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FAIR VALUE (Tables)
9 Months Ended
Sep. 30, 2021
Fair Value Disclosures [Abstract]  
Fair Value, by Balance Sheet Grouping The Company’s other financial assets and financial liabilities by fair-value hierarchy level are set forth below. Please see notes 8 and 16 for the fair value of the Company’s outstanding debt obligations and amounts due from/to affiliates, respectively.
As of September 30, 2021As of December 31, 2020
Level ILevel IILevel IIITotalLevel ILevel IILevel IIITotal
Assets
U.S. Treasury and other securities (1)
$6,477 $— $— $6,477 $9,562 $— $— $9,562 
Corporate investments63,854 4,529 32,639 101,022 — 4,575 27,045 31,620 
Foreign-currency forward contracts (2)
— 5,095 — 5,095 — 459 — 459 
Total assets$70,331 $9,624 $32,639 $112,594 $9,562 $5,034 $27,045 $41,641 
Liabilities
Foreign-currency forward contracts (3)
$— $(407)$— $(407)$— $(20,051)$— $(20,051)
(1)    For U.S. Treasury securities the carrying value approximates fair value due to their short-term nature and are classified as Level I investments within the fair value hierarchy detailed above.
(2)    Amounts are included in other assets, except for $2,345 as of September 30, 2021, which is included within corporate investments in the consolidated statements of financial condition.
(3)    Amounts are included in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition, except for $147 and $16,191 as of September 30, 2021 and December 31, 2020, respectively, which are included within corporate investments in the condensed consolidated statements of financial condition.
Summary of Changes in Fair Value of Level III Investments
The table below sets forth a summary of changes in the fair value of Level III financial instruments:
Three months ended September 30,
20212020
Corporate Investments:
Beginning balance$32,771 $22,022 
Contributions or additions257 772 
Distributions(141)(1,996)
Net gain (loss) included in earnings(248)2,536 
Ending balance$32,639 $23,334 
Net change in unrealized gains (losses) attributable to financial instruments still held at end of period $(436)$2,536 
Nine months ended September 30,
20212020
Corporate Investments:
Beginning balance$27,045 $30,311 
Contributions or additions10,475 2,562 
Distributions(14,165)(6,993)
Net gain (loss) included in earnings9,284 (2,546)
Ending balance$32,639 $23,334 
Net change in unrealized losses attributable to financial instruments still held at end of period $(7,968)$(989)
The table below sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the Company’s Level III financial instruments:
Fair Value as ofSignificant Unobservable Input
Financial InstrumentSeptember 30, 2021December 31, 2020Valuation TechniqueRangeWeighted Average
Corporate investment – Limited partnership interests
$32,639 $27,045 Market approach
(value of underlying assets)
Not applicableNot applicableNot applicable
Summary of Changes in Fair Value of Level III Investments
The table below sets forth a summary of changes in the fair value of Level III financial instruments:
Three months ended September 30,
20212020
Corporate Investments:
Beginning balance$32,771 $22,022 
Contributions or additions257 772 
Distributions(141)(1,996)
Net gain (loss) included in earnings(248)2,536 
Ending balance$32,639 $23,334 
Net change in unrealized gains (losses) attributable to financial instruments still held at end of period $(436)$2,536 
Nine months ended September 30,
20212020
Corporate Investments:
Beginning balance$27,045 $30,311 
Contributions or additions10,475 2,562 
Distributions(14,165)(6,993)
Net gain (loss) included in earnings9,284 (2,546)
Ending balance$32,639 $23,334 
Net change in unrealized losses attributable to financial instruments still held at end of period $(7,968)$(989)
The table below sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the Company’s Level III financial instruments:
Fair Value as ofSignificant Unobservable Input
Financial InstrumentSeptember 30, 2021December 31, 2020Valuation TechniqueRangeWeighted Average
Corporate investment – Limited partnership interests
$32,639 $27,045 Market approach
(value of underlying assets)
Not applicableNot applicableNot applicable
The following tables set forth a summary of changes in the fair value of Level III investments:
Corporate Debt – Bank DebtCorporate Debt – All OtherEquities – Common StockEquities – Preferred StockReal EstateTotal
Three months ended September 30, 2021    
Beginning balance$421,031 $176,598 $350,194 $192,185 $45,666 $1,185,674 
Deconsolidation of funds
— (12,598)— — — (12,598)
Transfers into Level III
18,700 — 204 — — 18,904 
Transfers out of Level III
(1,858)(560)— (32,190)— (34,608)
Purchases138,682 42,609 99,446 150,394 6,233 437,364 
Sales(35,919)(312)(11,828)— (22,233)(70,292)
Realized gain (losses), net737 10 (2,714)(583)(2,545)
Unrealized appreciation (depreciation), net7,449 5,262 35,135 16,458 (251)64,053 
Ending balance$548,822 $211,009 $470,437 $326,852 $28,832 $1,585,952 
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period$7,705 $4,248 $32,002 $16,458 $(250)$60,163 
Three months ended September 30, 2020     
Beginning balance$148,679 $73,473 $100,159 $214 $— $322,525 
Deconsolidation of funds
— (47,436)— — — (47,436)
Transfers into Level III
27,458 2,334 12,751 — — 42,543 
Transfers out of Level III
(27,022)(9,705)(43,205)— — (79,932)
Purchases2,422 1,288 — — — 3,710 
Sales(55,461)(1,459)— — — (56,920)
Realized gains (losses), net(84)155 — — — 71 
Unrealized appreciation (depreciation), net(1,019)1,239 18,205 (78)— 18,347 
Ending balance$94,973 $19,889 $87,910 $136 $— $202,908 
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period
$(1,989)$1,592 $(12,355)$(79)$— $(12,831)
Corporate Debt – Bank DebtCorporate Debt – All OtherEquities – Common StockEquities – Preferred StockReal EstateTotal
Nine months ended September 30, 2021
Beginning balance$255,283 $79,085 $187,370 $23,219 $— $544,957 
Deconsolidation of funds
(3,065)(12,598)— — — (15,663)
Transfers into Level III
69,983 2,960 209 — — 73,152 
Transfers out of Level III
(68,258)(15,776)— (32,190)— (116,224)
Purchases395,707 151,573 264,946 311,256 52,850 1,176,332 
Sales(115,799)(4,798)(16,622)(1,655)(22,233)(161,107)
Realized gain (loss), net4,158 450 (10,986)162 (583)(6,799)
Unrealized appreciation (depreciation), net10,813 10,113 45,520 26,060 (1,202)91,304 
Ending balance$548,822 $211,009 $470,437 $326,852 $28,832 $1,585,952 
Net change in unrealized appreciation attributable to assets still held at end of period$10,670 $9,659 $34,008 $22,845 $(1,200)$75,982 
Nine months ended September 30, 2020
Beginning balance$77,736 $103,172 $130,437 $657 $230,741 $542,743 
Deconsolidation of funds
(78,451)(86,507)(264,513)— (269,404)(698,875)
Transfers into Level III
147,449 58,374 13,105 — — 218,928 
Transfers out of Level III
(71,282)(24,669)(43,205)— — (139,156)
Purchases119,557 17,747 264,909 — 38,663 440,876 
Sales(75,663)(38,788)— — — (114,451)
Realized gain (loss), net(8,890)97 — — — (8,793)
Unrealized depreciation, net(15,483)(9,537)(12,823)(521)— (38,364)
Ending balance$94,973 $19,889 $87,910 $136 $— $202,908 
Net change in unrealized appreciation (depreciation) attributable to assets still held at end of period
$(9,448)$(3,429)$(12,657)$(507)$— $(26,041)
Valuation of Investments and Other Financial Instruments The table below summarizes the investments and other financial instruments of the consolidated funds by fair-value hierarchy level:
As of September 30, 2021As of December 31, 2020
Level ILevel IILevel IIITotalLevel ILevel IILevel IIITotal
Assets
Investments:
Corporate debt – bank debt
$— $7,074,261 $548,822 $7,623,083 $— $6,363,403 $255,282 $6,618,685 
Corporate debt – all other
— 1,251,350 211,009 1,462,359 — 881,018 79,085 960,103 
Equities – common stock
186,951 49,057 470,437 706,445 3,052 187,370 190,423 
Equities – preferred stock
70,803 32,190 326,852 429,845 — — 23,219 23,219 
Real estate
— — 28,832 28,832 — 6,879 — 6,879 
Total investments
257,754 8,406,858 1,585,952 10,250,564 3,052 7,251,301 544,956 7,799,309 
Derivatives:
Foreign-currency forward contracts
— 8,010 — 8,010 — 482 — 482 
Swaps— — — — — — 
Options and futures
977 — — 977 26 — — 26 
Total derivatives (1)
977 8,018 — 8,995 26 482 — 508 
Total assets$258,731 $8,414,876 $1,585,952 $10,259,559 $3,078 $7,251,783 $544,956 $7,799,817 
Liabilities
CLO debt obligations:
Senior secured notes
$— $(6,890,368)$— $(6,890,368)$— $(6,321,580)$— $(6,321,580)
Subordinated notes
— (317,741)— (317,741)— (215,278)— (215,278)
Total CLO debt obligations (2)
— (7,208,109)— (7,208,109)— (6,536,858)— (6,536,858)
Derivatives:
Foreign-currency forward contracts
— (1,048)— (1,048)— (933)— (933)
Swaps— (14,502)— (14,502)— — — — 
Options and futures
— (193)— (193)— — — — 
Warrants— (5,381)— (5,381)— — — — 
Total derivatives (3)
— (21,124)— (21,124)— (933)— (933)
Total liabilities
$— $(7,229,233)$— $(7,229,233)$— $(6,537,791)$— $(6,537,791)
(1)    Amounts are included in other assets under “assets of consolidated funds” in the condensed consolidated statements of financial condition.
(2)    The fair value of CLO liabilities is classified based on the more observable fair value of CLO assets. Please see notes 2 and 8 for more information.
(3)    Amounts are included in accounts payable, accrued expenses and other liabilities under “liabilities of consolidated funds” in the condensed consolidated statements of financial condition
Summary of Valuation Techniques and Quantitative Information The following table sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the consolidated funds’ Level III investments as of September 30, 2021:
Investment TypeFair ValueValuation Technique
Significant Unobservable
Inputs (1)(2)
Range
Weighted Average (3)
Credit-oriented investments:
  
Communication services
55,349 
Market approach
(comparable companies) (4)
Revenue multiple (5)
1x - 3x
2x
40,057 
Recent market information (6)
Quoted pricesNot applicableNot applicable
2,987 
Recent transaction price (7)
Quoted pricesNot applicableNot applicable
Consumer discretionary:
12,779 
Recent market information (6)
Quoted pricesNot applicableNot applicable
6,001 
Discounted cash flow (8)
Discount rate
11% - 13%
12%
Energy:16,437 
Recent market information (6)
Quoted pricesNot applicableNot applicable
1,844 
Discounted cash flow (8)
Discount rate
12% - 14%
13%
Financials:
25,904 
Discounted cash flow (8)
Discount rate
11% - 13%
12%
17,169 
Recent market information (6)
Quoted pricesNot applicableNot applicable
7,700 
Recent transaction price (7)
Quoted pricesNot applicableNot applicable
Health care:
61,055 
Recent market information (6)
Quoted pricesNot applicableNot applicable
7,772 
Market approach
(comparable companies) (4)
Multiple of underlying assets (9)
0.9x - 1.1x
1x
Industrials116,386 
Discounted cash flow (8)
Discount rate
12% - 13%
13%
10,311 
Recent market information (6)
Quoted pricesNot applicableNot applicable
Materials:139,152 
Discounted cash flow (8)
Discount rate
10% - 13%
11%
11,224 
Recent market information (6)
Quoted pricesNot applicableNot applicable
Real estate:
78,382 
Market approach
(comparable companies) (4)
Multiple of underlying assets (9)
0.9x - 1.1x
1x
71,263 
Recent transaction price (7)
Quoted pricesNot applicableNot applicable
36,248 
Recent market information (6)
Quoted pricesNot applicableNot applicable
Utilities26,049 
Recent market information (6)
Quoted pricesNot applicableNot applicable
Other:
15,762 
Recent market information (6)
Quoted pricesNot applicableNot applicable
Equity investments:
320,838 
Recent transaction price (7)
Quoted pricesNot applicableNot applicable
181,378 
Market approach
(comparable companies) (4)
Multiple of underlying assets (9)
0.9x - 1.1x
1x
159,811 
Discounted cash flow (8)
Discount rate
7% - 16%
12%
94,428 
Market approach
(comparable companies) (4)
Earnings multiple (10)
5x - 35x
13x
40,834 
Market approach
(comparable companies) (4)
Revenue multiple (5)
13x - 14x
14x
Real estate-oriented investments:
16,098 
Recent transaction price (7)
Quoted pricesNot applicableNot applicable
12,734 
Discounted cash flow (8)
Discount rate
24% - 26%
25%
Total Level III
   investments
$1,585,952 
The following table sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the consolidated funds’ Level III investments as of December 31, 2020:
Investment TypeFair ValueValuation Technique
Significant Unobservable
Inputs (1)(2)
Range
Weighted Average (3)
Credit-oriented investments:
  
Energy:
$14,318 
Discounted cash flow (4)
Discount rate
7% - 9%
8%
10,431 
Recent market information (5)
Quoted pricesNot applicableNot applicable
Financials:
24,301 
Recent market information (5)
Quoted pricesNot applicableNot applicable
Health care:
20,447 
Recent market information (5)
Quoted pricesNot applicableNot applicable
     Industrials:50,263 
Recent market information (5)
Quoted pricesNot applicableNot applicable
12,298 
Recent transaction price (6)
Quoted pricesNot applicableNot applicable
     Materials:59,615 
Recent transaction price (6)
Quoted pricesNot applicableNot applicable
Real estate:
78,635 
Recent transaction price (6)
Quoted pricesNot applicableNot applicable
18,177 
Recent market information (5)
Quoted pricesNot applicableNot applicable
Other:
38,932 
Recent market information (5)
Quoted pricesNot applicableNot applicable
6,951 
Discounted cash flow (4)
Discount rate
6% – 8%
7%
Equity investments:
133,779 
Recent transaction price (6)
Quoted pricesNot applicableNot applicable
76,809 
Discounted cash flow (4)
Discount rate
6% - 8%
7%
Total Level III
   investments
$544,956 
(1)    The discount rate is the significant unobservable input used in the fair-value measurement of performing credit-oriented investments in which the consolidated funds do not have a controlling interest in the underlying issuer, as well as certain equity investments and real estate loan portfolios. An increase (decrease) in the discount rate would result in a lower (higher) fair-value measurement.
(2)    Multiple of either earnings or underlying assets is the significant unobservable input used in the market approach for the fair-value measurement of distressed credit-oriented investments, credit-oriented investments in which the consolidated funds have a controlling interest in the underlying issuer, equity investments and certain real estate-oriented investments. An increase (decrease) in the multiple would result in a higher (lower) fair-value measurement.
(3)    The weighted average is based on the fair value of the investments included in the range.
(4)    A market approach is generally used to value distressed investments and investments in which the consolidated funds have a controlling interest in the underlying issuer
(5)    Revenue multiples are based on comparable public companies and transactions with comparable companies. The Company typically applies the multiple to trailing twelve-months' revenue. However, in certain cases other revenue measures, such as pro forma revenue, may be utilized if deemed to be more relevant
(6)    Certain investments are valued using vendor prices or broker quotes for the subject or similar securities.  Generally, investments valued in this manner are classified as Level III because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities, or may require adjustment for investment-specific factors or restrictions.
(7)    Certain investments are valued based on recent transactions, generally defined as investments purchased or sold within six months of the valuation date. The fair value may also be based on a pending transaction expected to close after the valuation date.
(8)    A discounted cash-flow method is generally used to value performing credit-oriented investments in which the consolidated funds do not have a controlling interest in the underlying issuer, as well as certain equity investments, real estate-oriented investments and real estate loan portfolios.
(9)    A market approach using the value of underlying assets utilizes a multiple, based on comparable companies, of underlying assets or the net book value of the portfolio company. The Company typically obtains the value of underlying assets from the underlying portfolio company’s financial statements or from pricing vendors. The Company may value the underlying assets by using prices and other relevant information from market transactions involving comparable assets.
(10)    Earnings multiples are based on comparable public companies and transactions with comparable companies. The Company typically utilizes multiples of EBITDA; however, in certain cases the Company may use other earnings multiples believed to be most relevant to the investment. The Company typically applies the multiple to trailing twelve-months’ EBITDA. However, in certain cases other earnings measures, such as pro forma EBITDA, may be utilized if deemed to be more relevant.
The significant valuation inputs, including the input range and weighted average rate, are as follows:
Valuation InputLowHighWeighted Average Rate
Discount rates8.0%26.0%14.3%
Constant default rates2.0%2.0%2.0%
Recovery rates65.0%70.0%67.5%