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 June 30, 2014

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 25,146,986 shares of the registrant’s common stock outstanding as of August 1, 2014.

CIFC CORP.

Index to Form 10-Q

	Page
Part I. Financial Information
Item 1. Condensed Consolidated Financial Statements and Notes (Unaudited)	4
Condensed Consolidated Balance Sheets (Unaudited)	4
Condensed Consolidated Statements of Operations (Unaudited)	6
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)	7
Condensed Consolidated Statements of Cash Flows (Unaudited)	8
Notes to Condensed Consolidated Financial Statements (Unaudited)	10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3. Quantitative and Qualitative Disclosures About Market Risk	50
Item 4. Controls and Procedures	51
Part II. Other Information
Item 1. Legal Proceedings	51
Item 1A. Risk Factors	51
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3. Defaults Upon Senior Securities	51
Item 4. Mine Safety Disclosures	51
Item 5. Other Information	51
Item 6. Exhibits	52
Signatures	53

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."

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 2013 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.

3

PART I. Financial Information

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

CIFC CORP. AND ITS SUBSIDIARIES

Condensed Consolidated Balance Sheets

(unaudited)

	June 30, 2014			December 31, 2013
	(Unaudited)
	(In thousands, except share and per share amounts)
ASSETS
Cash and cash equivalents	$	22,046		$	25,497
Restricted cash and cash equivalents	1,693			1,700
Due from brokers	—			18,813
Investments at fair value	24,177			16,883
Receivables	2,550			2,120
Prepaid and other assets	3,833			5,104
Deferred tax asset, net	50,815			57,675
Equipment and improvements, net	4,443			4,261
Intangible assets, net	19,707			25,223
Goodwill	76,000			76,000
Subtotal	205,264			233,276
Assets of Consolidated Entities:
Restricted cash and cash equivalents	850,212			699,387
Due from brokers	196,471			209,882
Investments at fair value	11,492,106			10,420,993
Receivables	39,760			36,350
Prepaid and other assets	1,562			300
Total assets of Consolidated Entities	12,580,111			11,366,912
TOTAL ASSETS	$	12,785,375		$	11,600,188
LIABILITIES
Due to brokers	$	1,036		$	5,499
Accrued and other liabilities	12,616			15,197
Deferred purchase payments	1,348			1,179
Contingent liabilities at fair value	14,450			16,961
Long-term debt	139,697			139,164
Subtotal	169,147			178,000
Non-Recourse Liabilities of Consolidated Entities:
Due to brokers	587,692			606,808
Accrued and other liabilities	210			100
Interest payable	27,177			22,552
Long-term debt at fair value	11,480,641			10,484,975
Total Non-Recourse Liabilities of Consolidated Entities (1)	12,095,720			11,114,435
TOTAL LIABILITIES	12,264,867			11,292,435
EQUITY
Common stock, par value $0.001: 500,000,000 shares authorized, 21,145,199 issued and 21,014,755 outstanding as of June 30, 2014 and 20,921,333 issued and 20,790,889 outstanding as of December 31, 2013	21			21
Treasury stock, at cost: 130,444 shares as of June 30, 2014 and December 31, 2013	(914		)	(914		)
Additional paid-in capital	964,533			963,011
Retained earnings (deficit)	(808,367		)	(810,858		)
TOTAL CIFC CORP. STOCKHOLDERS’ EQUITY	155,273			151,260
Noncontrolling interest in Consolidated Funds (Note 2)	174,454			5,107
Appropriated retained earnings (deficit) of Consolidated VIEs	190,781			151,386
TOTAL EQUITY	520,508			307,753
TOTAL LIABILITIES AND EQUITY	$	12,785,375		$	11,600,188

4

CIFC CORP. AND ITS SUBSIDIARIES

Condensed Consolidated Balance Sheets (continued)

(unaudited)

Included in the Company's Condensed Consolidated Balance Sheets are balances from Consolidated Variable Interest Entities ("Consolidated VIEs") (1). See Note 2 and 4.

	June 30, 2014		December 31, 2013
	(In thousands)
ASSETS
Assets of Consolidated VIEs:
Restricted cash and cash equivalents	$	835,960	$	699,122
Due from brokers	140,806		209,882
Investments at fair value	11,304,278		10,420,993
Receivables	39,198		36,350
Prepaid and other assets	919		—
Total assets of Consolidated VIEs	$	12,321,161	$	11,366,347
LIABILITIES
Non-Recourse Liabilities of Consolidated VIEs:
Due to brokers	$	519,504	$	606,808
Accrued and other liabilities	3		42
Interest payable	27,177		22,552
Long-term debt at fair value	11,480,641		10,484,975
Total Non-Recourse Liabilities of Consolidated VIEs	$	12,027,325	$	11,114,377

Explanatory Note: 

________________________________

(1) If the Company were to liquidate, the assets of the Consolidated Entities 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 and residual interests of the Consolidated Entities have no recourse to the Company's general assets. Therefore, this debt is not the Company's obligation.

   See notes to Condensed Consolidated Financial Statements.

5

CIFC CORP. AND ITS SUBSIDIARIES

Condensed Consolidated Statements of Operations

(unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(In thousands, except share and per share amounts)
Revenues
Management fees	$	1,378		$	2,240		$	2,990		$	4,883
Net interest income from investments	97			106			194			97
Total net revenues	1,475			2,346			3,184			4,980
Expenses
Compensation and benefits	8,047			6,986			15,387			14,510
Professional services	706			715			1,752			2,638
General and administrative expenses	2,259			1,843			4,472			3,327
Depreciation and amortization	2,870			4,278			6,015			8,496
Total expenses	13,882			13,822			27,626			28,971
Other Income (Expense) and Gain (Loss)
Net gain (loss) on investments at fair value	1,121			251			2,527			600
Net gain (loss) on contingent liabilities at fair value (Note 9)	(1,529		)	613			(1,758		)	499
Corporate interest expense	(1,486		)	(1,452		)	(2,953		)	(2,934		)
Net gain on sale of management contract	—			—			228			752
Other, net	—			(5		)	—			(2		)
Net other income (expense) and gain (loss)	(1,894		)	(593		)	(1,956		)	(1,085		)
Operating income (loss)	(14,301		)	(12,069		)	(26,398		)	(25,076		)
Net results of Consolidated Entities (Note 6)	37,046			53,102			86,128			100,160
Income (loss) before income taxes	22,745			41,033			59,730			75,084
Income tax (expense) benefit	(6,837		)	(6,488		)	(19,241		)	(9,598		)
Net income (loss)	15,908			34,545			40,489			65,486
Net (income) loss attributable to noncontrolling interest in Consolidated Entities (Note 2)	(9,464		)	(27,002		)	(33,810		)	(55,156		)
Net income (loss) attributable to CIFC Corp.	$	6,444		$	7,543		$	6,679		$	10,330
Earnings (loss) per share (Note 12) —
Basic	$	0.31		$	0.36		$	0.32		$	0.50
Diluted	$	0.26		$	0.31		$	0.29		$	0.44
Weighted-average number of shares outstanding (Note 12)—
Basic	20,971,928			20,808,750			20,905,949			20,803,151
Diluted	26,212,593			25,601,165			26,141,070			25,719,972
Dividends Declared	$	0.10		n/a			$	0.20		n/a

See notes to Condensed Consolidated Financial Statements.

6

CIFC CORP. AND ITS SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(In thousands)
Net income (loss)	$	15,908		$	34,545		$	40,489		$	65,486
Other comprehensive income (loss):
Foreign currency translation	—			6			—			3
Other comprehensive income (loss)	—			6			—			3
Comprehensive income (loss)	15,908			34,551			40,489			65,489
Comprehensive (income) loss attributable to noncontrolling interest in Consolidated Entities	(9,464		)	(27,002		)	(33,810		)	(55,156		)
Comprehensive income (loss) attributable to CIFC Corp.	$	6,444		$	7,549		$	6,679		$	10,333

   See notes to Condensed Consolidated Financial Statements.

7

CIFC CORP. AND ITS SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(unaudited)

	For the Six Months Ended June 30,
	2014			2013
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	40,489		$	65,486
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	169			230
Share-based compensation	881			2,899
Net (gain) loss on investments and contingent liabilities at fair value / other (gain) loss	(770		)	(1,099		)
Net gain on the sale of management contract	(228		)	(752		)
Depreciation and amortization	6,015			8,496
Deferred income tax expense (benefit)	6,860			(3,895		)
Consolidated Entities:
Net (gain) loss on investments at fair value	(9,946		)	(12,386		)
Net (gain) loss on liabilities at fair value	82,701			73,728
Net other (gain) loss	(2,322		)	48
Changes in operating assets and liabilities:
Due from brokers	12,832			(31,473		)
Receivables	(434		)	432
Prepaid and other assets	1,192			746
Due to brokers	(4,463		)	4,581
Accrued and other liabilities	(2,583		)	(3,349		)
Change in restricted cash and cash equivalents	7			(2		)
Consolidated Entities:
Due from brokers	52,596			(225,918		)
Purchase of investments at fair value	(4,693,839		)	(5,347,508		)
Sales of investments at fair value	4,010,495			4,819,752
Receivables	(3,773		)	(9,337		)
Due to brokers	(77,439		)	172,070
Accrued and other liabilities	(130		)	(5,066		)
Interest payable	4,608			903
Net cash provided by (used in) operating activities	(577,082		)	(491,414		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of management contracts	228			752
Purchases of investments at fair value	(13,947		)	(66,784		)
Sales of investments at fair value	20,201			67,324
Purchases of equipment and improvements	(680		)	(329		)
Consolidated Entities:
Change in restricted cash and cash equivalents	(120,263		)	(16,826		)
Net cash provided by (used in) investing activities	(114,461		)	(15,863		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock	—			(65		)
Payment of stock and debt issuance costs	613			525
Dividends paid	(4,188		)	—
Settlement of warrants and options	641			(93		)
Deferred purchase payments and payments on contingent liabilities	(4,270		)	(12,007		)
Consolidated Entities:
Net contributions from noncontrolling interests	31,191			—
Proceeds from issuance of long-term debt	2,487,474			1,937,495
Payments made on long-term debt	(1,823,369		)	(1,432,764		)
Net cash provided by (used in) financing activities	688,092			493,091
Foreign currency translation	—			3
Net increase (decrease) in cash and cash equivalents	(3,451		)	(14,183		)
Cash and cash equivalents at beginning of period	25,497			47,692
Cash and cash equivalents at end of period	$	22,046		$	33,509

8

CIFC CORP. AND ITS SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (continued)

(unaudited)

	For the Six Months Ended June 30,
	2014			2013
	(In thousands)
SUPPLEMENTAL DISCLOSURE:
Cash paid for interest	$	1,577		$	2,102
Cash paid for income taxes	$	13,271		$	14,456
Consolidated Entities:
Cash paid for interest	$	72,250		$	56,894
Non-cash disclosures:
Exercise of stock options	$	—		$	197
Consolidated Entities:
Consolidation of net assets	$	160,074		$	—
Deconsolidation of net assets	$	(984	)	$	—
Non-cash settlement of interest receivables with increases in principal	$	1,012		$	1,257

See notes to Condensed Consolidated Financial Statements.

9

CIFC CORP. AND ITS SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 1—Organization and Business

CIFC Corp. (“CIFC” and, together with its subsidiaries, the “Company”) is a fundamentals-based, relative value, alternative credit manager. Its primary business is to provide investment management services for investment products. The Company manages assets 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.

The Company's assets under management ("AUM") is primarily comprised of Collateralized Loan Obligations ("CLOs"), credit funds and separately managed accounts ("SMAs", together with credit funds "other loan-based products"). These credit products are opportunistic investment strategies where the Company seeks to generate both current income and capital appreciation, primarily through senior secured corporate loan (“SSCL”) investments and, to a lesser extent, other investments. Management internally views the business as one reportable segment.

The Company has three primary sources of revenue: management fees, incentive fees and investment income. Management fees are generally earned based on the amount of assets managed (or AUM), incentive fees are earned based on the performance of the funds and investment income is earned based on the performance of the Company’s direct investment in its products.

CIFC Corp. is a Delaware corporation headquartered in New York City. As of June 30, 2014, DFR Holdings LLC ("DFR Holdings"), on a fully-diluted basis, owns approximately 70% of the Company’s diluted shares outstanding.

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, 2013.

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.

In addition, certain prior year amounts on the Condensed Consolidated Financial Statements and the related notes have been re-presented to conform to current period presentation and provide additional details.

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

10

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Consolidated Entities—Consolidated Entities includes the operating results of the Consolidated Funds and the Consolidated VIEs as defined below. As of June 30, 2014 and December 31, 2013, the Company held $114.1 million and $92.1 million, respectively of investments in its Consolidated Entities. In addition, the Company recognized management fees and net interest income from investments of the Consolidated Entities as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(In thousands)
Net results of Consolidated Entities	$	37,046		$	53,102		$	86,128		$	100,160
Net (income) loss attributable to noncontrolling interest in Consolidated Entities	(9,464		)	(27,002		)	(33,810		)	(55,156		)
Net results from Consolidated Entities attributable to CIFC Corp.	$	27,582		$	26,100		$	52,318		$	45,004
Characteristics of net results of Consolidated Entities attributable to CIFC Corp:
Consolidated Entities management fees	$	20,560		$	23,559		$	40,803		$	41,714
Consolidated Entities net investment income (1)	7,022			2,541			11,515			3,290
Net results from Consolidated Entities attributable to CIFC Corp.	$	27,582		$	26,100		$	52,318		$	45,004

Explanatory Note: 

________________________________

(1) Includes equity distributions earned from residual interests in CLOs.

Consolidated Funds—The Company consolidates entities in which the Company has a controlling voting interest. As of June 30, 2014, the Company consolidated the following funds under the voting interest model.

Tactical Income Fund—During 2013, the Company launched an open ended credit fund that invests primarily in second-lien loans (the "Tactical Income Fund"). As of June 30, 2014 and December 31, 2013, the Company is the investment adviser for the fund and, as the general partner in the fund, held an investment of $10.9 million and $10.2 million, respectively. As of both June 30, 2014 and December 31, 2013, the Company held a controlling financial and voting interest in the Tactical Income Fund and consolidated the entity.

Senior Secured Loan Fund—During 2012, the Company launched an open ended credit fund that invests in U.S. performing senior secured corporate loans ("the "Senior Secured Loan Fund") to provide capital appreciation and risk-adjusted returns to its investors. During March 2014, several new investors entered the fund, eliminating a limited partners' substantive participating right in the fund. As of June 30, 2014, the Company consolidated the fund as it held a controlling voting interest as the investment adviser. Prior to the consolidation, the Company's investment was recorded in "Investments at fair value" on the Company's Consolidated Balance Sheet. As of June 30, 2014 and December 31, 2013, the Company held an investment of $5.1 million and $10.8 million, respectively. As of June 30, 2014, the limited partners held a $173.2 million investment which was reported in "Noncontrolling interest in Consolidated Funds" on the Condensed Consolidated Balance Sheet.

Consolidated VIEs—The Company also consolidates variable interest entities in which it is deemed the primary beneficiary. These Consolidated VIEs generally include CLOs and CDOs (collectively, the "Consolidated CLOs") and warehouses the Company manages, holds an investment in the entity or is entitled to incentive fees.

Consolidated CLOs—As of June 30, 2014, the Company consolidated 28 CLOs. As of December 31, 2013, the Company consolidated 26 CLOs. See Note 4.

Warehouses—From time to time, the Company will create special purpose vehicles ("SPV") to warehouse SSCLs in advance of sponsoring new CLOs or other funds. The Company would generally contribute equity to the new SPVs which are typically levered (three to five times) depending on the terms agreed to with the warehousing counterparties. When the related CLO or fund is sponsored, typically around three to nine months later, the warehouse is “terminated,” with it concurrently repaying the related financing and returning to the Company its equity contribution, net of gains and losses, if any.

11

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

During the six months ended June 30, 2014, the Company consolidated 5 warehouses and deconsolidated 2 warehouses, respectively, and during the six months ended June 30, 2013, the Company consolidated 4 warehouses and deconsolidated 3 warehouses, respectively, in conjunction with the sponsorship of newly issued CLOs. See Notes 4 and 6 for more information. As of June 30, 2014, the Company consolidated 3 warehouses.

Unconsolidated Funds—Co-Investment Fund—During 2013, the Company launched a closed end structured credit fund that invests primarily in residual tranches of CLOs and, to a lesser extent, warehouses, managed by CIFC (the "Co-Investment Fund"). As of June 30, 2014 and December 31, 2013, carrying value of the Company's investment, as the general partner of the fund was $17.1 million and $15.3 million, respectively. During the first quarter of 2014, several limited partners entered into the fund removing the general partner's presumption of control, and as such, the Company deconsolidated the fund from its Condensed Consolidated Financial Statements. As of June 30, 2014, the Company's investment was recorded in "Investments at fair value" on the Company's Condensed Consolidated Balance Sheet.

Unconsolidated VIEs

As of June 30, 2014, the Company had variable interests in an additional 2 CLOs, 8 CDOs, and 2 other investment products, which the Company managed, that were not consolidated (collectively the "Unconsolidated VIEs") as the Company was not deemed to be the primary beneficiary of the VIEs. As of December 31, 2013, the Company's unconsolidated VIEs included 5 CLOs, 8 CDOs and 1 other investment product.

The Company's maximum exposure to loss on Unconsolidated VIEs includes its investment, management fee receivables and future management fees collectible by the Company. As of June 30, 2014 and December 31, 2013, the Company had no maximum exposure to loss associated with the Unconsolidated VIEs related to investments made by the Company in the Unconsolidated VIEs. In addition, as of both June 30, 2014 and December 31, 2013, the Company's management fee receivables were $0.2 million.

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

As of June 30, 2014, 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, 2013, have not changed.

Recent Accounting Updates

In June 2013, the FASB issued Accounting Standards Update ("ASU") 2013-08, Financial Services—Investment Companies, which amends the scope, measurement, and disclosure requirements for investment companies. This ASU amends the requirements related to qualifying for the “investment-company deferral“ under ASU 2010-10, Consolidation. This guidance was effective for the Company's fiscal year beginning January 1, 2014. The adoption of this guidance did not have a material impact on the Company's Condensed Consolidated Financial Statements.

In July 2013, the FASB issued ASU 2013-11, Income Taxes, which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss ("NOL") carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance was effective for the Company's fiscal year beginning January 1, 2014. The adoption of this guidance did not have an impact on the Company's Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard clarifies the required factors that an entity must consider when recognizing revenue and also requires additional disclosures. ASU 2014-09 is effective for the Company beginning January 1, 2017. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is evaluating the impact ASU 2014-09 will have on the Company's Condensed Consolidated Financial Statements.

12

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 4—Consolidated VIEs

Although the Company consolidates all the assets and liabilities of the Consolidated VIEs (including the Consolidated CLOs and warehouses), its maximum exposure to loss is limited to its investments and beneficial interests in the Consolidated VIEs and the receivables of management fees from the Consolidated VIEs. All of these items are eliminated upon consolidation. The assets of each of the Consolidated VIEs are administered 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 and residual interests 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 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):

	June 30, 2014		December 31, 2013
	(In thousands)
Total Assets	$	11,600,237	$	10,963,096
Total Liabilities (non-recourse)	11,371,999		10,756,652
Maximum exposure to loss:
Investments and beneficial interests (2)	$	33,847	$	49,490
Receivables	3,593		3,836
Total maximum exposure to loss	$	37,440	$	53,326

Explanatory Notes: 

________________________________

(1) In addition, exposure to loss excludes future management fees on the Consolidated VIEs, which are not included in the table above.

(2) Amounts are eliminated in consolidation. As of June 30, 2014 and December 31, 2013, the Company held an investment of $32.5 million and $44.3 million, respectively, directly in the residual interests of its Consolidated CLOs and, through its ownership of credit funds (see Note 2), the Company invested an additional $1.4 million and $5.2 million, respectively, in the residual interests of its Consolidated CLOs.

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

	June 30, 2014						December 31, 2013
	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)	$	720,924	$	655,326	$	65,598	$	403,251	$	357,725	$	42,279

Explanatory Note: 

________________________________

(1) Maximum exposure to loss is generally limited to the Company's investment in the entity. As of June 30, 2014 and December 31, 2013, the Company consolidated three and two warehouses, respectively. Amounts are eliminated in consolidation. As of December 31, 2013, the Company invested $32.5 million directly in its warehouses, and through its ownership of the credit funds (see Note 2), the Company invested an additional $9.7 million in the warehouses. The Company did not have any investments through its ownership of the credit funds as of June 30, 2014.

13

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The table below represents total net results of the Consolidated VIEs included in the net results of the Consolidated Entities on the Condensed Consolidated Statements of Operations:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
Consolidated CLOs	$	32,090	$	48,407	$	80,971	$	96,093
Warehouses (1)	1,316		4,695		1,310		4,067
Net results of Consolidated VIEs	$	33,406	$	53,102	$	82,281	$	100,160

Explanatory Note: 

________________________________

(1) During the three and six months ended June 30, 2014, the Company's results from warehouses included four and five warehouse investments and during the three and six months ended June 30, 2013, the Company's results from warehouses included three and four, warehouse investments, respectively.

Note 5—Fair Value

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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

	June 30, 2014								December 31, 2013
	Level 1		Level 2		Level 3		Estimated Fair Value		Level 1		Level 2		Level 3		Estimated Fair Value
	(In thousands)								(In thousands)
Assets
Investments at fair value:
Investment in Funds	$	—	$	—	$	17,082	$	17,082	$	—	$	10,827	$	—	$	10,827
Loans	—		1,022		1,008		2,030		—		5,546		510		6,056
Structured products & other	—		—		5,065		5,065		—		—		—		—
Subtotal	—		1,022		23,155		24,177		—		16,373		510		16,883
Consolidated Entities:
Loans	—		9,544,447		1,852,974		11,397,421		—		8,604,967		1,706,290		10,311,257
Corporate bonds	—		—		6,210		6,210		—		—		16,220		16,220
Structured products & other	—		2,322		86,153		88,475		—		—		93,516		93,516
Total Consolidated Entities	—		9,546,769		1,945,337		11,492,106		—		8,604,967		1,816,026		10,420,993
Total Assets	$	—	$	9,547,791	$	1,968,492	$	11,516,283	$	—	$	8,621,340	$	1,816,536	$	10,437,876
Liabilities
Contingent liabilities	$	—	$	—	$	14,450	$	14,450	$	—	$	—	$	16,961	$	16,961
Consolidated Entities:
Long-term debt (1)	—		—		11,480,641		11,480,641		—		—		10,484,975		10,484,975
Total Consolidated Entities	—		—		11,480,641		11,480,641		—		—		10,484,975		10,484,975
Total Liabilities	$	—	$	—	$	11,495,091	$	11,495,091	$	—	$	—	$	10,501,936	$	10,501,936

Explanatory Note:

______________________________

(1) The Company generally invests in the residual equity of the CLOs it sponsors and invests in the warehouses it issues.

14

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED 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
	For the Three Months Ended June 30, 2014																							For the Three Months Ended June 30, 2013
	Investments at fair value											Investment Assets of Consolidated Entities												Investment Assets of Consolidated Entities
	Loans			Investments in Funds		Structured Products & Other			Total			Loans			Corporate Bonds			Structured Products & Other			Total			Loans			Corporate Bonds			Structured Products & Other			Total
				(In thousands)
Estimated fair value, beginning of period	$	1,512		$	15,964	$	1,880		$	19,356		$	1,826,333		$	5,893		$	95,486		$	1,927,712		$	1,342,176		$	37,806		$	96,297		$	1,476,279
Transfers into Level 3 (1)	—			—		—			—			446,894			—			—			446,894			170,010			—			—			170,010
Transfers out of Level 3 (2)	—			—		—			—			(593,806		)	—			—			(593,806		)	(474,307		)	—			—			(474,307		)
Transfers in due to consolidation or acquisition	1,008			—		—			1,008			12,081			314			6,256			18,651			—			—			—			—
Transfers between classes	(1,512		)	—		—			(1,512		)	1,512			—			—			1,512			—			—			—			—
Net realized/unrealized gains (losses)	—			1,108		(23		)	1,085			(26,271		)	3			4,069			(22,199		)	(1,574		)	77			6,855			5,358
Purchases	—			10		3,208			3,218			598,719			—			1,475			600,194			453,788			2,038			933			456,759
Sales	—			—		—			—			(164,961		)	—			(15,633		)	(180,594		)	(122,763		)	(23,091		)	(814		)	(146,668		)
Settlements	—			—		—			—			(247,527		)	—			(5,500		)	(253,027		)	(141,633		)	—			—			(141,633		)
Estimated fair value, end of period	$	1,008		$	17,082	$	5,065		$	23,155		$	1,852,974		$	6,210		$	86,153		$	1,945,337		$	1,225,697		$	16,830		$	103,271		$	1,345,798
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	$	7		$	1,108	$	(23	)	$	1,092		$	(10,455	)	$	(51	)	$	(1,655	)	$	(12,161	)	$	(9,050	)	$	134		$	2,137		$	(6,779	)

	Level 3 Financial Assets at Fair Value
	For the Six Months Ended June 30, 2014																							For the Six Months Ended June 30, 2013
	Investments at fair value											Investment Assets of Consolidated Entities												Investment Assets of Consolidated Entities
	Loans			Investments in Funds		Structured Products & Other			Total			Loans			Corporate Bonds			Structured Products & Other			Total			Loans			Corporate Bonds			Structured Products & Other			Total
				(In thousands)
Estimated fair value, beginning of period	$	510		$	—	$	—		$	510		$	1,706,290		$	16,220		$	93,516		$	1,816,026		$	1,177,058		$	67,438		$	81,709		$	1,326,205
Transfers into Level 3 (1)	—			—		—			—			952,630			—			—			952,630			396,080			—			—			396,080
Transfers out of Level 3 (2)	—			—		—			—			(1,150,813		)	—			—			(1,150,813		)	(754,912		)	—			—			(754,912		)
Transfers in due to consolidation or acquisition	1,008			15,964		—			16,972			33,284			314			6,256			39,854			—			—			—			—
Transfers between classes	(510		)	—		—			(510		)	2,021			—			—			2,021			—			—			—			—
Net realized/unrealized gains (losses)	—			1,108		(21		)	1,087			(27,936		)	517			7,597			(19,822		)	9,122			357			10,179			19,658
Purchases	—			10		5,086			5,096			1,050,822			—			1,475			1,052,297			866,876			2,788			19,471			889,135
Sales	—			—		—			—			(313,458		)	(10,841		)	(16,229		)	(340,528		)	(184,862		)	(53,256		)	(7,064		)	(245,182		)
Settlements	—			—		—			—			(399,866		)	—			(6,462		)	(406,328		)	(283,665		)	(497		)	(1,024		)	(285,186		)
Estimated fair value, end of period	$	1,008		$	17,082	$	5,065		$	23,155		$	1,852,974		$	6,210		$	86,153		$	1,945,337		$	1,225,697		$	16,830		$	103,271		$	1,345,798
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	$	—		$	1,108	$	(21	)	$	1,087		$	(9,510	)	$	196		$	2,165		$	(7,149	)	$	4,877		$	148		$	10,694		$	15,719

Explanatory Notes:

______________________________

(1) Transfers in represent loans currently valued by a third party pricing service using composite prices determined using less than two quotes, an internally developed pricing model or broker quotes and that were previously marked by a third party pricing service using composite prices determined from two or more quotes.

(2) Transfers out represent loans previously valued 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 from two or more quotes.

15

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	Level 3 Financial Liabilities at Fair Value
	For the Three Months Ended June 30, 2014									For the Three Months Ended June 30, 2013
	Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Entities			Total			Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Entities			Total
	(In thousands)
Estimated fair value, beginning of period	$	14,974		$	10,724,646		$	10,739,620		$	30,330		$	10,262,893		$	10,293,223
Sale of investments in Consolidated CLOs (1)	—			30,444			30,444			—			12,404			12,404
Transfer in due to consolidation or deconsolidation	—			231,673			231,673			—			—			—
Net realized/unrealized (gains) losses	1,529			55,072			56,601			(613		)	21,286			20,673
Purchases	—			15,300			15,300			—			789,837			789,837
Sales	—			—			—			—			(593,699		)	(593,699		)
Issuances	—			1,347,632			1,347,632			—			—			—
Settlements (2)	(2,053		)	(924,126		)	(926,179		)	(5,940		)	(317,542		)	(323,482		)
Estimated fair value, end of period	$	14,450		$	11,480,641		$	11,495,091		$	23,777		$	10,175,179		$	10,198,956
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period	$	(1,529	)	$	13,112		$	11,583		$	613		$	137,402		$	138,015

	Level 3 Financial Liabilities at Fair Value
	For the Six Months Ended June 30, 2014									For the Six Months Ended June 30, 2013
	Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Entities			Total			Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Entities			Total
	(In thousands)
Estimated fair value, beginning of period	$	16,961		$	10,484,975		$	10,501,936		$	33,783		$	9,596,434		$	9,630,217
Sale of investments in Consolidated CLOs (1)	—			62,445			62,445			—			14,085			14,085
Transfer in due to consolidation or deconsolidation	—			247,303			247,303			—			—			—
Net realized/unrealized (gains) losses	1,758			86,017			87,775			(499		)	73,728			73,229
Purchases	—			24,667			24,667			—			1,923,412			1,923,412
Sales	—			—			—			—			(593,699		)	(593,699		)
Issuances	—			2,458,455			2,458,455			—			—			—
Settlements (2)	(4,269		)	(1,883,221		)	(1,887,490		)	(9,507		)	(838,781		)	(848,288		)
Estimated fair value, end of period	$	14,450		$	11,480,641		$	11,495,091		$	23,777		$	10,175,179		$	10,198,956
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period	$	(1,758	)	$	47,339		$	45,581		$	499		$	89,414		$	89,913

Explanatory Notes:

__________________________

(1) Represents the Company's sales of its residual interests in the Consolidated CLOs. The sale removes the requirement to consolidate the CLOs, therefore, debt and/or subordinated notes of the CLOs are no longer eliminated in consolidation.

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

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. 

Investments in Funds—Investments in Funds represents the Company's investment in certain credit funds where the Company co-invests with third party investors. The fair value of investments in funds are generally determined based on the Company's proportionate share of the Net Asset Value ("NAV") of the fund. When the Company and third party investors have the ability to redeem their investments at their respective proportionate share of NAV at, or within three months of the reporting date, the investments at fair value are classified as Level 2 and when the Company and third party investors do not have the ability to redeem their investment at their proportionate share of NAV at, or within three months of the reporting date, the investments at fair value are classified as Level 3. 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.

16

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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. 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.

Structured Products & Other—Structured products and other primarily represents the fair value of investments in third party CLOs or CDOs which are generally valued via a third-party pricing service. The inputs to the valuation include recent trade information, 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 service's valuation model are generally obtained from active markets, the third-party pricing service does not provide a detailed analysis for each security valued. The Company performs certain procedures on a sample basis to determine that prices approximate fair market value. 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 these assets are classified as Level 3 within the fair value hierarchy.

In addition, included in Structured Products and Other is the Company's warehouse TRS (Note 7). The fair value of the Warehouse TRS is calculated as the sum of (i) the change in fair value of the reference obligations (SSCL's are valued at a composite of the mid-point in the bid-ask spread of broker quotes) since they became reference obligations (ii) net realized gains (losses) on reference obligations sold during the period and (iii) interest income earned on the reference obligations, less an amount equal to LIBOR plus an agreed upon margin on the outstanding notional amount of the reference obligations. The Warehouse TRS is classified as Level 2 within the fair value hierarchy.

Contingent Liabilities—The fair value of contingent liabilities is based on a discounted cash flow model. The model is based on projections of the relevant future management 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.

17

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 debt and subordinated notes are classified as Level 3 within the fair value hierarchy. Effective June 30, 2014, the fair value of the debt and subordinated notes of the Consolidated CLOs or Warehouses are valued via a third-party pricing service. The inputs to the valuation include recent trade information, 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 service's valuation model are generally obtained from active markets, the third-party pricing service does not provide a detailed analysis for each security valued. The Company performs certain procedures on a sample basis to determine that prices approximate fair market value. 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 these assets are classified as Level 3 within the fair value hierarchy.

Prior to June 30, 2014, the fair value of the debt and subordinated notes of the Consolidated CLOs and Warehouses were based on internally developed discounted cash flow models and utilized both observable and unobservable inputs in the determination of fair value. Significant inputs to the valuation models included the structure of the Consolidated CLOs or Warehouses and estimates related to loan default, recovery and discount rates. These liabilities were classified as Level 3 within the fair value hierarchy.

18

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Quantitative Information about Level 3 Assets & Liabilities

The disclosure provided below provides quantitative information about the significant unobservable inputs used in the valuation of the contingent liabilities and the long-term debt of the Consolidated CLOs. The table excludes the significant unobservable inputs used in valuing investments of the Consolidated CLOs and, effective June 30, 2014, long-term debt of the Consolidated CLOs and Warehouses as they were provided by a third party pricing service.

					June 30, 2014	December 31, 2013	Impact of Increase in Input on Fair Value Measurement (1)
Financial Liabilities	June 30, 2014 Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input	Range	Range
Contingent Liabilities	$	14,450	Discounted cash flows	Discount rate (2)	3.9%-12.5%	5.1%-15.0%	Decrease
				Default rate (3)	1.5-2.0%	2.0%	Decrease
				Recovery rate (3)	70%	70%	Increase
				Pre-payment rate (3)	35-40%	30-40%	Decrease
				Reinvestment spread of assets above LIBOR	3.0-3.8%	3.0-3.8%	Increase
				Reinvestment price of assets	100.0	100.0	Increase
Long-Term Debt of the Consolidated CLOs & Warehouses	$	11,480,641	Discounted cash flows	Discount rate - Debt Tranches (4)	n/a (5)	0.6%-7.1%	Decrease
				Discount rate - Subordinated Note Tranches	n/a (5)	12%	Decrease
				Default rate (3)	n/a (5)	1.0-2.0%	Decrease
				Recovery rate (3)	n/a (5)	70-75%	Increase
				Pre-payment rate (3)	n/a (5)	25-40%	Decrease
				Reinvestment spread of assets above LIBOR	n/a (5)	3.0-3.8%	Increase
				Reinvestment price of assets	n/a (5)	99.5-100.0	Increase

Explanatory Notes:

____________________________

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

(2) The discount rate varies by type of management fee (senior management fee, subordinated management fee, or incentive fee), the priority of that management fee in the waterfall of the CLO and the relative risk associated with the respective management fee cash flow projections. Amounts are presented as a spread over LIBOR.

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

(4) Prior to June 30, 2014, the valuation of long-term debt of the Consolidated CLOs discounted the cash flows of each tranche of debt and subordinated notes provided from the projected cash flow models. The discount rate varies by the original credit rating of each tranche of debt or year of issuance for the subordinated notes. Amounts are presented as a spread over LIBOR.

(5) Although the inputs used in the third-party pricing service's valuation model are generally obtained from active markets, the third-party pricing service does not provide a detailed analysis for each security valued. The Company performs certain procedures on a sample basis to determine that prices approximate fair market value.

19

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED 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 are as follows:

	As of June 30, 2014				As of December 31, 2013
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
	(In thousands)
Financial liabilities:
Long-term debt:
Convertible Notes (1)	$	19,697	$	37,231	$	19,164	$	32,149
Junior Subordinated Notes (2)	$	120,000	$	63,257	$	120,000	$	63,535

Explanatory Notes:

________________________________

(1) The estimated fair value of the Convertible Notes as of December 31, 2013 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. Subsequent to quarter end, Convertible Notes outstanding were converted (see Notes 10, 11 and 14) therefore as of June 30, 2014, the estimated fair value is classified as Level 1 within the fair value hierarchy.

(2) The Junior Subordinated Notes include both the March and October Junior Subordinated Notes (see Note 10). The estimated fair values of the Junior Subordinated Notes were determined using a discounted cash flow model which utilizes significant unobservable inputs, including discount rates, yield and forward LIBOR curve assumptions.  This methodology is classified as Level 3 within the fair value hierarchy.

The carrying value of all of the following approximate the fair value of the financial instruments and are considered Level 1 in the fair value hierarchy: cash and cash equivalents, restricted cash and cash equivalents, due from brokers, receivables, due to brokers and deferred purchase payments. In addition, amounts in the Consolidated Entities related to due from brokers, restricted cash and cash equivalents, receivables and due to brokers also approximate the fair value of the instruments and are all considered Level 1 on the fair value hierarchy.

Loans and other investments classified as investments at fair value of the Consolidated Entities are diversified over multiple industries. In addition, applicable agreements to CLOs and warehouses outline industry concentration limits. Management does not believe the Company has any significant concentration risks.

20

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 6—Net Results of Consolidated Entities

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

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(in thousands)
Investment income	$	128,703		$	120,719		$	249,146		$	239,882
Interest expense	(40,799		)	(26,103		)	(76,873		)	(59,024		)
Net investment income	87,904			94,616			172,273			180,858
Net gain (loss) on investments at fair value	7,187			(68,707		)	9,946			12,386
Net gain (loss) on liabilities at fair value	(52,407		)	36,765			(82,701		)	(73,728		)
Net gain (loss) on other investments and derivatives	2,215			(103		)	2,322			(48		)
Net gain (loss) from activities of Consolidated Entities	$	44,899		$	62,571		$	101,840		$	119,468
Expenses of Consolidated Entities	(7,853		)	(9,469		)	(15,712		)	(19,308		)
Net Results of Consolidated Entities (1)	$	37,046		$	53,102		$	86,128		$	100,160

Explanatory Note:

________________________________

(1) See Note 2 for a reconciliation of Net Results from Consolidated Entities attributable to CIFC Corp.

Note 7—Derivative Instruments and Hedging Activities

Total Return Swap—During March 2014, the Company, through a warehouse SPV, entered into a total return swap ("TRS")agreement with a third party bank. Under the TRS, the Company received the income on the reference obligations (including gains on terminated reference obligations) and paid the counterparty an amount equal to three month LIBOR plus a margin on the outstanding notional amount of the reference obligations and losses on terminated reference obligations. The Company also consolidates this Warehouse SPV as it is a variable interest entity in which it is deemed the primary beneficiary (see Note 2).

As of June 30, 2014, the notional amount of SSCLs included as reference obligations of the Warehouse TRS was $179.6 million and the Warehouse SPV had $47.4 million (of which $26.5 million represented the Company's investment) of cash posted as collateral under the TRS, which is included within "Restricted cash and cash equivalents" of Consolidated VIEs on the Consolidated Balance Sheets. During the three and six months ended June 30, 2014, the Company recognized net income/expense related to derivative instruments of $2.2 million and $2.3 million, respectively, on the Condensed Consolidated Statement of Operations.

21

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 8—Intangible Assets

Intangible assets are 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)
June 30, 2014:
Investment management contracts	3.6	$	72,941	$	57,634	$	15,307
Referral arrangement	5.3	3,810		953		2,857
Non-compete agreements	3.7	1,535		836		699
Trade name	6.8	1,250		406		844
Total intangible assets		$	79,536	$	59,829	$	19,707
December 31, 2013:
Investment management contracts	4.0	$	72,941	$	52,661	$	20,280
Referral arrangement	5.8	3,810		572		3,238
Non-compete agreements	4.2	1,535		736		799
Trade name	7.3	1,250		344		906
Total intangible assets		$	79,536	$	54,313	$	25,223

Explanatory Notes:

_________________________________

(1) Gross carrying amounts have been adjusted for impaired assets as of the date presented.

(2) During the three and six months ended June 30, 2014, the Company recorded amortization expense on its intangible assets of $2.6 million and $5.5 million, respectively, and during the three and six months ended June 30, 2013, the Company recorded amortization expense on its intangible assets of $4.1 million and $8.1 million, respectively.

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

	(In thousands)
2014 (6 months remaining)	$	4,633
2015	6,796
2016	4,010
2017	2,172
2018	1,527
Thereafter	569
	$	19,707

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 payment on the closing date and contingent payments which were collected during 2013 and 2014. During the six months ended June 30, 2014 and 2013, the Company collected contingent payments of $0.2 million and $0.8 million, respectively, which was reported in "Net gain on the sale of management contract" on the Condensed Consolidated Statements of Operations.

22

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 9—Deferred Purchase Payments and Contingent Liabilities at Fair Value

The Company's Deferred Purchase Payments and Contingent Liabilities at fair value are as follows:

	June 30, 2014		December 31, 2013
	(In thousands)
Deferred purchase payments	$	1,348	$	1,179
Contingent liabilities from the Merger (related party) - Note 14	$	13,238	$	15,349
Contingent liabilities value assumed through the Merger	1,212		1,612
Contingent liabilities at fair value	$	14,450	$	16,961

Deferred Purchase Payments—In April 2011, the Company entered into a merger (the "Merger") with Commercial Industrial Finance Corp. ("Legacy CIFC"). As a result of the Merger, Legacy CIFC became CIFCAM, a wholly-owned subsidiary of CIFC. The consideration for the Merger included the payment to CIFC Parent Holdings LLC ("CIFC Parent"), the sole stockholder of Legacy CIFC, of $7.5 million of cash payable in three equal installments of $2.5 million (subject to certain adjustments). During the six months ended June 30, 2013, the Company made the final deferred purchase payment related to the Merger of $2.5 million leaving no remaining amounts outstanding under this agreement.

In March 2010, the Company entered into an acquisition and investment agreement with DFR Holdings and CNCIM pursuant to which it agreed to acquire all of the equity interests in CNCIM from DFR Holdings. The consideration for the CNCIM acquisition includes deferred purchase payments totaling $7.5 million in cash payable in five equal annual installments beginning in December 2010. The final remaining installment of $1.5 million is payable on December 9, 2014. As of June 30, 2014 and December 31, 2013, the fair value of the remaining deferred purchase payments of $1.3 million and $1.2 million, respectively, was included in the Condensed Consolidated Balance Sheets.

Contingent Liabilities at Fair Value—In addition to the consideration paid in connection with the Merger, the Company was required to pay CIFC Parent a portion of incentive fees earned on six CLOs managed by CIFCAM (the "Legacy CIFC CLOs"). The terms of these payments were as follows: (i) the first $15.0 million of incentive fees received (which was fulfilled in 2013), (ii) 50% of any incentive fees in excess of $15.0 million in aggregate received from the Legacy CIFC CLOs by the combined company over ten years from April 13, 2011 (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 and six months ended June 30, 2014, the Company made total payments of $1.9 million and $3.9 million, respectively, and during the three and six months ended June 30, 2013, the Company made total payments of $4.9 million and $7.8 million, respectively, related to these contingent liabilities. As of June 30, 2014, there are no remaining payments under item (i) and the Company made cumulative payments of $10.4 million under item (ii) to date.

In addition, the Company also assumed contingent liabilities during 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 management fees from the CypressTree CLOs. These fixed percentages vary by CLO. From the Merger Closing Date to June 2013 the minimum fixed percentage was 55%, and effective July 2013, the minimum fixed percentage was 39%. During the three and six months ended June 30, 2014, the Company made payments of $0.2 million and $0.4 million, respectively, and during the three and six months ended June 30, 2013, the Company made payments of $1.1 million and $1.7 million, respectively, related to these contingent liabilities.

23

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED 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 June 30,					For the Six Months Ended June 30,
	2014			2013		2014			2013
	(In thousands)
Contingent liabilities from the Merger	$	(1,544	)	$	421	$	(1,765	)	$	345
Contingent liabilities assumed through the Merger	15			192		7			154
Total net gain (loss) on contingent liabilities at fair value	$	(1,529	)	$	613	$	(1,758	)	$	499

Note 10—Long-Term Debt

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

	June 30, 2014					December 31, 2013
	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	%	21.3	$	95,000	1.00	%	21.8
October Junior Subordinated Notes (2)	25,000		3.72	%	21.3	25,000		3.73	%	21.8
Total Subordinated Notes Debt	$	120,000	1.57	%	21.3	$	120,000	1.57	%	21.8
Convertible Notes (3)	$	19,697	11.00	%	n/a (3)	$	19,164	10.00	%	3.9
Total recourse debt	$	139,697				$	139,164
Non-recourse Consolidated Entities' debt:
Consolidated CLOs (4)	$	11,042,200	1.58	%	8.7	$	10,336,453	1.43	%	8.3
Warehouses (5)	438,441		1.41	%	n/m	148,522		1.30	%	n/m
Total non-recourse Consolidated Entities' debt	$	11,480,641	1.57	%	8.7	$	10,484,975	1.43	%	8.3
Total long-term debt	$	11,620,338				$	10,624,139

Explanatory Notes:

________________________________

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

(2) October Junior Subordinated Notes bear interest at an annual rate of 3 monthLIBOR plus 3.50% and mature on October 30, 2035.

(3) As of June 30, 2014 and December 31, 2013, Convertible Notes were recorded net of a discount of $5.3 million and $5.8 million, respectively and paid interest at the stated rates of 11.00% and 10.00%, respectively. Including the discount, the effective rate of interest is 18.14% for both periods. The Convertible Notes have a $25.0 million aggregate principal amount. Subsequent to quarter end, Convertible Notes outstanding were converted (see Notes 11 and 14).

(4) Long-term debt of the Consolidated CLOs is recorded at fair value. The subordinated notes of Consolidated CLOs do not have a stated interest rate. Therefore, they are excluded from the calculation of the weighted average borrowing rate. As of June 30, 2014 and December 31, 2013, the par value of the Consolidated CLOs long-term debt (including subordinated notes) was $12.0 billion and $10.9 billion, respectively.

(5) Long-term debt of warehouses not held by the Company is recorded at fair value. The fair value excludes the preferred shares of Warehouse(s) outstanding as of each respective period not held by the Company, which have a par value of $68.6 million and $67.5 million as of June 30, 2014 and December 31, 2013, respectively. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate.

24

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Recourse Debt

Convertible Notes—On June 18, 2014, the Company gave notice to its convertible note holder of its intention to redeem the notes at their full par value of $25.0 million. On July 12, 2014, the note holder, DFR Holdings LLC, exercised its right to convert the notes into shares of common stock. Pursuant to the agreement, the Convertible Notes converted into 4,132,231 shares of common stock at a conversion price of $6.05 per share. Effective June 9, 2014, cash interest increased from 10% to 11% per annum and Company could call the notes without a prepayment penalty.

Non-Recourse Consolidated Entities Debt

Consolidated CLOs—During the six months ended June 30, 2014, the Consolidated CLOs issued $1.4 billion of debt, paid down $0.9 billion of their outstanding debt, made net borrowings under revolving credit facilities of $9.4 million, and distributed $116.9 million to the holders of their subordinated notes. During the six months ended June 30, 2013, the Consolidated CLOs issued $1.6 billion of debt, paid down $747.3 million of their outstanding debt, made net borrowings under revolving credit facilities of $27.9 million, and distributed $141.1 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 $11.6 billion and $11.0 billion as of June 30, 2014 and December 31, 2013, respectively.

Other Consolidated Entities—The debt and equity holders have recourse to the total assets of the respective Consolidated Entity's assets. See Note 4 for further details of the Company's exposure to loss on Consolidated Entities.

Note 11—Equity

Common Stock—On June 18, 2014, the Company gave notice to its convertible note holder of its intention to redeem the notes at their full par value of $25.0 million. On July 12, 2014, the note holder, DFR Holdings LLC, exercised its right to convert the notes into 4,132,231 shares of common stock. See also Note 10 and 14.

During the three and six months ended June 30, 2014, the Company declared cash dividends of $0.10 and $0.20, respectively, per common share. There were no cash dividends declared during the three and six months ended June 30, 2013. Subsequent to quarter end, the Company declared a cash dividend of $0.10 per share which will be paid on September 15, 2014 to shareholders of record as of the close of business on August 25, 2014 (see also Note 16).

Stock-based Compensation—During the three and six months ended June 30, 2014, the Company recorded total stock-based compensation expense for its Stock Options and Restricted Stock Units ("RSU") of $0.6 million and $0.7 million, respectively, and during the three and six months ended June 30, 2013, the Company recorded total stock-based compensation expense of $0.9 million and $1.7 million, respectively, on the Condensed Consolidated Statements of Operations within "Compensation and benefits" and "General and administrative expenses."

As of June 30, 2014, an aggregate of 1,108,592 shares remain available for issuance under the Company's 2011 Stock Plan ("2011 Stock Plan"). During the six months ended June 30, 2014, the Company's Board of Directors approved the second amendment to the 2011 Stock Plan increasing the aggregate number of common shares authorized for issuance under the plan by 2.0 million shares to 6,181,929. As of June 30, 2014, there was $10.9 million of estimated unrecognized compensation expense related to unvested stock option and RSU awards, net of estimated forfeitures. The remaining weighted average vesting period of stock options and RSUs are 1.4 years and 5.7 years, respectively.

25

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Stock Options—The following table summarizes certain Stock Options 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, 2013	3,879,813		$	6.05	5.77	$	5,979
Granted (1)	400,000		8.81
Exercised	(100,000	)	4.83
Forfeited (2)	(325,000	)	5.79
Outstanding at June 30, 2014	3,854,813		$	6.67	5.63	$	9,033
Exercisable at June 30, 2014	2,392,547		$	6.34	3.83	$	6,385
Vested and Expected to vest at June 30, 2014 (3)	3,774,035		$	6.65	5.57	$	8,909

Explanatory Notes:

________________________________

(1) On June 13, 2014, the Company granted to certain executives 200,000 service-based stock options with one-quarter of the awards vesting on January 1, 2015, and 200,000 service-based stock options with one-third of the awards vesting on January 1, 2015. The remainder of these options will vest ratably over the respective remaining term of the option agreements.

(2) The forfeited stock-based awards are returned to the grant pool for reissuance under the 2011 Stock Plan.

(3) Includes 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 weighted average assumptions as of the grant date related to stock-based awards (by period issued) are listed in the table below:

	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2014	2013	2014		2013
Expected dividend yield	4.54%	—	4.54	%	—
Expected volatility	42.65%	n/a	42.65	%	48.75	%
Risk-free interest rate	1.96%	n/a	1.96	%	1.10	%
Expected life (years)	5.77	n/a	5.77		6.11

The stock-based awards granted generally 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. Options granted during 2014 included an expected dividend yield representing what the Company expected to distribute in the foreseeable future at the grant date. All options granted prior to 2014 did not include an expected dividend yield since the Company declared its first dividend in third quarter of 2013. 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.

26

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

RSUs—On June 13, 2014, the Company granted 800,000 service-based RSUs to certain executives which vest as follows: (i) 600,000 service-based RSUs comprised of five120,000 RSU tranches, with 20% of the first tranche initially vesting on December 31, 2014, 20% of the second tranche initially vesting on December 31, 2015, 20% of the third tranche initially vesting on December 31, 2016, 20% of the fourth tranche initially vesting on December 31, 2017 and 20% of the fifth tranche initially vesting on December 31, 2018 (each such 20% initial vesting date, the “Initial Vest Date” in respect of such tranche).  Following the Initial Vest Date in respect of each tranche, 5% of the remaining RSUs will vest quarterly over the four year period following the Initial Vest Date in respect of such tranche. (ii) 200,000 service-based RSUs vest over two years. On the same day, the Company also granted 150,000 performance-based RSUs to certain executives which cliff vest on January 1, 2017. These awards are not entitled to dividends, therefore the fair value of these awards were determined using the Company's grant date common stock price less the present value of the expected dividends forgone during the vesting period.

On June 5, 2014, the Company granted 64,396 service-based RSUs to the Company's directors that vest in approximately one year. The awards are entitled to dividend equivalent rights and, as such, the fair value of the awards were determined using the Company's grant date common stock price.

The weighted average grant date fair value of all awards granted above was $7.86.

The following table summarizes restricted stock units activity:

	For the Six Months Ended June 30,
	2014		2013
Restricted stock units outstanding, beginning of period	18,486		103,360
Granted	1,014,396		—
Settled (1)	(7,236	)	(96,124	)
Restricted stock units outstanding, end of period (2)	1,025,646		7,236

Explanatory Notes:

_________________________________

(1) Represents the gross number of RSUs settled during the period with the issuance of common stock to the restricted stock unit holder.  During the six months ended June 30, 2014, the Company issued 7,236 shares of common stock to settle the third 1/3 annual installment of the RSUs granted in 2011. During the six months ended June 30, 2013, the Company issued 88,888 shares of common stock to settle restricted stock grants from 2010 and 7,236 shares of common stock to settle the second 1/3 annual installment of the RSUs granted in 2011.

(2) For 2013, outstanding amount relates to the remaining 2011 grants to certain members of the Board. The 2011 grants were fully vested and delivered as of June 30, 2014.

Profits Interests Awards—During June 2011, CIFC Parent (a related party until December 18, 2013) granted certain employees of the Company profits interests in CIFC Parent. During the three and six months ended June 30, 2014, the Company recorded a non-cash compensation expense of $0.1 million for both periods, and during the three and six months ended June 30, 2013, the Company recorded a non-cash compensation expense of $0.2 million and $1.2 million, respectively, in "Compensation and benefits" on the Condensed Consolidated Statements of Operations related to the amortization and remeasurement of the value of the awards. As of June 30, 2014, there were no estimated unrecognized compensation expense related to these awards.

Warrants—In connection with the restructuring of an investment product formerly managed by the Company, CIFC issued 250,000 warrants. These warrants provides the holders the right to purchase shares of the Company's common stock at an exercise price of $4.25 per share and expired on April 9, 2014. As of December 31, 2013, total warrants outstanding totaled 225,000. During the six months ended June 30, 2014, the holders of the warrants exercised the 225,000 warrants and the Company net share settled for 99,065 of common shares.

27

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 12 —Earnings (Loss) Per Share

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

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands, except per share data)
Net income (loss) attributable to CIFC Corp. - basic	$	6,444	$	7,543	$	6,679	$	10,330
Dilutive effect of Convertible Notes (1)	479		455		951		904
Net income (loss) attributable to CIFC Corp. - diluted	$	6,923	$	7,998	$	7,630	$	11,234
Weighted-average shares - basic	20,972		20,809		20,906		20,803
Convertible Notes (1)	4,132		4,132		4,132		4,132
Stock options (2)	630		199		611		252
Warrants	470		461		482		533
Unvested RSUs (2)	9		n/a		10		n/a
Weighted-average shares - diluted	26,213		25,601		26,141		25,720
Earnings (loss) per share
Basic	$	0.31	$	0.36	$	0.32	$	0.50
Diluted	$	0.26	$	0.31	$	0.29	$	0.44

Explanatory Notes:

________________________________

(1) Subsequent to quarter end, the Convertible Notes were converted into 4.1 million shares of common stock to DFR Holdings (see Notes 10, 11 and 14).

(2) For the three and six months ended June 30, 2014, 1.1 million and 0.9 million, respectively, of stock options and 0.4 million and 0.2 million, respectively, of unvested RSUs were considered anti-dilutive and excluded from diluted EPS. For both the three and six months ended June 30, 2013, 1.2 million of stock options were considered anti-dilutive and excluded from diluted EPS.

Note 13—Income Taxes

The following table summarizes the Company's tax position:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(In thousands)
Income (loss) before income taxes	$	22,745		$	41,033		$	59,730		$	75,084
Income tax expense	$	(6,837	)	$	(6,488	)	$	(19,241	)	$	(9,598	)
Effective income tax rate	30.1		%	15.8		%	32.2		%	12.8		%

The effective tax rate, including noncontrolling interests in Consolidated VIEs, was 30.1% and 32.2%, respectively, during the three and six months ended June 30, 2014 and 15.8% and 12.8%, respectively, during the three and six months ended June 30, 2013. The increase in the effective tax rate compared with the prior year was primarily attributable to the write-down of deferred tax assets impacted by tax law changes enacted by New York State on March 31, 2014 that are effective for tax years beginning on or after January 1, 2015 and decrease in the Consolidated VIEs noncontrolling interest income/(loss), which is included in pre-tax income/(loss) but is not taxable to CIFC Corp. During the six months ended June 30, 2014, the Company included a tax expense of approximately $6.7 million related to the change in New York State tax laws. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the result of new judicial interpretations or changes in tax laws or regulations.

28

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14—Related Party Transactions

DFR Holdings—As of June 30, 2014 and December 31, 2013, DFR Holdings owned approximately 14.7 million shares of the Company's common stock and $25.0 million aggregate principal amount of the Company's Convertible Notes, which is convertible into approximately 4.1 million shares of the Company's common stock. Subsequent to quarter end, on July 12, 2014, DFR Holdings exercised its right to convert the notes into shares of common stock (see Note 10, 11 and 16). In addition, DFR Holdings held warrants that entitle them the right to purchase 2.0 million shares of the Company's voting common stock. As such, related party transactions also included (i) the interest expense on Convertible notes of $0.9 million and $1.8 million, respectively, during the three and six months ended June 30, 2014 and $0.9 million and $1.7 million, respectively, during the three and six months ended June 30, 2013, (ii) deferred purchase payments (see Note 9), and (iii) quarterly dividends (see Note 11). For the three and six months ended June 30, 2013, total management fees from related parties was $13,000 and $25,000, respectively. The Company did not earn any management fees from DFR Holdings for the three and six months ended June 30, 2014.

The Company agreed to nominate to the Company's Board of Directors six directors designated by DFR Holdings. The number of directors that can be designated by DFR Holdings is reduced in the event that DFR Holdings decreases its ownership (on a diluted basis) in CIFC. If DFR Holdings' ownership falls below 5%, it will lose the right to designate any director. During the three and six months ended June 30, 2014, the directors earned an aggregate $0.2 million and $0.3 million, respectively, related to their services.

CIFC Parent—As of June 30, 2014, CIFC Parent no longer owns common shares of the Company. However, during the three and six months ended June 30, 2013, CIFC Parent held 9.1 million shares of the Company's common stock and invested in CLOs managed by the Company.

As such, related party transactions for the three and six months ended June 30, 2014, included (i) contingent liabilities payments to CIFC Parent (see Note 9), (ii) CIFC Parent's investment of $1.3 million in two Consolidated Funds managed by the Company as of June 30, 2014, (iii) fees to the Company for providing certain administrative services to CIFC Parent, and (iv) profits interests in CIFC Parent granted during 2011 to certain employees of the Company (see Note 11). As of June 30, 2014 and December 31, 2013, total management fee receivables due from related parties was $12,500 and $167,000, respectively. For the three and six months ended June 30, 2014, total management fees from related parties was $12,500 and $25,000, respectively, and for the three and six months ended June 30, 2013, total management fees from related parties was $46,000 and $93,000, respectively.

Other—As of June 30, 2014 and December 31, 2013, a board member holds $1.0 million of income notes in one of the Company's sponsored CLOs, CIFC Funding 2013-II, Ltd., through an entity in which he is a 50% equity holder.

Funds—As of June 30, 2014, employees and directors of the Company invested an aggregate $3.5 million in three different funds which the Company invests in and manages. Employees are not charged a management fee on their investment. Directors were charged a fee, similar to certain other investors. For the three and six months ended June 30, 2014, these amounts were de minimis.

Note 15—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 it is not probable and estimable that any loss will be incurred.

In addition, in June 2013, a suit was filed against the Company (and certain of its affiliates and directors) by a former employee. The Company denies the allegations, intends to defend itself vigorously, believes that the pending lawsuit is without merit and has filed counterclaims against the plaintiff.

29

CIFC CORP. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Lease Commitments—During the three and six months ended June 30, 2014, total occupancy expense was $0.4 million and $0.8 million, respectively, and during the three and six months ended June 30, 2013, total occupancy expense was $0.4 million and $0.7 million, respectively. The future minimum commitments under the Company's lease agreement are as follows:

	(In thousands)
2014 (6 months remaining)	$	803
2015	1,607
2016	1,607
2017	1,607
2018	1,680
Thereafter	7,010
	$	14,314

Unfunded 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. Unfunded loan commitments represent the estimated fair value of those unfunded revolvers of loan facilities.

Unfunded loan commitments represent the estimated fair value of those unfunded revolvers of loan facilities. As of June 30, 2014 and December 31, 2013, the Consolidated CLOs had unfunded investment commitments on loans of $38.6 million and $36.8 million, 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.

Other—As of both June 30, 2014 and December 31, 2013, the Company fully funded the aggregate minimum commitment to invest $30.0 million in its CIFC sponsored funds.

Note 16—Subsequent Events

Subsequent to quarter end, the Company sponsored the issuance of a new CLO that represented approximately $700 million of new loan-based AUM. In addition, the Company priced another CLO that represented approximately $600 million of new loan-based AUM.

Subsequent to quarter end, the Company declared a cash dividend of $0.10 per share. The dividend will be paid on September 15, 2014 to shareholders of record as of the close of business on August 25, 2014.

On June 18, 2014, the Company gave notice to the convertible note holders of its intention to redeem the notes at their full par value of $25.0 million. On July 12, 2014, the note holder, DFR Holdings, exercised its right to convert the notes into 4,132,231 shares of common stock.

30

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 2013 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.”

Overview

CIFC Corp. (“CIFC” and, together with its subsidiaries, "we" or "us") is a fundamentals-based, relative value, alternative credit manager. Our primary business is to provide investment management services for investment products. We manage assets 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 assets under management ("AUM") is primarily comprised of Collateralized Loan Obligations ("CLOs"), credit funds and separately managed accounts ("SMAs", together with credit funds "other loan-based products"). These credit products are opportunistic investment strategies where we seek to generate both current income and capital appreciation, primarily through senior secured corporate loan (“SSCL”) investments and, to a lesser extent, other investments. Management internally views the business as one reportable segment.

We have three primary sources of revenue: management fees, incentive fees and investment income. Management fees are generally earned based on the amount of assets managed (or AUM), incentive fees are earned based on the performance of the funds and investment income is earned based on the performance of our direct investment in our products.

CIFC Corp. is a Delaware corporation headquartered in New York City. As of June 30, 2014, DFR Holdings LLC, on a fully-diluted basis, owns approximately 70% of our diluted shares outstanding.

Executive Overview

We had a strong quarter with ENI increasing 48% year over year. Our CLOs and total return funds continue to perform well. The CLO market has been strong in 2014 and outpaced the record levels of 2013. Our loan-based AUM increased by $0.5 billion during the first half of the year. During the quarter, CIFC sponsored its largest CLO that represents approximately $0.8 billion of new AUM. Year-to-date, we have priced four CLOs with aggregate new AUM of $2.7 billion. Our ability to establish warehouses and accumulate assets before pricing the CLOs has been a key competitive advantage we continue to leverage.

During the quarter ended June 30, 2014, we recorded GAAP net income attributable to CIFC Corp. of $6.4 million, compared to $7.5 million for the same period in the prior year. The decrease in total net income period over period was predominately due to a $2.1 million increase in losses on contingent liabilities related to an improvement in the expected performance of legacy CIFC CLOs with fee sharing arrangements. This loss was partially offset by an increase in $1.5 million in net revenues which was primarily related to an increase in net investment income. See "Results of Operations" below for additional details.

Economic Net Income ("ENI") was $15.2 million, compared to $10.3 million for the same period in the prior year. ENI increased period to period by $4.9 million or 48% primarily related to higher net investment income and management fees. Net investment income increase was driven primarily by an increase in net gains from CIFC's investments in CLOs, credit funds and warehouses during the current quarter. In addition, management fees increased as we recognized more revenues from CLOs and credit funds launched since the second quarter of 2013. These increases were partially offset by (i) decreases in management fees from certain legacy CLOs that are amortizing pursuant to their contractual terms, and (ii) increases in compensation, benefits and other operating expenses to support our continued growth. See "Non-GAAP Measure - ENI" below for additional details.

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Fee Earning AUM

Fee Earning Assets Under Management ("Fee Earning AUM" or "AUM") refers to the assets managed by us on which we are paid management fees and/or incentive fees. Generally, fees are paid on the aggregate collateral balance at par, and principal cash of CLOs and the value of the assets in credit funds (excluding non-fee earning AUM such as our investments).

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

	June 30, 2014			March 31, 2014			December 31, 2013			June 30, 2013
	Number of Accounts	Fee Earning AUM		Number of Accounts	Fee Earning AUM		Number of Accounts	Fee Earning AUM		Number of Accounts	Fee Earning AUM
		(In thousands)			(In thousands)			(In thousands)			(In thousands)
Post 2011 CLOs	10	$	5,539,964	9	$	4,732,728	8	$	4,127,951	6	$	3,219,531
Legacy CLOs (2)	19	5,819,791		19	6,423,605		20	6,811,382		26	8,344,616
Total CLOs	29	11,359,755		28	11,156,333		28	10,939,333		32	11,564,147
Other Loan-Based Products (3)	6	1,211,907		6	1,189,120		6	1,106,526		3	822,534
Total Loan-Based AUM	35	12,571,662		34	12,345,453		34	12,045,859		35	12,386,681
ABS and Corporate Bond CDOs	8	$	737,769	8	768,609		8	$	802,821	10	$	1,325,535
Total Fee Earning AUM	43	$	13,309,431	42	$	13,114,062	42	$	12,848,680	45	$	13,712,216

Explanatory Notes:

_________________________________

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

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

(3) Other loan-based products management fee structures vary by fund and may not be similar to a CLO.

Fee Earning AUM activity is as follows:

	For the Three Months Ended			For the Six Months Ended			Last Twelve Months
	June 30, 2014
	(In thousands)
Total loan-based AUM - Beginning Balance	$	12,345,453		$	12,045,859		$	12,386,681
CLO New Issuances	800,000			1,400,462			2,303,694
CLO Principal Paydown	(527,131		)	(908,647		)	(1,935,706		)
CLO Calls, Redemptions and Sales	(86,693		)	(86,693		)	(548,758		)
Fund Subscriptions	25,101			72,289			383,853
Other (1)	14,932			48,392			(18,102		)
Total loan-based AUM - Ending Balance	12,571,662			12,571,662			12,571,662
Total CDOs - Ending Balance	737,769			737,769			737,769
Total Fee Earning AUM - Ending Balance	$	13,309,431		$	13,309,431		$	13,309,431

Explanatory Note:

_________________________________

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

32

During the three months ended June 30, 2014, total AUM increased by $0.2 billion. During the quarter, we sponsored the issuance of one CLO and increased subscriptions to other loan-based products increasing Fee Earning AUM by $825.1 million. New AUM was offset by declines in AUM for certain Legacy CLOs and CDOs aggregating $644.7 million which have reached the end of their contractual reinvestment periods (after which capital is returned to investors as the loan assets underlying the CLOs and CDOs repay principal).

During the six months ended June 30, 2014, total AUM increased by $0.5 billion. During the period, we sponsored the issuance of two CLOs and increased subscriptions to other loan-based products increasing Fee Earning AUM by approximately $1.5 billion. New AUM was offset by declines in AUM for certain Legacy CLOs and CDOs aggregating $1.1 billion which have reached the end of their contractual reinvestment periods (after which capital is returned to investors as the loan assets underlying the CLOs and CDOs repay principal).

Most of the CLOs and CDOs we manage and issued prior to 2011 have passed their first optional call date and are generally callable by their subordinated note holders, subject to satisfaction of certain conditions. As expected, CDO AUM continued to decline during the three and six months ended June 30, 2014. We do not expect to sponsor new CDOs and expect CDO AUM to continue to decline going forward as these funds run-off per their contractual terms.

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

	Issuance Date	June 30, 2014 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.	01/12	$	403,874	01/14	01/15	2023
CIFC Funding 2012-I, Ltd.	07/12	454,274		08/14	08/16	2024
CIFC Funding 2012-II, Ltd.	11/12	732,827		12/14	12/16	2024
CIFC Funding 2012-III, Ltd.	01/13	504,295		01/15	01/17	2025
CIFC Funding 2013-I, Ltd.	03/13	505,540		04/15	04/17	2025
CIFC Funding 2013-II, Ltd.	06/13	627,787		07/15	07/17	2025
CIFC Funding 2013-III, Ltd.	09/13	403,289		10/15	10/17	2025
CIFC Funding 2013-IV, Ltd.	11/13	503,492		11/15	11/17	2024
CIFC Funding 2014, Ltd.	03/14	601,236		04/16	04/18	2025
CIFC Funding 2014-II, Ltd.	05/14	803,350		05/16	05/18	2026
Total Post 2011 CLOs		5,539,964
Legacy CLOs
Navigator 2005 CLO, Ltd.	07/05	29,580		10/11	10/11	2017
Bridgeport CLO Ltd.	06/06	359,502		10/09	07/13	2020
CIFC Funding 2006-I, Ltd.	08/06	218,498		10/10	10/12	2020
Columbus Nova 2006-I, Ltd.	08/06	266,079		10/09	10/12	2018
Navigator 2006 CLO, Ltd.	09/06	218,093		09/10	09/13	2020
CIFC Funding 2006-I B, Ltd.	10/06	205,696		12/10	12/12	2020
Burr Ridge CLO Plus Ltd.	12/06	247,188		06/12	03/13	2023
CIFC Funding 2006-II, Ltd.	12/06	356,223		03/11	03/13	2021
Columbus Nova 2006-II, Ltd.	12/06	324,263		02/10	02/13	2018
Hewett's Island CLO V, Ltd.	12/06	122,413		12/09	12/12	2018
CIFC Funding 2007-I, Ltd.	02/07	345,666		05/11	11/13	2021
CIFC Funding 2007-II, Ltd.	03/07	591,076		04/11	04/14	2021
Columbus Nova 2007-I, Ltd.	03/07	274,299		05/10	05/13	2019
Hewett's Island CLO VI, Ltd.	05/07	166,239		06/10	06/13	2019
Schiller Park CLO Ltd.	05/07	373,321		07/11	04/13	2021
Bridgeport CLO II Ltd.	06/07	489,899		12/10	09/14	2021
CIFC Funding 2007-III, Ltd.	07/07	434,483		07/10	07/14	2021
Primus CLO II, Ltd.	07/07	365,097		10/11	07/14	2021
Columbus Nova 2007-II, Ltd.	11/07	432,176		10/10	10/14	2021
Total Legacy CLOs		5,819,791
Total CLOs		$	11,359,755

Explanatory Notes:

_________________________________

(1) CLOs are generally callable by equity holders (or the subordinated note holders of the CLO) 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. 

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Results of Condensed Consolidated Operations

The Condensed Consolidated Financial Statements include the financial statements of our wholly owned subsidiaries, the entities in which we have a controlling interest ("Consolidated Funds") and variable interest entities ("VIEs" or "Consolidated VIEs") for which we are deemed to be the primary beneficiary (together the "Consolidated Entities"). Consolidated VIEs includes certain CLOs and warehouses we manage. The following table presents our comparative Condensed Consolidated Statements of Operations for the three months ended June 30, 2014 and 2013:

	For the Three Months Ended June 30,						2014 vs. 2013
	2014			2013			Variance			% Variance
	(In thousands, except share and per share amounts)
Revenues
Management fees	$	1,378		$	2,240		$	(862	)	(38	)%
Net investment income	97			106			(9		)	(8	)%
Total net revenues	1,475			2,346			(871		)	(37	)%
Expenses
Compensation and benefits	8,047			6,986			1,061			15	%
Professional services	706			715			(9		)	(1	)%
General and administrative expenses	2,259			1,843			416			23	%
Depreciation and amortization	2,870			4,278			(1,408		)	(33	)%
Total expenses	13,882			13,822			60			—	%
Other Income (Expense) and Gain (Loss)
Net gain (loss) on investments at fair value	1,121			251			870			347	%
Net gain (loss) on contingent liabilities at fair value	(1,529		)	613			(2,142		)	(349	)%
Corporate interest expense	(1,486		)	(1,452		)	(34		)	2	%
Other, net	—			(5		)	5			(100	)%
Net other income (expense) and gain (loss)	(1,894		)	(593		)	(1,301		)	219	%
Operating income (loss)	(14,301		)	(12,069		)	(2,232		)	18	%
Net results of Consolidated Entities	37,046			53,102			(16,056		)	(30	)%
Income (loss) before income taxes	22,745			41,033			(18,288		)	(45	)%
Income tax (expense) benefit	(6,837		)	(6,488		)	(349		)	5	%
Net income (loss)	15,908			34,545			(18,637		)	(54	)%
Net (income) loss attributable to noncontrolling interest in Consolidated Entities	(9,464		)	(27,002		)	17,538			(65	)%
Net income (loss) attributable to CIFC Corp.	$	6,444		$	7,543		$	(1,099	)	(15	)%
Earnings (loss) per share:
Basic	$	0.31		$	0.36		$	(0.05	)	(14	)%
Diluted	$	0.26		$	0.31		$	(0.05	)	(16	)%
Weighted-average number of shares outstanding:
Basic	20,971,928			20,808,750			163,178			1	%
Diluted	26,212,593			25,601,165			611,428			2	%

35

Net income (loss) attributable to CIFC Corp. was $6.4 million, or $0.26 per fully diluted share for the three months ended June 30, 2014, compared to $7.5 million, or $0.31 per fully diluted share, in the prior year. Net income (loss) attributable to CIFC Corp. decreased by $1.1 million from the prior year predominantly due to the following net results:

Total Net Revenues—GAAP net revenues includes management fees from unconsolidated CLOs, CDOs and other loan-based products. Unconsolidated funds included 2 CLOs, 8 CDOs, and 2 other investment products as of June 30, 2014 compared to 7 CLOs, 11 CDOs and 1 other investment product as of June 30, 2013. Total net revenues decreased $0.9 million or 37% from the same period of the prior year primarily due to reductions in AUM from unconsolidated funds that liquidated since the second quarter of 2013. In addition, certain unconsolidated CLOs and CDOs have reached the end of their contractual reinvestment periods thereby reducing AUM and its related management fees. This decrease is partially offset by management fees from other loan-based products as AUM from these products increased since the second quarter of the prior year.

Total Expenses—Depreciation and Amortization decreased by $1.4 million which was mostly offset by an increase in Compensation and Benefits of $1.1 million.

Depreciation and amortization decreased by $1.4 million or 33% from the same period of the prior year primarily due to a reduction in amortization expense on intangible assets related to management contracts acquired for certain CLOs and CDOs that were impaired or written off in the prior year. Compensation and benefits increased by $1.1 million or 15% from the same period of the prior year, as a result of an increase in compensation for certain key executives and an overall increased headcount.

Net other income (expense) and gain (loss)—Total Net other income and gains decreased by $1.3 million or 219% period over period, primarily due to an increase in net losses on Contingent Liabilities at Fair Value related to an improvement in the expected performance of legacy CIFC CLOs with fee sharing arrangements.

Net results of Consolidated Entities attributable to CIFC Corp.—The table below represents our share in the net results of the Consolidated Entities and a reconciliation to the characteristics of these results:

	For the Three Months Ended June 30,						2014 vs. 2013
	2014			2013			Variance			% Variance
	(In thousands)
Net results of Consolidated Entities	$	37,046		$	53,102		$	(16,056	)	(30	)%
Net (income) loss attributable to noncontrolling interest in Consolidated Entities	(9,464		)	(27,002		)	17,538			(65	)%
Net results of Consolidated Entities attributable to CIFC Corp.	$	27,582		$	26,100		$	1,482		6	%
Characteristics of net results of Consolidated Entities attributable to CIFC Corp:
Consolidated Entities management fees	$	20,560		$	23,559		$	(2,999	)	(13	)%
Consolidated Entities net investment income	7,022			2,541			4,481			176	%
Net results of Consolidated Entities attributable to CIFC Corp.	$	27,582		$	26,100		$	1,482		6	%

Net results of Consolidated Entities attributable to CIFC Corp. includes our portion of the Consolidated Entities' (including our Consolidated VIEs, or CLOs and warehouses) operating results. During the three months ended June 30, 2014 and 2013, we recognized $27.6 million and $26.1 million, respectively, of Consolidated Entities' management fees and net investment interest income related to our investments in the Consolidated Entities.

The $1.5 million or 6% increase in Net results of Consolidated Entities attributable to CIFC Corp. was primarily due to an increase in Consolidated Entities' net investment income partially offset by a decrease in management fees. Net investment income increased primarily driven by an increase in net gains from our warehouses, credit funds and CLO investments during the current quarter. These increases were offset by decreases in management fees from consolidated legacy CLOs that have reached the end of their contractual reinvestment periods and are amortizing pursuant to their contractual terms.

36

Income tax expense/benefit—The following table summarizes our tax position:

	For the Three Months Ended June 30,
	2014			2013
	(In thousands)
Income (loss) before income taxes	$	22,745		$	41,033
Income tax expense	$	(6,837	)	$	(6,488	)
Effective income tax rate	30.1		%	15.8		%

The effective tax rate, including noncontrolling interests in Consolidated VIEs, was 30.1% and 15.8%, for the three months ended June 30, 2014 and 2013, respectively. The increase in the effective tax rate compared with the same period in the prior year was primarily attributable to a decrease in the Consolidated VIEs noncontrolling interest income/(loss), which is included in pre-tax income/(loss) but is not taxable to CIFC Corp.

The following table presents our comparative Condensed Consolidated Statements of Operations for the six months ended June 30, 2014 and 2013:

	For the Six Months Ended June 30,						2014 vs. 2013
	2014			2013			Variance			% Variance
	(In thousands, except share and per share amounts)
Revenues
Management fees	$	2,990		$	4,883		$	(1,893	)	(39	)%
Net investment income	194			97			97			100	%
Total net revenues	3,184			4,980			(1,796		)	(36	)%
Expenses
Compensation and benefits	15,387			14,510			877			6	%
Professional services	1,752			2,638			(886		)	(34	)%
General and administrative expenses	4,472			3,327			1,145			34	%
Depreciation and amortization	6,015			8,496			(2,481		)	(29	)%
Total expenses	27,626			28,971			(1,345		)	(5	)%
Other Income (Expense) and Gain (Loss)
Net gain (loss) on investments at fair value	2,527			600			1,927			321	%
Net gain (loss) on contingent liabilities at fair value	(1,758		)	499			(2,257		)	(452	)%
Corporate interest expense	(2,953		)	(2,934		)	(19		)	1	%
Net gain on the sale of management contract	228			752			(524		)	(70	)%
Other, net	—			(2		)	2			(100	)%
Net other income (expense) and gain (loss)	(1,956		)	(1,085		)	(871		)	(80	)%
Operating income (loss)	(26,398		)	(25,076		)	(1,322		)	(5	)%
Net results of Consolidated Entities	86,128			100,160			(14,032		)	(14	)%
Income (loss) before income taxes	59,730			75,084			(15,354		)	(20	)%
Income tax (expense) benefit	(19,241		)	(9,598		)	(9,643		)	100	%
Net income (loss)	40,489			65,486			(24,997		)	(38	)%
Net (income) loss attributable to noncontrolling interest in Consolidated Entities	(33,810		)	(55,156		)	21,346			(39	)%
Net income (loss) attributable to CIFC Corp.	$	6,679		$	10,330		$	(3,651	)	(35	)%
Earnings (loss) per share:
Basic	$	0.32		$	0.50		$	(0.18	)	n/m
Diluted	$	0.29		$	0.44		$	(0.15	)	n/m
Weighted-average number of shares outstanding:
Basic	20,905,949			20,803,151			102,798			—	%
Diluted	26,141,070			25,719,972			421,098			2	%

37

Net income (loss) attributable to CIFC Corp. was $6.7 million, or $0.29 per fully diluted share for the six months ended June 30, 2014, compared to $10.3 million, or $0.44 per fully diluted share, in the prior year. Net income (loss) attributable to CIFC Corp. decreased by $3.7 million from the prior year predominantly due to the following net results:

Total Net Revenues—GAAP net revenues includes management fees from unconsolidated CLOs, CDOs and other loan-based products. Unconsolidated funds included 2 CLOs, 8 CDOs, and 2 other investment products as of June 30, 2014 compared to 7 CLOs, 11 CDOs and 1 other investment product as of June 30, 2013.Total net revenues decreased $1.8 million or 36% from the prior year primarily due to reductions in AUM from unconsolidated funds that liquidated during 2013. In addition, certain unconsolidated CLOs and CDOs have reached the end of their contractual reinvestment periods thereby reducing AUM and its related management fees. This decrease is slightly offset by management fees from other loan-based products as AUM from these products has increased since the same period in the prior year.

Total Expenses—Total expenses decreased $1.3 million or 5% year over year primarily due to decreases in Depreciation and amortization expenses partially offset by higher General and administrative expenses.

Depreciation and amortization decreased by $2.5 million or 29% from the prior year primarily due to a reduction in intangible amortization expense on management contracts acquired for certain CLOs and CDOs that were impaired or written off in the prior year. General and administrative expenses increased year over year due to increase in (i) investment related subscription services and (ii) other general and administrative costs to support our overall growth.

Net other income (expense) and gain (loss)—Total Net other income and gains decreased by $0.9 million or 80% year over year, primarily due to a $2.3 million increase in net losses on Contingent Liabilities at Fair Value related to an improvement in the expected performance of legacy CIFC CLOs with fee sharing arrangements. This decrease was partially offset by increases in net gains on Investments at Fair Value due to an increase in net gains from the settlement of warehouses and realization of gains from the sales of certain CLO residual equity during the current year.

Net results of Consolidated Entities attributable to CIFC Corp.—The table below represents our share in the net results of the Consolidated Entities and a reconciliation to the characteristics of these results:

	For the Six Months Ended June 30,						2014 vs. 2013
	2014			2013			Variance			% Variance
	(In thousands)
Net results of Consolidated Entities	$	86,128		$	100,160		$	(14,032	)	(14	)%
Net (income) loss attributable to noncontrolling interest in Consolidated Entities	(33,810		)	(55,156		)	21,346			(39	)%
Net results of Consolidated Entities attributable to CIFC Corp.	$	52,318		$	45,004		$	7,314		16	%
Characteristics of net results of Consolidated Entities attributable to CIFC Corp:
Consolidated Entities management fees	$	40,803		$	41,714		$	(911	)	(2	)%
Consolidated Entities net investment income	11,515			3,290			8,225			250	%
Net results of Consolidated Entities attributable to CIFC Corp.	$	52,318		$	45,004		$	7,314		16	%

Net results of Consolidated Entities attributable to CIFC Corp. includes our portion of the Consolidated Entities' (including our Consolidated VIEs, or CLOs and warehouses) operating results. During the six months ended June 30, 2014 and 2013, we recognized $52.3 million and $45.0 million, respectively, of Consolidated Entities' management fees and net investment interest income related to our investments in the Consolidated Entities.

The $7.3 million or 16% increase in Net results of Consolidated Entities attributable to CIFC Corp. was primarily due to an increase in Consolidated Entities' net investment income. Net investment income increased primarily driven by an increase in net gains from our warehouses, credit funds and CLO investments during the current year. These increases were offset by decreases in management fees from consolidated legacy CLOs that have reached the end of their contractual reinvestment periods and are amortizing pursuant to their contractual terms.

38

Income tax expense/benefit—The following table summarizes our tax position:

		For the Six Months Ended June 30,
		2014			2013
	(In thousands)
Income (loss) before income taxes		$	59,730		$	75,084
Income tax expense		$	(19,241	)	$	(9,598	)
Effective income tax rate		32.2		%	12.8		%

The effective tax rate, including noncontrolling interests in Consolidated VIEs, was 32.2% and 12.8%, for the six months ended June 30, 2014 and 2013, respectively. The increase in the effective tax rate compared with the prior year was primarily attributable to the write-down of deferred tax assets impacted by tax law changes enacted by New York State on March 31, 2014 that are effective for tax years beginning on or after January 1, 2015 and a decrease in the Consolidated VIEs noncontrolling interest income/(loss), which is included in pre-tax income/(loss) but is not taxable to CIFC Corp. During the six months ended June 30, 2014, we included a tax expense of approximately $6.7 million related to the change in New York State tax laws. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the result of new judicial interpretations or changes in tax laws or regulations.

Economic Net Income "ENI" and Deconsolidated Non-GAAP Statements (Non-GAAP Measures, unaudited)

Economic Net Income "ENI"

ENI is a non-GAAP financial measure of profitability which we use in addition to GAAP Net income attributable to CIFC Corp. to measure the performance of our core business (excluding non-core products). We believe ENI reflects the nature and substance of the business, the economic results driven by management fee revenues from the management of client funds and earnings on our investments. ENI presents management fee revenues net of (i) any fee-sharing arrangements resulting from mergers or acquisitions and (ii) revenues attributable to non-core investment products. In addition, ENI represents net income (loss) attributable to CIFC Corp. before taxes, gains (losses) on disposition(s) attributable to non-core assets, a portion of non-cash compensation related to profits interests granted by CIFC Parent in June 2011 (a significant stockholder prior to December 18, 2013 - See Item 8 - "Consolidated Financial Statements - Note 14"), amortization and impairments of intangible assets, gains/(losses) on derivatives and contingent liabilities and certain non-recurring operating expenses and strategic transaction expenses (such as those associated with mergers and acquisitions).

39

ENI may not be comparable to similar measures presented by other companies, as they are non-GAAP financial measures that are 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 an 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:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(in thousands)
GAAP Net income (loss) attributable to CIFC Corp.	$	6,444		$	7,543		$	6,679		$	10,330
Reconciling and non-recurring items:
Management fee sharing arrangements (1)	(2,421		)	(5,688		)	(5,066		)	(9,898		)
Management fees attributable to non-core funds (2)	(201		)	(2,111		)	(442		)	(2,652		)
Compensation costs (3)	430			558			942			1,657
Amortization and impairment of intangibles	2,608			4,100			5,517			8,148
Net (gain)/loss on contingent liabilities and other (4)	1,529			(613		)	1,758			(499		)
Gain on sales of contracts (5)	—			—			(228		)	(752		)
Income tax expense (benefit)	6,837			6,488			19,241			9,598
Total reconciling and non-recurring items	8,782			2,734			21,722			5,602
ENI	$	15,226		$	10,277		$	28,401		$	15,932

Explanatory Notes:

______________________________

(1) We share management fees on certain of the acquired CLOs we manage (shared with the party that sold the funds to us). Management fees are presented on a gross basis for GAAP and on a net basis for Non-GAAP ENI.

(2) Current year ENI calculation includes the reduction attributable to non-core management fees. Prior year ENI calculation has been adjusted to conform with the current year's calculation.

(3) Compensation has been adjusted for non-cash compensation related to profits interests granted to CIFC employees by CIFC Parent Holdings LLC (a significant stockholder in us prior to December 18, 2013) and sharing of incentive fees with certain former employees established in connection with our acquisition of certain CLOs from Columbus Nova Credit Investments Management LLC (“CNCIM Acquisition”).

(4) Adjustment primarily includes the elimination of gains (losses) on contingent liabilities during the respective periods.

(5) In January 2012, we completed the sale of our right to manage Gillespie CLO PLC. We recognized additional gains from contingent payments collected during 2014 and 2013.

40

The following table presents our components of ENI for the three and six months ended June 30, 2014 and 2013 (1):

	For the Three Months Ended June 30,									For the Six Months Ended June 30,
					2014 vs. 2013										2014 vs. 2013
	2014		2013		Variance			% Variance		2014		2013			Variance			% Variance
	(in thousands)									(in thousands)
Adjusted revenues
Management Fees - Senior	$	5,634	$	4,987	$	647		13	%	$	10,326	$	9,750		$	576		6	%
Management Fees - Subordinated	8,343		8,102		241			3	%	16,812		16,448			364			2	%
Incentive Fees from CLOs	4,511		4,553		(42		)	(1	)%	9,411		7,167			2,244			31	%
Other loan-based products	828		359		469			131	%	1,736		682			1,054			155	%
Total management Fees (2)	19,316		18,001		1,315			7	%	38,285		34,047			4,238			12	%
CLO Funds	3,509		679		2,830			417	%	4,821		(1,060		)	5,881			(555	)%
Warehouses	3,085		2,043		1,042			51	%	6,448		4,666			1,782			38	%
Other loan-based products	1,646		176		1,470			835	%	2,967		381			2,586			679	%
Total net investment income	8,240		2,898		5,342			184	%	14,236		3,987			10,249			257	%
Total adjusted net revenues	27,556		20,899		6,657			32	%	52,521		38,034			14,487			38	%
Adjusted expenses
Compensation and benefits	7,617		6,428		1,189			18	%	14,445		12,853			1,592			12	%
Professional services	706		715		(9		)	(1	)%	1,752		2,638			(886		)	(34	)%
General and administrative expenses	2,259		1,843		416			23	%	4,472		3,327			1,145			34	%
Depreciation and amortization	262		179		83			46	%	498		348			150			43	%
Corporate interest expense	1,486		1,452		34			2	%	2,953		2,934			19			1	%
Other, net	—		5		(5		)	(100	)%	—		2			(2		)	100	%
Total adjusted expenses	12,330		10,622		1,708			16	%	24,120		22,102			2,018			9	%
ENI	$	15,226	$	10,277	$	4,949		48	%	$	28,401	$	15,932		$	12,469		78	%

Explanatory Notes:

______________________________

(1) Balances to this table can be derived by taking the deconsolidated non-GAAP Statement of Operations and adjusting balances using the ENI reconciliation of GAAP net income (loss) attributable to CIFC Corp. to ENI.

(2) Current year ENI calculation does not include management fees from non-core products. Prior year ENI calculation has been adjusted to conform with the current year's calculation.

For the three months ended June 30, 2014 and 2013:

Adjusted Management Fees—Total adjusted management fee revenue increased by $1.3 million or 7% as the current year quarter included a full quarter of results from CLOs sponsored, funds launched and SMAs entered since the second quarter of 2013. These increases were partially offset by principal paydowns, calls and redemptions of certain legacy CLOs.

Adjusted net investment income—Total adjusted net investment income increased by $5.3 million or 184%, primarily driven by an increase in net gains recognized on our CLO and warehouse investments held during the current quarter compared to the same period in the prior year. In addition, new credit funds launched since the second quarter of 2013 contributed to $1.5 million of the increase year over year.

Adjusted expenses—Total adjusted expenses increased by $1.7 million or 16% primarily due to an increase in adjusted compensation and benefits and adjusted other general and administrative costs. The increase of adjusted compensation and benefits costs was due to an increase in compensation for certain key executives and an overall increased headcount. Total investment related subscription services and costs to support our overall growth increased adjusted other general and administrative costs.

41

For the six months ended June 30, 2014 and 2013:

Adjusted Management Fees—Total adjusted management fee revenue increased by $4.2 million or 12% primarily as a result of an increase in incentive fees and fees from other loan-based products. Incentive fees increased as (i) we earned 50% of incentive fees realized from the legacy CIFC CLOs acquired through the Merger. All incentive fees earned during the first four months of 2013 were entirely shared with the seller (see also Contingent Liabilities and Other Commitments below for further details) and (ii) more CLOs reached their incentive fee hurdles since the second quarter of 2013. Other loan-based product management fees increased as the current year included a full year of results from funds launched since the second quarter of 2013. These increases were partially offset by principal paydowns, calls and redemptions of certain legacy CLOs.

Adjusted net investment income—Total adjusted net investment income increased by $10.2 million. The increase was primarily driven by an increase in net gains recognized on our CLO and warehouse investments held during the current year compared to the prior year. In addition, new credit funds launched since the second quarter of 2013 contributed to $2.6 million of the increase year over year.

Adjusted expenses—Total adjusted expenses increased by $2.0 million or 9% primarily due to an increase in adjusted compensation and benefits costs and adjusted general and administrative costs. The increase of adjusted compensation and benefits costs was due to an increase in compensation for certain key executives and an overall increased headcount. Total investment related subscription services and costs to support our overall growth increased adjusted other general and administrative costs. The overall increase was slightly offset by decreases in professional fees due to an overall reduction of the use of external consultants as we hired personnel to perform these services. In addition, during 2013, we incurred more professional fees to launch new products.

42

Deconsolidated Non-GAAP Statements

The Deconsolidated Non-GAAP Statements represents the Consolidated GAAP statements adjusted to eliminate the impact of the Consolidated Entities. On the Statement of Operations, we have reclassed the sum of Net results of Consolidated Entities, Net (income) loss attributable to noncontrolling interest in Consolidated Entities and Net gain (loss) on investments at fair value to the Deconsolidated Non-GAAP line items that represent its characteristics; management fees and interest income. On the Balance Sheets, we have excluded amounts related to all consolidated entities. Management uses these Non-GAAP statements in addition to Consolidated GAAP Statements to measure the performance of its core asset management business.

The following table presents the reconciliation from GAAP to Deconsolidated Non-GAAP Statement of Operations for the three months ended June 30, 2014 and 2013:

	For the Three Months Ended June 30,
	2014									2013
(In thousands)	Consolidated GAAP			Consolidation Adjustments			Deconsolidated Non-GAAP			Consolidated GAAP			Consolidation Adjustments			Deconsolidated Non-GAAP
Revenues
Management fees	$	1,378		$	20,560		$	21,938		$	2,240		$	23,559		$	25,799
Net investment income	97			8,143			8,240			106			2,792			2,898
Total net revenues	1,475			28,703			30,178			2,346			26,351			28,697
Expenses
Compensation and benefits	8,047			—			8,047			6,986			—			6,986
Professional services	706			—			706			715			—			715
General and administrative expenses	2,259			—			2,259			1,843			—			1,843
Depreciation and amortization	2,870			—			2,870			4,278			—			4,278
Total expenses	13,882			—			13,882			13,822			—			13,822
Other Income (Expense) and Gain (Loss)
Net gain (loss) on investments at fair value	1,121			(1,121		)	—			251			(251		)	—
Net gain (loss) on contingent liabilities at fair value	(1,529		)	—			(1,529		)	613			—			613
Corporate interest expense	(1,486		)	—			(1,486		)	(1,452		)	—			(1,452		)
Other, net	—			—			—			(5		)	—			(5		)
Net other income (expense) and gain (loss)	(1,894		)	(1,121		)	(3,015		)	(593		)	(251		)	(844		)
Operating income (loss)	(14,301		)	27,582			13,281			(12,069		)	26,100			14,031
Net results of Consolidated Entities	37,046			(37,046		)	—			53,102			(53,102		)	—
Income (loss) before income taxes	22,745			(9,464		)	13,281			41,033			(27,002		)	14,031
Income tax (expense) benefit	(6,837		)	—			(6,837		)	(6,488		)	—			(6,488		)
Net income (loss)	15,908			(9,464		)	6,444			34,545			(27,002		)	7,543
Net (income) loss attributable to noncontrolling interest in Consolidated Entities	(9,464		)	9,464			—			(27,002		)	27,002			—
Net income (loss) attributable to CIFC Corp.	$	6,444		$	—		$	6,444		$	7,543		$	—		$	7,543

43

The following table presents the reconciliation from GAAP to Deconsolidated Non-GAAP Statement of Operations for the six months ended June 30, 2014 and 2013:

	For the Six Months Ended June 30,
	2014									2013
(In thousands)	Consolidated GAAP			Consolidation Adjustments			Deconsolidated Non-GAAP			Consolidated GAAP			Consolidation Adjustments			Deconsolidated Non-GAAP
Revenues
Management fees	$	2,990		$	40,803		$	43,793		$	4,883		$	41,714		$	46,597
Net investment income	194			14,042			14,236			97			3,890			3,987
Total net revenues	3,184			54,845			58,029			4,980			45,604			50,584
Expenses
Compensation and benefits	15,387			—			15,387			14,510			—			14,510
Professional services	1,752			—			1,752			2,638			—			2,638
General and administrative expenses	4,472			—			4,472			3,327			—			3,327
Depreciation and amortization	6,015			—			6,015			8,496			—			8,496
Total expenses	27,626			—			27,626			28,971			—			28,971
Other Income (Expense) and Gain (Loss)
Net gain (loss) on investments at fair value	2,527			(2,527		)	—			600			(600		)	—
Net gain (loss) on contingent liabilities at fair value	(1,758		)	—			(1,758		)	499			—			499
Corporate interest expense	(2,953		)	—			(2,953		)	(2,934		)	—			(2,934		)
Net gain on the sale of management contracts	228			—			228			752			—			752
Other, net	—			—			—			(2		)	—			(2		)
Net other income (expense) and gain (loss)	(1,956		)	(2,527		)	(4,483		)	(1,085		)	(600		)	(1,685		)
Operating income (loss)	(26,398		)	52,318			25,920			(25,076		)	45,004			19,928
Net results of Consolidated Entities	86,128			(86,128		)	—			100,160			(100,160		)	—
Income (loss) before income taxes	59,730			(33,810		)	25,920			75,084			(55,156		)	19,928
Income tax (expense) benefit	(19,241		)	—			(19,241		)	(9,598		)	—			(9,598		)
Net income (loss)	40,489			(33,810		)	6,679			65,486			(55,156		)	10,330
Net (income) loss attributable to noncontrolling interest in Consolidated Entities	(33,810		)	33,810			—			(55,156		)	55,156			—
Net income (loss) attributable to CIFC Corp.	$	6,679		$	—		$	6,679		$	10,330		$	—		$	10,330

44

The following table presents the reconciliation from GAAP to Deconsolidated Non-GAAP Balance Sheets as of June 30, 2014 and December 31, 2013:

	June 30, 2014									December 31, 2013
(In thousands)	Consolidated GAAP			Consolidation Adjustments			Deconsolidated Non-GAAP			Consolidated GAAP			Consolidation Adjustments			Deconsolidated Non-GAAP
ASSETS
Cash and cash equivalents	$	22,046		$	—		$	22,046		$	25,497		$	(4,132	)	$	21,365
Restricted cash and cash equivalents	1,693			—			1,693			1,700			—			1,700
Due from brokers	—			—			—			18,813			(4,985		)	13,828
Investments at fair value	24,177			115,438			139,615			16,883			96,248			113,131
Receivables	2,550			3,718			6,268			2,120			3,814			5,934
Prepaid and other assets	3,833			—			3,833			5,104			(222		)	4,882
Deferred tax asset, net	50,815			—			50,815			57,675			—			57,675
Equipment and improvements, net	4,443			—			4,443			4,261			—			4,261
Intangible assets, net	19,707			—			19,707			25,223			—			25,223
Goodwill	76,000			—			76,000			76,000			—			76,000
Subtotal	205,264			119,156			324,420			233,276			90,723			323,999
Total assets of Consolidated Entities	12,580,111			(12,580,111		)	—			11,366,912			(11,366,912		)	—
TOTAL ASSETS	$	12,785,375		$	(12,460,955	)	$	324,420		$	11,600,188		$	(11,276,189	)	$	323,999
LIABILITIES
Due to brokers	$	1,036		$	—		$	1,036		$	5,499		$	(4,991	)	$	508
Dividend payable	—			—			—			—			—			—
Accrued and other liabilities	12,616			—			12,616			15,197			(270		)	14,927
Deferred purchase payments	1,348			—			1,348			1,179			—			1,179
Contingent liabilities at fair value	14,450			—			14,450			16,961			—			16,961
Long-term debt	139,697			—			139,697			139,164			—			139,164
Subtotal	169,147			—			169,147			178,000			(5,261		)	172,739
Total non-recourse liabilities of Consolidated Entities	12,095,720			(12,095,720		)	—			11,114,435			(11,114,435		)	—
TOTAL LIABILITIES	12,264,867			(12,095,720		)	169,147			11,292,435			(11,119,696		)	172,739
EQUITY
Common stock	21			—			21			21			—			21
Treasury stock	(914		)	—			(914		)	(914		)	—			(914		)
Additional paid-in capital	964,533			—			964,533			963,011			—			963,011
Retained earnings (deficit)	(808,367		)	—			(808,367		)	(810,858		)	—			(810,858		)
TOTAL CIFC CORP. STOCKHOLDERS’ EQUITY	155,273			—			155,273			151,260			—			151,260
Noncontrolling interest in Consolidated Funds	174,454			(174,454		)	—			5,107			(5,107		)	—
Appropriated retained earnings (deficit) of Consolidated Entities	190,781			(190,781		)	—			151,386			(151,386		)	—
TOTAL EQUITY	520,508			(365,235		)	155,273			307,753			(156,493		)	151,260
TOTAL LIABILITIES AND EQUITY	$	12,785,375		$	(12,460,955	)	$	324,420		$	11,600,188		$	(11,276,189	)	$	323,999

45

Liquidity and Capital Resources

As of June 30, 2014, total GAAP cash and cash equivalents decreased by $3.5 million to $22.0 million from $25.5 million as of December 31, 2013. For the six months ended June 30, 2014, we utilized $4.7 billion to purchase investments in our Consolidated Entities and received proceeds of $4.0 billion from the sale of investments in our Consolidated Entities. We used restricted cash of our Consolidated Entities of $120.3 million to fund our Consolidated Entities' activities. In addition, we received $2.5 billion of proceeds and made $1.8 billion of payments on Consolidated Entity related long-term debt during the quarter, paid down $4.3 million of contingent liabilities (related to fee sharing arrangements) and paid dividends of $4.2 million. Further, during the six months ended June 30, 2014 and 2013, we paid income taxes of $13.3 million and $14.5 million, respectively.

The table below is a reconciliation of selected cash flows data for the six months ended June 30, 2014 from GAAP to Non-GAAP:

	For the Six Months Ended June 30,
(In thousands)	GAAP			Consolidation Adjustments			Deconsolidated Non-GAAP
Cash and Cash Equivalents, Beginning	$	25,497		$	(4,132	)	$	21,365
Net cash provided by/(used in) Operating Activities	(577,082		)	603,484			26,402
Net cash provided by/(used in) Investing Activities	(114,461		)	95,943			(18,518		)
Net cash provided by/(used in) Financing Activities	688,092			(695,295		)	(7,203		)
Net change in Cash and Cash Equivalents	(3,451		)	4,132			681
Cash and Cash Equivalents, End	$	22,046		$	—		$	22,046

As of June 30, 2014, total deconsolidated non-GAAP cash and cash equivalents increased by $0.7 million to $22.0 million from $21.4 million as of December 31, 2013. For the six months ended June 30, 2014, cash flows from operations provided net cash proceeds of $26.4 million. Our net investment activity in CIFC managed CLO equity, warehouses and funds during the six months was $18.1 million. We paid down $4.3 million of contingent liabilities (related to fee sharing arrangements) and paid dividends of $4.2 million. In addition, during the six months ended June 30, 2014 and 2013, we paid income taxes of $13.3 million and $14.5 million, respectively.

On June 18, 2014, we gave notice to our convertible note holder of our intention to redeem the notes at their full par value of $25.0 million. On July 12, 2014, the note holder, DFR Holdings LLC, exercised its right to convert the notes into shares of common stock. Pursuant to the agreement, the Convertible Notes converted into 4,132,231 shares of common stock at an initial conversion price of $6.05 per share.

Our investments as of June 30, 2014 and December 31, 2013 are as follows:

Non-GAAP (1)	June 30, 2014		December 31, 2013
CIFC Managed CLO Equity (Residual Interests)	$	32,479	$	44,292
Warehouses (2)(3)	65,598		32,529
Other loan-based products (3)	41,538		36,310
Total	$	139,615	$	113,131

Explanatory Notes:

________________________________

(1) Pursuant to GAAP, investments in consolidated CLOs, warehouses and certain other loan-based products are eliminated from "Investments at fair value" on our Consolidated Balance Sheets.

(2) From time to time, we establish “warehouses”, entities designed to accumulate investments in advance of sponsoring new CLOs or other funds managed by us.  To establish a warehouse, we contribute equity capital to a newly formed entity which is typically levered (three to five times) and begins accumulating investments.  When the related CLO or fund is sponsored, typically three to nine months later, the warehouse is “terminated”, with it concurrently repaying the related financing and returning to CIFC our equity contribution, net of gains and losses, if any.

(3) As of June 30, 2014 and December 31, 2013, $24.2 million and $16.9 million, respectively, of our investments in funds and warehouses was not consolidated and included on our Consolidated Balance Sheets.

46

Other Sources and Uses of Funds

Deferred Purchase Payments—In April 2011, we entered into a merger (the "Merger") with Commercial Industrial Finance Corp. ("Legacy CIFC"). As a result of the Merger, Legacy CIFC became CIFCAM, a wholly-owned subsidiary of CIFC. The consideration for the Merger included the payment to CIFC Parent Holdings LLC ("CIFC Parent"), the sole stockholder of Legacy CIFC, of $7.5 million of cash payable in three equal installments of $2.5 million (subject to certain adjustments). During six months ended June 30, 2013, we made the final deferred purchase payment related to the Merger of $2.5 million leaving no remaining amounts outstanding under this agreement.

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 CNCIM acquisition includes deferred purchase payments totaling $7.5 million in cash payable in five equal annual installments beginning in December 2010. The final remaining installment of $1.5 million is payable on December 9, 2014. As of June 30, 2014 and December 31, 2013, the fair value of the remaining deferred purchase payments of $1.3 million and $1.2 million, respectively, was included in the Condensed Consolidated Balance Sheets.

Contingent Liabilities at Fair Value—In addition to the consideration paid in connection with the Merger, we were required to pay CIFC Parent a portion of incentive fees earned on six CLOs managed by CIFCAM (the "Legacy CIFC CLOs"). The terms of these payments were as follows: (i) the first $15.0 million of incentive fees received (which was fulfilled in 2013), (ii) 50% of any incentive fees in excess of $15.0 million in aggregate received from the Legacy CIFC CLOs by the combined company over ten years from April 13, 2011 (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 and six months ended June 30, 2014, we made total payments of $1.9 million and $3.9 million, respectively, and during the three and six months ended June 30, 2013, we made total payments of $4.9 million and $7.8 million, respectively, related to these contingent liabilities. As of June 30, 2014, there are no remaining payments under item (i) and we made cumulative payments of $10.4 million under item (ii) to date.

 In addition, we also assumed contingent liabilities during 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 management fees from the CypressTree CLOs. These fixed percentages vary by CLO. From the Merger Closing Date to June 2013 the minimum fixed percentage was 55%, and effective July 2013, the minimum fixed percentage was 39%. During the three and six months ended June 30, 2014, we made payments of $0.2 million and $0.4 million, respectively, and during the three and six months ended June 30, 2013, we made payments of $1.1 million and $1.7 million, respectively, related to these contingent liabilities.

47

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

	June 30, 2014					December 31, 2013
	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	%	21.3	$	95,000	1.00	%	21.8
October Junior Subordinated Notes (2)	25,000		3.72	%	21.3	25,000		3.73	%	21.8
Total Subordinated Notes Debt	$	120,000	1.57	%	21.3	$	120,000	1.57	%	21.8
Convertible Notes (3)	$	19,697	11.00	%	n/a (3)	$	19,164	10.00	%	3.9
Total recourse debt	$	139,697				$	139,164
Non-recourse Consolidated Entities' debt:
Consolidated CLOs (4)	$	11,042,200	1.58	%	8.7	$	10,336,453	1.43	%	8.3
Warehouses (5)	438,441		1.41	%	n/m	148,522		1.30	%	n/m
Total non-recourse Consolidated Entities' debt	$	11,480,641	1.57	%	8.7	$	10,484,975	1.43	%	8.3
Total long-term debt	$	11,620,338				$	10,624,139

Explanatory Notes:

________________________________

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

(2) October Junior Subordinated Notes bear interest at an annual rate of 3 month LIBOR plus 3.50% and mature on October 30, 2035.

(3) As of June 30, 2014 and December 31, 2013, Convertible Notes were recorded net of a discount of $5.3 million and $5.8 million, respectively and paid interest at the stated rates of 11.00% and 10.00%, respectively. Including the discount, the effective rate of interest is 18.14% for both periods. The Convertible Notes have a $25.0 million aggregate principal amount. Subsequent to quarter end, our Convertible Notes outstanding were converted (see "Item 1—Consolidated Financial Statements—Notes 11 and 14").

(4) Long-term debt of the Consolidated CLOs is recorded at fair value. The subordinated notes of Consolidated CLOs do not have a stated interest rate. Therefore, they are excluded from the calculation of the weighted average borrowing rate. As of June 30, 2014 and December 31, 2013, the par value of the Consolidated CLOs long-term debt (including subordinated notes) was $12.0 billion and $10.9 billion, respectively.

(5) Long-term debt of warehouses not held by us is recorded at fair value. The fair value excludes the preferred shares of Warehouse(s) outstanding as of each respective period not held by us, which have a par value of $68.6 million and $67.5 million as of June 30, 2014 and December 31, 2013, respectively. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate.

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 management 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. Subsequent to quarter end, on July 12, 2014, the Convertible Notes were converted. See Subsequent Events below.

48

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

	(In thousands)
2014 (6 months remaining)	$	803
2015	1,607
2016	1,607
2017	1,607
2018	1,680
Thereafter	7,010
	$	14,314

Consolidated VIEs—Although we consolidate all the assets and liabilities of the Consolidated VIEs (includes the Consolidated CLOs, and warehouses), our maximum exposure to loss is limited to our investments and beneficial interests in the Consolidated VIEs and the receivables of management fees from the Consolidated VIEs. All of these items are eliminated upon consolidation. The assets of each of the Consolidated VIEs are administered 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 and residual interests of the Consolidated VIEs have no recourse to our general assets. Therefore, this debt is not our obligation.

Related Party Transactions

DFR Holdings—As of June 30, 2014 and December 31, 2013, DFR Holdings owned approximately 14.7 million shares of our common stock and $25.0 million aggregate principal amount of our Convertible Notes, which is convertible into approximately 4.1 million shares of our common stock. Subsequent to quarter end, on July 12, 2014, DFR Holdings exercised its right to convert the notes into shares of common stock (see Note 10, 11 and 16). In addition, DFR Holdings held warrants that entitle them the right to purchase 2.0 million shares of our voting common stock. As such, related party transactions also included (i) the interest expense on Convertible notes of $0.9 million and $1.8 million, respectively, during the three and six months ended June 30, 2014 and $0.9 million and $1.7 million, respectively, during the three and six months ended June 30, 2013, (ii) deferred purchase payments (see above—Deferred Purchase Payments and Contingent Liabilities and Other Commitments), and (iii) quarterly dividends (see "Item 1—Consolidated Financial Statements—Note 11"). For the three and six months ended June 30, 2013, total management fees from related parties was $13,000 and $25,000, respectively. We did not earn any management fees from DFR Holdings for the three and six months ended June 30, 2014.

We agreed to nominate to our Board of Directors six directors designated by DFR Holdings. The number of directors that can be designated by DFR Holdings is reduced in the event that DFR Holdings decreases its ownership (on a diluted basis) in CIFC. If DFR Holdings' ownership falls below 5%, it loses the right to designate any director. During the three and six months ended June 30, 2014, the directors earned an aggregate $0.2 million and $0.3 million, respectively, related to their services.

CIFC Parent—As of June 30, 2014, CIFC Parent no longer owns common shares of CIFC. However, during the six months ended June 30, 2013, CIFC Parent held 9.1 million shares of our common stock and invested in CLOs managed by CIFC.

As such, related party transactions for the three and six months ended June 30, 2014, included (i) contingent liabilities payments to CIFC Parent (see above—Deferred Purchase Payments and Contingent Liabilities and Other Commitments), (ii) CIFC Parent's investment of $1.3 million in two Consolidated Funds managed by CIFC as of June 30, 2014, (iii) fees to us for providing certain administrative services to CIFC Parent, and (iv) profits interests in CIFC Parent granted during 2011 to certain of our employees (see "Item 1—Consolidated Financial Statements—Note 11"). As of June 30, 2014 and December 31, 2013, total management fee receivables due from related parties was $12,500 and $167,000, respectively. For the three and six months ended June 30, 2014, total management fees from related parties was $12,500 and $25,000, respectively, and for the three and six months ended June 30, 2013, total management fees from related parties was $46,000 and $93,000, respectively.

Other—As of June 30, 2014 and December 31, 2013, a board member purchased $1.0 million of income notes in one of our sponsored CLOs, CIFC Funding 2013-II, Ltd., through an entity in which he is a 50% equity holder.

Funds—As of June 30, 2014, employees and directors of CIFC invested an aggregate $3.5 million in three different funds which CIFC invested in and manages. Employees are not charged a management fee on their investment. Directors were charged a fee, similar to certain other investors. For the three and six months ended June 30, 2014, that amount was de minimis.

49

Off-Balance Sheet Arrangements

As of June 30, 2014, 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 June 30, 2014, we did not guarantee any obligations of unconsolidated entities, enter into any commitments or express intent to provide additional funding to any such entities.

Other—As of both June 30, 2014 and December 31, 2013, we fully funded our aggregate minimum commitment to invest $30.0 million in CIFC sponsored funds.

Subsequent Events

Subsequent to quarter end, we sponsored the issuance of a new CLO that represented approximately $700.0 million of new loan-based AUM. In addition, we priced another CLO that represented approximately $600 million of new loan-based AUM.

Subsequent to quarter end, we declared a cash dividend of $0.10 per share. The dividend will be paid on September 15, 2014 to shareholders of record as of the close of business on August 25, 2014.

On June 18, 2014, we gave notice to the convertible note holders of our intention to redeem the notes at their full par value of $25.0 million. On July 12, 2014, the note holder, DFR Holdings, exercised its right to convert the notes into 4,132,231 shares of common stock.

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, 2013, in Management's Discussion and Analysis of Financial Condition. There have been no significant changes to our critical accounting estimates as of June 30, 2014.

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 7A.

50

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 Principal Executive Officers 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 Principal Executive Officers 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 Principal Executive Officers 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.

PART II. Other Information

Item 1.    Legal Proceedings

A suit was filed in June 2013 against us (and certain of our affiliates and directors) with the Supreme Court of the State of New York, County of New York, by Nga Tran-Pedretti, a former employee, alleging, among other things, employment discrimination, sexual harassment, wrongful discharge, fraud, breach of fiduciary duty and various securities law violations.  Such suit was removed to the United States District Court in the Southern District of New York on June 25, 2013.  The Company and its Directors deny the allegations, intend to defend themselves vigorously, believe that the pending lawsuit is without merit and have filed counterclaims against the plaintiff.

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 2013 Form 10-K.

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

No common shares were repurchased during the three and six months ended June 30, 2014.

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.

51

Item 6.    Exhibits

Ex. No.	Description of Exhibit
10.1	Amended and Restated Non-Disclosure, Non-Competition, Non-Hiring, Non-Solicitation and Severance Agreement, dated June 13, 2014, by and between CIFC Corp. and Stephen J. Vaccaro (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on June 17, 2014).
10.2	Non-Disclosure, Non-Competition, Non-Hiring, Non-Solicitation and Severance Agreement, dated June 13, 2014, by and between CIFC Corp. and Oliver Wriedt (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on June 17, 2014).
10.3	Restricted Stock Unit Award Agreement, dated June 13, 2014, by and between CIFC Corp. and Stephen J. Vaccaro (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on June 17, 2014).
10.4	Restricted Stock Unit Award Agreement, dated June 13, 2014, by and between CIFC Corp. and Oliver Wriedt (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on June 17, 2014).
10.5	Restricted Stock Unit Award Agreement, dated June 13, 2014, by and between CIFC Corp. and Stephen J. Vaccaro (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on June 17, 2014).
10.6	Restricted Stock Unit Award Agreement, dated June 13, 2014, by and between CIFC Corp. and Oliver Wriedt (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on June 17, 2014).
10.7	Restricted Stock Unit Award Agreement, dated June 13, 2014, by and between CIFC Corp. and Stephen J. Vaccaro (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on June 17, 2014).
10.8	Restricted Stock Unit Award Agreement, dated June 13, 2014, by and between CIFC Corp. and Oliver Wriedt (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on June 17, 2014).
10.9	Stock Option Award Certificate, dated June 13, 2014, by and between CIFC Corp. and Stephen J. Vaccaro (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on June 17, 2014).
10.10	Stock Option Award Certificate, dated June 13, 2014, by and between CIFC Corp. and Oliver Wriedt (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on June 17, 2014).
10.11	Stock Option Award Certificate, dated June 13, 2014, by and between CIFC Corp. and Oliver Wriedt (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on June 17, 2014).
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 June 30, 2014, 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.

52

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)
Date:	August 13, 2014	By:	/s/ STEPHEN J. VACCARO
		Stephen J. Vaccaro, Co-President
		(Principal Executive Officer)
Date:	August 13, 2014	By:	/s/ OLIVER WRIEDT
		Oliver Wriedt, Co-President
		(Principal Executive Officer)
Date:	August 13, 2014	By:	/s/ RAHUL AGARWAL
		Rahul Agarwal, Chief Financial Officer
		(Principal Financial and Accounting Officer)

53

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen J. Vaccaro, 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:	August 13, 2014	/s/ STEPHEN J. VACCARO
		Stephen J. Vaccaro
		Co-President
		(Principal Executive Officer)

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Oliver Wriedt, 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:	August 13, 2014	/s/ OLIVER WRIEDT
		Oliver Wriedt
		Co-President
		(Principal Executive Officer)

Exhibit 31.1

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:	August 13, 2014	/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 quarter ending June 30, 2014 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.

Date:	August 13, 2014	/s/ STEPHEN J. VACCARO
		Stephen J. Vaccaro
		Co-President
		(Principal Executive Officer)
Date:	August 13, 2014	/s/ OLIVER WRIEDT
		Oliver Wriedt
		Co-President
		(Principal Executive Officer)
Date:	August 13, 2014	/s/ RAHUL AGARWAL
		Rahul Agarwal
		Chief Financial Officer
		(Principal Financial Officer)

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Liabilities, Fair Value Disclosure
Contingent liabilities at fair value	$ 14,450		$ 16,961
Level 2 | Recurring basis
Assets, Fair Value Disclosure
Investment in Funds			10,827
Loans	1,022		5,546
Investments in loans, corporate bonds and other products	1,022		16,373
Assets, Fair Value Disclosure	9,547,791		8,621,340
Level 3 | Recurring basis
Assets, Fair Value Disclosure
Investment in Funds	17,082
Loans	1,008		510
Structured products & other	5,065
Investments in loans, corporate bonds and other products	23,155		510
Assets, Fair Value Disclosure	1,968,492		1,816,536
Liabilities, Fair Value Disclosure
Contingent liabilities at fair value	14,450		16,961
Financial and Nonfinancial Liabilities, Fair Value Disclosure	11,495,091		10,501,936
Estimated Fair Value | Recurring basis
Assets, Fair Value Disclosure
Investment in Funds	17,082		10,827
Loans	2,030		6,056
Structured products & other	5,065
Investments in loans, corporate bonds and other products	24,177		16,883
Assets, Fair Value Disclosure	11,516,283		10,437,876
Liabilities, Fair Value Disclosure
Contingent liabilities at fair value	14,450		16,961
Financial and Nonfinancial Liabilities, Fair Value Disclosure	11,495,091		10,501,936
Consolidated Entities
Liabilities, Fair Value Disclosure
Long-term debt at fair value	11,480,641		10,484,975
Consolidated Entities | Level 2 | Recurring basis
Assets, Fair Value Disclosure
Loans	9,544,447		8,604,967
Derivative Asset	2,322
Investments in loans, corporate bonds and other products	9,546,769		8,604,967
Consolidated Entities | Level 3 | Recurring basis
Assets, Fair Value Disclosure
Loans	1,852,974		1,706,290
Corporate bonds	6,210		16,220
Structured products & other	86,153		93,516
Investments in loans, corporate bonds and other products	1,945,337		1,816,026
Liabilities, Fair Value Disclosure
Long-term debt at fair value	11,480,641	[1]	10,484,975	[1]
Financial and Nonfinancial Liabilities, Fair Value Disclosure	11,480,641		10,484,975
Consolidated Entities | Estimated Fair Value | Recurring basis
Assets, Fair Value Disclosure
Loans	11,397,421		10,311,257
Corporate bonds	6,210		16,220
Structured products & other			93,516
Investments and Derivative Assets	88,475
Investments in loans, corporate bonds and other products	11,492,106		10,420,993
Liabilities, Fair Value Disclosure
Long-term debt at fair value	11,480,641	[1]	10,484,975	[1]
Financial and Nonfinancial Liabilities, Fair Value Disclosure	$ 11,480,641		$ 10,484,975

[1] The Company generally invests in the residual equity of the CLOs it sponsors and invests in the warehouses it issues.

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INCOME TAXES 10-Q (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Tax Examination [Line Items]
Income (loss) before income taxes	$ 22,745,000	$ 41,033,000	$ 59,730,000	$ 75,084,000
Income tax expense	6,837,000	6,488,000	19,241,000	9,598,000
Effective income tax rate	30.10%	15.80%	32.20%	12.80%
Tax expense related to change in state tax laws			$ 6,700,000

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LONG-TERM DEBT (Details) (USD $)							6 Months Ended			12 Months Ended		6 Months Ended	12 Months Ended			6 Months Ended		12 Months Ended		3 Months Ended				6 Months Ended		12 Months Ended		6 Months Ended		12 Months Ended							6 Months Ended				6 Months Ended				6 Months Ended	12 Months Ended	0 Months Ended		3 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Warehouses		Dec. 31, 2013 Warehouses		Jun. 30, 2014 Consolidated CLOs		Jun. 30, 2013 Consolidated CLOs	Dec. 31, 2013 Consolidated CLOs		Jun. 30, 2014 Consolidated Variable Interest Entities	Dec. 31, 2013 Consolidated Variable Interest Entities	Jun. 30, 2014 Recourse Debt	Dec. 31, 2013 Recourse Debt	Jun. 30, 2014 March Junior Subordinated Notes		Dec. 31, 2013 March Junior Subordinated Notes		Jun. 30, 2014 March Junior Subordinated Notes Through April 30, 2015	Jun. 30, 2013 March Junior Subordinated Notes Through April 30, 2015	Jun. 30, 2013 March Junior Subordinated Notes From April 30, 2015 until maturity on October 30, 2035	Jun. 30, 2013 October Junior Subordinated Notes	Jun. 30, 2014 October Junior Subordinated Notes		Dec. 31, 2013 October Junior Subordinated Notes		Jun. 30, 2014 Subordinated Debt Obligations		Dec. 31, 2013 Subordinated Debt Obligations		Dec. 31, 2013 Convertible Debt		Jun. 30, 2014 Convertible Debt		Jun. 18, 2014 Convertible Debt	Jun. 30, 2014 Subordinated notes of Consolidated CLOs Consolidated CLOs	Jun. 30, 2013 Subordinated notes of Consolidated CLOs Consolidated CLOs	Jun. 30, 2014 Class D Notes	Dec. 31, 2013 Class D Notes	Jun. 30, 2014 Revolving credit facility Consolidated CLOs	Jun. 30, 2013 Revolving credit facility Consolidated CLOs	Jun. 30, 2014 Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure	Dec. 31, 2013 Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure	Jun. 30, 2014 Common Stock [Member]	Dec. 31, 2013 Common Stock [Member]	Jul. 12, 2014 Common Stock [Member] Subsequent Event [Member]	Jul. 12, 2014 Common Stock [Member] Subsequent Event [Member]	Jun. 30, 2014 LIBOR [Member] March Junior Subordinated Notes From April 30, 2015 until maturity on October 30, 2035	Jun. 30, 2014 LIBOR [Member] October Junior Subordinated Notes
LONG-TERM DEBT
Carrying Value	$ 139,697,000	$ 139,164,000	$ 438,441,000	[1]	$ 148,522,000	[1]	$ 11,042,200,000	[2]		$ 10,336,453,000	[2]			$ 139,697,000	$ 139,164,000	$ 95,000,000	[3]	$ 95,000,000	[3]					$ 25,000,000	[4]	$ 25,000,000	[4]	$ 120,000,000	[5]	$ 120,000,000	[5]	$ 19,164,000	[6],[7]	$ 19,697,000	[6],[7]				$ 11,620,338,000	$ 10,624,139,000			$ 11,480,641,000	$ 10,484,975,000
Current Weighted Average Borrowing Rate (as a percent)			1.41%	[1]	1.30%	[1]	1.58%	[2]		1.43%	[2]	1.57%	1.43%			1.00%	[3]	1.00%	[3]					3.72%	[4]	3.73%	[4]	1.57%		1.57%		10.00%	[6]	11.00%	[6]
Debt instruments - Weighted Average, Remaining Maturity							8 years 8 months 0 days	[2]		8 years 3 months 0 days	[2]	8 years 8 months 0 days	8 years 3 months 0 days			21 years 3 months 0 days	[3]	21 years 10 months 0 days	[3]					21 years 3 months 0 days	[4]	21 years 10 months 0 days	[4]	21 years 3 months 0 days		21 years 10 months 0 days		3 years 11 months 0 days	[6]
Discount																																5,800,000		5,300,000
Principal outstanding amount			68,600,000		67,500,000		12,000,000,000			10,900,000,000																								25,000,000		25,000,000
Debt Instrument, Convertible, Number of Equity Instruments																																													4,132,231	4,132,231	4,132,231
Debt Instrument, Convertible, Conversion Price																																																$ 6.05
Annual rate (as a percent)																				1.00%	1.00%
Annual interest rate (as a percent)																						LIBOR	LIBOR																										LIBOR	LIBOR
Debt Instrument, Basis Spread on Variable Rate																						2.58%	3.50%																										2.58%	3.50%
Effective rate of interest (as a percent)																																18.14%		18.14%
Carrying value of the assets for which debt holders have a recourse for repayment			720,924,000		403,251,000		11,600,237,000			10,963,096,000
Debt issued							1,400,000,000		1,600,000,000																																9,400,000	27,900,000
Outstanding debt paid down							$ 900,000,000		$ 747,300,000																												$ 116,900,000	$ 141,100,000

[1] Long-term debt of warehouses not held by the Company is recorded at fair value. The fair value excludes the preferred shares of Warehouse(s) outstanding as of each respective period not held by the Company, which have a par value of $68.6 million and $67.5 million as of June 30, 2014 and December 31, 2013, respectively. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate.

[2] Long-term debt of the Consolidated CLOs is recorded at fair value. The subordinated notes of Consolidated CLOs do not have a stated interest rate. Therefore, they are excluded from the calculation of the weighted average borrowing rate. As of June 30, 2014 and December 31, 2013, the par value of the Consolidated CLOs long-term debt (including subordinated notes) was $12.0 billion and $10.9 billion, respectively.

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

[4] October Junior Subordinated Notes bear interest at an annual rate of 3 month LIBOR plus 3.50% and mature on October 30, 2035.

[5] The Junior Subordinated Notes include both the March and October Junior Subordinated Notes (see Note 10). The estimated fair values of the Junior Subordinated Notes were determined using a discounted cash flow model which utilizes significant unobservable inputs, including discount rates, yield and forward LIBOR curve assumptions. This methodology is classified as Level 3 within the fair value hierarchy.

[6] As of June 30, 2014 and December 31, 2013, Convertible Notes were recorded net of a discount of $5.3 million and $5.8 million, respectively and paid interest at the stated rates of 11.00% and 10.00%, respectively. Including the discount, the effective rate of interest is 18.14% for both periods. The Convertible Notes have a $25.0 million aggregate principal amount. Subsequent to quarter end, Convertible Notes outstanding were converted (see Notes 11 and 14).

[7] The estimated fair value of the Convertible Notes as of December 31, 2013 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. Subsequent to quarter end, Convertible Notes outstanding were converted (see Notes 10, 11 and 14) therefore as of June 30, 2014, the estimated fair value is classified as Level 1 within the fair value hierarchy.

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RELATED PARTY TRANSACTIONS (Details) (USD $)	3 Months Ended		6 Months Ended			3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended			3 Months Ended		6 Months Ended			6 Months Ended	12 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jun. 30, 2014 DFR Holdings Board of Directors [Member]	Jun. 30, 2014 DFR Holdings Board of Directors [Member]	Jun. 30, 2013 DFR Holdings LLC	Jun. 30, 2014 DFR Holdings LLC	Jun. 30, 2013 DFR Holdings LLC	Dec. 31, 2013 DFR Holdings LLC	Jun. 30, 2014 CIFC Parent Holdings LLC	Jun. 30, 2013 CIFC Parent Holdings LLC	Jun. 30, 2014 CIFC Parent Holdings LLC	Jun. 30, 2013 CIFC Parent Holdings LLC	Dec. 31, 2013 CIFC Parent Holdings LLC	Jun. 30, 2014 Common Stock	Dec. 31, 2013 Common Stock	Jun. 30, 2014 Convertible Debt	Jun. 30, 2013 Convertible Debt	Jun. 30, 2014 Convertible Debt	Jun. 30, 2013 Convertible Debt	Jun. 18, 2014 Convertible Debt	Jun. 30, 2014 CIFC FUNDING 2013-II - Board Member Investment	Dec. 31, 2013 CIFC FUNDING 2013-II - Board Member Investment	Jun. 30, 2014 CIFC Funds CIFC Employees item	Jun. 30, 2014 Warrants DFR Holdings LLC	Dec. 31, 2013 Warrants DFR Holdings LLC	Jun. 30, 2014 Minimum Common Stock DFR Holdings LLC	Jun. 30, 2014 Consolidated Funds CIFC Parent Holdings LLC
Related party transactions
Number of shares owned (shares)									14,700,000		14,700,000		9,100,000		9,100,000
Class of Warrant or Right, Outstanding																											2,000,000	2,000,000
Debt Instrument, Convertible, Number of Equity Instruments																	4,132,231	4,132,231
Interest Expense	$ 1,486,000	$ 1,452,000	$ 2,953,000	$ 2,934,000															$ 900,000	$ 900,000	$ 1,800,000	$ 1,700,000
Directors designated by DFR Holdings									6
DFR Holdings ownership percentage (minimum)																								50.00%	50.00%				5.00%
DFR Holdings director compensation	8,047,000	6,986,000	15,387,000	14,510,000		200,000	300,000
Debt Instrument, Face Amount																			25,000,000		25,000,000		25,000,000	1,000,000	1,000,000
Receivables recorded from Related Parties												12,500		12,500		167,000
Revenue from Related Parties								13,000		25,000		12,500	46,000	25,000	93,000
Investments at fair value	$ 24,177,000		$ 24,177,000		$ 16,883,000																					$ 3,500,000				$ 1,300,000
Investments in Consolidated Funds by Related Parties																										3				2

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INTANGIBLE ASSETS AND GOODWILL (Details) (USD $)	3 Months Ended			6 Months Ended					6 Months Ended		12 Months Ended		6 Months Ended		12 Months Ended		6 Months Ended		12 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014		Jun. 30, 2013	Jun. 30, 2014		Jun. 30, 2013	Dec. 31, 2013		Jun. 30, 2014 Investment management contracts		Dec. 31, 2013 Investment management contracts		Jun. 30, 2014 Referral Agreement		Dec. 31, 2013 Referral Agreement		Jun. 30, 2014 Non-compete agreements		Dec. 31, 2013 Non-compete agreements		Jun. 30, 2014 Trade name		Dec. 31, 2013 Trade name
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Gross Carrying Amount	$ 79,536,000	[1]		$ 79,536,000	[1]		$ 79,536,000	[1]	$ 72,941,000	[1]	$ 72,941,000	[1]	$ 3,810,000	[1]	$ 3,810,000	[1]	$ 1,535,000	[1]	$ 1,535,000	[1]	$ 1,250,000	[1]	$ 1,250,000	[1]
Accumulated Amortization	59,829,000	[2]		59,829,000	[2]		54,313,000	[2]	57,634,000	[2]	52,661,000	[2]	953,000	[2]	572,000	[2]	836,000	[2]	736,000	[2]	406,000	[2]	344,000	[2]
Net Carrying Amount	19,707,000			19,707,000			25,223,000		15,307,000		20,280,000		2,857,000		3,238,000		699,000		799,000		844,000		906,000
Finite Lived Intangible Assets Remaining, Weighted Average - Remaining Useful Life									3 years 7 months 0 days		4 years 0 months 0 days		5 years 3 months 0 days		5 years 10 months		3 years 8 months 0 days		4 years 2 months 15 days		6 years 9 months 0 days		7 years 3 months
Amortization of intangible assets	2,600,000		4,100,000	5,500,000		8,100,000
Expected amortization expense of the existing intangible assets
2014 (6 months remaining)	4,633,000			4,633,000
2015	6,796,000			6,796,000
2016	4,010,000			4,010,000
2017	2,172,000			2,172,000
2018	1,527,000			1,527,000
Thereafter	569,000			569,000
Expected amortization expense	19,707,000			19,707,000
Intangible assets, other disclosures
Net gain on the sale of management contract				$ 228,000		$ 752,000

[1] Gross carrying amounts have been adjusted for impaired assets as of the date presented.

[2] During the three and six months ended June 30, 2014, the Company recorded amortization expense on its intangible assets of $2.6 million and $5.5 million, respectively, and during the three and six months ended June 30, 2013, the Company recorded amortization expense on its intangible assets of $4.1 million and $8.1 million, respectively.

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EARNINGS (LOSS) PER SHARE (Tables)

6 Months Ended

Jun. 30, 2014

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 ("EPS"):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands, except per share data)
Net income (loss) attributable to CIFC Corp. - basic	$	6,444	$	7,543	$	6,679	$	10,330
Dilutive effect of Convertible Notes (1)	479		455		951		904
Net income (loss) attributable to CIFC Corp. - diluted	$	6,923	$	7,998	$	7,630	$	11,234
Weighted-average shares - basic	20,972		20,809		20,906		20,803
Convertible Notes (1)	4,132		4,132		4,132		4,132
Stock options (2)	630		199		611		252
Warrants	470		461		482		533
Unvested RSUs (2)	9		n/a		10		n/a
Weighted-average shares - diluted	26,213		25,601		26,141		25,720
Earnings (loss) per share
Basic	$	0.31	$	0.36	$	0.32	$	0.50
Diluted	$	0.26	$	0.31	$	0.29	$	0.44

Explanatory Notes:

________________________________

(1) Subsequent to quarter end, the Convertible Notes were converted into 4.1 million shares of common stock to DFR Holdings (see Notes 10, 11 and 14).

(2) For the three and six months ended June 30, 2014, 1.1 million and 0.9 million, respectively, of stock options and 0.4 million and 0.2 million, respectively, of unvested RSUs were considered anti-dilutive and excluded from diluted EPS. For both the three and six months ended June 30, 2013, 1.2 million of stock options were considered anti-dilutive and excluded from diluted EPS.

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SUBSEQUENT EVENTS (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended	6 Months Ended			0 Months Ended			6 Months Ended	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2014	Jul. 10, 2014 New CLO sponsored	Aug. 06, 2014 New CLO priced	Aug. 25, 2014 Dividend Declared	Jun. 30, 2014 Convertible Debt	Jun. 18, 2014 Convertible Debt	Jun. 30, 2014 Common Stock [Member]	Dec. 31, 2013 Common Stock [Member]
Subsequent Event [Line Items]
Newly sponsored CLO loan-based AUM			$ 700	$ 600
Dividends Declared	$ 0.10	$ 0.20			$ 0.10
Debt Instrument, Face Amount						$ 25.0	$ 25.0
Debt Instrument, Convertible, Number of Equity Instruments								4,132,231	4,132,231

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BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION Basis of Presentation and Principles of Consolidation (Tables)

6 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

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

In addition, the Company recognized management fees and net interest income from investments of the Consolidated Entities as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(In thousands)
Net results of Consolidated Entities	$	37,046		$	53,102		$	86,128		$	100,160
Net (income) loss attributable to noncontrolling interest in Consolidated Entities	(9,464		)	(27,002		)	(33,810		)	(55,156		)
Net results from Consolidated Entities attributable to CIFC Corp.	$	27,582		$	26,100		$	52,318		$	45,004
Characteristics of net results of Consolidated Entities attributable to CIFC Corp:
Consolidated Entities management fees	$	20,560		$	23,559		$	40,803		$	41,714
Consolidated Entities net investment income (1)	7,022			2,541			11,515			3,290
Net results from Consolidated Entities attributable to CIFC Corp.	$	27,582		$	26,100		$	52,318		$	45,004

Explanatory Note: 

________________________________

(1) Includes equity distributions earned from residual interests in CLOs.

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EQUITY (Details 2) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		0 Months Ended	3 Months Ended	6 Months Ended		0 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 Stock Options and Restricted Stock Units [Member]	Jun. 30, 2013 Stock Options and Restricted Stock Units [Member]	Jun. 30, 2014 Stock Options and Restricted Stock Units [Member]	Jun. 30, 2013 Stock Options and Restricted Stock Units [Member]	Jun. 30, 2014 Stock Options	Jun. 30, 2014 Stock Options	Jun. 30, 2014 Stock Options	Jun. 30, 2013 Stock Options	Jun. 30, 2014 Restricted Stock Units [Member]
Stock-based Compensation
2011 Stock Plan - number of shares authorized					6,181,929		6,181,929
2011 Stock Plan - number of additional shares authorized							2,000,000
2011 Stock Plan - number of shares available for grant					1,108,592		1,108,592
Stock-based compensation for stock options and RSUs	$ 0.1	$ 0.2	$ 0.1	$ 1.2	$ 0.6	$ 0.9	$ 0.7	$ 1.7
Nonvested Awards, Compensation Not yet Recognized, Stock Options and RSUs					$ 10.9		$ 10.9
Weighted average vesting period									1 year 5 months				5 years 8 months 25 days
Contractual term											10 years
Options, Award Vesting Period											4 years
Grant Date-Stock Based Awards - Weighted Average Assumptions
Expected dividend yield										4.54%	4.54%	0.00%
Expected volatility										42.65%	42.65%	48.75%
Risk-free interest rate										1.96%	1.96%	1.10%
Expected life (years)										5 years 9 months 6 days	5 years 9 months 6 days	6 years 1 month 11 days

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 4) (USD $) In Thousands, unless otherwise specified							12 Months Ended		6 Months Ended		12 Months Ended		6 Months Ended		12 Months Ended						3 Months Ended		6 Months Ended	3 Months Ended					12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Recurring basis Estimated Fair Value	Dec. 31, 2013 Recurring basis Estimated Fair Value	Jun. 30, 2014 Recurring basis Level 3	Dec. 31, 2013 Recurring basis Level 3	Dec. 31, 2013 Projected Cash Flow Approach Valuation Technique [Member] Recurring basis Contingent Liabilities at Fair Value Level 3		Jun. 30, 2014 Projected Cash Flow Approach Valuation Technique [Member] Recurring basis Contingent Liabilities at Fair Value Level 3 Minimum		Dec. 31, 2013 Projected Cash Flow Approach Valuation Technique [Member] Recurring basis Contingent Liabilities at Fair Value Level 3 Minimum		Jun. 30, 2014 Projected Cash Flow Approach Valuation Technique [Member] Recurring basis Contingent Liabilities at Fair Value Level 3 Maximum		Dec. 31, 2013 Projected Cash Flow Approach Valuation Technique [Member] Recurring basis Contingent Liabilities at Fair Value Level 3 Maximum		Dec. 31, 2013 Projected Cash Flow Approach Valuation Technique [Member] Recurring basis Debt tranches of Consolidated CLOs Level 3 Minimum		Dec. 31, 2013 Projected Cash Flow Approach Valuation Technique [Member] Recurring basis Debt tranches of Consolidated CLOs Level 3 Maximum		Jun. 30, 2014 Projected Cash Flow Approach Valuation Technique [Member] Recurring basis Contingent liabilities and the long-term debt of the Consolidated CLOs Level 3		Jun. 30, 2014 Projected Cash Flow Approach Valuation Technique [Member] Recurring basis Contingent liabilities and the long-term debt of the Consolidated CLOs Level 3	Jun. 30, 2014 Projected Cash Flow Approach Valuation Technique [Member] Recurring basis Contingent liabilities and the long-term debt of the Consolidated CLOs Level 3 Minimum		Mar. 31, 2013 Projected Cash Flow Approach Valuation Technique [Member] Recurring basis Contingent liabilities and the long-term debt of the Consolidated CLOs Level 3 Minimum	Jun. 30, 2014 Projected Cash Flow Approach Valuation Technique [Member] Recurring basis Contingent liabilities and the long-term debt of the Consolidated CLOs Level 3 Maximum		Dec. 31, 2013 Projected Cash Flow Approach Valuation Technique [Member] Recurring basis Subordinated notes of Consolidated CLOs Level 3	Jun. 30, 2014 Consolidated Entities	Dec. 31, 2013 Consolidated Entities	Jun. 30, 2014 Consolidated Entities Recurring basis Estimated Fair Value		Dec. 31, 2013 Consolidated Entities Recurring basis Estimated Fair Value		Jun. 30, 2014 Consolidated Entities Recurring basis Level 3		Dec. 31, 2013 Consolidated Entities Recurring basis Level 3
Quantitative Information about Level 3 Assets & Liabilities
Contingent liabilities at fair value	$ 14,450	$ 16,961	$ 14,450	$ 16,961	$ 14,450	$ 16,961
Discount rate (as a percent)									3.90%	[1]	5.10%	[1]	12.50%	[1]	15.00%	[1]	0.60%	[2]	7.10%	[2]									12.00%
Default rate (as a percent)							2.00%	[3]									1.00%	[3]	2.00%					1.50%	[3]		2.00%	[3]
Recovery rate (as a percent)							70.00%	[3]									70.00%	[3]	75.00%	[3]	70.00%	[3]
Pre-payment rate (as a percent)											30.00%	[3]			40.00%	[3]	25.00%	[3]	40.00%	[3]				35.00%	[3]		40.00%	[3]
Reinvestment spread over LIBOR (as a percent)											3.00%				3.80%		3.00%		3.80%					3.00%			3.80%
Reinvestment price							100.00%												100.00%		100.00%					99.50%
Long-term debt at fair value																														$ 11,480,641	$ 10,484,975	$ 11,480,641	[4]	$ 10,484,975	[4]	$ 11,480,641	[4]	$ 10,484,975	[4]
Debt Instrument, Description of Variable Rate Basis																							LIBOR

[1] The discount rate varies by type of management fee (senior management fee, subordinated management fee, or incentive fee), the priority of that management fee in the waterfall of the CLO and the relative risk associated with the respective management fee cash flow projections. Amounts are presented as a spread over LIBOR.

[2] Prior to June 30, 2014, the valuation of long-term debt of the Consolidated CLOs discounted the cash flows of each tranche of debt and subordinated notes provided from the projected cash flow models. The discount rate varies by the original credit rating of each tranche of debt or year of issuance for the subordinated notes. Amounts are presented as a spread over LIBOR.

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

[4] The Company generally invests in the residual equity of the CLOs it sponsors and invests in the warehouses it issues.

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BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION (Details) (USD $)	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013		Dec. 31, 2013
Basis of Presentation and Principles of Consolidation
Investments at fair value	$ 24,177,000				$ 24,177,000				$ 16,883,000
Net Results and Characteristics of Consolidated Entities [Abstract]
Net results from Consolidated Entities attributable to CIFC Corp.	6,444,000		7,543,000		6,679,000		10,330,000
Consolidated VIEs [Abstract]
Number of CLOs consolidated	28				28				26
Unconsolidated VIEs [Abstract]
Number of CLOs not consolidated	2				2				5
Number of CDOs not consolidated	8				8				8
Number of Other Investment Products not consolidated	2				2				1
Consolidated Entities
Basis of Presentation and Principles of Consolidation
Investments at fair value	11,492,106,000				11,492,106,000				10,420,993,000
Net Results and Characteristics of Consolidated Entities [Abstract]
Net results of Consolidated Entities	37,046,000	[1]	53,102,000	[1]	86,128,000	[1]	100,160,000	[1]
Net (income) loss attributable to noncontrolling interest in Consolidated Entities	(9,464,000)		(27,002,000)		(33,810,000)		(55,156,000)
Net results from Consolidated Entities attributable to CIFC Corp.	27,582,000		26,100,000		52,318,000		45,004,000
Characteristics of Net Results - Management Fees	20,560,000		23,559,000		40,803,000		41,714,000
Consolidated Entities net investment income	7,022,000	[2]	2,541,000	[2]	11,515,000	[2]	3,290,000	[2]
Tactical Income Fund
Consolidated Funds [Abstract]
General Partners' Capital Account	10,900,000				10,900,000				10,200,000
Co-Investment Fund
Consolidated Funds [Abstract]
Equity Method Investments	17,100,000				17,100,000				15,300,000
Warehouses
Net Results and Characteristics of Consolidated Entities [Abstract]
Net results of Consolidated Entities	1,316,000	[3]	4,695,000	[3]	1,310,000	[3]	4,067,000	[3]
Consolidated VIEs [Abstract]
Warehouses consolidated					5		4
Warehouses deconsolidated					2		3
Consolidated Warehouse Investments Held	3				3				2
Unconsolidated VIEs [Abstract]
Maximum exposure to loss	65,598,000	[4]			65,598,000	[4]			42,279,000	[4]
Senior Secured Loan Fund
Consolidated Funds [Abstract]
Noncontrolling interest in Consolidated Funds	173,200,000				173,200,000
Equity Method Investments	5,100,000				5,100,000				10,800,000
Consolidated Funds
Consolidated Funds [Abstract]
Noncontrolling interest in Consolidated Funds	174,454,000				174,454,000				5,107,000
Accounts Receivable | Variable Interest Entity, Not Primary Beneficiary
Unconsolidated VIEs [Abstract]
Maximum exposure to loss	200,000				200,000				200,000
Consolidated Entities | Consolidated Entities
Basis of Presentation and Principles of Consolidation
Investments at fair value	$ 114,100,000				$ 114,100,000				$ 92,100,000

[1] See Note 2 for a reconciliation of Net Results from Consolidated Entities attributable to CIFC Corp.

[2] Includes equity distributions earned from residual interests in CLOs.

[3] During the three and six months ended June 30, 2014, the Company's results from warehouses included four and five warehouse investments and during the three and six months ended June 30, 2013, the Company's results from warehouses included three and four, warehouse investments, respectively.

[4] Maximum exposure to loss is generally limited to the Company's investment in the entity. As of June 30, 2014 and December 31, 2013, the Company consolidated three and two warehouses, respectively. Amounts are eliminated in consolidation. As of December 31, 2013, the Company invested $32.5 million directly in its warehouses, and through its ownership of the credit funds (see Note 2), the Company invested an additional $9.7 million in the warehouses. The Company did not have any investments through its ownership of the credit funds as of June 30, 2014.

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EQUITY (Details 4) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended			6 Months Ended		0 Months Ended		3 Months Ended		6 Months Ended						6 Months Ended				0 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jun. 30, 2014 Grants in 2011 [Member]	Jun. 30, 2013 Grants in 2011 [Member]	Jun. 30, 2014 Restricted Stock Units [Member]		Jun. 30, 2014 Restricted Stock Units [Member]		Jun. 30, 2014 Restricted Stock Units [Member]		Jun. 30, 2013 Restricted Stock Units [Member]		Dec. 31, 2013 Restricted Stock Units [Member]	Dec. 31, 2012 Restricted Stock Units [Member]	Jun. 30, 2013 Grants in 2010 [Member]	Apr. 28, 2014 Warrants	Apr. 07, 2014 Warrants	Apr. 13, 2011 Warrants	Jun. 13, 2014 Service-based 2014 Grants - Employee [Member] Restricted Stock Units [Member]	Jun. 13, 2014 Service-based [Member] Restricted Stock Units [Member]	Jun. 13, 2014 Service-based 2014 Grants B [Member] Restricted Stock Units [Member]	Jun. 13, 2014 Performance-based 2014 Grants [Member] Restricted Stock Units [Member]	Jun. 05, 2014 Service-based 2014 Grants - Director [Member] Restricted Stock Units [Member]	Jun. 13, 2014 Third Tranche [Member] Service-based [Member] Restricted Stock Units [Member]	Jun. 13, 2014 Fourth Tranche [Member] Service-based [Member] Restricted Stock Units [Member]	Jun. 13, 2014 Fifth Tranche [Member] Service-based [Member] Restricted Stock Units [Member]	Jun. 13, 2014 All tranches [Member] Service-based [Member] Restricted Stock Units [Member]	Jun. 13, 2014 First Tranche [Member] Service-based [Member] Restricted Stock Units [Member]	Jun. 13, 2014 Second Tranche [Member] Service-based [Member] Restricted Stock Units [Member]	Jun. 13, 2014 Quarterly installments thereafter Service-based [Member] Restricted Stock Units [Member]	Jun. 13, 2014 Years remaining [Member] Service-based [Member] Restricted Stock Units [Member]	Jun. 13, 2014 Awards vested per tranche [Member] Service-based [Member] Restricted Stock Units [Member]
Profits Interest Awards
Profits Interests Awards non-cash compensation expense	$ 0.1	$ 0.2	$ 0.1	$ 1.2
Restricted Stock
Restricted Stock Units, Outstanding Number								1,025,646	[1]	1,025,646	[1]	1,025,646	[1]	7,236	[1]	18,486	103,360
Restricted Stock Units, Grants in Period												1,014,396		0								800,000	600,000	200,000	150,000	64,396
Restricted Stock Units, Settled in Period												(7,236)	[2]	(96,124)	[2]
Restricted Stock Units, Vesting Annual Installments						1/3												1/3					five				third	fourth	fifth		first	second
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other than Options, Vesting Period Awards per Tranche																																			120,000
Restricted Stock Units, Award Vesting Rights, Percentage																											20.00%	20.00%	20.00%	20.00%	20.00%	20.00%	5.00%
Restricted Stock Units, Grants in Period, Weighted Average Grant Date Fair Value										$ 7.86
Weighted average vesting period								5 years 8 months 25 days																2 years		1 year								4 years
Restricted Stock Units, Grants settled from 2009, 2010, 2011 awards						7,236	7,236											88,888
Warrants
Class of Warrant or Right, Outstanding																				225,000	250,000
Class of Warrant or Right, Exercise Price of Warrants or Rights																					4.25
Common stock, shares issued upon exercise of warrants	21,145,199		21,145,199		20,921,333														99,065

[1] For 2013, outstanding amount relates to the remaining 2011 grants to certain members of the Board. The 2011 grants were fully vested and delivered as of June 30, 2014.

[2] Represents the gross number of RSUs settled during the period with the issuance of common stock to the restricted stock unit holder. During the six months ended June 30, 2014, the Company issued 7,236 shares of common stock to settle the third 1/3 annual installment of the RSUs granted in 2011. During the six months ended June 30, 2013, the Company issued 88,888 shares of common stock to settle restricted stock grants from 2010 and 7,236 shares of common stock to settle the second 1/3 annual installment of the RSUs granted in 2011.

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DEFERRED PURCHASE PAYMENTS AND CONTINGENT LIABILITIES AT FAIR VALUE (Details) (USD $)	3 Months Ended		6 Months Ended			0 Months Ended		0 Months Ended	1 Months Ended	3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Apr. 13, 2011 DFR Holdings LLC	Mar. 31, 2010 DFR Holdings LLC	Apr. 13, 2011 CIFC Parent Holdings LLC	Apr. 30, 2011 CIFC Parent Holdings LLC	Jun. 30, 2014 CIFC Parent Holdings LLC	Jun. 30, 2013 CIFC Parent Holdings LLC	Jun. 30, 2014 CIFC Parent Holdings LLC	Jun. 30, 2013 CIFC Parent Holdings LLC	Dec. 31, 2013 CIFC Parent Holdings LLC	Jun. 30, 2014 Cypress Tree Investment Management LLC	Jun. 30, 2013 Cypress Tree Investment Management LLC	Jun. 30, 2014 Cypress Tree Investment Management LLC	Dec. 31, 2013 Cypress Tree Investment Management LLC	Jun. 30, 2013 Cypress Tree Investment Management LLC	Jun. 30, 2014 Estimated Fair Value Recurring basis	Dec. 31, 2013 Estimated Fair Value Recurring basis	Dec. 09, 2014 Subsequent Event [Member] DFR Holdings LLC
Deferred Purchase Payments and Contingent Liabilities [Abstract]
Deferred purchase payments	$ 1,348,000		$ 1,348,000		$ 1,179,000
Contingent liabilities	14,450,000		14,450,000		16,961,000					13,238,000		13,238,000		15,349,000	1,212,000		1,212,000	1,612,000		14,450,000	16,961,000
Business Acquisition Cost of Acquired Entity Cash Payable							7,500,000	7,500,000														1,500,000
Installments of Deferred Purchase Payments						5		3
Business Acquisition Cost of Acquired Entity Fixed Deferred Payments Per Installment								2,500,000
Deferred Purchase Payments during year				2,500,000
Net gain (loss) on contingent liabilities at fair value	(1,529,000)	613,000	(1,758,000)	499,000						(1,544,000)	421,000	(1,765,000)	345,000		15,000	192,000	7,000		154,000
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
Payments On Contingent Liabilities - 100% fee sharing										1,900,000	4,900,000	3,900,000	7,800,000
Payments on Contingent Liabilities - 50% fee sharing										10,400,000		10,400,000
Business Acquisition, Cost of Acquired Entity Percentage of Fees in Excess of Initial Incentive Fees									50.00%
Business Acquisition Contingent Consideration Minimum Percentage of Investment Advisory Fees																		39.00%	55.00%
Deferred purchase payments and payments on contingent liabilities			$ (4,270,000)	$ (12,007,000)											$ 200,000	$ 1,100,000	$ 400,000		$ 1,700,000

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BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

6 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Principles of Consolidation

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, 2013.

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.

In addition, certain prior year amounts on the Condensed Consolidated Financial Statements and the related notes have been re-presented to conform to current period presentation and provide additional details.

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

Consolidated Entities—Consolidated Entities includes the operating results of the Consolidated Funds and the Consolidated VIEs as defined below. As of June 30, 2014 and December 31, 2013, the Company held $114.1 million and $92.1 million, respectively of investments in its Consolidated Entities. In addition, the Company recognized management fees and net interest income from investments of the Consolidated Entities as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(In thousands)
Net results of Consolidated Entities	$	37,046		$	53,102		$	86,128		$	100,160
Net (income) loss attributable to noncontrolling interest in Consolidated Entities	(9,464		)	(27,002		)	(33,810		)	(55,156		)
Net results from Consolidated Entities attributable to CIFC Corp.	$	27,582		$	26,100		$	52,318		$	45,004
Characteristics of net results of Consolidated Entities attributable to CIFC Corp:
Consolidated Entities management fees	$	20,560		$	23,559		$	40,803		$	41,714
Consolidated Entities net investment income (1)	7,022			2,541			11,515			3,290
Net results from Consolidated Entities attributable to CIFC Corp.	$	27,582		$	26,100		$	52,318		$	45,004

Explanatory Note: 

________________________________

(1) Includes equity distributions earned from residual interests in CLOs.

Consolidated Funds—The Company consolidates entities in which the Company has a controlling voting interest. As of June 30, 2014, the Company consolidated the following funds under the voting interest model.

Tactical Income Fund—During 2013, the Company launched an open ended credit fund that invests primarily in second-lien loans (the "Tactical Income Fund"). As of June 30, 2014 and December 31, 2013, the Company is the investment adviser for the fund and, as the general partner in the fund, held an investment of $10.9 million and $10.2 million, respectively. As of both June 30, 2014 and December 31, 2013, the Company held a controlling financial and voting interest in the Tactical Income Fund and consolidated the entity.

Senior Secured Loan Fund—During 2012, the Company launched an open ended credit fund that invests in U.S. performing senior secured corporate loans ("the "Senior Secured Loan Fund") to provide capital appreciation and risk-adjusted returns to its investors. During March 2014, several new investors entered the fund, eliminating a limited partners' substantive participating right in the fund. As of June 30, 2014, the Company consolidated the fund as it held a controlling voting interest as the investment adviser. Prior to the consolidation, the Company's investment was recorded in "Investments at fair value" on the Company's Consolidated Balance Sheet. As of June 30, 2014 and December 31, 2013, the Company held an investment of $5.1 million and $10.8 million, respectively. As of June 30, 2014, the limited partners held a $173.2 million investment which was reported in "Noncontrolling interest in Consolidated Funds" on the Condensed Consolidated Balance Sheet.

Consolidated VIEs—The Company also consolidates variable interest entities in which it is deemed the primary beneficiary. These Consolidated VIEs generally include CLOs and CDOs (collectively, the "Consolidated CLOs") and warehouses the Company manages, holds an investment in the entity or is entitled to incentive fees.

Consolidated CLOs—As of June 30, 2014, the Company consolidated 28 CLOs. As of December 31, 2013, the Company consolidated 26 CLOs. See Note 4.

Warehouses—From time to time, the Company will create special purpose vehicles ("SPV") to warehouse SSCLs in advance of sponsoring new CLOs or other funds. The Company would generally contribute equity to the new SPVs which are typically levered (three to five times) depending on the terms agreed to with the warehousing counterparties. When the related CLO or fund is sponsored, typically around three to nine months later, the warehouse is “terminated,” with it concurrently repaying the related financing and returning to the Company its equity contribution, net of gains and losses, if any.

During the six months ended June 30, 2014, the Company consolidated 5 warehouses and deconsolidated 2 warehouses, respectively, and during the six months ended June 30, 2013, the Company consolidated 4 warehouses and deconsolidated 3 warehouses, respectively, in conjunction with the sponsorship of newly issued CLOs. See Notes 4 and 6 for more information. As of June 30, 2014, the Company consolidated 3 warehouses.

Unconsolidated Funds—Co-Investment Fund—During 2013, the Company launched a closed end structured credit fund that invests primarily in residual tranches of CLOs and, to a lesser extent, warehouses, managed by CIFC (the "Co-Investment Fund"). As of June 30, 2014 and December 31, 2013, carrying value of the Company's investment, as the general partner of the fund was $17.1 million and $15.3 million, respectively. During the first quarter of 2014, several limited partners entered into the fund removing the general partner's presumption of control, and as such, the Company deconsolidated the fund from its Condensed Consolidated Financial Statements. As of June 30, 2014, the Company's investment was recorded in "Investments at fair value" on the Company's Condensed Consolidated Balance Sheet.

Unconsolidated VIEs

As of June 30, 2014, the Company had variable interests in an additional 2 CLOs, 8 CDOs, and 2 other investment products, which the Company managed, that were not consolidated (collectively the "Unconsolidated VIEs") as the Company was not deemed to be the primary beneficiary of the VIEs. As of December 31, 2013, the Company's unconsolidated VIEs included 5 CLOs, 8 CDOs and 1 other investment product.

The Company's maximum exposure to loss on Unconsolidated VIEs includes its investment, management fee receivables and future management fees collectible by the Company. As of June 30, 2014 and December 31, 2013, the Company had no maximum exposure to loss associated with the Unconsolidated VIEs related to investments made by the Company in the Unconsolidated VIEs. In addition, as of both June 30, 2014 and December 31, 2013, the Company's management fee receivables were $0.2 million.

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 5) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Long-term debt:
Long-term debt	$ 139,697		$ 139,164
Estimated Fair Value
Long-term debt:
Convertible Notes	37,231	[1]	32,149	[2]
Junior Subordinated Notes	63,257	[2]	63,535	[1]
Convertible Debt
Long-term debt:
Long-term debt	19,697	[2],[3]	19,164	[2],[3]
Subordinated Debt Obligations
Long-term debt:
Long-term debt	$ 120,000	[1]	$ 120,000	[1]

[1] The Junior Subordinated Notes include both the March and October Junior Subordinated Notes (see Note 10). The estimated fair values of the Junior Subordinated Notes were determined using a discounted cash flow model which utilizes significant unobservable inputs, including discount rates, yield and forward LIBOR curve assumptions. This methodology is classified as Level 3 within the fair value hierarchy.

[2] The estimated fair value of the Convertible Notes as of December 31, 2013 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. Subsequent to quarter end, Convertible Notes outstanding were converted (see Notes 10, 11 and 14) therefore as of June 30, 2014, the estimated fair value is classified as Level 1 within the fair value hierarchy.

[3] As of June 30, 2014 and December 31, 2013, Convertible Notes were recorded net of a discount of $5.3 million and $5.8 million, respectively and paid interest at the stated rates of 11.00% and 10.00%, respectively. Including the discount, the effective rate of interest is 18.14% for both periods. The Convertible Notes have a $25.0 million aggregate principal amount. Subsequent to quarter end, Convertible Notes outstanding were converted (see Notes 11 and 14).

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INTANGIBLE ASSETS AND GOODWILL (Tables)

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

Intangible assets are 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)
June 30, 2014:
Investment management contracts	3.6	$	72,941	$	57,634	$	15,307
Referral arrangement	5.3	3,810		953		2,857
Non-compete agreements	3.7	1,535		836		699
Trade name	6.8	1,250		406		844
Total intangible assets		$	79,536	$	59,829	$	19,707
December 31, 2013:
Investment management contracts	4.0	$	72,941	$	52,661	$	20,280
Referral arrangement	5.8	3,810		572		3,238
Non-compete agreements	4.2	1,535		736		799
Trade name	7.3	1,250		344		906
Total intangible assets		$	79,536	$	54,313	$	25,223

Explanatory Notes:

_________________________________

(1) Gross carrying amounts have been adjusted for impaired assets as of the date presented.

(2) During the three and six months ended June 30, 2014, the Company recorded amortization expense on its intangible assets of $2.6 million and $5.5 million, respectively, and during the three and six months ended June 30, 2013, the Company recorded amortization expense on its intangible assets of $4.1 million and $8.1 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)
2014 (6 months remaining)	$	4,633
2015	6,796
2016	4,010
2017	2,172
2018	1,527
Thereafter	569
	$	19,707

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NET RESULTS OF CONSOLIDATED VIEs (Tables)

6 Months Ended

Jun. 30, 2014

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 Entities":

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(in thousands)
Investment income	$	128,703		$	120,719		$	249,146		$	239,882
Interest expense	(40,799		)	(26,103		)	(76,873		)	(59,024		)
Net investment income	87,904			94,616			172,273			180,858
Net gain (loss) on investments at fair value	7,187			(68,707		)	9,946			12,386
Net gain (loss) on liabilities at fair value	(52,407		)	36,765			(82,701		)	(73,728		)
Net gain (loss) on other investments and derivatives	2,215			(103		)	2,322			(48		)
Net gain (loss) from activities of Consolidated Entities	$	44,899		$	62,571		$	101,840		$	119,468
Expenses of Consolidated Entities	(7,853		)	(9,469		)	(15,712		)	(19,308		)
Net Results of Consolidated Entities (1)	$	37,046		$	53,102		$	86,128		$	100,160

Explanatory Note:

________________________________

(1) See Note 2 for a reconciliation of Net Results from Consolidated Entities attributable to CIFC Corp.

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COMMITMENTS AND CONTINGENCIES (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 Consolidated CLOs	Dec. 31, 2013 Consolidated CLOs	Jun. 30, 2014 CIFC Funds	Dec. 31, 2013 CIFC Funds
Lease Commitments
Occupancy, Net	$ 400,000	$ 400,000	$ 800,000	$ 700,000
Future minimum commitments under the lease
Current Year	803,000		803,000
Due in two years	1,607,000		1,607,000
Due in three years	1,607,000		1,607,000
Due in four years	1,607,000		1,607,000
Due in five years	1,680,000		1,680,000
Thereafter	7,010,000		7,010,000
Future minimum commitments	14,314,000		14,314,000
Other Commitments and Contingencies
Unfunded investment commitments					$ 38,600,000	$ 36,800,000	$ 30,000,000	$ 30,000,000

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NET RESULTS OF CONSOLIDATED VIEs (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Consolidated Variable Interest Entities
Net investment income	$ 97		$ 106		$ 194		$ 97
Net gain (loss) on investments at fair value	1,121		251		2,527		600
Net gain (loss) on contingent liabilities at fair value	(1,529)		613		(1,758)		499
Consolidated Entities
Consolidated Variable Interest Entities
Investment income	128,703		120,719		249,146		239,882
Interest expense	(40,799)		(26,103)		(76,873)		(59,024)
Net investment income	87,904		94,616		172,273		180,858
Net gain (loss) on investments at fair value	7,187		(68,707)		9,946		12,386
Net gain (loss) on contingent liabilities at fair value	(52,407)		36,765		(82,701)		(73,728)
Net gain (loss) on other investments and derivatives	2,215		(103)		2,322		(48)
Net gain (loss) from activities of Consolidated Entities	44,899		62,571		101,840		119,468
Expenses of Consolidated Entities	(7,853)		(9,469)		(15,712)		(19,308)
Net results of Consolidated Entities	$ 37,046	[1]	$ 53,102	[1]	$ 86,128	[1]	$ 100,160	[1]

[1] See Note 2 for a reconciliation of Net Results from Consolidated Entities attributable to CIFC Corp.

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DEFERRED PURCHASE PAYMENTS AND CONTINGENT LIABILITIES AT FAIR VALUE (Tables)

6 Months Ended

Jun. 30, 2014

Business Combination, Contingent Consideration Arrangements [Abstract]

Schedule of estimated fair value of the contingent liabilities

The Company's Deferred Purchase Payments and Contingent Liabilities at fair value are as follows:

	June 30, 2014		December 31, 2013
	(In thousands)
Deferred purchase payments	$	1,348	$	1,179
Contingent liabilities from the Merger (related party) - Note 14	$	13,238	$	15,349
Contingent liabilities value assumed through the Merger	1,212		1,612
Contingent liabilities at fair value	$	14,450	$	16,961

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 June 30,					For the Six Months Ended June 30,
	2014			2013		2014			2013
	(In thousands)
Contingent liabilities from the Merger	$	(1,544	)	$	421	$	(1,765	)	$	345
Contingent liabilities assumed through the Merger	15			192		7			154
Total net gain (loss) on contingent liabilities at fair value	$	(1,529	)	$	613	$	(1,758	)	$	499

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LONG-TERM DEBT (Tables)

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

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

	June 30, 2014					December 31, 2013
	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	%	21.3	$	95,000	1.00	%	21.8
October Junior Subordinated Notes (2)	25,000		3.72	%	21.3	25,000		3.73	%	21.8
Total Subordinated Notes Debt	$	120,000	1.57	%	21.3	$	120,000	1.57	%	21.8
Convertible Notes (3)	$	19,697	11.00	%	n/a (3)	$	19,164	10.00	%	3.9
Total recourse debt	$	139,697				$	139,164
Non-recourse Consolidated Entities' debt:
Consolidated CLOs (4)	$	11,042,200	1.58	%	8.7	$	10,336,453	1.43	%	8.3
Warehouses (5)	438,441		1.41	%	n/m	148,522		1.30	%	n/m
Total non-recourse Consolidated Entities' debt	$	11,480,641	1.57	%	8.7	$	10,484,975	1.43	%	8.3
Total long-term debt	$	11,620,338				$	10,624,139

Explanatory Notes:

________________________________

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

(2) October Junior Subordinated Notes bear interest at an annual rate of 3 monthLIBOR plus 3.50% and mature on October 30, 2035.

(3) As of June 30, 2014 and December 31, 2013, Convertible Notes were recorded net of a discount of $5.3 million and $5.8 million, respectively and paid interest at the stated rates of 11.00% and 10.00%, respectively. Including the discount, the effective rate of interest is 18.14% for both periods. The Convertible Notes have a $25.0 million aggregate principal amount. Subsequent to quarter end, Convertible Notes outstanding were converted (see Notes 11 and 14).

(4) Long-term debt of the Consolidated CLOs is recorded at fair value. The subordinated notes of Consolidated CLOs do not have a stated interest rate. Therefore, they are excluded from the calculation of the weighted average borrowing rate. As of June 30, 2014 and December 31, 2013, the par value of the Consolidated CLOs long-term debt (including subordinated notes) was $12.0 billion and $10.9 billion, respectively.

(5) Long-term debt of warehouses not held by the Company is recorded at fair value. The fair value excludes the preferred shares of Warehouse(s) outstanding as of each respective period not held by the Company, which have a par value of $68.6 million and $67.5 million as of June 30, 2014 and December 31, 2013, respectively. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate.

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ORGANIZATION

6 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION

Organization and Business

CIFC Corp. (“CIFC” and, together with its subsidiaries, the “Company”) is a fundamentals-based, relative value, alternative credit manager. Its primary business is to provide investment management services for investment products. The Company manages assets 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.

The Company's assets under management ("AUM") is primarily comprised of Collateralized Loan Obligations ("CLOs"), credit funds and separately managed accounts ("SMAs", together with credit funds "other loan-based products"). These credit products are opportunistic investment strategies where the Company seeks to generate both current income and capital appreciation, primarily through senior secured corporate loan (“SSCL”) investments and, to a lesser extent, other investments. Management internally views the business as one reportable segment.

The Company has three primary sources of revenue: management fees, incentive fees and investment income. Management fees are generally earned based on the amount of assets managed (or AUM), incentive fees are earned based on the performance of the funds and investment income is earned based on the performance of the Company’s direct investment in its products.

CIFC Corp. is a Delaware corporation headquartered in New York City. As of June 30, 2014, DFR Holdings LLC ("DFR Holdings"), on a fully-diluted basis, owns approximately 70% of the Company’s diluted shares outstanding.

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EQUITY (Tables)

6 Months Ended

Jun. 30, 2014

Stockholders' Equity Note [Abstract]

Schedule of Share-based Compensation Stock Options Activity

The following table summarizes certain Stock Options 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, 2013	3,879,813		$	6.05	5.77	$	5,979
Granted (1)	400,000		8.81
Exercised	(100,000	)	4.83
Forfeited (2)	(325,000	)	5.79
Outstanding at June 30, 2014	3,854,813		$	6.67	5.63	$	9,033
Exercisable at June 30, 2014	2,392,547		$	6.34	3.83	$	6,385
Vested and Expected to vest at June 30, 2014 (3)	3,774,035		$	6.65	5.57	$	8,909

Explanatory Notes:

________________________________

(1) On June 13, 2014, the Company granted to certain executives 200,000 service-based stock options with one-quarter of the awards vesting on January 1, 2015, and 200,000 service-based stock options with one-third of the awards vesting on January 1, 2015. The remainder of these options will vest ratably over the respective remaining term of the option agreements.

(2) The forfeited stock-based awards are returned to the grant pool for reissuance under the 2011 Stock Plan.

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

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

The weighted average assumptions as of the grant date related to stock-based awards (by period issued) are listed in the table below:

	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2014	2013	2014		2013
Expected dividend yield	4.54%	—	4.54	%	—
Expected volatility	42.65%	n/a	42.65	%	48.75	%
Risk-free interest rate	1.96%	n/a	1.96	%	1.10	%
Expected life (years)	5.77	n/a	5.77		6.11

Restricted Stock Units [Table Text Block]

The following table summarizes restricted stock units activity:

	For the Six Months Ended June 30,
	2014		2013
Restricted stock units outstanding, beginning of period	18,486		103,360
Granted	1,014,396		—
Settled (1)	(7,236	)	(96,124	)
Restricted stock units outstanding, end of period (2)	1,025,646		7,236

Explanatory Notes:

_________________________________

(1) Represents the gross number of RSUs settled during the period with the issuance of common stock to the restricted stock unit holder.  During the six months ended June 30, 2014, the Company issued 7,236 shares of common stock to settle the third 1/3 annual installment of the RSUs granted in 2011. During the six months ended June 30, 2013, the Company issued 88,888 shares of common stock to settle restricted stock grants from 2010 and 7,236 shares of common stock to settle the second 1/3 annual installment of the RSUs granted in 2011.

(2) For 2013, outstanding amount relates to the remaining 2011 grants to certain members of the Board. The 2011 grants were fully vested and delivered as of June 30, 2014.

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) (Level 3, Recurring basis, USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Loans
Changes in financial asset measured at fair value classified within Level 3
Estimated fair value, beginning of period	$ 1,512				$ 510
Transfers in due to consolidation or acquisition	1,008				1,008
Transfers between classes	(1,512)				(510)
Net realized/unrealized gains (losses)	0
Purchases	0
Settlements	0
Estimated fair value, end of period	1,008				1,008
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	7				0
Loans | Consolidated Variable Interest Entities
Changes in financial asset measured at fair value classified within Level 3
Estimated fair value, beginning of period	1,826,333		1,342,176		1,706,290		1,177,058
Transfers into Level 3	446,894	[1]	170,010	[1]	952,630	[1]	396,080	[1]
Transfers out of Level 3	(593,806)	[2]	(474,307)	[2]	(1,150,813)	[2]	(754,912)	[2]
Transfers in due to consolidation or acquisition	12,081				33,284
Transfers between classes	1,512				2,021
Net realized/unrealized gains (losses)	(26,271)		(1,574)		(27,936)		9,122
Purchases	598,719		453,788		1,050,822		866,876
Sales	(164,961)		(122,763)		(313,458)		(184,862)
Settlements	(247,527)		(141,633)		(399,866)		(283,665)
Estimated fair value, end of period	1,852,974		1,225,697		1,852,974		1,225,697
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	(10,455)		(9,050)		(9,510)		4,877
Investments in Funds [Member]
Changes in financial asset measured at fair value classified within Level 3
Estimated fair value, beginning of period	15,964
Transfers in due to consolidation or acquisition	0				15,964
Net realized/unrealized gains (losses)	1,108				1,108
Purchases	10				10
Estimated fair value, end of period	17,082				17,082
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	1,108				1,108
Corporate Bonds | Consolidated Variable Interest Entities
Changes in financial asset measured at fair value classified within Level 3
Estimated fair value, beginning of period	5,893		37,806		16,220		67,438
Transfers in due to consolidation or acquisition	314				314
Net realized/unrealized gains (losses)	3		77		517		357
Purchases			2,038				2,788
Sales	0		(23,091)		(10,841)		(53,256)
Settlements			0				(497)
Estimated fair value, end of period	6,210		16,830		6,210		16,830
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	(51)		134		196		148
Other
Changes in financial asset measured at fair value classified within Level 3
Estimated fair value, beginning of period	1,880
Net realized/unrealized gains (losses)	(23)				(21)
Purchases	3,208				5,086
Estimated fair value, end of period	5,065				5,065
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	(23)				(21)
Other | Consolidated Variable Interest Entities
Changes in financial asset measured at fair value classified within Level 3
Estimated fair value, beginning of period	95,486		96,297		93,516		81,709
Transfers in due to consolidation or acquisition	6,256				6,256
Net realized/unrealized gains (losses)	4,069		6,855		7,597		10,179
Purchases	1,475		933		1,475		19,471
Sales	(15,633)		(814)		(16,229)		(7,064)
Settlements	(5,500)		0		(6,462)		(1,024)
Estimated fair value, end of period	86,153		103,271		86,153		103,271
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	(1,655)		2,137		2,165		10,694
Investment and Derivative Assets | Consolidated Variable Interest Entities
Changes in financial asset measured at fair value classified within Level 3
Estimated fair value, beginning of period	1,927,712		1,476,279		1,816,026		1,326,205
Transfers into Level 3	446,894	[1]	170,010	[1]	952,630	[1]	396,080	[1]
Transfers out of Level 3	(593,806)	[2]	(474,307)	[2]	(1,150,813)		(754,912)	[2]
Transfers in due to consolidation or acquisition	18,651		0		39,854		0
Transfers between classes	1,512				2,021
Net realized/unrealized gains (losses)	(22,199)		5,358		(19,822)		19,658
Purchases	600,194		456,759		1,052,297		889,135
Sales	(180,594)		(146,668)		(340,528)		(245,182)
Settlements	(253,027)		(141,633)		(406,328)		(285,186)
Estimated fair value, end of period	1,945,337		1,345,798		1,945,337		1,345,798
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	(12,161)		(6,779)		(7,149)		15,719
Investment in Funds [Member] | Consolidated Variable Interest Entities
Changes in financial asset measured at fair value classified within Level 3
Estimated fair value, beginning of period	19,356				510
Transfers in due to consolidation or acquisition	1,008				16,972
Transfers between classes	(1,512)				(510)
Net realized/unrealized gains (losses)	1,085				1,087
Purchases	3,218				5,096
Settlements	0
Estimated fair value, end of period	23,155				23,155
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	$ 1,092				$ 1,087

[1] Transfers in represent loans currently valued by a third party pricing service using composite prices determined using less than two quotes, an internally developed pricing model or broker quotes and that were previously marked by a third party pricing service using composite prices determined from two or more quotes.

[2] Transfers out represent loans previously valued 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 from two or more quotes.

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EARNINGS (LOSS) PER SHARE (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended				6 Months Ended				3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended		12 Months Ended	0 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014 Stock Options	Jun. 30, 2013 Stock Options	Jun. 30, 2014 Stock Options	Jun. 30, 2013 Stock Options	Jun. 30, 2014 Restricted Stock [Member]	Jun. 30, 2014 Restricted Stock [Member]	Jun. 30, 2014 Common Stock [Member]	Dec. 31, 2013 Common Stock [Member]	Jul. 12, 2014 Subsequent Event [Member] Common Stock [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method
Debt Instrument, Convertible, Number of Equity Instruments															4,132,231	4,132,231	4,132,231
Net Income (Loss) Available to Common Stockholders, Basic	$ 6,444		$ 7,543		$ 6,679		$ 10,330
Interest on Convertible Debt, Net of Tax	479	[1]	455	[1]	951	[1]	904	[1]
Net Income (Loss) Available to Common Stockholders, Diluted	$ 6,923		$ 7,998		$ 7,630		$ 11,234
Weighted-average shares used in basic calculation	20,971,928		20,808,750		20,905,949		20,803,151
Dilutive securities, Effect on Basic Earnings Per Share, Convertible Notes	4,132,000	[1]	4,132,000	[1]	4,132,000	[1]	4,132,000	[1]
Dilutive securities, Effect on Basic Earnings Per Share, Stock options	630,000	[2]	199,000	[2]	611,000	[2]	252,000	[2]
Dilutive securities, Effect on Basic Earnings Per Share, Warrants	470,000		461,000		482,000		533,000
IDilutive securities, Effect on Basic Earnings Per Share, Restricted Stock Units	9,000	[2]			10,000	[2]
Weighted-average shares used in diluted calculation	26,212,593		25,601,165		26,141,070		25,719,972
Earnings (loss) per share, Basic	$ 0.31		$ 0.36		$ 0.32		$ 0.50
Earnings (loss) per share, Diluted	$ 0.26		$ 0.31		$ 0.29		$ 0.44
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount									1,100,000	1,200,000	900,000	1,200,000	400,000	200,000

[1] Subsequent to quarter end, the Convertible Notes were converted into 4.1 million shares of common stock to DFR Holdings (see Notes 10, 11 and 14).

[2] For the three and six months ended June 30, 2014, 1.1 million and 0.9 million, respectively, of stock options and 0.4 million and 0.2 million, respectively, of unvested RSUs were considered anti-dilutive and excluded from diluted EPS. For both the three and six months ended June 30, 2013, 1.2 million of stock options were considered anti-dilutive and excluded from diluted EPS.

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
ASSETS
Cash and cash equivalents	$ 22,046		$ 25,497
Restricted cash and cash equivalents	1,693		1,700
Due from brokers	0		18,813
Investments at fair value	24,177		16,883
Receivables	2,550		2,120
Prepaid and other assets	3,833		5,104
Deferred tax assets, net	50,815		57,675
Equipment and improvements, net	4,443		4,261
Intangible assets, net	19,707		25,223
Goodwill	76,000		76,000
Subtotal	205,264		233,276
Assets	12,785,375		11,600,188
LIABILITIES
Due to brokers	1,036		5,499
Accrued and other liabilities	12,616		15,197
Deferred purchase payments	1,348		1,179
Contingent liabilities at fair value	14,450		16,961
Long-term debt	139,697		139,164
Subtotal	169,147		178,000
Liabilities	12,264,867		11,292,435
EQUITY
Common stock, par value $0.001: 500,000,000 shares authorized, 21,145,199 issued and 21,014,755 outstanding as of June 30, 2014 and 20,921,333 issued and 20,790,889 outstanding as of December 31, 2013	21		21
Treasury stock, at cost: 130,444 shares as of June 30, 2014 and December 31, 2013	(914)		(914)
Additional paid-in capital	964,533		963,011
Retained earnings (deficit)	(808,367)		(810,858)
Stockholders' Equity Attributable to Parent	155,273		151,260
TOTAL EQUITY	520,508		307,753
TOTAL LIABILITIES AND EQUITY	12,785,375		11,600,188
Consolidated Entities
ASSETS
Restricted cash and cash equivalents	850,212		699,387
Due from brokers	196,471		209,882
Investments at fair value	11,492,106		10,420,993
Receivables	39,760		36,350
Prepaid and other assets	1,562		300
Assets	12,580,111		11,366,912
LIABILITIES
Due to brokers	587,692		606,808
Accrued and other liabilities	210		100
Interest payable	27,177		22,552
Long-term debt at fair value	11,480,641		10,484,975
Liabilities	12,095,720		11,114,435
Consolidated Funds
EQUITY
Noncontrolling interest in Consolidated Funds	174,454		5,107
Consolidated VIEs
ASSETS
Restricted cash and cash equivalents	835,960		699,122
Due from brokers	140,806		209,882
Investments at fair value	11,304,278		10,420,993
Receivables	39,198		36,350
Prepaid and other assets	919		0
Assets	12,321,161		11,366,347
LIABILITIES
Due to brokers	519,504		606,808
Accrued and other liabilities	3		42
Interest payable	27,177		22,552
Long-term debt at fair value	11,480,641		10,484,975
Liabilities	12,027,325	[1]	11,114,377	[1]
EQUITY
Retained earnings (deficit)	$ 190,781		$ 151,386

[1] If the Company were to liquidate, the assets of the Consolidated Entities 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 and residual interests of the Consolidated Entities have no recourse to the Company's general assets. Therefore, this debt is not the Company's obligation.

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014
Derivative [Line Items]
Notional amount	$ 179.6	$ 179.6
Collateral Already Posted, Aggregate Fair Value	47.4	47.4
Net income/expense related to derivative instruments	2.2	2.3
CIFC Corp [Member]
Derivative [Line Items]
Collateral Already Posted, Aggregate Fair Value	$ 26.5	$ 26.5

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Net income (loss)	$ 15,908	$ 34,545	$ 40,489	$ 65,486
Other comprehensive income (loss): Foreign Currency Translation	0	6	0	3
Other comprehensive income (loss)	0	6	0	3
Comprehensive income (loss)	15,908	34,551	40,489	65,489
Comprehensive income (loss) attributable to CIFC Corp.	6,444	7,549	6,679	10,333
Consolidated Entities
Net (income) loss attributable to noncontrolling interest in Consolidated Entities	$ (9,464)	$ (27,002)	$ (33,810)	$ (55,156)

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COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Schedule of future minimum commitments under the lease

The future minimum commitments under the Company's lease agreement are as follows:

	(In thousands)
2014 (6 months remaining)	$	803
2015	1,607
2016	1,607
2017	1,607
2018	1,680
Thereafter	7,010
	$	14,314

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2014

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 it is not probable and estimable that any loss will be incurred.

In addition, in June 2013, a suit was filed against the Company (and certain of its affiliates and directors) by a former employee. The Company denies the allegations, intends to defend itself vigorously, believes that the pending lawsuit is without merit and has filed counterclaims against the plaintiff.

Lease Commitments—During the three and six months ended June 30, 2014, total occupancy expense was $0.4 million and $0.8 million, respectively, and during the three and six months ended June 30, 2013, total occupancy expense was $0.4 million and $0.7 million, respectively. The future minimum commitments under the Company's lease agreement are as follows:

	(In thousands)
2014 (6 months remaining)	$	803
2015	1,607
2016	1,607
2017	1,607
2018	1,680
Thereafter	7,010
	$	14,314

Unfunded 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. Unfunded loan commitments represent the estimated fair value of those unfunded revolvers of loan facilities.

Unfunded loan commitments represent the estimated fair value of those unfunded revolvers of loan facilities. As of June 30, 2014 and December 31, 2013, the Consolidated CLOs had unfunded investment commitments on loans of $38.6 million and $36.8 million, 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.

Other—As of both June 30, 2014 and December 31, 2013, the Company fully funded the aggregate minimum commitment to invest $30.0 million in its CIFC sponsored funds.

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ORGANIZATION AND BUSINESS Organization and Business (Details) (DFR Holdings LLC)	Jun. 30, 2014
DFR Holdings LLC
DFR Holdings LLC Transaction
Percentage of diluted shares outstanding	70.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING UPDATES (POLICIES)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

New Accounting Pronouncements

Recent Accounting Updates

In June 2013, the FASB issued Accounting Standards Update ("ASU") 2013-08, Financial Services—Investment Companies, which amends the scope, measurement, and disclosure requirements for investment companies. This ASU amends the requirements related to qualifying for the “investment-company deferral“ under ASU 2010-10, Consolidation. This guidance was effective for the Company's fiscal year beginning January 1, 2014. The adoption of this guidance did not have a material impact on the Company's Condensed Consolidated Financial Statements.

In July 2013, the FASB issued ASU 2013-11, Income Taxes, which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss ("NOL") carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance was effective for the Company's fiscal year beginning January 1, 2014. The adoption of this guidance did not have an impact on the Company's Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard clarifies the required factors that an entity must consider when recognizing revenue and also requires additional disclosures. ASU 2014-09 is effective for the Company beginning January 1, 2017. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is evaluating the impact ASU 2014-09 will have on the Company's Condensed Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 40,489	$ 65,486
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Amortization of debt issuance costs	169	230
Share-based compensation	881	2,899
Net (gain) loss on investments and liabilities at fair value / other (gain) loss	(770)	(1,099)
Net gain on the sale of management contract	(228)	(752)
Depreciation and amortization	6,015	8,496
Deferred income tax expense (benefit)	6,860	(3,895)
Net (gain) loss on liabilities at fair value	1,758	(499)
Changes in operating assets and liabilities:
Due from brokers	12,832	(31,473)
Receivables	(434)	432
Prepaid and other assets	1,192	746
Due to brokers	(4,463)	4,581
Accrued and other liabilities	(2,583)	(3,349)
Change in restricted cash and cash equivalents	7	(2)
Net cash provided by (used in) operating activities	(577,082)	(491,414)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of management contracts	228	752
Purchases of investments at fair value	(13,947)	(66,784)
Sales of investments at fair value	20,201	67,324
Purchases of equipment and improvements	(680)	(329)
Net cash provided by (used in) investing activities	(114,461)	(15,863)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock	0	(65)
Payment of stock and debt issuance costs	613	525
Dividends paid	(4,188)	0
Settlement of warrants and options	641	(93)
Deferred purchase payments and payments on contingent liabilities	(4,270)	(12,007)
Net cash provided by (used in) financing activities	688,092	493,091
Foreign currency translation	0	3
Net increase (decrease) in cash and cash equivalents	(3,451)	(14,183)
Cash and cash equivalents at beginning of period	25,497	47,692
Cash and cash equivalents at end of period	22,046	33,509
SUPPLEMENTAL DISCLOSURE:
Cash paid for interest	1,577	2,102
Cash paid for income taxes	13,271	14,456
Exercise of stock options	0	197
Consolidated Entities
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Net (gain) loss on investments at fair value	(9,946)	(12,386)
Net (gain) loss on liabilities at fair value	82,701	73,728
Net other (gain) loss	(2,322)	48
Changes in operating assets and liabilities:
Due from brokers	52,596	(225,918)
Receivables	(3,773)	(9,337)
Purchases of investments at fair value	(4,693,839)	(5,347,508)
Sales of investments at fair value	4,010,495	4,819,752
Due to brokers	(77,439)	172,070
Accrued and other liabilities	(130)	(5,066)
Interest payable	4,608	903
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in restricted cash and cash equivalents	(120,263)	(16,826)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net contributions from noncontrolling interests	31,191	0
Proceeds from issuance of long-term debt	2,487,474	1,937,495
Payments made on long-term debt	(1,823,369)	(1,432,764)
SUPPLEMENTAL DISCLOSURE:
Cash paid for interest	72,250	56,894
Consolidation of net assets	160,074	0
Deconsolidation of net assets	(984)	0
Non-cash settlement of interest receivables with increases in principal	$ 1,012	$ 1,257

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CONSOLIDATED BALANCE SHEETS (VIE) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Restricted cash and cash equivalents	$ 1,693		$ 1,700
Due from brokers	0		18,813
Investments at fair value	24,177		16,883
Receivables	2,550		2,120
Prepaid and other assets	3,833		5,104
Assets	12,785,375		11,600,188
Due to brokers	1,036		5,499
Accrued and other liabilities	12,616		15,197
Liabilities	12,264,867		11,292,435
Consolidated VIEs
Restricted cash and cash equivalents	835,960		699,122
Due from brokers	140,806		209,882
Investments at fair value	11,304,278		10,420,993
Receivables	39,198		36,350
Prepaid and other assets	919		0
Assets	12,321,161		11,366,347
Due to brokers	519,504		606,808
Accrued and other liabilities	3		42
Interest payable	27,177		22,552
Long-term debt at fair value	11,480,641		10,484,975
Liabilities	$ 12,027,325	[1]	$ 11,114,377	[1]

[1] If the Company were to liquidate, the assets of the Consolidated Entities 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 and residual interests of the Consolidated Entities have no recourse to the Company's general assets. Therefore, this debt is not the Company's obligation.

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LONG-TERM DEBT

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

LONG-TERM DEBT

Long-Term Debt

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

	June 30, 2014					December 31, 2013
	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	%	21.3	$	95,000	1.00	%	21.8
October Junior Subordinated Notes (2)	25,000		3.72	%	21.3	25,000		3.73	%	21.8
Total Subordinated Notes Debt	$	120,000	1.57	%	21.3	$	120,000	1.57	%	21.8
Convertible Notes (3)	$	19,697	11.00	%	n/a (3)	$	19,164	10.00	%	3.9
Total recourse debt	$	139,697				$	139,164
Non-recourse Consolidated Entities' debt:
Consolidated CLOs (4)	$	11,042,200	1.58	%	8.7	$	10,336,453	1.43	%	8.3
Warehouses (5)	438,441		1.41	%	n/m	148,522		1.30	%	n/m
Total non-recourse Consolidated Entities' debt	$	11,480,641	1.57	%	8.7	$	10,484,975	1.43	%	8.3
Total long-term debt	$	11,620,338				$	10,624,139

Explanatory Notes:

________________________________

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

(2) October Junior Subordinated Notes bear interest at an annual rate of 3 monthLIBOR plus 3.50% and mature on October 30, 2035.

(3) As of June 30, 2014 and December 31, 2013, Convertible Notes were recorded net of a discount of $5.3 million and $5.8 million, respectively and paid interest at the stated rates of 11.00% and 10.00%, respectively. Including the discount, the effective rate of interest is 18.14% for both periods. The Convertible Notes have a $25.0 million aggregate principal amount. Subsequent to quarter end, Convertible Notes outstanding were converted (see Notes 11 and 14).

(4) Long-term debt of the Consolidated CLOs is recorded at fair value. The subordinated notes of Consolidated CLOs do not have a stated interest rate. Therefore, they are excluded from the calculation of the weighted average borrowing rate. As of June 30, 2014 and December 31, 2013, the par value of the Consolidated CLOs long-term debt (including subordinated notes) was $12.0 billion and $10.9 billion, respectively.

(5) Long-term debt of warehouses not held by the Company is recorded at fair value. The fair value excludes the preferred shares of Warehouse(s) outstanding as of each respective period not held by the Company, which have a par value of $68.6 million and $67.5 million as of June 30, 2014 and December 31, 2013, respectively. They do not have a stated interest rate and are excluded from the calculation of the weighted average borrowing rate.

Recourse Debt

Convertible Notes—On June 18, 2014, the Company gave notice to its convertible note holder of its intention to redeem the notes at their full par value of $25.0 million. On July 12, 2014, the note holder, DFR Holdings LLC, exercised its right to convert the notes into shares of common stock. Pursuant to the agreement, the Convertible Notes converted into 4,132,231 shares of common stock at a conversion price of $6.05 per share. Effective June 9, 2014, cash interest increased from 10% to 11% per annum and Company could call the notes without a prepayment penalty.

Non-Recourse Consolidated Entities Debt

Consolidated CLOs—During the six months ended June 30, 2014, the Consolidated CLOs issued $1.4 billion of debt, paid down $0.9 billion of their outstanding debt, made net borrowings under revolving credit facilities of $9.4 million, and distributed $116.9 million to the holders of their subordinated notes. During the six months ended June 30, 2013, the Consolidated CLOs issued $1.6 billion of debt, paid down $747.3 million of their outstanding debt, made net borrowings under revolving credit facilities of $27.9 million, and distributed $141.1 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 $11.6 billion and $11.0 billion as of June 30, 2014 and December 31, 2013, respectively.

Other Consolidated Entities—The debt and equity holders have recourse to the total assets of the respective Consolidated Entity's assets. See Note 4 for further details of the Company's exposure to loss on Consolidated Entities.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 01, 2014
Document And Entity Information
Entity Registrant Name	CIFC Corp.
Entity Central Index Key	0001313918
Document Type	10-Q
Document Period End Date	Jun. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		25,146,986
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2

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EQUITY

6 Months Ended

Jun. 30, 2014

Stockholders' Equity Note [Abstract]

EQUITY

Equity

Common Stock—On June 18, 2014, the Company gave notice to its convertible note holder of its intention to redeem the notes at their full par value of $25.0 million. On July 12, 2014, the note holder, DFR Holdings LLC, exercised its right to convert the notes into 4,132,231 shares of common stock. See also Note 10 and 14.

During the three and six months ended June 30, 2014, the Company declared cash dividends of $0.10 and $0.20, respectively, per common share. There were no cash dividends declared during the three and six months ended June 30, 2013. Subsequent to quarter end, the Company declared a cash dividend of $0.10 per share which will be paid on September 15, 2014 to shareholders of record as of the close of business on August 25, 2014 (see also Note 16).

Stock-based Compensation—During the three and six months ended June 30, 2014, the Company recorded total stock-based compensation expense for its Stock Options and Restricted Stock Units ("RSU") of $0.6 million and $0.7 million, respectively, and during the three and six months ended June 30, 2013, the Company recorded total stock-based compensation expense of $0.9 million and $1.7 million, respectively, on the Condensed Consolidated Statements of Operations within "Compensation and benefits" and "General and administrative expenses."

As of June 30, 2014, an aggregate of 1,108,592 shares remain available for issuance under the Company's 2011 Stock Plan ("2011 Stock Plan"). During the six months ended June 30, 2014, the Company's Board of Directors approved the second amendment to the 2011 Stock Plan increasing the aggregate number of common shares authorized for issuance under the plan by 2.0 million shares to 6,181,929. As of June 30, 2014, there was $10.9 million of estimated unrecognized compensation expense related to unvested stock option and RSU awards, net of estimated forfeitures. The remaining weighted average vesting period of stock options and RSUs are 1.4 years and 5.7 years, respectively.

Stock Options—The following table summarizes certain Stock Options 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, 2013	3,879,813		$	6.05	5.77	$	5,979
Granted (1)	400,000		8.81
Exercised	(100,000	)	4.83
Forfeited (2)	(325,000	)	5.79
Outstanding at June 30, 2014	3,854,813		$	6.67	5.63	$	9,033
Exercisable at June 30, 2014	2,392,547		$	6.34	3.83	$	6,385
Vested and Expected to vest at June 30, 2014 (3)	3,774,035		$	6.65	5.57	$	8,909

Explanatory Notes:

________________________________

(1) On June 13, 2014, the Company granted to certain executives 200,000 service-based stock options with one-quarter of the awards vesting on January 1, 2015, and 200,000 service-based stock options with one-third of the awards vesting on January 1, 2015. The remainder of these options will vest ratably over the respective remaining term of the option agreements.

(2) The forfeited stock-based awards are returned to the grant pool for reissuance under the 2011 Stock Plan.

(3) Includes 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 weighted average assumptions as of the grant date related to stock-based awards (by period issued) are listed in the table below:

	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2014	2013	2014		2013
Expected dividend yield	4.54%	—	4.54	%	—
Expected volatility	42.65%	n/a	42.65	%	48.75	%
Risk-free interest rate	1.96%	n/a	1.96	%	1.10	%
Expected life (years)	5.77	n/a	5.77		6.11

The stock-based awards granted generally 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. Options granted during 2014 included an expected dividend yield representing what the Company expected to distribute in the foreseeable future at the grant date. All options granted prior to 2014 did not include an expected dividend yield since the Company declared its first dividend in third quarter of 2013. 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.

RSUs—On June 13, 2014, the Company granted 800,000 service-based RSUs to certain executives which vest as follows: (i) 600,000 service-based RSUs comprised of five120,000 RSU tranches, with 20% of the first tranche initially vesting on December 31, 2014, 20% of the second tranche initially vesting on December 31, 2015, 20% of the third tranche initially vesting on December 31, 2016, 20% of the fourth tranche initially vesting on December 31, 2017 and 20% of the fifth tranche initially vesting on December 31, 2018 (each such 20% initial vesting date, the “Initial Vest Date” in respect of such tranche).  Following the Initial Vest Date in respect of each tranche, 5% of the remaining RSUs will vest quarterly over the four year period following the Initial Vest Date in respect of such tranche. (ii) 200,000 service-based RSUs vest over two years. On the same day, the Company also granted 150,000 performance-based RSUs to certain executives which cliff vest on January 1, 2017. These awards are not entitled to dividends, therefore the fair value of these awards were determined using the Company's grant date common stock price less the present value of the expected dividends forgone during the vesting period.

On June 5, 2014, the Company granted 64,396 service-based RSUs to the Company's directors that vest in approximately one year. The awards are entitled to dividend equivalent rights and, as such, the fair value of the awards were determined using the Company's grant date common stock price.

The weighted average grant date fair value of all awards granted above was $7.86.

The following table summarizes restricted stock units activity:

	For the Six Months Ended June 30,
	2014		2013
Restricted stock units outstanding, beginning of period	18,486		103,360
Granted	1,014,396		—
Settled (1)	(7,236	)	(96,124	)
Restricted stock units outstanding, end of period (2)	1,025,646		7,236

Explanatory Notes:

_________________________________

(1) Represents the gross number of RSUs settled during the period with the issuance of common stock to the restricted stock unit holder.  During the six months ended June 30, 2014, the Company issued 7,236 shares of common stock to settle the third 1/3 annual installment of the RSUs granted in 2011. During the six months ended June 30, 2013, the Company issued 88,888 shares of common stock to settle restricted stock grants from 2010 and 7,236 shares of common stock to settle the second 1/3 annual installment of the RSUs granted in 2011.

(2) For 2013, outstanding amount relates to the remaining 2011 grants to certain members of the Board. The 2011 grants were fully vested and delivered as of June 30, 2014.

Profits Interests Awards—During June 2011, CIFC Parent (a related party until December 18, 2013) granted certain employees of the Company profits interests in CIFC Parent. During the three and six months ended June 30, 2014, the Company recorded a non-cash compensation expense of $0.1 million for both periods, and during the three and six months ended June 30, 2013, the Company recorded a non-cash compensation expense of $0.2 million and $1.2 million, respectively, in "Compensation and benefits" on the Condensed Consolidated Statements of Operations related to the amortization and remeasurement of the value of the awards. As of June 30, 2014, there were no estimated unrecognized compensation expense related to these awards.

Warrants—In connection with the restructuring of an investment product formerly managed by the Company, CIFC issued 250,000 warrants. These warrants provides the holders the right to purchase shares of the Company's common stock at an exercise price of $4.25 per share and expired on April 9, 2014. As of December 31, 2013, total warrants outstanding totaled 225,000. During the six months ended June 30, 2014, the holders of the warrants exercised the 225,000 warrants and the Company net share settled for 99,065 of common shares.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
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	21,145,199	20,921,333
Common stock, shares outstanding	21,014,755	20,790,889
Treasury stock, shares	130,444	130,444

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FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair Value

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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

	June 30, 2014								December 31, 2013
	Level 1		Level 2		Level 3		Estimated Fair Value		Level 1		Level 2		Level 3		Estimated Fair Value
	(In thousands)								(In thousands)
Assets
Investments at fair value:
Investment in Funds	$	—	$	—	$	17,082	$	17,082	$	—	$	10,827	$	—	$	10,827
Loans	—		1,022		1,008		2,030		—		5,546		510		6,056
Structured products & other	—		—		5,065		5,065		—		—		—		—
Subtotal	—		1,022		23,155		24,177		—		16,373		510		16,883
Consolidated Entities:
Loans	—		9,544,447		1,852,974		11,397,421		—		8,604,967		1,706,290		10,311,257
Corporate bonds	—		—		6,210		6,210		—		—		16,220		16,220
Structured products & other	—		2,322		86,153		88,475		—		—		93,516		93,516
Total Consolidated Entities	—		9,546,769		1,945,337		11,492,106		—		8,604,967		1,816,026		10,420,993
Total Assets	$	—	$	9,547,791	$	1,968,492	$	11,516,283	$	—	$	8,621,340	$	1,816,536	$	10,437,876
Liabilities
Contingent liabilities	$	—	$	—	$	14,450	$	14,450	$	—	$	—	$	16,961	$	16,961
Consolidated Entities:
Long-term debt (1)	—		—		11,480,641		11,480,641		—		—		10,484,975		10,484,975
Total Consolidated Entities	—		—		11,480,641		11,480,641		—		—		10,484,975		10,484,975
Total Liabilities	$	—	$	—	$	11,495,091	$	11,495,091	$	—	$	—	$	10,501,936	$	10,501,936

Explanatory Note:

______________________________

(1) The Company generally invests in the residual equity of the CLOs it sponsors and invests in the warehouses it issues.

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
	For the Three Months Ended June 30, 2014																							For the Three Months Ended June 30, 2013
	Investments at fair value											Investment Assets of Consolidated Entities												Investment Assets of Consolidated Entities
	Loans			Investments in Funds		Structured Products & Other			Total			Loans			Corporate Bonds			Structured Products & Other			Total			Loans			Corporate Bonds			Structured Products & Other			Total
				(In thousands)
Estimated fair value, beginning of period	$	1,512		$	15,964	$	1,880		$	19,356		$	1,826,333		$	5,893		$	95,486		$	1,927,712		$	1,342,176		$	37,806		$	96,297		$	1,476,279
Transfers into Level 3 (1)	—			—		—			—			446,894			—			—			446,894			170,010			—			—			170,010
Transfers out of Level 3 (2)	—			—		—			—			(593,806		)	—			—			(593,806		)	(474,307		)	—			—			(474,307		)
Transfers in due to consolidation or acquisition	1,008			—		—			1,008			12,081			314			6,256			18,651			—			—			—			—
Transfers between classes	(1,512		)	—		—			(1,512		)	1,512			—			—			1,512			—			—			—			—
Net realized/unrealized gains (losses)	—			1,108		(23		)	1,085			(26,271		)	3			4,069			(22,199		)	(1,574		)	77			6,855			5,358
Purchases	—			10		3,208			3,218			598,719			—			1,475			600,194			453,788			2,038			933			456,759
Sales	—			—		—			—			(164,961		)	—			(15,633		)	(180,594		)	(122,763		)	(23,091		)	(814		)	(146,668		)
Settlements	—			—		—			—			(247,527		)	—			(5,500		)	(253,027		)	(141,633		)	—			—			(141,633		)
Estimated fair value, end of period	$	1,008		$	17,082	$	5,065		$	23,155		$	1,852,974		$	6,210		$	86,153		$	1,945,337		$	1,225,697		$	16,830		$	103,271		$	1,345,798
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	$	7		$	1,108	$	(23	)	$	1,092		$	(10,455	)	$	(51	)	$	(1,655	)	$	(12,161	)	$	(9,050	)	$	134		$	2,137		$	(6,779	)

	Level 3 Financial Assets at Fair Value
	For the Six Months Ended June 30, 2014																							For the Six Months Ended June 30, 2013
	Investments at fair value											Investment Assets of Consolidated Entities												Investment Assets of Consolidated Entities
	Loans			Investments in Funds		Structured Products & Other			Total			Loans			Corporate Bonds			Structured Products & Other			Total			Loans			Corporate Bonds			Structured Products & Other			Total
				(In thousands)
Estimated fair value, beginning of period	$	510		$	—	$	—		$	510		$	1,706,290		$	16,220		$	93,516		$	1,816,026		$	1,177,058		$	67,438		$	81,709		$	1,326,205
Transfers into Level 3 (1)	—			—		—			—			952,630			—			—			952,630			396,080			—			—			396,080
Transfers out of Level 3 (2)	—			—		—			—			(1,150,813		)	—			—			(1,150,813		)	(754,912		)	—			—			(754,912		)
Transfers in due to consolidation or acquisition	1,008			15,964		—			16,972			33,284			314			6,256			39,854			—			—			—			—
Transfers between classes	(510		)	—		—			(510		)	2,021			—			—			2,021			—			—			—			—
Net realized/unrealized gains (losses)	—			1,108		(21		)	1,087			(27,936		)	517			7,597			(19,822		)	9,122			357			10,179			19,658
Purchases	—			10		5,086			5,096			1,050,822			—			1,475			1,052,297			866,876			2,788			19,471			889,135
Sales	—			—		—			—			(313,458		)	(10,841		)	(16,229		)	(340,528		)	(184,862		)	(53,256		)	(7,064		)	(245,182		)
Settlements	—			—		—			—			(399,866		)	—			(6,462		)	(406,328		)	(283,665		)	(497		)	(1,024		)	(285,186		)
Estimated fair value, end of period	$	1,008		$	17,082	$	5,065		$	23,155		$	1,852,974		$	6,210		$	86,153		$	1,945,337		$	1,225,697		$	16,830		$	103,271		$	1,345,798
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	$	—		$	1,108	$	(21	)	$	1,087		$	(9,510	)	$	196		$	2,165		$	(7,149	)	$	4,877		$	148		$	10,694		$	15,719

Explanatory Notes:

______________________________

(1) Transfers in represent loans currently valued by a third party pricing service using composite prices determined using less than two quotes, an internally developed pricing model or broker quotes and that were previously marked by a third party pricing service using composite prices determined from two or more quotes.

(2) Transfers out represent loans previously valued 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 from two or more quotes.

	Level 3 Financial Liabilities at Fair Value
	For the Three Months Ended June 30, 2014									For the Three Months Ended June 30, 2013
	Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Entities			Total			Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Entities			Total
	(In thousands)
Estimated fair value, beginning of period	$	14,974		$	10,724,646		$	10,739,620		$	30,330		$	10,262,893		$	10,293,223
Sale of investments in Consolidated CLOs (1)	—			30,444			30,444			—			12,404			12,404
Transfer in due to consolidation or deconsolidation	—			231,673			231,673			—			—			—
Net realized/unrealized (gains) losses	1,529			55,072			56,601			(613		)	21,286			20,673
Purchases	—			15,300			15,300			—			789,837			789,837
Sales	—			—			—			—			(593,699		)	(593,699		)
Issuances	—			1,347,632			1,347,632			—			—			—
Settlements (2)	(2,053		)	(924,126		)	(926,179		)	(5,940		)	(317,542		)	(323,482		)
Estimated fair value, end of period	$	14,450		$	11,480,641		$	11,495,091		$	23,777		$	10,175,179		$	10,198,956
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period	$	(1,529	)	$	13,112		$	11,583		$	613		$	137,402		$	138,015

	Level 3 Financial Liabilities at Fair Value
	For the Six Months Ended June 30, 2014									For the Six Months Ended June 30, 2013
	Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Entities			Total			Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Entities			Total
	(In thousands)
Estimated fair value, beginning of period	$	16,961		$	10,484,975		$	10,501,936		$	33,783		$	9,596,434		$	9,630,217
Sale of investments in Consolidated CLOs (1)	—			62,445			62,445			—			14,085			14,085
Transfer in due to consolidation or deconsolidation	—			247,303			247,303			—			—			—
Net realized/unrealized (gains) losses	1,758			86,017			87,775			(499		)	73,728			73,229
Purchases	—			24,667			24,667			—			1,923,412			1,923,412
Sales	—			—			—			—			(593,699		)	(593,699		)
Issuances	—			2,458,455			2,458,455			—			—			—
Settlements (2)	(4,269		)	(1,883,221		)	(1,887,490		)	(9,507		)	(838,781		)	(848,288		)
Estimated fair value, end of period	$	14,450		$	11,480,641		$	11,495,091		$	23,777		$	10,175,179		$	10,198,956
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period	$	(1,758	)	$	47,339		$	45,581		$	499		$	89,414		$	89,913

Explanatory Notes:

__________________________

(1) Represents the Company's sales of its residual interests in the Consolidated CLOs. The sale removes the requirement to consolidate the CLOs, therefore, debt and/or subordinated notes of the CLOs are no longer eliminated in consolidation.

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

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. 

Investments in Funds—Investments in Funds represents the Company's investment in certain credit funds where the Company co-invests with third party investors. The fair value of investments in funds are generally determined based on the Company's proportionate share of the Net Asset Value ("NAV") of the fund. When the Company and third party investors have the ability to redeem their investments at their respective proportionate share of NAV at, or within three months of the reporting date, the investments at fair value are classified as Level 2 and when the Company and third party investors do not have the ability to redeem their investment at their proportionate share of NAV at, or within three months of the reporting date, the investments at fair value are classified as Level 3. 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.

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. 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.

Structured Products & Other—Structured products and other primarily represents the fair value of investments in third party CLOs or CDOs which are generally valued via a third-party pricing service. The inputs to the valuation include recent trade information, 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 service's valuation model are generally obtained from active markets, the third-party pricing service does not provide a detailed analysis for each security valued. The Company performs certain procedures on a sample basis to determine that prices approximate fair market value. 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 these assets are classified as Level 3 within the fair value hierarchy.

In addition, included in Structured Products and Other is the Company's warehouse TRS (Note 7). The fair value of the Warehouse TRS is calculated as the sum of (i) the change in fair value of the reference obligations (SSCL's are valued at a composite of the mid-point in the bid-ask spread of broker quotes) since they became reference obligations (ii) net realized gains (losses) on reference obligations sold during the period and (iii) interest income earned on the reference obligations, less an amount equal to LIBOR plus an agreed upon margin on the outstanding notional amount of the reference obligations. The Warehouse TRS is classified as Level 2 within the fair value hierarchy.

Contingent Liabilities—The fair value of contingent liabilities is based on a discounted cash flow model. The model is based on projections of the relevant future management 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 debt and subordinated notes are classified as Level 3 within the fair value hierarchy. Effective June 30, 2014, the fair value of the debt and subordinated notes of the Consolidated CLOs or Warehouses are valued via a third-party pricing service. The inputs to the valuation include recent trade information, 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 service's valuation model are generally obtained from active markets, the third-party pricing service does not provide a detailed analysis for each security valued. The Company performs certain procedures on a sample basis to determine that prices approximate fair market value. 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 these assets are classified as Level 3 within the fair value hierarchy.

Prior to June 30, 2014, the fair value of the debt and subordinated notes of the Consolidated CLOs and Warehouses were based on internally developed discounted cash flow models and utilized both observable and unobservable inputs in the determination of fair value. Significant inputs to the valuation models included the structure of the Consolidated CLOs or Warehouses and estimates related to loan default, recovery and discount rates. These liabilities were classified as Level 3 within the fair value hierarchy.

Quantitative Information about Level 3 Assets & Liabilities

The disclosure provided below provides quantitative information about the significant unobservable inputs used in the valuation of the contingent liabilities and the long-term debt of the Consolidated CLOs. The table excludes the significant unobservable inputs used in valuing investments of the Consolidated CLOs and, effective June 30, 2014, long-term debt of the Consolidated CLOs and Warehouses as they were provided by a third party pricing service.

					June 30, 2014	December 31, 2013	Impact of Increase in Input on Fair Value Measurement (1)
Financial Liabilities	June 30, 2014 Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input	Range	Range
Contingent Liabilities	$	14,450	Discounted cash flows	Discount rate (2)	3.9%-12.5%	5.1%-15.0%	Decrease
				Default rate (3)	1.5-2.0%	2.0%	Decrease
				Recovery rate (3)	70%	70%	Increase
				Pre-payment rate (3)	35-40%	30-40%	Decrease
				Reinvestment spread of assets above LIBOR	3.0-3.8%	3.0-3.8%	Increase
				Reinvestment price of assets	100.0	100.0	Increase
Long-Term Debt of the Consolidated CLOs & Warehouses	$	11,480,641	Discounted cash flows	Discount rate - Debt Tranches (4)	n/a (5)	0.6%-7.1%	Decrease
				Discount rate - Subordinated Note Tranches	n/a (5)	12%	Decrease
				Default rate (3)	n/a (5)	1.0-2.0%	Decrease
				Recovery rate (3)	n/a (5)	70-75%	Increase
				Pre-payment rate (3)	n/a (5)	25-40%	Decrease
				Reinvestment spread of assets above LIBOR	n/a (5)	3.0-3.8%	Increase
				Reinvestment price of assets	n/a (5)	99.5-100.0	Increase

Explanatory Notes:

____________________________

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

(2) The discount rate varies by type of management fee (senior management fee, subordinated management fee, or incentive fee), the priority of that management fee in the waterfall of the CLO and the relative risk associated with the respective management fee cash flow projections. Amounts are presented as a spread over LIBOR.

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

(4) Prior to June 30, 2014, the valuation of long-term debt of the Consolidated CLOs discounted the cash flows of each tranche of debt and subordinated notes provided from the projected cash flow models. The discount rate varies by the original credit rating of each tranche of debt or year of issuance for the subordinated notes. Amounts are presented as a spread over LIBOR.

(5) Although the inputs used in the third-party pricing service's valuation model are generally obtained from active markets, the third-party pricing service does not provide a detailed analysis for each security valued. The Company performs certain procedures on a sample basis to determine that prices approximate fair market value.

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 are as follows:

	As of June 30, 2014				As of December 31, 2013
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
	(In thousands)
Financial liabilities:
Long-term debt:
Convertible Notes (1)	$	19,697	$	37,231	$	19,164	$	32,149
Junior Subordinated Notes (2)	$	120,000	$	63,257	$	120,000	$	63,535

Explanatory Notes:

________________________________

(1) The estimated fair value of the Convertible Notes as of December 31, 2013 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. Subsequent to quarter end, Convertible Notes outstanding were converted (see Notes 10, 11 and 14) therefore as of June 30, 2014, the estimated fair value is classified as Level 1 within the fair value hierarchy.

(2) The Junior Subordinated Notes include both the March and October Junior Subordinated Notes (see Note 10). The estimated fair values of the Junior Subordinated Notes were determined using a discounted cash flow model which utilizes significant unobservable inputs, including discount rates, yield and forward LIBOR curve assumptions.  This methodology is classified as Level 3 within the fair value hierarchy.

The carrying value of all of the following approximate the fair value of the financial instruments and are considered Level 1 in the fair value hierarchy: cash and cash equivalents, restricted cash and cash equivalents, due from brokers, receivables, due to brokers and deferred purchase payments. In addition, amounts in the Consolidated Entities related to due from brokers, restricted cash and cash equivalents, receivables and due to brokers also approximate the fair value of the instruments and are all considered Level 1 on the fair value hierarchy.

Loans and other investments classified as investments at fair value of the Consolidated Entities are diversified over multiple industries. In addition, applicable agreements to CLOs and warehouses outline industry concentration limits. Management does not believe the Company has any significant concentration risks.

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CONSOLIDATED VIEs

6 Months Ended

Jun. 30, 2014

Clos and Consolidated Variable Interest Entities

Consolidated VIEs

Consolidated VIEs

Although the Company consolidates all the assets and liabilities of the Consolidated VIEs (including the Consolidated CLOs and warehouses), its maximum exposure to loss is limited to its investments and beneficial interests in the Consolidated VIEs and the receivables of management fees from the Consolidated VIEs. All of these items are eliminated upon consolidation. The assets of each of the Consolidated VIEs are administered 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 and residual interests 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 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):

	June 30, 2014		December 31, 2013
	(In thousands)
Total Assets	$	11,600,237	$	10,963,096
Total Liabilities (non-recourse)	11,371,999		10,756,652
Maximum exposure to loss:
Investments and beneficial interests (2)	$	33,847	$	49,490
Receivables	3,593		3,836
Total maximum exposure to loss	$	37,440	$	53,326

Explanatory Notes: 

________________________________

(1) In addition, exposure to loss excludes future management fees on the Consolidated VIEs, which are not included in the table above.

(2) Amounts are eliminated in consolidation. As of June 30, 2014 and December 31, 2013, the Company held an investment of $32.5 million and $44.3 million, respectively, directly in the residual interests of its Consolidated CLOs and, through its ownership of credit funds (see Note 2), the Company invested an additional $1.4 million and $5.2 million, respectively, in the residual interests of its Consolidated CLOs.

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

	June 30, 2014						December 31, 2013
	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)	$	720,924	$	655,326	$	65,598	$	403,251	$	357,725	$	42,279

Explanatory Note: 

________________________________

(1) Maximum exposure to loss is generally limited to the Company's investment in the entity. As of June 30, 2014 and December 31, 2013, the Company consolidated three and two warehouses, respectively. Amounts are eliminated in consolidation. As of December 31, 2013, the Company invested $32.5 million directly in its warehouses, and through its ownership of the credit funds (see Note 2), the Company invested an additional $9.7 million in the warehouses. The Company did not have any investments through its ownership of the credit funds as of June 30, 2014.

The table below represents total net results of the Consolidated VIEs included in the net results of the Consolidated Entities on the Condensed Consolidated Statements of Operations:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
Consolidated CLOs	$	32,090	$	48,407	$	80,971	$	96,093
Warehouses (1)	1,316		4,695		1,310		4,067
Net results of Consolidated VIEs	$	33,406	$	53,102	$	82,281	$	100,160

Explanatory Note: 

________________________________

(1) During the three and six months ended June 30, 2014, the Company's results from warehouses included four and five warehouse investments and during the three and six months ended June 30, 2013, the Company's results from warehouses included three and four, warehouse investments, respectively.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Events

Subsequent to quarter end, the Company sponsored the issuance of a new CLO that represented approximately $700 million of new loan-based AUM. In addition, the Company priced another CLO that represented approximately $600 million of new loan-based AUM.

Subsequent to quarter end, the Company declared a cash dividend of $0.10 per share. The dividend will be paid on September 15, 2014 to shareholders of record as of the close of business on August 25, 2014.

On June 18, 2014, the Company gave notice to the convertible note holders of its intention to redeem the notes at their full par value of $25.0 million. On July 12, 2014, the note holder, DFR Holdings, exercised its right to convert the notes into 4,132,231 shares of common stock.

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EARNINGS (LOSS) PER SHARE

6 Months Ended

Jun. 30, 2014

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 ("EPS"):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands, except per share data)
Net income (loss) attributable to CIFC Corp. - basic	$	6,444	$	7,543	$	6,679	$	10,330
Dilutive effect of Convertible Notes (1)	479		455		951		904
Net income (loss) attributable to CIFC Corp. - diluted	$	6,923	$	7,998	$	7,630	$	11,234
Weighted-average shares - basic	20,972		20,809		20,906		20,803
Convertible Notes (1)	4,132		4,132		4,132		4,132
Stock options (2)	630		199		611		252
Warrants	470		461		482		533
Unvested RSUs (2)	9		n/a		10		n/a
Weighted-average shares - diluted	26,213		25,601		26,141		25,720
Earnings (loss) per share
Basic	$	0.31	$	0.36	$	0.32	$	0.50
Diluted	$	0.26	$	0.31	$	0.29	$	0.44

Explanatory Notes:

________________________________

(1) Subsequent to quarter end, the Convertible Notes were converted into 4.1 million shares of common stock to DFR Holdings (see Notes 10, 11 and 14).

(2) For the three and six months ended June 30, 2014, 1.1 million and 0.9 million, respectively, of stock options and 0.4 million and 0.2 million, respectively, of unvested RSUs were considered anti-dilutive and excluded from diluted EPS. For both the three and six months ended June 30, 2013, 1.2 million of stock options were considered anti-dilutive and excluded from diluted EPS.

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INTANGIBLE ASSETS AND GOODWILL

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

Intangible assets are 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)
June 30, 2014:
Investment management contracts	3.6	$	72,941	$	57,634	$	15,307
Referral arrangement	5.3	3,810		953		2,857
Non-compete agreements	3.7	1,535		836		699
Trade name	6.8	1,250		406		844
Total intangible assets		$	79,536	$	59,829	$	19,707
December 31, 2013:
Investment management contracts	4.0	$	72,941	$	52,661	$	20,280
Referral arrangement	5.8	3,810		572		3,238
Non-compete agreements	4.2	1,535		736		799
Trade name	7.3	1,250		344		906
Total intangible assets		$	79,536	$	54,313	$	25,223

Explanatory Notes:

_________________________________

(1) Gross carrying amounts have been adjusted for impaired assets as of the date presented.

(2) During the three and six months ended June 30, 2014, the Company recorded amortization expense on its intangible assets of $2.6 million and $5.5 million, respectively, and during the three and six months ended June 30, 2013, the Company recorded amortization expense on its intangible assets of $4.1 million and $8.1 million, respectively.

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

	(In thousands)
2014 (6 months remaining)	$	4,633
2015	6,796
2016	4,010
2017	2,172
2018	1,527
Thereafter	569
	$	19,707

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 payment on the closing date and contingent payments which were collected during 2013 and 2014. During the six months ended June 30, 2014 and 2013, the Company collected contingent payments of $0.2 million and $0.8 million, respectively, which was reported in "Net gain on the sale of management contract" on the Condensed Consolidated Statements of Operations.

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NET RESULTS OF CONSOLIDATED VIEs

6 Months Ended

Jun. 30, 2014

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

Net Gain (Loss) from Activities of Consolidated Variable Interest Entities [Text Block]

Net Results of Consolidated Entities

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

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(in thousands)
Investment income	$	128,703		$	120,719		$	249,146		$	239,882
Interest expense	(40,799		)	(26,103		)	(76,873		)	(59,024		)
Net investment income	87,904			94,616			172,273			180,858
Net gain (loss) on investments at fair value	7,187			(68,707		)	9,946			12,386
Net gain (loss) on liabilities at fair value	(52,407		)	36,765			(82,701		)	(73,728		)
Net gain (loss) on other investments and derivatives	2,215			(103		)	2,322			(48		)
Net gain (loss) from activities of Consolidated Entities	$	44,899		$	62,571		$	101,840		$	119,468
Expenses of Consolidated Entities	(7,853		)	(9,469		)	(15,712		)	(19,308		)
Net Results of Consolidated Entities (1)	$	37,046		$	53,102		$	86,128		$	100,160

Explanatory Note:

________________________________

(1) See Note 2 for a reconciliation of Net Results from Consolidated Entities attributable to CIFC Corp.

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

6 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

Total Return Swap—During March 2014, the Company, through a warehouse SPV, entered into a total return swap ("TRS")agreement with a third party bank. Under the TRS, the Company received the income on the reference obligations (including gains on terminated reference obligations) and paid the counterparty an amount equal to three month LIBOR plus a margin on the outstanding notional amount of the reference obligations and losses on terminated reference obligations. The Company also consolidates this Warehouse SPV as it is a variable interest entity in which it is deemed the primary beneficiary (see Note 2).

As of June 30, 2014, the notional amount of SSCLs included as reference obligations of the Warehouse TRS was $179.6 million and the Warehouse SPV had $47.4 million (of which $26.5 million represented the Company's investment) of cash posted as collateral under the TRS, which is included within "Restricted cash and cash equivalents" of Consolidated VIEs on the Consolidated Balance Sheets. During the three and six months ended June 30, 2014, the Company recognized net income/expense related to derivative instruments of $2.2 million and $2.3 million, respectively, on the Condensed Consolidated Statement of Operations.

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DEFERRED PURCHASE PAYMENTS AND CONTINGENT LIABILITIES AT FAIR VALUE

6 Months Ended

Jun. 30, 2014

Business Combination, Contingent Consideration Arrangements [Abstract]

CONTINGENT LIABILITIES AT FAIR VALUE

Deferred Purchase Payments and Contingent Liabilities at Fair Value

The Company's Deferred Purchase Payments and Contingent Liabilities at fair value are as follows:

	June 30, 2014		December 31, 2013
	(In thousands)
Deferred purchase payments	$	1,348	$	1,179
Contingent liabilities from the Merger (related party) - Note 14	$	13,238	$	15,349
Contingent liabilities value assumed through the Merger	1,212		1,612
Contingent liabilities at fair value	$	14,450	$	16,961

Deferred Purchase Payments—In April 2011, the Company entered into a merger (the "Merger") with Commercial Industrial Finance Corp. ("Legacy CIFC"). As a result of the Merger, Legacy CIFC became CIFCAM, a wholly-owned subsidiary of CIFC. The consideration for the Merger included the payment to CIFC Parent Holdings LLC ("CIFC Parent"), the sole stockholder of Legacy CIFC, of $7.5 million of cash payable in three equal installments of $2.5 million (subject to certain adjustments). During the six months ended June 30, 2013, the Company made the final deferred purchase payment related to the Merger of $2.5 million leaving no remaining amounts outstanding under this agreement.

In March 2010, the Company entered into an acquisition and investment agreement with DFR Holdings and CNCIM pursuant to which it agreed to acquire all of the equity interests in CNCIM from DFR Holdings. The consideration for the CNCIM acquisition includes deferred purchase payments totaling $7.5 million in cash payable in five equal annual installments beginning in December 2010. The final remaining installment of $1.5 million is payable on December 9, 2014. As of June 30, 2014 and December 31, 2013, the fair value of the remaining deferred purchase payments of $1.3 million and $1.2 million, respectively, was included in the Condensed Consolidated Balance Sheets.

Contingent Liabilities at Fair Value—In addition to the consideration paid in connection with the Merger, the Company was required to pay CIFC Parent a portion of incentive fees earned on six CLOs managed by CIFCAM (the "Legacy CIFC CLOs"). The terms of these payments were as follows: (i) the first $15.0 million of incentive fees received (which was fulfilled in 2013), (ii) 50% of any incentive fees in excess of $15.0 million in aggregate received from the Legacy CIFC CLOs by the combined company over ten years from April 13, 2011 (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 and six months ended June 30, 2014, the Company made total payments of $1.9 million and $3.9 million, respectively, and during the three and six months ended June 30, 2013, the Company made total payments of $4.9 million and $7.8 million, respectively, related to these contingent liabilities. As of June 30, 2014, there are no remaining payments under item (i) and the Company made cumulative payments of $10.4 million under item (ii) to date.

In addition, the Company also assumed contingent liabilities during 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 management fees from the CypressTree CLOs. These fixed percentages vary by CLO. From the Merger Closing Date to June 2013 the minimum fixed percentage was 55%, and effective July 2013, the minimum fixed percentage was 39%. During the three and six months ended June 30, 2014, the Company made payments of $0.2 million and $0.4 million, respectively, and during the three and six months ended June 30, 2013, the Company made payments of $1.1 million and $1.7 million, respectively, related to these contingent 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 June 30,					For the Six Months Ended June 30,
	2014			2013		2014			2013
	(In thousands)
Contingent liabilities from the Merger	$	(1,544	)	$	421	$	(1,765	)	$	345
Contingent liabilities assumed through the Merger	15			192		7			154
Total net gain (loss) on contingent liabilities at fair value	$	(1,529	)	$	613	$	(1,758	)	$	499

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INCOME TAXES 10-Q Effective Tax Rate (Tables)

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Effective Tax Rate [Table Text Block]

The following table summarizes the Company's tax position:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(In thousands)
Income (loss) before income taxes	$	22,745		$	41,033		$	59,730		$	75,084
Income tax expense	$	(6,837	)	$	(6,488	)	$	(19,241	)	$	(9,598	)
Effective income tax rate	30.1		%	15.8		%	32.2		%	12.8		%

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EQUITY (Details 3) (Stock Options, USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended		12 Months Ended	0 Months Ended		6 Months Ended
	Jun. 30, 2014		Dec. 31, 2013	Jun. 13, 2014 2014 Stock Options Grant - A [Member]	Jun. 13, 2014 2014 Stock Options Grant - B [Member]	Jun. 30, 2014 Weighted Average of Exercise Prices on awards granted, exercised and forfeited [Member]
Stock Options Rollforward
Outstanding at the beginning of the period (in shares)	3,879,813
Outstanding Options, Weighted Average Exercise Price at the beginning of the period						$ 6.05
Options, Grants in Period, Gross	400,000	[1]		200,000	200,000
Options, Exercises in Period, gross	(100,000)
Options, Forfeitures and Expirations in Period	(325,000)	[2]
Outstanding at the end of the period (in shares)	3,854,813		3,879,813
Options, Exercisable, Number	2,392,547
Options, Vested and Expected to Vest, Outstanding, Number	3,774,035	[3]
Options, Grants in Period, Weighted Average Exercise Price						$ 8.81	[1]
Options, Exercises in Period, Weighted Average Exercise Price						$ 4.83
Options, Forfeitures in Period, Weighted Average Exercise Price						$ 5.79	[2]
Outstanding Options, Weighted Average Exercise Price at the end of the period						$ 6.67
Options, Exercisable, Weighted Average Exercise Price						$ 6.34
Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price						$ 6.65	[3]
Options, Outstanding, Weighted Average Remaining Contractual Term at the beginning of the period	5 years 7 months 18 days		5 years 9 months 8 days
Options, Outstanding, Weighted Average Remaining Contractual Term at the end of the period	5 years 7 months 18 days		5 years 9 months 8 days
Options, Exercisable, Weighted Average Remaining Contractual Term	3 years 9 months 28 days
Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term	5 years 6 months 25 days	[3]
Options, Outstanding, Intrinsic Value at the beginning of the period	$ 9,033		$ 5,979
Options, Outstanding, Intrinsic Value at the end of the period	9,033		5,979
Options, Exercisable, Intrinsic Value	6,385
Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value	$ 8,909	[3]
Options, 2014 Grants, Initial Vesting Terms				one-quarter	one-third

[1] On June 13, 2014, the Company granted to certain executives 200,000 service-based stock options with one-quarter of the awards vesting on January 1, 2015, and 200,000 service-based stock options with one-third of the awards vesting on January 1, 2015. The remainder of these options will vest ratably over the respective remaining term of the option agreements.

[2] The forfeited stock-based awards are returned to the grant pool for reissuance under the 2011 Stock Plan.

[3] Includes a reduction to outstanding options at period end for expected forfeiture rate over the life of the options.

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

Related Party Transactions

DFR Holdings—As of June 30, 2014 and December 31, 2013, DFR Holdings owned approximately 14.7 million shares of the Company's common stock and $25.0 million aggregate principal amount of the Company's Convertible Notes, which is convertible into approximately 4.1 million shares of the Company's common stock. Subsequent to quarter end, on July 12, 2014, DFR Holdings exercised its right to convert the notes into shares of common stock (see Note 10, 11 and 16). In addition, DFR Holdings held warrants that entitle them the right to purchase 2.0 million shares of the Company's voting common stock. As such, related party transactions also included (i) the interest expense on Convertible notes of $0.9 million and $1.8 million, respectively, during the three and six months ended June 30, 2014 and $0.9 million and $1.7 million, respectively, during the three and six months ended June 30, 2013, (ii) deferred purchase payments (see Note 9), and (iii) quarterly dividends (see Note 11). For the three and six months ended June 30, 2013, total management fees from related parties was $13,000 and $25,000, respectively. The Company did not earn any management fees from DFR Holdings for the three and six months ended June 30, 2014.

The Company agreed to nominate to the Company's Board of Directors six directors designated by DFR Holdings. The number of directors that can be designated by DFR Holdings is reduced in the event that DFR Holdings decreases its ownership (on a diluted basis) in CIFC. If DFR Holdings' ownership falls below 5%, it will lose the right to designate any director. During the three and six months ended June 30, 2014, the directors earned an aggregate $0.2 million and $0.3 million, respectively, related to their services.

CIFC Parent—As of June 30, 2014, CIFC Parent no longer owns common shares of the Company. However, during the three and six months ended June 30, 2013, CIFC Parent held 9.1 million shares of the Company's common stock and invested in CLOs managed by the Company.

As such, related party transactions for the three and six months ended June 30, 2014, included (i) contingent liabilities payments to CIFC Parent (see Note 9), (ii) CIFC Parent's investment of $1.3 million in two Consolidated Funds managed by the Company as of June 30, 2014, (iii) fees to the Company for providing certain administrative services to CIFC Parent, and (iv) profits interests in CIFC Parent granted during 2011 to certain employees of the Company (see Note 11). As of June 30, 2014 and December 31, 2013, total management fee receivables due from related parties was $12,500 and $167,000, respectively. For the three and six months ended June 30, 2014, total management fees from related parties was $12,500 and $25,000, respectively, and for the three and six months ended June 30, 2013, total management fees from related parties was $46,000 and $93,000, respectively.

Other—As of June 30, 2014 and December 31, 2013, a board member holds $1.0 million of income notes in one of the Company's sponsored CLOs, CIFC Funding 2013-II, Ltd., through an entity in which he is a 50% equity holder.

Funds—As of June 30, 2014, employees and directors of the Company invested an aggregate $3.5 million in three different funds which the Company invests in and manages. Employees are not charged a management fee on their investment. Directors were charged a fee, similar to certain other investors. For the three and six months ended June 30, 2014, these amounts were de minimis.

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CONSOLIDATED VIEs (Tables)

6 Months Ended

Jun. 30, 2014

Clos and Consolidated Variable Interest Entities

Schedule of Consolidated VIE assets, non-recourse liabilities and maximum exposure [Table Text Block]

The following table summarizes the 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):

	June 30, 2014		December 31, 2013
	(In thousands)
Total Assets	$	11,600,237	$	10,963,096
Total Liabilities (non-recourse)	11,371,999		10,756,652
Maximum exposure to loss:
Investments and beneficial interests (2)	$	33,847	$	49,490
Receivables	3,593		3,836
Total maximum exposure to loss	$	37,440	$	53,326

Explanatory Notes: 

________________________________

(1) In addition, exposure to loss excludes future management fees on the Consolidated VIEs, which are not included in the table above.

(2) Amounts are eliminated in consolidation. As of June 30, 2014 and December 31, 2013, the Company held an investment of $32.5 million and $44.3 million, respectively, directly in the residual interests of its Consolidated CLOs and, through its ownership of credit funds (see Note 2), the Company invested an additional $1.4 million and $5.2 million, respectively, in the residual interests of its Consolidated CLOs.

Schedule of Consolidated Warehouses' assets, non-recourse liabilities and maximum exposure [Table Text Block]

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

	June 30, 2014						December 31, 2013
	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)	$	720,924	$	655,326	$	65,598	$	403,251	$	357,725	$	42,279

Explanatory Note: 

________________________________

(1) Maximum exposure to loss is generally limited to the Company's investment in the entity. As of June 30, 2014 and December 31, 2013, the Company consolidated three and two warehouses, respectively. Amounts are eliminated in consolidation. As of December 31, 2013, the Company invested $32.5 million directly in its warehouses, and through its ownership of the credit funds (see Note 2), the Company invested an additional $9.7 million in the warehouses. The Company did not have any investments through its ownership of the credit funds as of June 30, 2014.

Schedule of Variable Interest Entities

The table below represents total net results of the Consolidated VIEs included in the net results of the Consolidated Entities on the Condensed Consolidated Statements of Operations:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
Consolidated CLOs	$	32,090	$	48,407	$	80,971	$	96,093
Warehouses (1)	1,316		4,695		1,310		4,067
Net results of Consolidated VIEs	$	33,406	$	53,102	$	82,281	$	100,160

Explanatory Note: 

________________________________

(1) During the three and six months ended June 30, 2014, the Company's results from warehouses included four and five warehouse investments and during the three and six months ended June 30, 2013, the Company's results from warehouses included three and four, warehouse investments, respectively.

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EQUITY (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended	6 Months Ended		12 Months Ended	0 Months Ended
	Jun. 30, 2014	Jun. 30, 2014	Jun. 30, 2014 Common Stock	Dec. 31, 2013 Common Stock	Aug. 25, 2014 Dividend Declared	Jun. 30, 2014 Convertible Debt	Jun. 18, 2014 Convertible Debt
Common Stock
Debt Instrument, Face Amount						$ 25.0	$ 25.0
Conversion shares			4,132,231	4,132,231
Dividends Declared	$ 0.10	$ 0.20			$ 0.10

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Level 3 Financial Liabilities at Fair Value
Estimated fair value, beginning of period	$ 10,739,620		$ 10,293,223		$ 10,501,936		$ 9,630,217
Sale of investments in Consolidated CLOs (1)	30,444	[1]	12,404	[2]	62,445	[1]	14,085	[1]
Transfer in due to consolidation or deconsolidation	231,673		0		247,303		0
Net realized/unrealized (gains) losses	56,601		20,673		87,775		73,229
Purchases	15,300		789,837		24,667		1,923,412
Sales	0		593,699		0		593,699
Issuances	1,347,632		0		2,458,455		0
Settlements	(926,179)	[3]	(323,482)	[3]	(1,887,490)	[3]	(848,288)	[3]
Estimated fair value, end of period	11,495,091		10,198,956		11,495,091		10,198,956
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period	11,583		138,015		45,581		89,913
Contingent Liabilities at Fair Value
Level 3 Financial Liabilities at Fair Value
Estimated fair value, beginning of period	14,974		30,330		16,961		33,783
Net realized/unrealized (gains) losses	1,529		(613)		1,758		(499)
Settlements	(2,053)	[3]	(5,940)	[3]	(4,269)	[3]	(9,507)	[3]
Estimated fair value, end of period	14,450		23,777		14,450		23,777
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period	(1,529)		613		(1,758)		499
Long-term Debt | Consolidated Entities
Level 3 Financial Liabilities at Fair Value
Estimated fair value, beginning of period	10,724,646		10,262,893		10,484,975		9,596,434
Sale of investments in Consolidated CLOs (1)	30,444	[1]	12,404	[2]	62,445	[1]	14,085	[1]
Transfer in due to consolidation or deconsolidation	231,673		0		247,303		0
Net realized/unrealized (gains) losses	55,072		21,286		86,017		73,728
Purchases	15,300		789,837		24,667		1,923,412
Sales	0		(593,699)		0		(593,699)
Issuances	1,347,632		0		2,458,455		0
Settlements	(924,126)	[3]	(317,542)	[3]	(1,883,221)	[3]	(838,781)	[3]
Estimated fair value, end of period	11,480,641		10,175,179		11,480,641		10,175,179
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period	$ 13,112		$ 137,402		$ 47,339		$ 89,414

[1] Represents the Company's sales of its residual interests in the Consolidated CLOs. The sale removes the requirement to consolidate the CLOs, therefore, debt and/or subordinated notes of the CLOs are no longer eliminated in consolidation.

[2] During the three and six months ended June 30, 2014, the Company's results from warehouses included four and five warehouse investments and during the three and six months ended June 30, 2013, the Company's results from warehouses included three and four, warehouse investments, respectively.

[3] For Contingent Liabilities at fair value, amount represents payments made related to the contingent liabilities assumed for the Merger with Legacy CIFC.

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues
Management fees	$ 1,378	$ 2,240	$ 2,990	$ 4,883
Net interest income from investments	97	106	194	97
Total net revenues	1,475	2,346	3,184	4,980
Expenses
Compensation and benefits	8,047	6,986	15,387	14,510
Professional services	706	715	1,752	2,638
General and administrative expenses	2,259	1,843	4,472	3,327
Depreciation and amortization	2,870	4,278	6,015	8,496
Total expenses	13,882	13,822	27,626	28,971
Other Income (Expense) and Gain (Loss)
Net gain (loss) on investments at fair value	1,121	251	2,527	600
Net gain (loss) on contingent liabilities at fair value (Note 9)	(1,529)	613	(1,758)	499
Corporate interest expense	(1,486)	(1,452)	(2,953)	(2,934)
Net gain on the sale of management contract			228	752
Other, net	0	(5)	0	(2)
Net other income (expense) and gain (loss)	(1,894)	(593)	(1,956)	(1,085)
Operating income (loss)	(14,301)	(12,069)	(26,398)	(25,076)
Net income (loss)
Income (loss) before income taxes	22,745	41,033	59,730	75,084
Income tax (expense) benefit	(6,837)	(6,488)	(19,241)	(9,598)
Net income (loss)	15,908	34,545	40,489	65,486
Net results from Consolidated Entities attributable to CIFC Corp.	6,444	7,543	6,679	10,330
Earnings (loss) per share
Earnings (loss) per share, Basic	$ 0.31	$ 0.36	$ 0.32	$ 0.50
Earnings (loss) per share, Diluted	$ 0.26	$ 0.31	$ 0.29	$ 0.44
Weighted-average number of shares outstanding -
Weighted Average Number of Shares Outstanding, Basic	20,971,928	20,808,750	20,905,949	20,803,151
Weighted Average Number of Shares Outstanding, Diluted	26,212,593	25,601,165	26,141,070	25,719,972
Dividends Declared	$ 0.10		$ 0.20
Consolidated Entities
Revenues
Net interest income from investments	87,904	94,616	172,273	180,858
Other Income (Expense) and Gain (Loss)
Net gain (loss) on investments at fair value	7,187	(68,707)	9,946	12,386
Net gain (loss) on contingent liabilities at fair value (Note 9)	(52,407)	36,765	(82,701)	(73,728)
Results of Consolidated Variable Interest Entities
Net results of Consolidated Entities (Note 6)	37,046	53,102	86,128	100,160
Net income (loss)
Net (income) loss attributable to noncontrolling interest in Consolidated Entities	(9,464)	(27,002)	(33,810)	(55,156)
Net results from Consolidated Entities attributable to CIFC Corp.	$ 27,582	$ 26,100	$ 52,318	$ 45,004

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING UPDATES

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies and Recent Accounting Updates

Summary of Significant Accounting Policies and Recent Accounting Updates

As of June 30, 2014, 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, 2013, have not changed.

Recent Accounting Updates

In June 2013, the FASB issued Accounting Standards Update ("ASU") 2013-08, Financial Services—Investment Companies, which amends the scope, measurement, and disclosure requirements for investment companies. This ASU amends the requirements related to qualifying for the “investment-company deferral“ under ASU 2010-10, Consolidation. This guidance was effective for the Company's fiscal year beginning January 1, 2014. The adoption of this guidance did not have a material impact on the Company's Condensed Consolidated Financial Statements.

In July 2013, the FASB issued ASU 2013-11, Income Taxes, which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss ("NOL") carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance was effective for the Company's fiscal year beginning January 1, 2014. The adoption of this guidance did not have an impact on the Company's Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard clarifies the required factors that an entity must consider when recognizing revenue and also requires additional disclosures. ASU 2014-09 is effective for the Company beginning January 1, 2017. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is evaluating the impact ASU 2014-09 will have on the Company's Condensed Consolidated Financial Statements.

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2014

Assets and liabilities measured at fair value

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:

	June 30, 2014								December 31, 2013
	Level 1		Level 2		Level 3		Estimated Fair Value		Level 1		Level 2		Level 3		Estimated Fair Value
	(In thousands)								(In thousands)
Assets
Investments at fair value:
Investment in Funds	$	—	$	—	$	17,082	$	17,082	$	—	$	10,827	$	—	$	10,827
Loans	—		1,022		1,008		2,030		—		5,546		510		6,056
Structured products & other	—		—		5,065		5,065		—		—		—		—
Subtotal	—		1,022		23,155		24,177		—		16,373		510		16,883
Consolidated Entities:
Loans	—		9,544,447		1,852,974		11,397,421		—		8,604,967		1,706,290		10,311,257
Corporate bonds	—		—		6,210		6,210		—		—		16,220		16,220
Structured products & other	—		2,322		86,153		88,475		—		—		93,516		93,516
Total Consolidated Entities	—		9,546,769		1,945,337		11,492,106		—		8,604,967		1,816,026		10,420,993
Total Assets	$	—	$	9,547,791	$	1,968,492	$	11,516,283	$	—	$	8,621,340	$	1,816,536	$	10,437,876
Liabilities
Contingent liabilities	$	—	$	—	$	14,450	$	14,450	$	—	$	—	$	16,961	$	16,961
Consolidated Entities:
Long-term debt (1)	—		—		11,480,641		11,480,641		—		—		10,484,975		10,484,975
Total Consolidated Entities	—		—		11,480,641		11,480,641		—		—		10,484,975		10,484,975
Total Liabilities	$	—	$	—	$	11,495,091	$	11,495,091	$	—	$	—	$	10,501,936	$	10,501,936

Explanatory Note:

______________________________

(1) The Company generally invests in the residual equity of the CLOs it sponsors and invests in the warehouses it issues.

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
	For the Three Months Ended June 30, 2014																							For the Three Months Ended June 30, 2013
	Investments at fair value											Investment Assets of Consolidated Entities												Investment Assets of Consolidated Entities
	Loans			Investments in Funds		Structured Products & Other			Total			Loans			Corporate Bonds			Structured Products & Other			Total			Loans			Corporate Bonds			Structured Products & Other			Total
				(In thousands)
Estimated fair value, beginning of period	$	1,512		$	15,964	$	1,880		$	19,356		$	1,826,333		$	5,893		$	95,486		$	1,927,712		$	1,342,176		$	37,806		$	96,297		$	1,476,279
Transfers into Level 3 (1)	—			—		—			—			446,894			—			—			446,894			170,010			—			—			170,010
Transfers out of Level 3 (2)	—			—		—			—			(593,806		)	—			—			(593,806		)	(474,307		)	—			—			(474,307		)
Transfers in due to consolidation or acquisition	1,008			—		—			1,008			12,081			314			6,256			18,651			—			—			—			—
Transfers between classes	(1,512		)	—		—			(1,512		)	1,512			—			—			1,512			—			—			—			—
Net realized/unrealized gains (losses)	—			1,108		(23		)	1,085			(26,271		)	3			4,069			(22,199		)	(1,574		)	77			6,855			5,358
Purchases	—			10		3,208			3,218			598,719			—			1,475			600,194			453,788			2,038			933			456,759
Sales	—			—		—			—			(164,961		)	—			(15,633		)	(180,594		)	(122,763		)	(23,091		)	(814		)	(146,668		)
Settlements	—			—		—			—			(247,527		)	—			(5,500		)	(253,027		)	(141,633		)	—			—			(141,633		)
Estimated fair value, end of period	$	1,008		$	17,082	$	5,065		$	23,155		$	1,852,974		$	6,210		$	86,153		$	1,945,337		$	1,225,697		$	16,830		$	103,271		$	1,345,798
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	$	7		$	1,108	$	(23	)	$	1,092		$	(10,455	)	$	(51	)	$	(1,655	)	$	(12,161	)	$	(9,050	)	$	134		$	2,137		$	(6,779	)

	Level 3 Financial Assets at Fair Value
	For the Six Months Ended June 30, 2014																							For the Six Months Ended June 30, 2013
	Investments at fair value											Investment Assets of Consolidated Entities												Investment Assets of Consolidated Entities
	Loans			Investments in Funds		Structured Products & Other			Total			Loans			Corporate Bonds			Structured Products & Other			Total			Loans			Corporate Bonds			Structured Products & Other			Total
				(In thousands)
Estimated fair value, beginning of period	$	510		$	—	$	—		$	510		$	1,706,290		$	16,220		$	93,516		$	1,816,026		$	1,177,058		$	67,438		$	81,709		$	1,326,205
Transfers into Level 3 (1)	—			—		—			—			952,630			—			—			952,630			396,080			—			—			396,080
Transfers out of Level 3 (2)	—			—		—			—			(1,150,813		)	—			—			(1,150,813		)	(754,912		)	—			—			(754,912		)
Transfers in due to consolidation or acquisition	1,008			15,964		—			16,972			33,284			314			6,256			39,854			—			—			—			—
Transfers between classes	(510		)	—		—			(510		)	2,021			—			—			2,021			—			—			—			—
Net realized/unrealized gains (losses)	—			1,108		(21		)	1,087			(27,936		)	517			7,597			(19,822		)	9,122			357			10,179			19,658
Purchases	—			10		5,086			5,096			1,050,822			—			1,475			1,052,297			866,876			2,788			19,471			889,135
Sales	—			—		—			—			(313,458		)	(10,841		)	(16,229		)	(340,528		)	(184,862		)	(53,256		)	(7,064		)	(245,182		)
Settlements	—			—		—			—			(399,866		)	—			(6,462		)	(406,328		)	(283,665		)	(497		)	(1,024		)	(285,186		)
Estimated fair value, end of period	$	1,008		$	17,082	$	5,065		$	23,155		$	1,852,974		$	6,210		$	86,153		$	1,945,337		$	1,225,697		$	16,830		$	103,271		$	1,345,798
Change in unrealized gains (losses) for the period for the assets held as of the end of the period	$	—		$	1,108	$	(21	)	$	1,087		$	(9,510	)	$	196		$	2,165		$	(7,149	)	$	4,877		$	148		$	10,694		$	15,719

Explanatory Notes:

______________________________

(1) Transfers in represent loans currently valued by a third party pricing service using composite prices determined using less than two quotes, an internally developed pricing model or broker quotes and that were previously marked by a third party pricing service using composite prices determined from two or more quotes.

(2) Transfers out represent loans previously valued 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 from two or more quotes.

	Level 3 Financial Liabilities at Fair Value
	For the Three Months Ended June 30, 2014									For the Three Months Ended June 30, 2013
	Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Entities			Total			Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Entities			Total
	(In thousands)
Estimated fair value, beginning of period	$	14,974		$	10,724,646		$	10,739,620		$	30,330		$	10,262,893		$	10,293,223
Sale of investments in Consolidated CLOs (1)	—			30,444			30,444			—			12,404			12,404
Transfer in due to consolidation or deconsolidation	—			231,673			231,673			—			—			—
Net realized/unrealized (gains) losses	1,529			55,072			56,601			(613		)	21,286			20,673
Purchases	—			15,300			15,300			—			789,837			789,837
Sales	—			—			—			—			(593,699		)	(593,699		)
Issuances	—			1,347,632			1,347,632			—			—			—
Settlements (2)	(2,053		)	(924,126		)	(926,179		)	(5,940		)	(317,542		)	(323,482		)
Estimated fair value, end of period	$	14,450		$	11,480,641		$	11,495,091		$	23,777		$	10,175,179		$	10,198,956
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period	$	(1,529	)	$	13,112		$	11,583		$	613		$	137,402		$	138,015

	Level 3 Financial Liabilities at Fair Value
	For the Six Months Ended June 30, 2014									For the Six Months Ended June 30, 2013
	Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Entities			Total			Contingent Liabilities at Fair Value			Long-term Debt of Consolidated Entities			Total
	(In thousands)
Estimated fair value, beginning of period	$	16,961		$	10,484,975		$	10,501,936		$	33,783		$	9,596,434		$	9,630,217
Sale of investments in Consolidated CLOs (1)	—			62,445			62,445			—			14,085			14,085
Transfer in due to consolidation or deconsolidation	—			247,303			247,303			—			—			—
Net realized/unrealized (gains) losses	1,758			86,017			87,775			(499		)	73,728			73,229
Purchases	—			24,667			24,667			—			1,923,412			1,923,412
Sales	—			—			—			—			(593,699		)	(593,699		)
Issuances	—			2,458,455			2,458,455			—			—			—
Settlements (2)	(4,269		)	(1,883,221		)	(1,887,490		)	(9,507		)	(838,781		)	(848,288		)
Estimated fair value, end of period	$	14,450		$	11,480,641		$	11,495,091		$	23,777		$	10,175,179		$	10,198,956
Change in unrealized gains (losses) for the period for the liabilities outstanding as of the end of the period	$	(1,758	)	$	47,339		$	45,581		$	499		$	89,414		$	89,913

Explanatory Notes:

__________________________

(1) Represents the Company's sales of its residual interests in the Consolidated CLOs. The sale removes the requirement to consolidate the CLOs, therefore, debt and/or subordinated notes of the CLOs are no longer eliminated in consolidation.

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

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 are as follows:

	As of June 30, 2014				As of December 31, 2013
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
	(In thousands)
Financial liabilities:
Long-term debt:
Convertible Notes (1)	$	19,697	$	37,231	$	19,164	$	32,149
Junior Subordinated Notes (2)	$	120,000	$	63,257	$	120,000	$	63,535

Explanatory Notes:

________________________________

(1) The estimated fair value of the Convertible Notes as of December 31, 2013 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. Subsequent to quarter end, Convertible Notes outstanding were converted (see Notes 10, 11 and 14) therefore as of June 30, 2014, the estimated fair value is classified as Level 1 within the fair value hierarchy.

(2) The Junior Subordinated Notes include both the March and October Junior Subordinated Notes (see Note 10). The estimated fair values of the Junior Subordinated Notes were determined using a discounted cash flow model which utilizes significant unobservable inputs, including discount rates, yield and forward LIBOR curve assumptions.  This methodology is classified as Level 3 within the fair value hierarchy.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The disclosure provided below provides quantitative information about the significant unobservable inputs used in the valuation of the contingent liabilities and the long-term debt of the Consolidated CLOs. The table excludes the significant unobservable inputs used in valuing investments of the Consolidated CLOs and, effective June 30, 2014, long-term debt of the Consolidated CLOs and Warehouses as they were provided by a third party pricing service.

					June 30, 2014	December 31, 2013	Impact of Increase in Input on Fair Value Measurement (1)
Financial Liabilities	June 30, 2014 Fair Value (in thousands)		Valuation Technique	Significant Unobservable Input	Range	Range
Contingent Liabilities	$	14,450	Discounted cash flows	Discount rate (2)	3.9%-12.5%	5.1%-15.0%	Decrease
				Default rate (3)	1.5-2.0%	2.0%	Decrease
				Recovery rate (3)	70%	70%	Increase
				Pre-payment rate (3)	35-40%	30-40%	Decrease
				Reinvestment spread of assets above LIBOR	3.0-3.8%	3.0-3.8%	Increase
				Reinvestment price of assets	100.0	100.0	Increase
Long-Term Debt of the Consolidated CLOs & Warehouses	$	11,480,641	Discounted cash flows	Discount rate - Debt Tranches (4)	n/a (5)	0.6%-7.1%	Decrease
				Discount rate - Subordinated Note Tranches	n/a (5)	12%	Decrease
				Default rate (3)	n/a (5)	1.0-2.0%	Decrease
				Recovery rate (3)	n/a (5)	70-75%	Increase
				Pre-payment rate (3)	n/a (5)	25-40%	Decrease
				Reinvestment spread of assets above LIBOR	n/a (5)	3.0-3.8%	Increase
				Reinvestment price of assets	n/a (5)	99.5-100.0	Increase

Explanatory Notes:

____________________________

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

(2) The discount rate varies by type of management fee (senior management fee, subordinated management fee, or incentive fee), the priority of that management fee in the waterfall of the CLO and the relative risk associated with the respective management fee cash flow projections. Amounts are presented as a spread over LIBOR.

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

(4) Prior to June 30, 2014, the valuation of long-term debt of the Consolidated CLOs discounted the cash flows of each tranche of debt and subordinated notes provided from the projected cash flow models. The discount rate varies by the original credit rating of each tranche of debt or year of issuance for the subordinated notes. Amounts are presented as a spread over LIBOR.

(5)

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CONSOLIDATED VIEs (Details) (USD $)	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013		Dec. 31, 2013
Consolidated Variable Interest Entities
Consolidated Warehouse Investments Held During	4		3		5		4
Consolidated CLOs of CIFC Corp | Investment and beneficial interests in CLOs
Consolidated Variable Interest Entities
Maximum exposure to loss	$ 32,500,000				$ 32,500,000				$ 44,300,000
Funds [Member] | Investment and beneficial interests in CLOs
Consolidated Variable Interest Entities
Maximum exposure to loss	1,400,000				1,400,000				5,200,000
Consolidated VIEs
Consolidated Variable Interest Entities
Net results of Consolidated Entities	33,406,000		53,102,000		82,281,000		100,160,000
Warehouses
Consolidated Variable Interest Entities
Consolidated assets	720,924,000				720,924,000				403,251,000
Consolidated liabilities	655,326,000				655,326,000				357,725,000
Maximum exposure to loss	65,598,000	[1]			65,598,000	[1]			42,279,000	[1]
Short-term Investments									32,500,000
Consolidated Warehouse Investments Held	3				3				2
Net results of Consolidated Entities	1,316,000	[2]	4,695,000	[2]	1,310,000	[2]	4,067,000	[2]
Consolidated CLOs
Consolidated Variable Interest Entities
Consolidated assets	11,600,237,000				11,600,237,000				10,963,096,000
Consolidated liabilities	11,371,999,000				11,371,999,000				10,756,652,000
Maximum exposure to loss	37,440,000				37,440,000				53,326,000
Net results of Consolidated Entities	32,090,000		48,407,000		80,971,000		96,093,000
Consolidated CLOs | Investment and beneficial interests in CLOs
Consolidated Variable Interest Entities
Maximum exposure to loss	33,847,000	[3]			33,847,000	[3]			49,490,000	[3]
Consolidated CLOs | Investment advisory fee receivables
Consolidated Variable Interest Entities
Maximum exposure to loss	3,593,000				3,593,000				3,836,000
Co-Investment Fund
Consolidated Variable Interest Entities
Short-term Investments									$ 9,700,000

[1] Maximum exposure to loss is generally limited to the Company's investment in the entity. As of June 30, 2014 and December 31, 2013, the Company consolidated three and two warehouses, respectively. Amounts are eliminated in consolidation. As of December 31, 2013, the Company invested $32.5 million directly in its warehouses, and through its ownership of the credit funds (see Note 2), the Company invested an additional $9.7 million in the warehouses. The Company did not have any investments through its ownership of the credit funds as of June 30, 2014.

[2] During the three and six months ended June 30, 2014, the Company's results from warehouses included four and five warehouse investments and during the three and six months ended June 30, 2013, the Company's results from warehouses included three and four, warehouse investments, respectively.

[3] Amounts are eliminated in consolidation. As of June 30, 2014 and December 31, 2013, the Company held an investment of $32.5 million and $44.3 million, respectively, directly in the residual interests of its Consolidated CLOs and, through its ownership of credit funds (see Note 2), the Company invested an additional $1.4 million and $5.2 million, respectively, in the residual interests of its Consolidated CLOs.

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INCOME TAXES 10-Q (Notes)

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Income Taxes

The following table summarizes the Company's tax position:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(In thousands)
Income (loss) before income taxes	$	22,745		$	41,033		$	59,730		$	75,084
Income tax expense	$	(6,837	)	$	(6,488	)	$	(19,241	)	$	(9,598	)
Effective income tax rate	30.1		%	15.8		%	32.2		%	12.8		%

The effective tax rate, including noncontrolling interests in Consolidated VIEs, was 30.1% and 32.2%, respectively, during the three and six months ended June 30, 2014 and 15.8% and 12.8%, respectively, during the three and six months ended June 30, 2013. The increase in the effective tax rate compared with the prior year was primarily attributable to the write-down of deferred tax assets impacted by tax law changes enacted by New York State on March 31, 2014 that are effective for tax years beginning on or after January 1, 2015 and decrease in the Consolidated VIEs noncontrolling interest income/(loss), which is included in pre-tax income/(loss) but is not taxable to CIFC Corp. During the six months ended June 30, 2014, the Company included a tax expense of approximately $6.7 million related to the change in New York State tax laws. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the result of new judicial interpretations or changes in tax laws or regulations.