate	1.10%	1.27%
Expected life (years)	6.11	6.09

The stock-based awards granted have exercise prices equal to the fair market value of the stock on the date of grant, a contractual term of 10 years and a vesting period of approximately 4 years. In addition to awards with service conditions, certain of the awards also contain performance conditions. The expected dividend yield is the expected annual dividend as a percentage of the fair market value of the stock on the date of grant. The Company does not expect to make dividend distributions in the foreseeable future. The expected volatility is estimated by considering the historical volatility of the Company's stock, the historical and implied volatility of peer companies and the Company's expectations of volatility for the expected life of the stock-based awards. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for an instrument which closely approximates the expected option term. The expected option term is the number of years management estimates that the stock-based award will be outstanding prior to exercise. The expected life of the stock-based awards issued is determined using the simplified method.

Profits Interest Awards—During 2011, CIFC Parent (a related party, see Note 15) granted certain employees of the Company profits interests in CIFC Parent. During the three months ended March 31, 2013, the Company recorded a non-cash compensation expense of $0.9 million in "Compensation and benefits" on the Condensed Consolidated Statements of Operations related to the amortization and remeasurement of the value of awards. As of March 31, 2013, there was $2.2 million of estimated unrecognized compensation expense related to these awards.

Appropriated Retained Earnings (Deficit) of Consolidated VIEs—Appropriated retained earnings (deficit) of Consolidated VIEs represents the excess fair value of the Consolidated CLOs’ assets over the Consolidated CLOs’ liabilities upon initial consolidation and is subsequently adjusted each period for the net income (loss) attributable to the Consolidated CLOs

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Revenues
Investment advisory fees	$ 2,642		$ 2,744
Net investment and interest income:
Net investment and interest income	(9)		1
Total net revenues	2,633		2,745
Expenses
Compensation and benefits	7,524		5,744
Professional services	1,923		724
General and administrative expenses	1,483		1,404
Depreciation and amortization	4,218		4,851
Restructuring charges		[1]	3,904	[1]
Total expenses	15,148		16,627
Gain (Loss) on Investments	349
Gain (Loss) on Liabilities at Fair Value	(114)		(2,377)
Other Nonoperating Income Expense, Net	3		(41)
Other Income (Expense) and Gain (Loss)
Corporate interest expense	(1,482)		(1,469)
Net gain on the sale of management contract	752		5,772
Net other income (expense) and gain (loss)	(492)		1,885
Operating income (loss)	(13,007)		(11,997)
Results of Consolidated Variable Interest Entities
Net results of Consolidated Variable Interest Entities	47,058		38,780
Net income (loss)
Income (loss) before income tax expense (benefit)	34,051		26,783
Income tax expense (benefit)	(3,110)		1,724
Net income (loss)	30,941		28,507
Net (income) loss attributable to noncontrolling interest and Consolidated Variable Interest Entities	(28,154)		(26,912)
Net income (loss) attributable to CIFC Corp.	2,787		1,595
Earnings Per Share, Basic	$ 0.13		$ 0.08
Earnings Per Share, Diluted	$ 0.13		$ 0.08
Weighted Average Number of Shares Outstanding, Basic	20,797,490		20,426,118
Weighted Average Number of Shares Outstanding, Diluted	25,793,831		24,610,121
Consolidated Variable Interest Entities
Expenses
Gain (Loss) on Investments	81,093		169,196
Gain (Loss) on Liabilities at Fair Value	(110,493)		(202,018)
Results of Consolidated Variable Interest Entities
Net results of Consolidated Variable Interest Entities	47,058		38,780
Consolidated Variable Interest Entities
Net investment and interest income:
Investment and interest income	119,163		96,082
Interest expense	32,920		23,569
Net investment and interest income	86,243		72,513
Expenses
Gain (Loss) on Investments	81,093		169,196
Gain (Loss) on Liabilities at Fair Value	(110,493)		(202,018)
Results of Consolidated Variable Interest Entities
Net gain (loss) from activities of Consolidated Variable Interest Entities	56,898		40,563
Expenses of Consolidated Variable Interest Entities	9,840		1,783
Net results of Consolidated Variable Interest Entities	$ 47,058	[2]	$ 38,780	[2]

[1] (1)During the three months ended March 31, 2012, the Company recorded lease termination fees of $3.1 million, a loss on disposal of associated equipment and improvements of $1.4 million, partially offset by a $(0.6) million reversal of deferred rent in conjunction with the closure of the Company's former Rosemont, Illinois office.

[2] (1)See Note 5 for a reconciliation of Net Results from Consolidated VIEs attributable to CIFC Corp. as amount does not impact the Company's operating results.

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair Value of Financial Instruments

Assets and Liabilities Measured at Fair Value on a Recurring Basis—The following tables summarizes the Company's assets and liabilities carried at fair value on a recurring basis, by class and by level:

	March 31, 2013								December 31, 2012
	Level 1 (1)		Level 2		Level 3		Estimated Fair Value		Level 1 (1)		Level 2		Level 3		Estimated Fair Value
	(In thousands)								(In thousands)
Assets
Investments at fair value	$	—	$	5,261	$	—	$	5,261	$	—	$	5,058	$	—	$	5,058
Consolidated VIEs:
Loans	—		8,257,814		1,342,176		9,599,990		—		7,740,574		1,177,058		8,917,632
Corporate bonds	—		—		37,806		37,806		—		—		67,438		67,438
Other	—		—		96,194		96,194		—		—		81,661		81,661
Derivative assets	—		—		103		103		—		—		48		48
Total Consolidated VIEs	—		8,257,814		1,476,279		9,734,093		—		7,740,574		1,326,205		9,066,779
Total Assets	$	—	$	8,263,075	$	1,476,279	$	9,739,354	$	—	$	7,745,632	$	1,326,205	$	9,071,837
Liabilities
Contingent liabilities	$	—	$	—	$	30,330	$	30,330	$	—	$	—	$	33,783	$	33,783
Consolidated VIEs:
Long-term debt	—		—		10,262,893		10,262,893		—		—		9,596,434		9,596,434
Total Consolidated VIEs	—		—		10,262,893		10,262,893		—		—		9,596,434		9,596,434
Total Liabilities	$	—	$	—	$	10,293,223	$	10,293,223	$	—	$	—	$	9,630,217	$	9,630,217

Explanatory Note:

______________________________

(1) There have been no transfers in or out of Level 1 for the periods presented.

Changes in Level 3 Recurring Fair Value Measurements—The following tables summarize by class the changes in financial assets and liabilities measured at fair value classified within Level 3 of the valuation hierarchy. Net realized and unrealized gains (losses) for Level 3 financial assets and liabilities measured at fair value are included in the Condensed Consolidated Statements of Operations. 

	Level 3 Financial Assets at Fair Value
	Three months ended For the Three Months Ended March 31, 2013														For the Three Months Ended March 31, 2012
	Investment and Derivative Assets of Consolidated Variable Interest Entities														Investment and Derivative Assets of Consolidated Variable Interest Entities
	Loans			Corporate Bonds			Other			Derivative Assets		Total			Loans			Corporate Bonds			Other			Derivative Assets			Total
	(In thousands)
Estimated fair value, beginning of period	$	1,177,058		$	67,438		$	81,661		$	48	$	1,326,205		$	19,729		$	154,096		$	47,806		$	5,281		$	226,912
Transfers into Level 3 (1)	226,070			—			—			—		226,070			77			—			—			—			77
Transfers out ofLevel 3 (2)	(280,605		)	—			—			—		(280,605		)	(5,453		)	—			—			—			(5,453		)
Transfers out due to deconsolidation (3)	—			—			—			—		—			—			(5,708		)	—			—			(5,708		)
Transfers between classes (4)	—			—			—			—		—			—			(33,290		)	33,290			—			—
Net realized/unrealized gains (losses)	10,696			280			3,269			55		14,300			1,614			2,913			10,206			(5,215		)	9,518
Purchases	413,088			750			18,538			—		432,376			—			—			4,930			—			4,930
Sales	(62,099		)	(30,165		)	(6,250		)	—		(98,514		)	(1,430		)	(5,931		)	(545		)	—			(7,906		)
Settlements	(142,032		)	(497		)	(1,024		)	—		(143,553		)	(14,104		)	(640		)	(2,161		)	—			(16,905		)
Estimated fair value, end of period	$	1,342,176		$	37,806		$	96,194		$	103	$	1,476,279		$	433		$	111,440		$	93,526		$	66		$	205,465
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	$	13,927		$	14		$	8,502		$	55	$	22,498		$	1,564		$	2,596		$	7,264		$	(5,215	)	$	6,209

Explanatory Notes:

______________________________

(1) 2013 transfers in represent loans valued by a third party pricing service using composite prices determined using less than two quotes which were previously valued by the same third party pricing service using composite prices determined using two or more quotes and loans. 2012 transfers in represent loans valued by an internally developed model utilizing unobservable market inputs which were previously valued by the comparable companies pricing model.

(2) 2013 transfers out represent loans previously marked by an internally developed pricing model, broker quotes, or a third party pricing service using composite prices determined using less than two quotes and are now being marked by a third party pricing service using composite prices determined using two or more quotes. 2012 transfers out represent loans valued by the comparable companies pricing model, which were previously valued by an internally developed model utilizing unobservable market inputs.

(3) The transfers out due to deconsolidation represent corporate bonds held in the DFR MM CLO (which was sold in 2012).

(4) The transfers between classes represent investments in CLOs and CDOs classified as corporate bonds as of December 31, 2011.

	Level 3 Financial Liabilities at Fair Value
	For the Three Months Ended March 31, 2013									For the Three Months Ended March 31, 2012
	Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Variable Interest Entities			Total			Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Variable Interest Entities			Total
	(In thousands)
Estimated fair value, beginning of period	$	33,783		$	9,596,434		$	9,630,217		$	39,279		$	7,559,568		$	7,598,847
Net realized/unrealized (gains) losses	114			52,442			52,556			2,377			150,531			152,908
Purchases	—			1,135,255			1,135,255			—			37,600			37,600
Sales	—			—			—			—			(5,000		)	(5,000		)
Issuances	—			—			—			—			377,377			377,377
Settlements (1)	(3,567		)	(521,238		)	(524,805		)	(5,224		)	(62,441		)	(67,665		)
Estimated fair value, end of period	$	30,330		$	10,262,893		$	10,293,223		$	36,432		$	8,057,635		$	8,094,067
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period	$	(114	)	$	(47,988	)	$	(48,102	)	$	2,551		$	146,499		$	149,050

Explanatory Note:

__________________________

(1) For Contingent Liabilities at fair value, amount represents payments made related to contingent liabilities assumed for the Merger with Legacy CIFC.

Quantitative Information about Level 3 Assets & Liabilities—ASC Topic 820, as amended by ASU 2011-04, requires disclosure of quantitative information about the significant unobservable inputs used in the valuation of assets and liabilities classified as Level 3 within the fair value hierarchy.  Disclosure of this information is not required in circumstances where a valuation (unadjusted) is obtained from a third-party pricing service and the information regarding the unobservable inputs is not reasonably available to the Company.  As such, the disclosure provided below provides quantitative information only about the significant unobservable inputs used in the valuation of the contingent liabilities and the long-term debt of the Consolidated CLOs.

The valuation of both the contingent liabilities and the long-term debt of the Consolidated CLOs begins with a model of projected cash flows for the relevant CLO.  In addition to the structure of each of the CLOs (as provided in the indenture for each CLO), the following table provides quantitative information about the significant unobservable inputs utilized in this projection.  Significant increases in any of the significant unobservable inputs, in isolation, will generally have an increase or decrease correlation with the fair value measurement of contingent liabilities and the long-term debt of the Consolidated CLOs, as shown in the table.

	March 31, 2013		December 31, 2012
Significant Unobservable Input	Range	Impact of Increase in Input on Fair Value Measurement (2)	Range	Impact of Increase in Input on Fair Value Measurement (2)
Default rate (1)	1-2%	Decrease	1-2%	Decrease
Recovery rate (1)	70-75%	Increase	70-75%	Increase
Pre-payment rate (1)	25-30%	Decrease	25-30%	Decrease
Reinvestment spread above LIBOR	3.0-3.8%	Increase	3.0-4.0%	Increase
Reinvestment price	99.5-100.0	Increase	99.5-100.0	Increase

Explanatory Notes:

____________________________

(1) Generally an increase in the default rate would be accompanied by a directionally opposite change in assumption for the recovery and pre-payment rates.

(2) Conversely, the impact of a decrease in input would have the opposite impact to the fair value as that presented in the table.

The valuation of the contingent liabilities as of March 31, 2013 discounts the investment advisory fees subject to fee-sharing arrangements provided from the projected cash flow model (described above) at discount rates ranging from 7% to 15%.  The discount rate varies by type of investment advisory fee (senior management fee, subordinated management fee, or incentive fee), the priority of that investment advisory fee in the waterfall of the CLO and the relative risk associated with the respective investment advisory fee cash flow projections. Increases (decreases) in the discount rates in isolation would result in a lower (higher) fair value measurement.

The valuation of the long-term debt of the Consolidated CLOs as of March 31, 2013 discounts the cash flows to each tranche of debt and subordinated notes provided from the projected cash flow model (described above) at discount rates ranging from 1% to 8% above LIBOR for the debt tranches and a discount rate of 12% for the subordinated notes tranches.  The discount rate varies by the original credit rating of each tranche of debt or year of issuance for the subordinated notes. Increases (decreases) in the discount rates in isolation would result in a lower (higher) fair value measurement.

Carrying Value and Estimated Fair Value of Financial Assets and Liabilities—The Company has not elected the fair value option for certain financial liabilities. A summary of the carrying value and estimated fair value of those liabilities is as follows:

	As of March 31, 2013		As of December 31, 2012
	Carrying Value	Estimated Fair Value	Carrying Value	Estimated Fair Value
	(In thousands)
Financial liabilities:
Long-term debt:
Convertible Notes (1)	18,450	34,008	18,233	33,058
Junior Subordinated Notes (2)	120,000	51,716	120,000	47,752

Explanatory Notes:

________________________________

(1) The estimated fair value of the Convertible Notes was determined using a third-party valuation firm that used a binomial tree model which utilizes significant unobservable inputs, including volatility and yield assumptions.  This methodology is classified as Level 3 within the fair value hierarchy.

(2) Junior Subordinated Notes include both the March and October Junior Subordinated Notes (see Note 11). The estimated fair values of the Junior Subordinated Notes were determined using a discounted cash flow model which utilizes significant unobservable inputs, including yield and forward LIBOR curve assumptions.  This methodology is classified as Level 3 within the fair value hierarchy.

The carrying value of other financial instruments including cash and cash equivalents, due from brokers, restricted cash and cash equivalents, receivables, due to brokers, deferred purchase payments, Consolidated VIE due from brokers, Consolidated VIE restricted cash and cash equivalents approximate the fair value of the instruments and are all considered Level 1 on the fair value hierarchy. The fair value of other financial instruments including investments at fair value, contingent liabilities at fair value, Consolidated VIE investment and derivative assets at fair value and Consolidated VIE long-term debt are included in the previous fair value hierarchy tables above.

The loans and other investments classified as investments at fair value of the Consolidated CLOs are diversified over many industries, primarily as a result of industry concentration limits outlined in the indentures of each CLO, and as such management does not believe the Company has any significant concentration risk.

Fair Value Methodologies of Financial Instruments—The following is a description of the Company's valuation methodologies for financial instruments measured at fair value by class as required by ASC Topic 820, including the general classification of such instruments pursuant to the valuation hierarchy. Under certain market conditions, the Company may make adjustments to the valuation methodologies described below. The Company maintains a consistent policy for the process of identifying when and how such adjustments should be made. To the extent that the Company makes a significant fair value adjustment, the valuation classification would generally be considered Level 3 within the fair value hierarchy.  The Company determined its classes of financial instruments based on an analysis of the nature, characteristics and risks of such financial instruments at fair value.

Loans—Loans are generally valued via a third-party pricing service. The value represents a composite of the mid-point in the bid-ask spread of broker quotes or is based on the composite price of a different tranche of the same or similar security if broker quotes are unavailable for the specific tranche the Company owns. The third-party pricing service provides the number of quotes used in determining the composite price, a factor that the Company uses in determining the observability level of the inputs to the composite price. When the fair value of the loan investments is based on a composite price determined using 2 or more quotes the composite price is considered to be based on significant observable inputs and classified as Level 2 within the fair value hierarchy. Effective December 31, 2012, when the fair value of certain loan investments is based on a composite price determined using less than two quotes, the composite price is considered to be based on significant unobservable inputs. In these instances, the Company performs certain procedures on a sample basis to determine that composite prices approximate fair market value. Alternative methodologies are used to value the loans such as a comparable company pricing model (an internally developed model using composite or other observable comparable market inputs) or an internally developed model using data including unobservable market inputs. Accordingly, loans valued using alternative methodologies are classified as Level 3 within the fair value hierarchy.

Corporate Bonds—Corporate bonds are generally valued via a third-party pricing service.  The inputs to the valuation include recent trades, discount rates and forward yield curves. Although the inputs used in the third-party pricing services valuation model are generally obtained from active markets and are observable, the third-party pricing service does not provide sufficient visibility into their pricing model. When a value is unavailable, the Company uses an internally developed discounted cash flow model that includes unobservable market inputs or broker quotes.  Accordingly corporate bonds are classified as Level 3 within the fair value hierarchy.

Other Assets—Other assets at fair value primarily represent investments in CLOs or CDOs which are generally valued via a third-party pricing service. The inputs to the valuation include recent trades, discount rates, forward yield curves, and loan level information (including loan loss, recovery and default rates, prepayment speeds and other security specific information obtained from the trustee and other service providers related to the product being valued). Although the inputs used in the third-party pricing services valuation model are generally obtained from active markets and are observable, the third-party pricing service does not provide sufficient visibility into their pricing model. When a value from a third-party pricing service is unavailable, the value may be based on an internally developed discounted cash flow model which includes unobservable market inputs or by broker quote.  Inputs to the internally developed model include the structure of the product being valued, estimates related to loan default, recovery and discount rates. Accordingly other assets are classified as Level 3 within the fair value hierarchy.

Investments in Funds—The fair value of investments in funds are generally valued based on the Company's proportionate share of the Net Asset Value ("NAV") of the fund. The Company has the ability to redeem its investment at its proportionate share of NAV at, or within three months of the reporting date. The NAV calculation includes significant inputs including the valuation of assets and liabilities of the fund. A third-party pricing service provides the underlying asset prices in the fund, which are generally observable. Investments at fair value valued in this manner are classified as Level 2 within the fair value hierarchy.

Contingent Liabilities—The fair value of contingent liabilities is determined via a third-party valuation firm and is based on a discounted cash flow model. The model is based on projections of the relevant future investment advisory fee cash flows and utilizes both observable and unobservable inputs in the determination of fair value. Significant inputs to the valuation model includes the structure of the underlying CLO and estimates related to loan default, recovery and discount rates.  Contingent liabilities are classified as Level 3 within the fair value hierarchy.

Long-Term Debt of the Consolidated CLOs & Warehouses—Long-term debt of the Consolidated CLOs and Warehouses consists of debt and subordinated notes of the Consolidated CLOs or Warehouses. The fair value of the debt and subordinated notes of the Consolidated CLOs or Warehouses is based upon discounted cash flow models and utilizes both observable and unobservable inputs in the determination of fair value. Significant inputs to the valuation models include the structure of the Consolidated CLO or Warehouses and estimates related to loan default, recovery and discount rates. Accordingly, the debt and subordinated notes are classified as Level 3 within the fair value hierarchy.

XML

CONSOLIDATED VIEs

3 Months Ended

Mar. 31, 2013

Clos and Consolidated Variable Interest Entities

CLOS AND CONSOLIDATED VARIABLE INTEREST ENTITIES

Consolidated VIEs

Although the Company consolidates all the assets and liabilities of the Consolidated VIEs, its maximum exposure to loss is limited to its investments and beneficial interests in the Consolidated VIEs and the receivables of the Consolidated VIEs. All these items are eliminated upon consolidation. The assets of each of the Consolidated VIEs are generally held by the trustee of each fund solely as collateral to satisfy the obligations of the Consolidated VIEs. If the Company were to liquidate, the assets of the Consolidated VIEs would not be available to the Company's general creditors, and as a result, the Company does not consider them its assets. Additionally, the investors in the debt of the Consolidated VIEs have no recourse to the Company's general assets. Therefore, this debt is not the Company's obligation.

Consolidated CLOs—The following table summarizes the Company's consolidated assets and non-recourse liabilities of the Consolidated CLOs included in the Condensed Consolidated Balance Sheets and the total maximum exposure to loss on these Consolidated CLOs, as follows (1):

	March 31, 2013		December 31, 2012
	(In thousands)
Total Assets	$	11,098,564	$	9,933,495
Total Liabilities (non-recourse)	10,934,644		9,806,010
Maximum exposure to loss:
Investments and beneficial interests	$	54,954	$	47,454
Receivables	2,828		2,674
Total maximum exposure to loss	$	57,782	$	50,128

Explanatory Note: 

________________________________

(1) In addition, exposure to loss includes future investment advisory fees on the Consolidated VIEs. This has not been included in the table above.

Other Consolidated Entities—The following table summarizes the Company's consolidated assets and non-recourse liabilities of other consolidated VIEs included in the Condensed Consolidated Balance Sheets:

	March 31, 2013						December 31, 2012
	Consolidated Assets		Consolidated Total Non-Recourse Liabilities		Maximum Exposure to Loss (1)		Consolidated Assets		Consolidated Total Non-Recourse Liabilities		Maximum Exposure to Loss (1)
	(In thousands)
Warehouses (1)	$	256,894	$	241,576	$	15,273	$	334,420	$	307,025	$	26,723

Explanatory Note: 

________________________________

(1) Maximum exposure to loss is generally limited to the Company's investment in the entity. As of March 31, 2013 and December 31, 2012, outstanding warehouses included the CIFC 2013-II Warehouse and CIFC 2012-III Warehouse, respectively.

The table below represents total net results of the Company's share of the Consolidated VIEs included on the Condensed Consolidated Statements of Operations as follows:

	For the Three Months Ended March 31,
	2013			2012
	(In thousands)
Consolidated CLOs	$	47,686		$	37,519
Warehouses (1)	(628		)	1,431
DFR MM CLO (2)	—			(170		)
Net results of Consolidated VIEs	47,058			38,780
Net (income) attributable to noncontrolling interest and Consolidated VIEs	(28,154		)	(26,912		)
Net results of Consolidated VIEs attributable to CIFC Corp.	$	18,904		$	11,868
Characteristics of net results of Consolidated VIEs attributable to CIFC Corp:
Consolidated VIE investment advisory fees	$	18,155		$	11,501
Consolidated VIE net investment income	749			367
Net results of Consolidated VIEs attributable to CIFC Corp.	$	18,904		$	11,868

Explanatory Notes: 

________________________________

(1) During the three months ended March 31, 2013 and 2012, the Company consolidated three and one warehouse investment(s), respectively.

(2) In February 2012, the Company sold its investments in and the rights to manage the DFR MM CLO for $36.5 million and deconsolidated the entity. The economic impact of the Company's investments in the DFR MM CLO had been determined by its initial investment of $69.0 million ($50.0 million of subordinated notes and $19.0 million of debt) and total cash distributed to the Company from initial investment to the date of sale of $52.2 million on the subordinated notes investment and $4.8 million in interest on the debt investment.

XML

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Commitments and Contingencies

Legal Proceedings

In the ordinary course of business, the Company may be subject to legal and regulatory proceedings and examinations that are generally incidental to the Company's ongoing operations. While there can be no assurance of the ultimate disposition of any such proceedings or examinations, the Company does not believe their disposition will have a material adverse effect on the Company's Condensed Consolidated Financial Statements.

In addition, in connection with activities of one of the Company's investment advisor subsidiaries that occurred prior to the Company's acquisition of such investment advisor, the Company made certain voluntary reimbursements and other payments to certain investors and CLOs currently or formerly managed by such investment advisor. As a result of a contractual arrangement the Company was fully indemnified for these payments by the seller of such investment advisor and do not believe they had a material adverse impact on the Company's Condensed Consolidated Financial Statements.

Lease Commitments

Total occupancy expense for both the three months ended March 31, 2013 and 2012 was $0.4 million. The future minimum commitments under the Company's lease agreement are as follows:

	(In thousands)
2013 (remaining 9 months)	$	803
2014	1,607
2015	1,607
2016	1,607
2017	1,607
Thereafter	8,690
	$	15,921

Other Commitments and Contingencies

The Consolidated CLOs have unfunded investment commitments on loans of $54.2 million and $55.3 million as of March 31, 2013 and December 31, 2012, respectively. The timing and amount of additional funding on these loans are at the discretion of the borrower, to the extent the borrower satisfies certain requirements and provides certain documentation. The Company does not have any obligation to fund these commitments.

XML

EARNINGS (LOSS) PER SHARE

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

EARNINGS (LOSS) PER SHARE

Earnings (Loss) Per Share

The following table presents the calculation of basic and diluted earnings (loss) per share:

	For the Three Months Ended March 31,
	2013		2012
	(In thousands, except per share data)
Net income (loss) attributable to CIFC Corp. - basic	$	2,787	$	1,595
Dilutive effect of Convertible Notes	449		260
Net income (loss) attributable to CIFC Corp. - diluted	3,236		1,855
Weighted-average shares - basic	20,797		20,426
Warrants	603		52
Stock options (1)	261		—
Convertible Notes	4,132		4,132
Weighted-average shares - diluted (2)	25,794		24,610
Earnings (loss) per share
Basic	$	0.13	$	0.08
Diluted	$	0.13	$	0.08

Explanatory Notes:

________________________________

(1) For the three months ended March 31, 2012, outstanding stock options were anti-dilutive under the treasury stock method.

(2) Includes the dilutive effect under the if-converted method for the Conversion Shares related to the Convertible Notes and the treasury stock method for the stock options and warrants. 

For the three months ended March 31, 2013 and 2012, the Company excluded 1.2 million and 3.5 million, respectively, of stock options from the calculation of diluted earnings per share because their effect was anti-dilutive under the treasury stock method.

XML

INTANGIBLE ASSETS AND GOODWILL

3 Months Ended

Mar. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

Intangible assets comprised of the following (1):

	Weighted-Average Remaining Estimated Useful Life	Gross Carrying Amount (1)		Accumulated Amortization (2)		Net Carrying Amount
	(In years)	(In thousands)
March 31, 2013::
Investment management contracts	5.3	$	76,047	$	42,576	$	33,471
Referral arrangement	6.5	3,810		191		3,619
Non-compete agreements	4.7	1,535		538		997
Trade name	8.0	1,250		250		1,000
Total intangible assets		$	82,642	$	43,555	$	39,087
December 31, 2012::
Investment management contracts	5.4	$	76,047	$	38,727	$	37,320
Referral Arrangement	6.8	3,810		95		3,715
Non-compete agreements	4.8	1,535		465		1,070
Trade name	8.3	1,250		219		1,031
Total intangible assets		$	82,642	$	39,506	$	43,136

Explanatory Notes:

_________________________________

(1) Gross carrying amounts exclude any amounts related to assets fully impaired as of the date presented.

(2) During the three months ended March 31, 2013 and 2012, the Company recorded amortization expense on its intangible assets of $4.0 million and $4.7 million, respectively.

The following table presents expected amortization expense of the existing intangible assets:

	(In thousands)
2013 (remaining 9 months)	$	11,080
2014	10,861
2015	7,096
2016	4,165
2017	2,286
Thereafter	3,599
	$	39,087

In January 2012, the Company completed the sale of its rights to manage Gillespie CLO PLC (“Gillespie”), a European CLO. The sale price was comprised of a $7.1 million payment on the closing date and contingent payments of which $0.7 million remain outstanding as of March 31, 2013. For the three months ended March 31, 2013 and 2012, the Company recorded a net gain on the sale of Gillespie of $0.8 million and $5.8 million, respectively, within "Net gain on the sale of management contract" in the Condensed Consolidated Statements of Operations.

XML

COMMITMENTS AND CONTINGENCIES (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013 Consolidated CLOs	Dec. 31, 2012 Consolidated CLOs
Lease Commitments
Occupancy, Net	$ 375,000	$ 433,000
Future minimum commitments under the lease
2013	803,000
2014	1,607,000
2015	1,607,000
Operating Leases, Future Minimum Payments, Due in Four Years	1,607,000
2016	1,607,000
Thereafter	8,690,000
Future minimum commitments	15,921,000
Other Commitments and Contingencies
Unfunded investment commitments on loans within the consolidated CLOs			$ 54,200,000	$ 55,300,000

XML

DERIVATIVE INSTRUMENTS

3 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments and Hedging Activities

Warrants—The Company and its Consolidated VIEs hold warrants to purchase equity interests in companies where they are/were, also a debt holder. These warrants are typically issued in connection with renegotiations and amendments of the loan agreements. As of both March 31, 2013 and December 31, 2012, the Company had 12 warrant contracts of which 10 warrant contracts were held by the Consolidated VIEs.

Unfunded Debt and Loan Commitments—Certain of the Consolidated CLOs have debt structures which include unfunded revolvers. Unfunded debt commitments represent the estimated fair value of those unfunded revolving debt facilities. The Consolidated CLOs also include holdings of unfunded revolvers of loan facilities. Unfunded loan commitments represent the estimated fair value of those unfunded revolvers of loan facilities. See Note 17 for more information on unfunded loan commitments.

XML

NET RESULTS OF CONSOLIDATED VIEs

3 Months Ended

Mar. 31, 2013

Net Gain (Loss) From Activities Of Consolidated Variable Interest Entities

NET GAIN (LOSS) FROM ACTIVITIES OF CONSOLIDATED VARIABLE INTEREST ENTITIES

Net Results of Consolidated VIEs

The following table is a summary of the components of "Net results of Consolidated Variable Interest Entities":

	For the Three Months Ended March 31,
	2013			2012
	(in thousands)
Investment income	$	119,163		$	96,082
Interest expense	(32,920		)	(23,569		)
Net investment income	86,243			72,513
Net gain (loss) on investments at fair value	81,093			169,196
Net gain (loss) on liabilities at fair value	(110,493		)	(202,018		)
Net gain (loss) on other investments	—			(727		)
Net gain (loss) on derivatives	55			1,599
Net gain (loss) from activities of Consolidated VIEs	$	56,898		$	40,563
Expenses of Consolidated VIEs	(9,840		)	(1,783		)
Net Results of Consolidated VIEs (1)	$	47,058		$	38,780

Explanatory Note:

________________________________

(1) See Note 5 for a reconciliation of Net Results from Consolidated VIEs attributable to CIFC Corp. as amount does not impact the Company's operating results.

XML

CONTINGENT LIABILITIES AT FAIR VALUE

3 Months Ended

Mar. 31, 2013

Business Combination, Contingent Consideration Arrangements [Abstract]

CONTINGENT LIABILITIES AT FAIR VALUE

Contingent Liabilities at Fair Value

The estimated fair value of the Company's contingent liabilities are as follows:

	March 31, 2013		December 31, 2012
	(In thousands)
Contingent liabilities from the Merger (related party) - Note 15	$	26,319	$	29,152
Contingent liabilities assumed through the Merger	4,011		4,631
Total contingent liabilities	$	30,330	$	33,783

The contingent liabilities from the Merger are payable to CIFC Parent. The terms of these payments are as follows: (i) the first $15.0 million of incentive fees received by the combined company from six of the CLOs managed by CIFCAM (the "Legacy CIFC CLOs") as of April 13, 2011 (the "Merger Closing Date"), (ii) 50% of any incentive fees in excess of $15.0 million in aggregate received from Legacy CLOs by the combined company over ten years from the Merger Closing Date and (iii) payments relating to the present value of any such incentive fees from the Legacy CIFC CLOs that remain payable to the combined company after the tenth anniversary of the Merger Closing Date. During the three months ended March 31, 2013 and 2012, the Company made payments of $2.9 million and $1.0 million, respectively, related to these contingent liabilities. As of March 31, 2013, the remaining payments under item (i) was $3.1 million.

In addition, there were contingent liabilities assumed in the Merger that primarily represent contingent consideration related to Legacy CIFC’s acquisition of CypressTree in December 2010. The assumed contingent liabilities are based on a fixed percentage of certain advisory fees from the CypressTree CLOs. These fixed percentages vary by CLO and have a minimum fixed percentage of 55%. During the three months ended March 31, 2013 and 2012, the Company made payments of $0.7 million and $4.3 million, respectively, related to these contingent liabilities.  Payments made during the three months ended March 31, 2012, included $3.0 million of one-time earn out payments for three of the CypressTree management contracts which reduced the required future payments.

The following table presents the changes in fair value of contingent liabilities recorded within "Net gain (loss) on liabilities at fair value" on the Condensed Consolidated Statements of Operations:

	For the Three Months Ended March 31,
	2013			2012
	(In thousands)
Contingent liabilities from the Merger	$	(76	)	$	(2,110	)
Contingent liabilities assumed through the Merger	(38		)	(267		)
Total net gain (loss) on liabilities at fair value	$	(114	)	$	(2,377	)

XML

EARNINGS (LOSS) PER SHARE (Tables)

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Schedule of calculation of basic and diluted earnings (loss) per share

The following table presents the calculation of basic and diluted earnings (loss) per share:

	For the Three Months Ended March 31,
	2013		2012
	(In thousands, except per share data)
Net income (loss) attributable to CIFC Corp. - basic	$	2,787	$	1,595
Dilutive effect of Convertible Notes	449		260
Net income (loss) attributable to CIFC Corp. - diluted	3,236		1,855
Weighted-average shares - basic	20,797		20,426
Warrants	603		52
Stock options (1)	261		—
Convertible Notes	4,132		4,132
Weighted-average shares - diluted (2)	25,794		24,610
Earnings (loss) per share
Basic	$	0.13	$	0.08
Diluted	$	0.13	$	0.08

Explanatory Notes:

________________________________

(1) For the three months ended March 31, 2012, outstanding stock options were anti-dilutive under the treasury stock method.

(2) Includes the dilutive effect under the if-converted method for the Conversion Shares related to the Convertible Notes and the treasury stock method for the stock options and warrants. 

XML

LONG-TERM DEBT (Details) (USD $)	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012	Dec. 31, 2012
LONG-TERM DEBT
Carrying Value	$ 138,450,000			$ 138,233,000
Number of Collateralized Loan Obligations Consolidated	25
CIFC Warehouses [Member]
LONG-TERM DEBT
Carrying Value	133,184,000	[1]		270,452,000	[1]
Current Weighted Average Borrowing Rate (as a percent)	1.03%	[1]		2.12%	[2]
Weighted-Average Remaining Maturity	0 years 2 months 12 days
Principal outstanding amount	25,100,000			14,300,000
Carrying value of the assets for which debt holders have a recourse for repayment	256,894,000			334,420,000
Consolidated CLOs
LONG-TERM DEBT
Carrying Value	10,129,709,000	[2]		9,325,982,000	[2]
Current Weighted Average Borrowing Rate (as a percent)	1.28%	[2]		1.16%	[2]
Weighted-Average Remaining Maturity	8 years 3 months 18 days	[2]		8 years 1 month 6 days	[2]
Principal outstanding amount	10,600,000,000			9,800,000,000
Carrying value of the assets for which debt holders have a recourse for repayment	11,098,564,000			9,933,495,000
Debt issued	1,000,000,000		377,400,000
Outstanding debt paid down	250,700,000		62,400,000
Consolidated Variable Interest Entities
LONG-TERM DEBT
Current Weighted Average Borrowing Rate (as a percent)	1.28%			1.19%
Weighted-Average Remaining Maturity	8 years 2 months 12 days			7 years 10 months 24 days
Recourse Debt
LONG-TERM DEBT
Carrying Value	138,450,000			138,233,000
March Junior Subordinated Notes
LONG-TERM DEBT
Carrying Value	95,000,000	[3]		95,000,000	[3]
Current Weighted Average Borrowing Rate (as a percent)	1.00%	[3]		1.00%	[3]
Weighted-Average Remaining Maturity	22 years 7 months 6 days	[3]		22 years 9 months 18 days	[3]
March Junior Subordinated Notes | Through April 30, 2015
LONG-TERM DEBT
Annual rate (as a percent)	1.00%
March Junior Subordinated Notes | From April 30, 2015 until maturity on October 30, 2035
LONG-TERM DEBT
Annual interest rate (as a percent)	LIBOR
Spread over annual interest rate (as a percent)	2.58%
October Junior Subordinated Notes
LONG-TERM DEBT
Carrying Value	25,000,000	[4]		25,000,000	[4]
Current Weighted Average Borrowing Rate (as a percent)	3.80%	[4]		3.81%	[4]
Weighted-Average Remaining Maturity	22 years 7 months 6 days	[4]		22 years 9 months 18 days	[4]
Annual interest rate (as a percent)	LIBOR
Spread over annual interest rate (as a percent)	3.50%
Subordinated Debt Obligations [Member]
LONG-TERM DEBT
Carrying Value	120,000,000	[4]		120,000,000	[4]
Current Weighted Average Borrowing Rate (as a percent)	1.58%			1.59%
Weighted-Average Remaining Maturity	22 years 7 months 6 days			22 years 9 months 18 days
Convertible Debt [Member]
LONG-TERM DEBT
Carrying Value	18,450,000	[4]		18,233,000	[4]
Current Weighted Average Borrowing Rate (as a percent)	9.00%	[5]		9.00%	[5]
Weighted-Average Remaining Maturity	4 years 8 months 12 days	[5]		4 years 10 months 24 days	[5]
Principal outstanding amount	25,000,000
Discount	6,500,000			6,800,000
Stated interest rate (as a percent)	9.00%
Effective rate of interest (as a percent)	18.14%
Subordinated notes of Consolidated CLOs | Consolidated CLOs
LONG-TERM DEBT
Outstanding debt paid down	57,900,000		51,500,000
Class D Notes
LONG-TERM DEBT
Carrying Value	10,401,343,000			9,734,667,000
Revolving credit facility | Consolidated CLOs
LONG-TERM DEBT
Debt issued			32,600,000
Common Stock
LONG-TERM DEBT
Debt Instrument, Convertible, Number of Equity Instruments	4,132,231
Debt Instrument, Convertible, Conversion Price	$ 6.05
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure [Member]
LONG-TERM DEBT
Carrying Value	$ 10,262,893,000			$ 9,596,434,000

[1] (4)Long-term debt of the Consolidated CLOs is recorded at fair value. The subordinated notes do not have a stated interest rate, and are therefore excluded from the calculation of the weighted average borrowing rate. The par value of the Consolidated CLOs long-term debt (including subordinated notes) was $10.6 billion and $9.8 billion as of March 31, 2013 and December 31, 2012, respectively.

[2] (6)Weighted average remaining maturity for warehouses are based on anticipated settlement dates. Contractual maturity for CIFC 2013-II Warehouse is January 23, 2015.

[3] (1)March Junior Subordinated Notes bear interest at an annual rate of 1% through April 30, 2015 and LIBOR plus 2.58% thereafter until maturity, October 30, 2035.

[4] (2)October Junior Subordinated Notes bear interest at an annual rate of LIBOR plus 3.50% and mature on October 30, 2035.

[5] As of March 31, 2013 and December 31, 2012, Convertible Notes were recorded net of discount of $6.5 million and $6.8 million, respectively. The Convertible Notes currently pay interest at the 9.00% stated rate; however, including the discount, the effective rate of interest is 18.14%. The Convertible Notes have a $25.0 million aggregate principal amount and will mature on December 9, 2017.

XML

RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2013

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

Related Party Transactions

CIFC Parent—CIFC Parent is considered a related party as a result its ownership of 9.1 million shares of the Company's common stock, issued as part of the consideration for the Merger with Legacy CIFC. As such, related party transactions include (i) the deferred purchase payments including those classified as contingent liabilities (see Note 9), (ii) CIFC Parent's investments in CLOs managed by the Company; including eight CLOs of which six were Consolidated CLOs as of March 31, 2013 and nine CLOs of which seven were Consolidated CLOs as of December 31, 2012 and (iii) the management agreement to provide certain administrative and support services to CIFC Parent.

DFR Holdings—DFR Holdings is considered a related party as a result of its ownership of 4.5 million shares of the Company's common stock, issued as part of the consideration for the acquisition of CNCIM. In addition, DFR Holdings owns $25.0 million aggregate principal amount of the Company's Convertible Notes which is convertible into 4.1 million shares of the Company's common stock. As such, related party transactions include (i) the interest expense on Convertible notes of $0.8 million for both the three months ended March 31, 2013 and 2012, (ii) the deferred purchase payments and (iii) the management agreement to provide certain administrative and support services to DFR Holdings.

Total related party receivables and investment advisory fee revenues related to management agreements noted above are as follows:

	Receivables				Investment Advisory Fees
	March 31, 2013		December 31, 2012		For the Three Months Ended March 31,
					2013		2012
	(in thousands)
CIFC Parent	$	65	$	19	$	46	$	50
DFR Holdings	30		17		13		20
Total Related Party Investment Advisory Fees	$	95	$	36	$	59	$	70

XML

STRATEGIC TRANSACTIONS (Tables)

3 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

Schedule of calculation of the purchase consideration

Calculation of purchase consideration is as follows:

	(In thousands, except share and per share information)
Shares issued	1,000,000
Multiplied by Closing Date share price (1)	$	7.51
Value of shares			$	7,510
Warrants issued	2,000,000
Multiplied by Closing Date estimated fair value per warrant (2)	$	1.83
Value of warrants			3,660
Cash			4,525
Total purchase consideration			$	15,695

Explanatory Notes: 

________________________________

(1) Represents the closing price of the Company's common stock on the Closing Date.

(2) The estimated fair value per warrant was determined utilizing a Black-Scholes model with the assistance of an independent valuation firm.

Summary of the recognized amounts of assets acquired and liabilities assumed

 The following is a summary of the recognized amounts of assets acquired and liabilities assumed in the GECC Transaction (1):

	(In thousands)
Receivables	$	147
Identifiable intangible assets	7,470
Excess of purchase consideration over identifiable net assets acquired - Goodwill (2) (3)	8,078
Recognized assets acquired and liabilities assumed	$	15,695

Explanatory Notes: 

________________________________

(1) Management is in the process of finalizing the purchase price calculations and allocations related to identifiable intangible assets, goodwill and contingent liabilities, pending finalization of revenue projections.

(2) Total amount is tax deductible.

(3) Relates to additional strategic opportunities that management believes will be available to the Company as a result of the association with GE Capital primarily sourced through the Commercial Council, including, but not limited to (i) growth in AUM, (ii) newly developed CIFC-managed investment products and business lines and (iii) preferred access to GE Capital originated loans.

Schedule of identifiable intangible assets acquired by asset class

The fair values of the assets acquired were estimated by management with the assistance of an independent valuation firm. The identifiable intangible assets acquired by asset class are as follows:

	Closing Date Estimated Fair Value		Closing Date Estimated Average Remaining Useful Life
	(In thousands)		(In years)
Intangible asset class:
Investment management contracts (1)	$	3,660	3
Referral Arrangement (2)	3,810		7
	$	7,470

Explanatory Notes: 

________________________________

(1) Related to the Navigator Management Agreements. Fair values were determined utilizing an excess earnings approach based upon projections of future investment advisory fees from the CLOs. Significant inputs to the investment advisory fee projections include the structure of the CLOs and estimates related to loan default, recovery and discount rates. The intangible assets related to the management contracts are amortized based on a ratio of expected discounted cash flows from the contracts over their expected remaining useful lives.

(2) Related to the Referral Arrangement (a defined term intended to encompass both referrals under the Referral Agreement described herein and any other business GE Capital may refer to the Company) was determined utilizing an excess earnings approach based upon projections of future revenues generated from the relationship. Significant inputs utilized in the projections include the structure of potential new investment vehicles generating revenues, the timing of investments in such vehicles and discount rates. The intangible assets related to the Referral Arrangement will be amortized based on estimated discounted cash flows of the significant projected future revenue streams. See Note 10 for additional disclosures regarding intangible assets.

XML

CONTINGENT LIABILITIES AT FAIR VALUE (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Contingent liabilities at fair value
Contingent liabilities	$ 30,330	$ 33,783
Recurring basis | Estimated Fair Value
Contingent liabilities at fair value
Contingent liabilities	30,330	33,783
CLOs Managed by CIFCAM [Member]
Contingent liabilities at fair value
Contingent liabilities	26,319	29,152
Cypress Tree Investment Management LLC [Member]
Contingent liabilities at fair value
Contingent liabilities	$ 4,011	$ 4,631

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012
Assets
Total investments and derivative assets of Consolidated Variable Interest Entities	$ 5,261		$ 5,058
Liabilities
Contingent liabilities at fair value	30,330		33,783
Consolidated Variable Interest Entities
Assets
Total investments and derivative assets of Consolidated Variable Interest Entities	9,734,093		9,066,779
Liabilities
Long-term debt	10,262,893		9,596,434
Recurring basis | Level 1
Assets
Total Assets	0	[1]	0	[1]
Liabilities
Total liabilities	0	[1]	0	[1]
Recurring basis | Level 1 | Consolidated Variable Interest Entities
Assets
Total investments and derivative assets of Consolidated Variable Interest Entities	0	[1]	0	[1]
Liabilities
Total liabilities	0	[1]	0	[1]
Recurring basis | Level 2
Assets
Total investments and derivative assets of Consolidated Variable Interest Entities	5,261		5,058
Total Assets	8,263,075		7,745,632
Liabilities
Total liabilities	0		0
Recurring basis | Level 2 | Consolidated Variable Interest Entities
Assets
Loans	8,257,814		7,740,574
Total investments and derivative assets of Consolidated Variable Interest Entities	8,257,814		7,740,574
Liabilities
Total liabilities	0		0
Recurring basis | Level 3
Assets
Total investments and derivative assets of Consolidated Variable Interest Entities	0		0
Total Assets	1,476,279		1,326,205
Liabilities
Contingent liabilities at fair value	30,330		33,783
Total liabilities	10,293,223		9,630,217
Recurring basis | Level 3 | Consolidated Variable Interest Entities
Assets
Loans	1,342,176		1,177,058
Corporate bonds	37,806		67,438
Other	96,194		81,661
Derivative assets	103		48
Total investments and derivative assets of Consolidated Variable Interest Entities	1,476,279		1,326,205
Liabilities
Long-term debt	10,262,893		9,596,434
Total liabilities	10,262,893		9,596,434
Recurring basis | Estimated Fair Value
Assets
Total investments and derivative assets of Consolidated Variable Interest Entities	5,261		5,058
Total Assets	9,739,354		9,071,837
Liabilities
Contingent liabilities at fair value	30,330		33,783
Total liabilities	10,293,223		9,630,217
Recurring basis | Estimated Fair Value | Consolidated Variable Interest Entities
Assets
Loans	9,599,990		8,917,632
Corporate bonds	37,806		67,438
Other	96,194		81,661
Derivative assets	103		48
Total investments and derivative assets of Consolidated Variable Interest Entities	9,734,093		9,066,779
Liabilities
Long-term debt	10,262,893		9,596,434
Total liabilities	$ 10,262,893		$ 9,596,434

[1] (1)There have been no transfers in or out of Level 1 for the periods presented.

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Statement of Other Comprehensive Income [Abstract]
Net income (loss)	$ 30,941	$ 28,507
Other comprehensive income (loss) from foreign currency translation	(3)	6
Other Comprehensive Income (Loss), Net of Tax	(3)	6
Comprehensive income (loss)	30,938	28,513
Comprehensive (income) loss attributable to noncontrolling interest and Consolidated Variable Interest Entities	(28,154)	(26,912)
Comprehensive income (loss) attributable to CIFC Corp.	$ 2,784	$ 1,601

XML

STRATEGIC TRANSACTIONS

3 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

STRATEGIC TRANSACTIONS

Strategic Transactions

GECC Transaction—On September 24, 2012 (the "Closing Date"), the Company closed a five year strategic relationship with General Electric Capital Corporation's (“GE Capital”) Bank Loan Group to provide new CIFC-managed investment products, including those involving GE Capital loan originations and/or vehicles to which GE Capital provides financing. Further, partnering with GE Capital positions the Company for unique opportunities given GE Capital's strength as a leading corporate lender coupled with CIFC's loan asset management platform. Pursuant to the transaction: (i) a commercial council (the “Commercial Council”) comprised of senior members of both GE Capital and the Company was formed to explore joint business opportunities; (ii) the Company and GE Capital entered into a referral agreement (the “Referral Agreement”) pursuant to which (a) GE Capital will refer certain potential investment advisory clients (“Referred Clients”) to the Company for a period of five years (which may be extended by mutual consent for up to two consecutive one year periods) and (b) the Company is obligated to pay GE Capital 15% of any advisory fees in excess of $9.0 million earned from Referred Clients in the aggregate, subject to certain exclusions, and (iii) GE Capital Debt Advisors LLC, a wholly owned indirect subsidiary of GE Capital (“GECDA”), exited the business of providing certain loan management services to third parties and assigned to CIFC Asset Management LLC ("CIFCAM") the right to manage four “Navigator” CLOs (the “Navigator Management Agreements”). The transaction described in this paragraph shall hereinafter be referred to as the “GECC Transaction”.

The GECC Transaction is considered a taxable business combination in accordance with ASC Topic 805-Business Combinations (“ASC Topic 805”). As consideration for the GECC Transaction, on the Closing Date, the Company (i) issued 1.0 million shares of its common stock to GE Capital Equity Investments, Inc., a wholly-owned subsidiary of GE Capital (“GECEII”), with a Closing Date fair value of $7.5 million, (ii) issued a warrant to GECEII to purchase 2.0 million shares of a newly created class of non-voting stock (the “GECEII Warrant”) at a per share exercise price of $6.375 with an estimated Closing Date fair value of $3.7 million and (iii) paid to GECDA $4.5 million in cash, subject to certain adjustments. In addition, the Company and GECEII entered into an investment agreement setting forth certain rights and obligations of GECEII as a stockholder of the Company, including a right of GECEII to designate a member of the board of directors (the "Board") so long as GECEII (together with its affiliates) owns at least 5% of the outstanding capital stock of the Company, calculated assuming the full conversion of all outstanding Convertible Notes into common stock and the full exercise of the GECEII Warrant. The Company did not record contingent consideration for its obligation to pay GE Capital 15% of investment advisory fees in excess of the first $9.0 million as the estimated fair value was deemed immaterial as of the Closing Date. Future payments to GE Capital under the Referral Agreement, if any, will reduce the Company's investment advisory revenue earned. Calculation of purchase consideration is as follows:

	(In thousands, except share and per share information)
Shares issued	1,000,000
Multiplied by Closing Date share price (1)	$	7.51
Value of shares			$	7,510
Warrants issued	2,000,000
Multiplied by Closing Date estimated fair value per warrant (2)	$	1.83
Value of warrants			3,660
Cash			4,525
Total purchase consideration			$	15,695

Explanatory Notes: 

________________________________

(1) Represents the closing price of the Company's common stock on the Closing Date.

(2) The estimated fair value per warrant was determined utilizing a Black-Scholes model with the assistance of an independent valuation firm.

 The following is a summary of the recognized amounts of assets acquired and liabilities assumed in the GECC Transaction (1):

	(In thousands)
Receivables	$	147
Identifiable intangible assets	7,470
Excess of purchase consideration over identifiable net assets acquired - Goodwill (2) (3)	8,078
Recognized assets acquired and liabilities assumed	$	15,695

Explanatory Notes: 

________________________________

(1) Management is in the process of finalizing the purchase price calculations and allocations related to identifiable intangible assets, goodwill and contingent liabilities, pending finalization of revenue projections.

(2) Total amount is tax deductible.

(3) Relates to additional strategic opportunities that management believes will be available to the Company as a result of the association with GE Capital primarily sourced through the Commercial Council, including, but not limited to (i) growth in AUM, (ii) newly developed CIFC-managed investment products and business lines and (iii) preferred access to GE Capital originated loans.

The fair values of the assets acquired were estimated by management with the assistance of an independent valuation firm. The identifiable intangible assets acquired by asset class are as follows:

	Closing Date Estimated Fair Value		Closing Date Estimated Average Remaining Useful Life
	(In thousands)		(In years)
Intangible asset class:
Investment management contracts (1)	$	3,660	3
Referral Arrangement (2)	3,810		7
	$	7,470

Explanatory Notes: 

________________________________

(1) Related to the Navigator Management Agreements. Fair values were determined utilizing an excess earnings approach based upon projections of future investment advisory fees from the CLOs. Significant inputs to the investment advisory fee projections include the structure of the CLOs and estimates related to loan default, recovery and discount rates. The intangible assets related to the management contracts are amortized based on a ratio of expected discounted cash flows from the contracts over their expected remaining useful lives.

(2) Related to the Referral Arrangement (a defined term intended to encompass both referrals under the Referral Agreement described herein and any other business GE Capital may refer to the Company) was determined utilizing an excess earnings approach based upon projections of future revenues generated from the relationship. Significant inputs utilized in the projections include the structure of potential new investment vehicles generating revenues, the timing of investments in such vehicles and discount rates. The intangible assets related to the Referral Arrangement will be amortized based on estimated discounted cash flows of the significant projected future revenue streams. See Note 10 for additional disclosures regarding intangible assets.

During the three months ended March 31, 2013, the Company recorded net income attributable to CIFC Corp. of $0.8 million which represents investment advisory fees from the Navigator CLOs.

As a result of the GECC Transaction, the Company consolidated one Navigator CLO, Navigator 2006 CLO. As of the Closing Date, the Company consolidated assets of $318.3 million and non-recourse liabilities of $313.2 million related to this CLO. As of March 31, 2013, the Company consolidated assets of $334.7 million and non-recourse liabilities of $332.4 million related to this CLO.

XML

RELATED PARTY TRANSACTIONS (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Related party transactions
Corporate interest expense	$ (1,482,000)	$ (1,469,000)
Receivables recorded	95,000		36,000
Investment advisory fees recorded	59,000	70,000
DFR Holdings
Related party transactions
Number of shares owned	4,500,000
Receivables recorded	30,000		17,000
Investment advisory fees recorded	13,000	20,000
CIFC Parent
Related party transactions
Number of shares owned	9,100,000
Number of CLOs held	8		9
Receivables recorded	65,000		19,000
Investment advisory fees recorded	46,000	50,000
CIFC Parent | Consolidated Variable Interest Entities
Related party transactions
Number of CLOs held	6		7
Common Stock
Related party transactions
Debt Instrument, Convertible, Number of Equity Instruments	4,132,231
Convertible Debt [Member]
Related party transactions
Debt Instrument, Face Amount	25,000,000
Corporate interest expense	$ 830,000	$ 820,000

XML

CONSOLIDATED VIEs (Tables)

3 Months Ended

Mar. 31, 2013

Clos and Consolidated Variable Interest Entities

Schedule of Variable Interest Entities [Table Text Block]

The following table summarizes the Company's consolidated assets and non-recourse liabilities of the Consolidated CLOs included in the Condensed Consolidated Balance Sheets and the total maximum exposure to loss on these Consolidated CLOs, as follows (1):

	March 31, 2013		December 31, 2012
	(In thousands)
Total Assets	$	11,098,564	$	9,933,495
Total Liabilities (non-recourse)	10,934,644		9,806,010
Maximum exposure to loss:
Investments and beneficial interests	$	54,954	$	47,454
Receivables	2,828		2,674
Total maximum exposure to loss	$	57,782	$	50,128

Explanatory Note: 

________________________________

(1) In addition, exposure to loss includes future investment advisory fees on the Consolidated VIEs. This has not been included in the table above.

The following table summarizes the Company's consolidated assets and non-recourse liabilities of other consolidated VIEs included in the Condensed Consolidated Balance Sheets:

	March 31, 2013						December 31, 2012
	Consolidated Assets		Consolidated Total Non-Recourse Liabilities		Maximum Exposure to Loss (1)		Consolidated Assets		Consolidated Total Non-Recourse Liabilities		Maximum Exposure to Loss (1)
	(In thousands)
Warehouses (1)	$	256,894	$	241,576	$	15,273	$	334,420	$	307,025	$	26,723

Explanatory Note: 

________________________________

(1) Maximum exposure to loss is generally limited to the Company's investment in the entity. As of March 31, 2013 and December 31, 2012, outstanding warehouses included the CIFC 2013-II Warehouse and CIFC 2012-III Warehouse, respectively.

The table below represents total net results of the Company's share of the Consolidated VIEs included on the Condensed Consolidated Statements of Operations as follows:

	For the Three Months Ended March 31,
	2013			2012
	(In thousands)
Consolidated CLOs	$	47,686		$	37,519
Warehouses (1)	(628		)	1,431
DFR MM CLO (2)	—			(170		)
Net results of Consolidated VIEs	47,058			38,780
Net (income) attributable to noncontrolling interest and Consolidated VIEs	(28,154		)	(26,912		)
Net results of Consolidated VIEs attributable to CIFC Corp.	$	18,904		$	11,868
Characteristics of net results of Consolidated VIEs attributable to CIFC Corp:
Consolidated VIE investment advisory fees	$	18,155		$	11,501
Consolidated VIE net investment income	749			367
Net results of Consolidated VIEs attributable to CIFC Corp.	$	18,904		$	11,868

Explanatory Notes: 

________________________________

(1) During the three months ended March 31, 2013 and 2012, the Company consolidated three and one warehouse investment(s), respectively.

(2) In February 2012, the Company sold its investments in and the rights to manage the DFR MM CLO for $36.5 million and deconsolidated the entity. The economic impact of the Company's investments in the DFR MM CLO had been determined by its initial investment of $69.0 million ($50.0 million of subordinated notes and $19.0 million of debt) and total cash distributed to the Company from initial investment to the date of sale of $52.2 million on the subordinated notes investment and $4.8 million in interest on the debt investment.

XML

STRATEGIC TRANSACTIONS (Details) (USD $)	3 Months Ended		0 Months Ended			0 Months Ended										0 Months Ended				3 Months Ended
	Mar. 31, 2013 item	Mar. 31, 2012	Sep. 24, 2012 General Electric Capital Corporation [Member]		Sep. 24, 2012 Navigator Clos [Member] clo	Sep. 24, 2012 Common Stock General Electric Capital Corporation [Member]		Sep. 24, 2012 Warrants General Electric Capital Corporation [Member]		Sep. 24, 2012 Investment management contracts General Electric Capital Corporation [Member]		Sep. 24, 2012 Referral Agreement General Electric Capital Corporation [Member] extension		Sep. 24, 2012 GE Capital Equity Investments, Inc [Member] Common Stock General Electric Capital Corporation [Member]	Sep. 24, 2012 GECEII General Electric Capital Corporation [Member]	Sep. 24, 2012 GECEII Warrants General Electric Capital Corporation [Member]	Sep. 24, 2012 GE Capital Debt Advisors LLC [Member] General Electric Capital Corporation [Member]	Mar. 31, 2013 Navigator 2006 CLO [Member] General Electric Capital Corporation [Member] clo	Sep. 24, 2012 Navigator 2006 CLO [Member] General Electric Capital Corporation [Member]	Mar. 31, 2013 Navigator Clos [Member] General Electric Capital Corporation [Member]	Mar. 31, 2013 Non-Recourse Debt [Member] Navigator 2006 CLO [Member] General Electric Capital Corporation [Member]	Sep. 24, 2012 Non-Recourse Debt [Member] Navigator 2006 CLO [Member] General Electric Capital Corporation [Member]
Business Acquisition
Term of strategic relationship			5 years
Acquired Finite-lived Intangible Asset, Weighted-Average Period before Renewal or Extension												5 years
Extensions available												2
Duration of extension												1 year
Percentage of fees in excess of initial advisory fees												15.00%
Initial advisory fees												$ 9,000,000
Navigator CLOs					4
Shares or warrants issued						1,000,000		2,000,000						1,000,000		2,000,000
Estimated fair value of shares issued														7,500,000		3,700,000
Exercise price (usd per share)																$ 6.375
Minimum share ownership (percent)															5.00%
Calculation of the purchase consideration
Shares or warrants issued						1,000,000		2,000,000						1,000,000		2,000,000
Multiplied by Closing Date fair value (in dollars per share)						$ 7.51	[1]	$ 1.83	[2]
Value of shares or warrants						7,510,000		3,660,000
Cash			4,525,000														4,500,000
Total purchase consideration			15,695,000	[3]
Recognized amounts of assets acquired and liabilities assumed
Receivables			147,000	[3]
Identifiable intangible assets			7,470,000	[3]
Excess of purchase consideration over identifiable net assets acquired - Goodwill			8,078,000	[3],[4],[5]
Total purchase consideration			15,695,000	[3]
Identifiable intangible assets acquired by asset class
Closing Date Estimated Fair Value			7,470,000							3,660,000	[6]	3,810,000	[7]
Closing Date Estimated Average Remaining Useful Life (In years)										3 years	[6]	7 years	[7]
Tax deductible goodwill			8,078,000	[3],[4],[5]
Investment advisory fees	2,642,000	2,744,000																		800,000
Consolidated CLOs	25																	1
Consolidated assets																		334,700,000	318,300,000
Consolidated liabilities																					332,400,000	313,200,000
Net loss related to the consolidated CLO	$ (47,058,000)	$ (38,780,000)

[1] (1)Represents the closing price of the Company's common stock on the Closing Date.

[2] (2)The estimated fair value per warrant was determined utilizing a Black-Scholes model with the assistance of an independent valuation firm.

[3] (1)Management is in the process of finalizing the purchase price calculations and allocations related to identifiable intangible assets, goodwill and contingent liabilities, pending finalization of revenue projections.

[4] Total amount is tax deductible.

[5] (3)Relates to additional strategic opportunities that management believes will be available to the Company as a result of the association with GE Capital primarily sourced through the Commercial Council, including, but not limited to (i) growth in AUM, (ii) newly developed CIFC-managed investment products and business lines and (iii) preferred access to GE Capital originated loans.

[6] (1)Related to the Navigator Management Agreements. Fair values were determined utilizing an excess earnings approach based upon projections of future investment advisory fees from the CLOs. Significant inputs to the investment advisory fee projections include the structure of the CLOs and estimates related to loan default, recovery and discount rates. The intangible assets related to the management contracts are amortized based on a ratio of expected discounted cash flows from the contracts over their expected remaining useful lives.

[7] (2)Related to the Referral Arrangement (a defined term intended to encompass both referrals under the Referral Agreement described herein and any other business GE Capital may refer to the Company) was determined utilizing an excess earnings approach based upon projections of future revenues generated from the relationship. Significant inputs utilized in the projections include the structure of potential new investment vehicles generating revenues, the timing of investments in such vehicles and discount rates. The intangible assets related to the Referral Arrangement will be amortized based on estimated discounted cash flows of the significant projected future revenue streams. See Note 10 for additional disclosures regarding intangible assets.

XML

INCOME TAXES

3 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Abstract]

INCOME TAXES

Income Taxes

The Condensed Consolidated Statement of Operations does not include a provision for income tax expense or (benefit) on the income or (loss) earned by Consolidated VIEs in which the Company is not a holder of the subordinated notes. The Consolidated VIEs are generally foreign entities exempt from U.S. federal and state income taxes. Income taxes, if any, are the responsibility of the individual holders of each security.  As such, the Company does record a provision for income tax expense or (benefit) on the income or (loss) earned by Consolidated VIEs in which the Company is a subordinated note holder. The provision is based on the Consolidated VIE's proportionate share of income or (loss) required to be included in the Company's taxable income. The effective tax rate, adjusted for non-controlling interests in the Consolidated VIEs was 52.7% and 1,335.0% for the three months ended March 31, 2013 and 2012.

The effective tax rate, including non-controlling interests in Consolidated VIEs was 9.1% and (6.4)% for the three months ended March 31, 2013 and 2012. The difference between the statutory federal tax rate and the Company's effective tax rate for the three months ended March 31, 2013 and 2012, was primarily attributable to state income taxes and certain discrete and other permanent items including, purchase accounting adjustments for fair value changes of contingent liabilities related to the Merger and the sale of the Company's rights to manage Gillespie. 

As of March 31, 2013 and December 31, 2012, total deferred tax assets was $53.4 million, net of a valuation allowance of $13.2 million and $50.5 million, net of a valuation allowance of $13.2 million, respectively.