Variable Interest Entities

12 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The Company consolidates certain VIEs for which it is determined that the Company is the primary beneficiary as described in Note 2.

Consolidated Variable Interest Entities

The Company consolidates general partner entities of certain Partnerships, which are not wholly owned by the Company. The total assets of the consolidated general partner entities are $10,036 and $4,787 as of March 31, 2022 and 2021, respectively. The general partner entities had no liabilities as of March 31, 2022 and 2021. The assets of the consolidated general partner entities represent equity-method investments in direct equity funds and customized separate accounts and may only be used to settle obligations of the general partners, if any. In addition, there is no recourse to the Company for the general partners’ liabilities, except for certain entities in which there could be a claw back of previously distributed carried interest.

The Company sponsored and consolidates HLAH through HL Alliance Holdings Sponsor LLC, a wholly owned subsidiary of the Company. On January 15, 2021, HLAH completed an initial public offering raising total gross proceeds of $276,000 which were placed in a trust and can only be utilized for funding a business combination or the redemption of Class A shares of HLAH. In a private placement concurrent with the initial public offering, HLAH sold warrants to HL Alliance Holdings Sponsor LLC for gross proceeds of $7,520 which were used by HLAH to pay the offering costs and also provide working capital. The total assets of HLAH are $276,675 and $277,528 and liabilities are $12,675 and $17,310 as of March 31, 2022 and 2021, respectively. The assets of HLAH held outside of the trust can only be used to settle obligations of HLAH and there is no recourse to the Company for HLAH’s liabilities. All warrants and Class B common stock of HLAH held by the Company are eliminated in consolidation.

Nonconsolidated Variable Interest Entities

The Company holds variable interests in certain Partnerships that are VIEs, which are not consolidated, as it is determined that the Company is not the primary beneficiary. Such Partnerships are considered VIEs because limited partners lack the ability to remove the general partner or dissolve the entity without cause, by

simple majority vote (i.e. have substantive “kick out” or “liquidation” rights). The Company’s involvement with such entities is in the form of direct equity interests in, and fee arrangements with, the Partnerships in which it also serves as the general partner or managing member. In the Company’s role as general partner or managing member, it generally considers itself the sponsor of the applicable Partnership and makes all investment and operating decisions. As of March 31, 2022, the total remaining unfunded commitments from the Company’s general partner entities to the unconsolidated VIEs was $104,804. Investor commitments are the primary source of financing for the unconsolidated VIEs.

The maximum exposure to loss represents the potential loss of assets recognized by the Company relating to these unconsolidated entities. The Company believes that its maximum exposure to loss is limited because it establishes separate limited liability or limited partnership entities to serve as the general partner or managing member of the Partnerships.

The carrying amount of assets and liabilities recognized in the Consolidated Balance Sheets related to the Company’s interests in these non-consolidated VIEs and the Company’s maximum exposure to loss relating to non-consolidated VIEs were as follows:


	March 31,
	2022		2021
Investments	$	191,378	$	138,092
Fees receivable	9,754		4,133
Due from related parties	778		837
Total VIE assets	201,910		143,062
Non-controlling interests	(1,873)		(2,211)
Maximum exposure to loss	$	200,037	$	140,851